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The Creative Fundraising Strategy That Became a Successful Business

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I'll be the first to admit that this fundraising strategy isn't for me. But I have a wife and kids, so maybe, a few years back, I would have given this one a shot.

The strategy: renting out the extra space in my apartment or house to travelers on a budget.

For three entrepreneurs, this fundraising strategy took on a life of its own. The three entrepreneurs, Joe Gebbia, Brian Chesky, and Nathan Blecharczyk, used this creative fundraising strategy (renting out the extra space in their apartments) to generate revenue after they quit their jobs to become entrepreneurs.

But, interestingly, they found the strategy so successful, that that turned it into a business that is now thriving.

The business, Airbnb is essentially the "eBay of space." It works like this...People list their apartments and houses (if they aren't going to be home), and even spare guest rooms, futons, and couches on the site and set a price per night.  And then travelers who are looking for a place to stay search the listings for an accommodation that's right for them.

So, real estate owners and renters earn money, travelers get a discount, and Airbnb earns a 10% fee on all transactions. A true win-win-win. As you might imagine, Airbnb is doing very well, and is now in over 1150 cities in 82 countries.

My takeaways/lessons here are two-fold: first, if you have extra space or are traveling, you should consider listing your space on Airbnb to generate some revenues to invest in your business. Second, as this company illustrates, you can never be too creative in coming up with ideas to fund your business.

If you want to see a brief video of the Airbnb team, including their story of how Barry Manilow's drummer is one of their top users, here is a cool clip:

 

 

 


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Barton says

Yes, That's a good idea, Actually contribution of poverty in most people in the world is buying and staying with lots of staffs which they are not using, but rather maintaining them at some costs which were ought to be accumulated for business investments. Is very costly constructing and maintaining extra space for ones life time
Posted at 4:07 pm
strategy management consultants says

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Posted at 9:32 am
ashley Bell says

i just spent friday night and saturday day, trying to right a mess made by an airbnb scammer. my friends booked a room that they found on airbnb, but since they were coming from mexico, they paid offline via western union. the person had listed an apartment that had a physical address that didn't exist, as it was right in the middle of penn station! my friends did not know this, but did not ask for my help until they realized they were without a place after arriving on friday night! as soon as i looked at the apartment listing, i knew it was a scam!!! they were ripped off for $1000! don't use this service unless you are familiar with the city you are visiting! and never pay offline...oh, yes, and they also said it was in walking distance to columbia university...walking distance if you don't mind walking about 75 blocks! never rent an apartment on 33rd street from Netasha...scam, scam, scam. And, by the way, airbnb, has yet to respond to our emergency calls (when i called, i did not yet know they had paid offline, thus voiding airbnb's obligation, however, my message did not indicate that!).
Posted at 4:01 pm
Alexis says

It's truly one of the major web innovations of the decade, and I've used it with great success, last year alone earning over $16K off my rental in New York, in just 9 months. Sadly, I believe their growth is overwhelming their customer service resources and now they have....literally no customer service at all. Their 1-800 emergency number goes to another business (who said, "they haven't had this number in over six months!") and while I've sent about 10 requests for help over the last two months, and received as many "how did we do?" feedback surveys, i HAVE NOT received one response to my requests which included a guest payment emergency, needing to change important tax information, and finally get my bank account information set up properly, after ten unsuccessful attempts. I had nothing but wonderful things to say about them last year, and sadly have nothing good to say about them this year other than it's a wonderful idea, and great looking site. C'mon, guys. Smarten up and at least offer a modicum of service. This treatment is insulting.
Posted at 1:19 pm

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