How to Establish a Billion Dollars Business With Startup App Like Airbnb

By looking at Airbnb’s success, you might think that it is just another example of overnight success. A matter of luck. But it’s not. In fact, they too had a long and hard journey for about 2 years before they saw the spark of success.

This growth story of Airbnb and how much hustling they did is what needed the most for establishing a billion-dollar startup.

How It Started

It all started in 2007 when Brian Chesky and Joe Gebbia, the founders of Airbnb, couldn’t pay the rent on their flat. And, out of necessity, they came up with an idea to bring in cash. They both decided to rent out their beds and sleep in the living room to earn little bit cash.

From this, they both felt that they were onto something, and started a relentless pursuit for the following years.

Though, the start was not easy. In fact, it never is.

Paul Graham also once said – “Startups actually take off because the founders make them take off.”

They didn’t make any money and maxed out on their credit cards. But, instead of giving up, they created a remarkable range of Obama and McCain branded cereals and made $30.000

During this time, both were constantly discouraged. Most people never believed in their idea, and just criticized them.

They saw the first hope when they made it into Y Combinator. Though Paul Graham, founder of Y Combinator, thought their idea is shitty, but he saw that Brian and Joe were indeed truly committed Entrepreneurs.

Point is, as soon as you know what to fix, fix it. And, fix it quickly and consistently.

Today, Airbnb is known as one of the pioneers of the on-demand economy. Recently, the company filed a new form D that closed off its series F with an additional $447.8 million. With this, total funds have reached more than $1 billion and the $30 billion valuations.

According to the latest report by TechCrunch, Airbnb won a lawsuit charged against them by Aimco, saying that Airbnb has intentionally encouraged people to break up their leases. According to another latest news from TechCrunch, HotelTonight, a leading hotel booking app, has got an interest from Airbnb. Airbnb is planning to acquire HotelTonight, which is one of the biggest apps, helping travelers to arrange last-minute accommodations.

However, the District Judge Dolly M. Gee declared the decision in favor of Airbnb, saying: “This conduct does not make Airbnb an information content provider. As stated above, an information content provider is statutorily defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”

Create Your Own Property Rental App Like Airbnb

Airbnb, which started as the marketplace for people with spare beds to connect with people who need a place to stay, but can’t afford a hotel. After Airbnb, Entrepreneurs started hitting the hospitality industry with startup ideas like Airbnb.

Airbnb History & Timeline


How Does Airbnb Work?

Host registers themselves on the portal and lists out their property details along with other factors like amenities, prices, house rules, etc.. Airbnb then sends a professional photographer to the location of host and takes high-quality photographs.

Travelers who are looking for cheap places to live can browse the available options according to their budget, amenities, etc..

In order to book a place, travelers need to pay the amount through Airbnb mentioned by the host and some additional money as tax and transaction fees. The host then approves the traveler’s request, traveler stays there and lastly, Airbnb pays the host money after deducting their commission.

Airbnb User Segments


Hosts are the people who want to make some money by renting their available space to the travelers. They can create their profile as a host and add their property to the list, add its details, set their own rent, check-in, check-out time, house rules, etc.

Hosts can accept or reject of traveler’s request after reading reviews of the traveler or by going through his/her social profiles.


Travelers are the people who are looking for affordable places to stay with the local hosts. They also have the option to search for property by filtering them according to their needs.

In order to book a place, travelers need to pay through Airbnb portal.

Freelance Photographers:

Airbnb has a huge network of freelance photographers in most major cities in the world. Once the host lists his or her property on the portal, freelance photographers are assigned to take high-quality pictures of the place.

The high-quality photographs get more responses and these freelance photographers are paid directly from property rental app – Airbnb.

Airbnb Business Model

Basically, the house renting app Airbnb offers free listings to hosts and lets travelers browse the listed places and select the one according to their requirements. The booking, as well as the monetary transactions, are done on Airbnb from where the company earns its share of revenue.

Commission From The Hosts (Property Owners)

Airbnb charges flat 10% commission from the hosts upon every booking done through their house rental app.

Transaction Fee From Guests (Travelers)

Airbnb charges 3% of the booking amount from the travelers as a transaction charge on every confirmed booking.

The Future of Vacation Rental Industry

The vacation rental industry is expanding and growing like never before. With the rise of on-demand economy portals like Airbnb, where anyone can rent and book a place has disrupted the industry.

Now, there are still competitors of Airbnb. Property rental apps such as Expedia, Tripadvisor and other sites in China are working on a global scale, but we all are witnessing the trend go and it will increase.

Though the vacation rental industry is becoming more commercialized, but the future of commercialization looks promising and is predicted to grow bigger. And, in order to establish a successful mobile app startup like Airbnb, Entrepreneurs need to go an extra mile and leverage the latest technologies to provides better services.

Idea For Property Rental App Like Airbnb

While Airbnb is already a multi-billion dollar company and is sure to grow further, but if you’ve similar idea where you can make the process of property rental easy, reliable, and much more efficient, then it’s possible to thrive in the vacation rental industry with your own Property rental app like Airbnb.

Don’t Just Ask People What They Want, Observe!

Designers don’t go out interviewing people what they want and act on their responses. They conduct experiments and assess how people react to their design.

Similarly, for on-demand property rental app, begin by thinking about scalable solutions of an established startup, and validate that idea.

Identify the ONE Key Metric!

The one most important thing is to identify a core metric that really matters to the industry. It doesn’t have been the obvious one. Explore further and look for a more reliable option for the same audience.

For example, if Airbnb founders had just focused on bookings, they wouldn’t have come up with concrete measures, and capture the global vacation rental market.

Create a Platform Where Both Guests and Hosts to Have Great Experiences

A big challenge in this type of online business is to get guests make bookings. In fact, it’s assumed that only around 14% of registered users ever make a booking. And, if you can get more users book a place, they are more likely to come back to make another booking.

In simple words, the important task for a vacation rental startup is to hook people to use your services. Because, once they’re hooked, they become a constant source of income.

The first step to making people feel better about the uncertain deal they’re making is to provide high-quality photos. Furthermore, it’s also recommended that you consider the identity verification a top priority in order to gain the trust of travelers.

Allow users to write public reviews for both hosts as well as guests to identify the bad places or annoying guests.

Hiring is Critical For Building a Great Product

A fundamental aspect of building a great property rental app is hiring. Entrepreneurs tend to think that hiring freelance designers and developer will get the job done. But, for a quality real estate app development, you need to go beyond your reach and discover the industry experts and app development agencies that have experience in building room booking app like Airbnb.

Use a Referral Program to Grow

This is the classic and widely used strategy – The referral programs. Its basic idea is simple. You create a referral system where a user gets reward if it gives a new sign up. One of the first companies to apply this strategy was PayPal and since then, many startups, as well as businesses, are leveraging its benefits.


Once your product gets ready and is up running, start hooking users with marketing strategies. Though, don’t ignore the bad user experiences and product bugs. If this happens, contact your development team and resolve the issues as quickly as you can.


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