Brian Chesky is co-founder and CEO of home sharing marketplace Airbnb. The company recently raised $1.5B at a $25.5B valuation.
Like all companies, Airbnb was once a small team with an idea. In fact, Brian recently shared 7 rejection emails that the company received from investors while it was trying to raise seed funding in 2008. There were likely many more. At the time, the company was offering 10% equity for $150,000. This values the company at $1.5M, so Airbnb’s current $25.5B valuation is a 17,000X return on the original valuation. Assuming 20% dilution in each of the company’s 7 funding rounds shared on Crunchbase, the return is north of 3,500X.
This story has two lessons.
First, VC’s aren’t necessarily right. In fact, we’re wrong a lot of the time. And we’re more likely to be wrong on big ideas like Airbnb which stretch your imagination when you first hear about them. Who would have thought that people would be willing to stay in the home of someone they’ve never met before, and that hosts would be willing to open their homes to strangers?
The second lesson follows from the first. VC’s aren’t the only people who are wrong. Everyone makes mistakes. If someone tells you that something can’t be done, but you really believe in what you’re doing, you’ll follow the path that you’ve set for yourself regardless. You’ll see each “no” as getting you one step closer to “yes”, not only in fundraising but also in recruiting, adoption of your product, and throughout your startup’s journey.
This second lesson is as valid for life as it is for startups. As Michael Jordan, arguably the greatest basketball player of all time, shares in the video below, failing over and over and over again in life is why you succeed.