Airbnb's First Pitch Deck: A Critical Review of Startup Metrics

[00:00:00]today we're going to be breaking down airbnb's first pitch deck I'm kind of excited for this this is a billion dollar company so obviously we all know that it ended well but did they pitch well at the beginning I'm Josh this is Jason we're here for co- launch we're looking at slide one air bed and breakfast air bed and breakfast I really didn't know there was a longer version of the brand name did you Airbnb they really I mean I knew what a bed and breakfast was and I knew I guess I knew but I didn't know there was air bed and breakfast if I remember correctly Airbnb started because they were renting out uh air mattresses at a conference in San Francisco so they immediately went ambitious here they were like forget air mattresses this is now a bed and breakfast definitely something's been Lost in Translation CU I've never had a breakfast at a Airbnb and I probably stayed in hundreds of them so I do like the slogan book rooms with with locals rather than hotels I like that they're saying that's simple and you got to think back right there's no such thing as Airbnb when this deck came out hotels is the only frame of reference that we have that's it so when they say locals they're saying this is a small business but what about airbed and hostile hostile I don't think the horror movie had come out either so it's probably still on brand let's check out slide two the problem price is an important concern for customers yeah we're all cheap that I don't think that's changed in 15 years hotels leave you disconnected from the city and its culture okay I don't know if I yeah yeah No Easy Way exists to book a room with a local or become host that they nailed that that is no longer correct thank you Airbnb but we have to go back in time to when this deck was created and at the time yeah that's fair there wasn't a way to just become a hotel owner in your in your apartment right they really kind of invented the category mhm and even then think about it hotelier where isot Hotel T where is the Uber and lift to Airbnb is there even a a Diet Coke or a Pepsi version of Airbnb yes yes there is what what is that vbo that's isn't that for more vacations and Extended Stays I don't I don't think it's used in the same analogous use case I think that every I think it's pretty close to Apples and apples but maybe some variants for sure I mean there's going to be some variants jump in the comment section what is your option that you use when you're not using Airbnb okay my little bro called it verbo he's like let's get a verbo okay I'm like do you mean Airbnb and he goes yeah I feel like verbo is more for like long long-term stays and vacation plan okay a web platform where users can rent out their space to host travelers to save money make money share culture I think Airbnb lost this idea but I love the idea that you're kind of getting the local version of the city I think that they had that initially and in share culture they were really leaning in on the culture aspect which is never been a reason why I got an Airbnb yeah but also we're so many iterations later I I think that is appealing cuz if you're talking about a hotel versus just staying in someone's home how do you make up and this is a perfect example in this pitch how do you make up for the lack of professionalism how do you make up for the lack of cleaning staff how do you make up for the lack of amenities well you say oh it's local it's culture it's authentic yeah well I think it's funny because I think all of our Founders can learn that no matter what you think about why this is valuable you could be completely wrong that customers don't care about a third of why you think it's valuable yeah cuz to me it's saving money yep it's also easier and quicker because the the hotel booking space is so clunky with these middle guys and and and you usually end up texting the owner or someone managing the property the seller gets to make some money and bu you know a lot of people invest in properties just to have airbnbs now but the reason why I do is because I like staying in a house as a kitchen I'll give you another one too as a comedian I travel a lot I use a lot of uh hotels and I also use a lot of airbnbs parking sometimes the difference between staying downtown like a hotel will be like 30 40 50 bucks a night for parking it's like yeah they don't tell you that when you're booking I'd rather get a nice apartment and then I can just Uber look I'm using startup on Startup I can just Uber to where I need to go there you go all right couch surfing 660,000 okay so I don't know know how they got this so this is a great example right of a deck how many decks do we see at code launch every year hundreds and hundreds of decks and they cite these numbers right and you have to immediately go when you're reading the pitch deck do I believe this number where did this number come from I see a red flag very round well I see fine print trying to say where it's coming from but it's so small it's almost like insidiously small yeah and then one of those is craigslist.com so 50,000 temporary housing listings per week in the US okay so I could see how they could scrape that that makes sense to me that's a believable number I guess couchsurfing.com was a thing I've never heard of it wow they really messed oh also I see a misspelling they left the r off surfing wow Airbnb come on no they might have been couchs sing.com maybe it's a cheaper domain do you think that like couching they left it off they had had a typo they had a typo that looks like it's got to be a typo that's really funny so 660,000 total users so this is interesting to prove Market validation for what Airbnb wanted to do they found another business which was similar but not the same right because staying on someone's couch is different than renting a room and they use that to compare the two this is incredibly important when you're trying to create a new category there's not going to be something that's directly analogous you're not going to find something that is exactly one to one what you have so it's about putting approximations together until it kind of looks the same oh the Old Market size slide trips booked two billion oh there's I can read this a little better Source travel industry Association of America World tourism organization they seem trustworthy so looking at this Market size slide we don't know exactly what point this is in history but we do see that at this point Airbnb is either forecasting or shown that their traffic is about a sixth the size of budget and online you got to think this is like priceline.com or other Budget Hotels but worldwide we're still seeing 2 billion plus bookings so if I was an investor looking at this and I saw 84 million trips book first off we've cross passed validation 84 million trips book is incredible uh the 2 billion plus is exciting because it goes how much of this can we disrupt I think this is a of what they think they can capture okay well they did based on the prim based on the Primitive look of this deck this has to be at the very beginning I think they did and I think they did they did capture it I think they probably got a little bigger even with their comic Sands font they got so big that cities are Banning them okay what do we got yeah we got a product product demo search by City Review listings and book it I like it these look like great mockups maybe this was the Primitive version I like this because if I've never used it before it's showing me the entire user Journey I'm looking for the city I have options and booking it could there be more slides sure but for a pitch deck I think that this articulates what the user journey is going to be this is a great job yeah I also like how there's it's not very noisy they got the the noise level right so far a lot of the pitch decks I see are TMI on the screen all at once yep too many words if you have 100 hundreds and hundreds of words it's going to be hard for somebody to retain that information there's an old phrase if I had more time I would have written a shorter letter and I think this perfectly captures it you're getting the information across another tip for you maybe you're applying for y combinator maybe you're applying for 500 startups maybe you're applying for code launch investors and accelerators look at hundreds and hundreds if not thousands of decks so if you have hundreds and hundreds of words when you could use or six you're putting that much more effort and work on the people that are sifting through the decks you're making it harder to stand out be clear be concise nail what you're doing yeah I think I'm like most folks I'm opening one deck forming an impression taking some notes closing it and opening another one right away yep so I'm seeing a lot of wants and you want to stand out in that c business model we take a 10% Commission on each transaction I think the increase that I think it's higher now pretty sure it's up to like 20 we've got $84 Million worth of trips with Airbnb that's decent chunk of the market we got a $25 average fee 15% of available Market on that their fine print mhm I think this slide is less clear than the last slide right because they're showing like a sh we have a date there projected Revenue by 2011 so this is probably 2009 yeah or even eight I like that they're showing what their average fee is that's an easy to understand number $80 a night at three nights that makes sense their revenue it feels like we made a giant jump they skipped a lot of steps to show us $2.1 billion in Revenue it's a classic slide but I really like a forecast that's tied to year one this many customers this much revenue per customer year two year three sometimes you can only do you know 6 months out or 12 months out but just throwing $2.1 billion in Revenue up there if I didn't know this was Airbnb I'd be rolling my eyes how hard would you be rolling your eyes if you saw no justification just 2.1 billion well yes I mean especially to our no product exists pitch deck Founders though that group is harder to you know trust a slide like this but we don't know what their situation was exactly looks like they had like a primitive product at this point yep adoption strategy how are we going to get people to adopt I love this because you know what this is left out of a lot of decks that I see yep they're like the founder looks like they're thinking it's so obvious everybody wants this right well yeah but you still have to get people to start using it yep let's talk about what they did well I love the thing that you see here with Craigslist where they created dual posting and so you see this a lot with Zillow and uh a lot of real estate firms also you see this a lot with job listings you go look for a job listing and you're looking on like Google jobs and then to click on it you have to go to another website then to click on that you have to go to another website so dual posting and and double posting is a way to increase traffic it's funny because you know Craigslist at some point might have been considered a competitor to what Airbnb was doing it was it was like the Antiquated way to do it but they were able to kind of like a what is it rora that that lives on the shark right that is not my expertise seiring Anatomy there's a there's a thing that eats like dirt that lives on a the little guy that shark little guy that lives with the shark and Airbnb became that until they became the shark and then they ate Craigslist and yeah Craigslist like Heyday was what 200 2 to 2010 and it's pretty much is it even still around used for anything I had a point most of their revenue was Adult Services and that got come get come get the dirt off my lawn and take it to your house isn't it good for I think Craigslist is good for like buying junker cars still um cars maybe yeah maybe yeah okay we got events as well was the strategy that they had this is where they're going to activate people at events they're going to be at October Fest which has 6 million people CIT uh which is a conference that may still be around yeah Summerfest not sure what that is Euro Cup that sounds cool and Far Away Marty gr 800,000 people and it makes a lot of sense like when you go to conferences especially like we go to a lot of tech conferences when you go to festivals that's going to be a prime opportunity to use Airbnb um the aggregators are the final one they have here like goco k kak orbits um partnersh it's yeah under under Partnerships it's interesting when you think of these sites like orbits gooo kayak they probably exclusively partnered with hotels initially and Airbnb was able to slide in there as the apples and oranges comparison and it's pretty compelling for people that are price conscious competition oh hey look speaking of that this is funny let's look at this look at this look at this couch surfing does have an R confirm okay R for that but also look at this they have Partnerships orbits and then they have competitors orbits orbits yeah that's Savage that's that's how you build a billion dooll startup you literally shake hands hey there's hos.com I told you hostiles was a thing yeah that's good yeah pretty but this is incredible like the lesson here is they're able to find a competitor and figure out a way to create a perceived mutually beneficial probably wasn't mutually beneficial it was probably parasitic but they were able to get that done and it's literally separated by one slide look at that that is crazy okay um they're focusing on affordability and online transaction and there okay this is a little dishonest these are always this is probably the most dishonesty I see is the competition slide um I do see like rank disregard for actually investigating competition and taking competition usually it's portrayed as if there's no competition yeah and there's always competition people are always doing the same thing you're going to do in some other way that's competition I love that they decided to go affordable that makes sense if you're doing a a diagram like this affordable makes complete sense but online transaction versus offline transaction they even have bedandbreakfast.com and they're trying to say it's offline transaction yeah come on buddy this slide I think is incredibly dishonest and and if I was an investor it would turn me off that they weren't being honest with me vbo was like directly in the comp comptition yes competitive advantages first to Market I believe that host incentive I can make I can believe that list once that's a big feature so think about that right Craigslist requires you to post every single Craig was a beating of epic proportions and everybody knows it who's ever used it but that pain point of having to continually relist or repost that's an interesting thing cuz if I had sat here with you and we didn't have this deck I bet we could have we could not have come up with that as a pain point if we were trying to think you have to be actively user of Craigslist to get that one yeah and and that's a big reason why people would come over from Craigslist to Airbnb EAS of use we used to do job ads there a long time ago yeah in the mid 2000s and it was the same problem for us do you know that guy Craig no I don't know good I don't want to hear him I don't want him to find out um one of the most profitable businesses though I was reading an article about how like they had like five employees and they were making like 40 million a year in Revenue it's insane um okay profiles I believe in that design and brand I believe in that I think that this is a good slide Team all right Joe is the UI and PR person look like he's got some serious cred and design and UI and yeah I like that guy what I like to see here is that there's a mix right we got somebody that understands user interface and based on the way this deck is laid out they were talking about pain points that people had with other sites that shows me that it's someone who understands user experience I see that we also have a developer that's good for the mix and you have the person that's in charge of Business Development I guess what I would immediately go to is I would be like okay well how strong is the business person because the platform is clearly working when they say they're going to make Partnerships with these sites like orbits this is the person that is probably going to drive it Brian chesky so yeah I think that this is a good mix let's talk about the team slide though right should you have every team member because at this point you know you got to think that Airbnb probably had 30 or 40 team members how many team members do you want to see on the slide I think this is a primitive Airbnb and this was the team and I'm just telling you based on the fact there was a misspelling at the beginning this is the very very beginning of Airbnb yes and these three guys plus this one adviser was it and that's what I think I'm just judging by my looking at a lot of decks um but you can see this developer have worked at Microsoft a couple of other companies and was a graduate of computer science from Harvard big now not not everybody has uh that guy that credibility on their team what I also like about this is it's not titles it's roles y right like I'm in charge of the user interface I'm in charge of Business Development I'm in charge when you're an early stage startup everyone has to wear a lot of hats so just saying like I'm the chief this you're the chief of what you're your Chief with no Indians but I I like that they've clearly laid out the work that each of them are going to be doing I think that's super communicative I agree with that yeah press I think we don't care are you ever going to care about a press slide yeah I mean they had a guy who's who they were crediting with PR so he's doing his job okay I would look at this personally and I would think this is too easy to fake it's way too easy to like submit your own press release get on a Business Insider list or just literally fabricate it um what I would like to see is like social proof or social evidence I think this is also a function of its time I think 10 or 12 years ago press really mattered whereas now I'd like to see what kind of Engagement did you get on a on an ad or a video or a post like did you get 40,000 likes and that was organic that's something that means a lot to me I think that probably replaces the modern day press slide this is wonderful I love user testimonials yep air bed and breakfast freaking rocks I like that Joe Sue F let's find him now and uh confirm his opinion I like this second one I found something in my price range that's en what enabled me to come to the conference right when you have hotels hotels are so fixed price and that industry is so kind of like trotten but this guy is saying because there was a new price range I was able to attend a conference I wouldn't have been able to so that's where you have kind of like over fix you don't have fixed variable pricing where it's like well now there's a whole new demographic that might buy tickets to this event that could become a partner that could then promote Airbnb because when I read that I'm my head's turning and I'm going oh well now you could go to the conference and be like hey what if we could improve your attendance by 10% message everyone and tell them there's this affordable Airbnb option that's cheaper than hotels yeah that's exciting and a lot of our Founders uh are building something that's like a Marketplace yep and for it to be valuable you have to have people on the demand side and you have to have people on the supply side Y and if you have too much of either one it's totally screwed up user experience and everyone comes away unhappy yep so um I'm always looking at that and asking Founders uh where they're conceiving of marketplaces is how are you going to activate both sides of the equation um and that's what I'm really interested in and that's what I would ask these guys if they were pitching to me and they've got one of the hosts how are you going to get more emilies CU you got three to one over here uh three people that want to use it and one that has one to be used yep they got both sides of the marketplace the ask we're looking for 12 months financing to reach 880,000 transactions they're looking for a $500,000 each man can you but let's let's back up and suck what what they did so clearly I can tell they had their own primitive product and this one developer yeah uh fellow he built it and let's say if they're trying to get to 880,000 they probably had 10,000 already yeah maybe and so they had a healthy activity going and now now they're taking that proven uh experience customer validated experience supply and demand side active on the platform now they're raising I wish too many folks try to raise before they have a product I wish I'd put 500,000 into this round that would be that would be nice yes you do yes you do okay so uh where do you think uh this deck ranks on our proprietary Cod launch deck ranking system it's tough ranking this because we know how it ends we know that Airbnb Bec becomes a multi-billion dollar company it changes the world that being said I think this deck was good but not great I think that there was room for improvement so I'm going to rank the original Airbnb deck a seven out of 10 typo included I was thinking almost an eight because of it's authenticity and it's Simplicity but the misspelling made it a seven so I to him at seven seven it is seven for Airbnb don't forget to send us your decks if you want us to do a review hit us up at codel launch.com Jason take us out we code you launch that's what we do at code launch where we build products for Founders for free