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The Sharing Economy: the Story of Airbnb

Peer-to-peer marketplace, collaborative consumption or the sharing economy—whatever you want to call it, it is clear that people are now choosing borrowing or renting over owning. Sharing economy projects are popping up everywhere around the world. There is no point in owning bikes, cars, parking spots or even random household goods, because you can just share them with others and use them only when you need them.

On the consumer side, the sharing economy meets the needs of a new generation of consumers, mostly young, who are willing to give up the luxury of having stuff at their disposal and share it with others in order to save money and help the environment. Of course, you can’t really share everything. A toothbrush-sharing service wouldn’t gain great popularity (however, you’ll be surprised to know I’ve heard of a pacifier-sharing service), but people are becoming open to sharing a more personal item (like their living room couch) if they only use it sporadically.

For small-business owners, the sharing economy can help diffuse the risk involved with starting a new business. Different sharing services are aimed to provide small businesses with what they need to cut costs on their operations. Nowadays, small businesses can share office space, conference rooms and office supplies, and use knowledge-sharing websites to get market insight. The idea of the sharing economy also crates an opportunity for entrepreneurs, as they constantly find new twists on this theme.

There are many examples: Thredup.com, an online platform for swapping kids’ clothes; Parkcirca.com, where you can make an extra buck by renting out your personal parking spot; and if you can’t get around to running your much-delayed errands, you can pay your neighbor to do it on Taskrabbit.com.

One of the biggest, if not THE biggest, success stories of the sharing economy is Airbnb. Airbnb is a San Francisco-based startup that provides a platform for people to rent their apartments or extra rooms to out-of-towners. The company makes its money by charging a small percentage of every deal closed.

The idea for this startup came to its two co-founders, Joe Gebbia & Brian Chesky, after they managed to rent air mattresses to people who came to a design conference that was held in town. Along the way, they brought in their third co-founder, Nathan Blecharczyk. Launched in 2008, the site is now active in 192 countries and 19,000 cities, with a whopping 5 million nights booked last year. Airbnb gained momentum by being “in the right place at the right time,” or, more precisely, Denver during the Democratic National Convention. Hotel rooms’ prices skyrocketed, and Airbnb was there to connect people who were willing to rent their rooms or houses to people who were stuck without a place to sleep. The site then drew the attention of CNN and the New York Times, and the rest is history.

However, the founders are not planning on stopping here. Airbnb is starting to emerge as a listings site for rentals of all kinds—a social media site for sharing. With the e-commerce market competition so fierce and the appearance of Airbnb copycats for just about anything rentable, even dogs, Airbnb is counting on its elegant and intuitive design to help it become a sharing-economy empire.

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