Today we have a guest post from my friend Rachel who has an incredible story about making money through Airbnb. For a period of time, her only income in NYC was from renting out her apartment on the site. Through her story, you may find that you are able to follow this path as well!
I’m Rachel, and I founded a tech startup called Seeds. Seeds embeds microlending into smartphone games. When you’re playing a game that Seeds has partnered with, you can make an IAP (in-app purchase) and a portion of the purchase will benefit entrepreneurs in places like Kenya, where a loan of a few dollars can go a long way. The loans are repaid with interest, and we continue lending the capital to other entrepreneurs, hopefully giving a leg up to as many people as we can. (Mr. NYBudget Note: This is the way that Kiva works as well, which I am a big supporter of).
I launched Seeds because I wanted to harness the 3.5 BILLION hours per week that people spend playing games and use it for a productive purpose, like microlending. Microlending improves lives. When I launched Seeds, I had supporting data that showed that people are more likely to spend money in games if that money goes to real-world social good. This is fantastic for us! The idea is to have Seeds solve multiple problems – we are improving user conversion for games and giving the game company a marketing opportunity to demonstrate that they cared about social good, which will lead to a more loyal and engaged user base. We are also sourcing more capital for micro-entrepreneurs in need. From the outset, it seemed like the idea was bound to succeed, so long as we had the necessary resources to execute properly.
Airbnb to the Rescue
So I my plan had one major problem. I was broke. Even though I had worked as a stock trader for years, I followed that by making a documentary about the impact of microlending on female entrepreneurs – which meant that my savings was basically gone after I invested it in the film. I had passion for the idea behind Seeds, a big vision of transforming the digital gaming landscape, but I had no idea how I’d be able to survive living in Manhattan while bootstrapping an early-stage startup.
Enter Airbnb. I saw a post made by entrepreneur-turned-VC Mark Suster on his blog, Both Sides of the Table. Mark talked about another startup CEO, Tracy DiNunzio, founder of what is now Tradesy. She listed her apartment on Airbnb to support herself while launching her company, and was able to use Airbnb to find a channel to startup success. I figured I could try to do the same thing.
And so I did. I at first listed the bedroom in my Washington Heights apartment (my roommate Nikita was cool enough to be tolerant of this arrangement), and I would sleep on the couch if there was a guest. Later on, I moved to a 2 bedroom apartment in Brooklyn with the intention of scaling my Airbnb business, renting out both bedrooms while I slept on the couch (which I did as much as I possibly could).
The Airbnb experience has pretty much been awesome for me all around. First, they send a professional photographer to take pictures of your apartment FOR FREE, which boosted my bookings immediately. The sign-up process at the time I registered, in early 2012, was extremely easy. I verified my email address, phone number and my Facebook account, and I was good to go (though I could’ve verified less if I had wanted).
Almost without exception, everyone I’ve hosted has been respectful and cool. I’ve had a couple guests, as Airbnb has become more mainstream, that approached the stay in the way they might approach a hotel stay experience, and were therefore more demanding, and I had one guest who blindsided me in a bad review even after asking to extend his stay, but overall it’s been really really great. I’ve made friends with a wonderful teacher from rural Germany who has been a guest multiple times, hung out with an awesome Eastern European filmmaker who showed me his recently completed feature, and have had multiple guests (a doctor from Belarus, a designer from SF) who relocated to NYC after crashing with me, and then became my New York friends.
The Money I Made
A typical week-long stay would generate $600 or more for me, depending on the number of guests. Airbnb brought in $35K for me in 2013, allowing me to get Seeds off the ground. Seeds is currently live in 2 games – Fashion Star Designer and Super Kid Cannon – and we have deals in place with a total of 5 gaming companies, with 40 more potential partners in our pipeline, all while growing our team! (Mr. NYBudget Note: WOW! $35,000??? I had no idea this could be so lucrative!)
Airbnb has allowed me to utilize NYC’s expensive rental costs so that they work for me rather than against me as I’ve pursued my entrepreneurial dreams. As a direct result, I’ve been able to raise investment funding, my company is generating revenue, and I’ve hired multiple NYC-based employees, proving that Airbnb has not only been a platform for my business, but also a boon for the NYC tech economy, allowing for the creation of more technological jobs in NYC.
Airbnb can do the same thing for any entrepreneur, artist, or freelancer working in an expensive city like New York. I feel very lucky that I happen to be living in a time and place in which this resource is available. I’ve invited several friends to become Airbnb hosts, and they’ve used it while bootstrapping their startups or furthered their artistic projects.
Recently, the city of New York has been cracking down on Airbnb – the Attorney General is demanding personal information from thousands of hosts, and has voiced a desire to “protect” the multi-billion dollar hotel industry. Apparently he sees Airbnb as a threat. But Airbnb is a boon – it allows for innovation and job creation. Airbnb is also completely legal, so long as you live in the space that you’re renting out.
I hope New York can fully realize this asset and support it in the way I feel it deserves. Wiithout Airbnb’s support, my New York-based startup and the jobs it has created could not exist.
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