Reid Hoffman - Blitzscaling

Theyre probably going to kill you.

The year was 2011, and in the offices of Airbnb, then a scrappy little forty-person start-up, its cofounder and CEO Brian Chesky had just received some very bad news.

Brian pondered the implications of the ominous prediction hed just heard from Andrew Mason, the cofounder and CEO of Groupon. He didnt like it.

Brian and his cofounders, Joe Gebbia and Nathan Blecharcyzk, had already fought their way through plenty of obstacles to build Airbnb, a website that makes it easy for people to rent out their rooms or homes for the night. In the beginning, every investor the founders approached had turned them down or, worse, ignored them. The company was on the upswing now, but the painful early days were still fresh in their minds, and they werent looking for another battle.

When the Airbnb founders first met, Paul Graham, the highly regarded founder of the start-up accelerator Y Combinator (YC), told them flat out that their idea was terrible. People are actually doing this?! he incredulously asked. When Brian told him yes, people were, in fact, renting out their living spaces for a night, Grahams response was Whats wrong with them?

Still, Graham had accepted the Airbnb guys into the three-month-long YC program. Not because he was inspired by their Airbnb business, but because he was impressed by the hustle of the founders. He loved the (now famous) story about how Chesky and his cofounders managed to pay the bills while trying to get Airbnb off the ground. It was 2008, a US presidential election year, so they created and sold special-edition cereals called Obama Os and Capn McCainsa sugary parody of (or tribute to, depending on how you look at it) that years candidates Barack Obama and John McCain. The creativity and persistence displayed by the Airbnb founders as cereal entrepreneurs got them in the door at YC; once in the program, they refined their business and were able to persuade two leading venture capital firms, Sequoia Capital and Greylock Partners (where I am a general partner), to invest.

Now, nearly four years later, it seemed like all the hard work was finally starting to pay off. Having celebrated its millionth booking, Airbnb had plenty of working capital, and it was clear that the concept was valuable.

But when youre successful, you attract competition. And sometimes that competition represents a deadly threat.

In Airbnbs case, that threat was three brothers from Cologne, Germany: Oliver, Marc, and Alexander Samwer. They had become billionaires by analyzing successful US companies, rapidly creating copycats in Europe, and, in many cases, selling those cloned companies to their original American inspirations. In other cases, the Samwers actually held on to and built out their clones; Zalando, the Zappos of Europe, had over ten thousand employees and was worth more than $10 billion in 2017.

Their first success was Alando, an eBay knockoff that they were able to sell to eBay for $43 million, just one hundred days after launching it. The Samwer brothers then invested in the German versions of YouTube (MyVideo), Twitter (Frazr), and Facebook (StudiVZ) before founding their own start-up studio, Rocket Internet.