How Uber and Airbnb Became Poster Children for the Disruption Economy
During the week of Barack Obama’s inauguration in January 2009, three young would-be entrepreneurs — Brian Chesky, Joe Gebbia and Nathan Blecharczyk — crashed on air mattresses in unfurnished rooms they had rented in a rundown house in Washington. They spent some of their days at a Metro station handing out fliers that urged strangers to offer rooms for rent, and in the evenings they fielded angry email complaints from a woman who had rented space in the basement. Despite the difficulties they faced that week, the huge demand for accommodations from people who had flocked to the inauguration convinced the group that the business they were hoping to create, which they called AirBed & Breakfast, would succeed if they persisted.
Also in town for the festivities were two other hustling San Francisco startup jockeys, Travis Kalanick and Garrett Camp. They had used a website to find more comfortable accommodations, but on Inauguration Day they couldn’t get a cab and had to sprint miles in the wicked cold to get to the mall on time. Camp had been trying to convince Kalanick to join him in a startup that would allow people to summon a car with the push of a button on an iPhone. The cab problems they had in Washington, which were similar to what they experienced in Paris a few months earlier, helped persuade him that the company, then called UberCab, had potential.
At certain moments in history, a confluence of technological and social advances creates the opportunity for a new field of innovation. That was happening at the beginning of 2009. A few months earlier, a reluctant Steve Jobs had been persuaded by his colleagues to allow other companies to develop apps for the iPhone. That happened just as Google Maps and GPS and other tools were enabling more wondrous mobile-based services. In addition, cloud services such as Amazon’s allowed startups to store and process large amounts of data without building their own infrastructure. The explosive growth of Facebook had encouraged people to create trusted identities and share things online. And as the 2008 financial crisis receded, the overcaffeinated venture capitalists of Silicon Valley became frenzied in the pursuit of new potential unicorns.
The result was the blossoming of a type of economic activity with many kludgy labels — the “sharing” or “gig” or “on-demand” economy — that do not quite capture its disruptive and transformative nature. What companies such as Airbnb and Uber have done in the past decade is take the peer-to-peer sharing of digital content that flourished online, through sites like Napster and YouTube and Facebook, and apply it to our physical world, including cars and rooms and scores of other goods, tasks and services.
Three new fast-paced narrative books written by seasoned business journalists (all of whom I have known since my days in the magazine world) detail the personal, financial and social aspects of the rise of these companies. “Wild Ride,” by Adam Lashinsky, executive editor of Fortune, is a crisp and lively look at both the good and bad aspects of the rise of Uber and its C.E.O., Kalanick. His Fortune colleague Leigh Gallagher has similarly produced a colorful account of Airbnb and its C.E.O., Brian Chesky, “The Airbnb Story.” And Brad Stone of Bloomberg News has intertwined the two tales in “The Upstarts,” a richly researched and highly readable narrative that provides additional layers of insight by weaving in contrasting stories of competing companies that failed.
In addition to these narratives, which are generally celebratory, it is also useful to read a darker counterpoint, Jonathan Taplin’s “Move Fast and Break Things,” which argues that the radical libertarian ideology and monopolistic greed of many Silicon Valley entrepreneurs helped to decimate the livelihood of musicians and is now undermining the communal idealism of the early internet. “The original mission of the internet,” he writes, “was hijacked by a small group of right-wing radicals to whom the ideas of democracy and decentralization were anathema.”
As happens on all of history’s uncharted frontiers, the pioneers of the sharing economy have displayed an energizing mix of idealism and recklessness. Airbnb’s founders came from a background of arts and design, rather than coding and engineering, which offered, contrary to the preaching of STEM education apostles, an advantage in a new economy built on connecting humans to other humans. As a child, Chesky used to visit the Norman Rockwell Museum near his home and spent hours sketching . “On a family trip to Florence one year,” Gallagher reports, “he stood in front of the statue of David for eight hours, meticulously drawing it.” Gebbia studied the violin, played jazz piano and originally planned to be a painter. They met at the Rhode Island School of Design, and they started their company when a big design conference came to San Francisco and there was a shortage of hotel rooms.
Both managed sports teams while at R.I.S.D., and their tale illustrates the importance of team formation in innovation. Each brought different skills to their collaboration: Chesky evolved into a manager and chief executive, and Gebbia focused on product design. To complete the team, they brought in Gebbia’s friend Blecharczyk, a computer science geek from Harvard who had started a software company when he was an undergraduate. “No one of us alone could have done this,” Gebbia said. “Two of us alone couldn’t have done this. But the combination of what Nate brings, what Brian brings, what I bring, put that together, and I think that’s how we’ve persevered through all the challenges.”