Many web startups begin without a business model. They have a cool service or a sticky blog -- or merely an *idea* that people might like.
Airbnb is not one of those startups. The site allows people to rent out their rooms or houses as vacation rentals, turning every place into a prospective microhotel. Their business model is simple: they handle the transaction, taking a 6-12 percent cut on each booking. In other words, they might not be a brick-and-mortar company, but they built in people paying them money from the beginning.
And that might be one reason that the company just grabbed $7 million in a Series A venture capital round led by Sequoia Capital and Greylock Partners, as Jenna Wortham notes in the New York Times.
Airbnb has come a long way since it was founded in August of 2008 by Joe Gebbia and some friends out of their shared apartment in San Francisco's SoMA district. Joe and I ran in similar circles in San Francisco, and I remember when he first dropped the idea on me. At the time, it didn't seem like the most serious business venture. There was already Couchsurfing.com, which seemed to provide the ability for people to travel around the world on the cheap staying with strangers. Why would anyone need Airbnb? Would thousands of people really want strangers staying with them?