Rejection - The story of Airbnb

Airbnb's successful Initial Public Offering (IPO) has been topical this week and once again, I have decided to ride the wave. I will try to keep it short and simple for the sake of those with limited financial markets knowledge.

The story of how Airbnb was founded in 2008 is fascinating and I would encourage you to look it up. However, it is not the thrust of this piece so I will not dwell on it. No one ever imagined that it would be such a game changer in the hospitality industry but this is exactly what company has turned out to be.

The rejection Brian Chesky is one of the co founders of the company and the current Chief Executive Officer (CEO). He wrote about how in June 2008, he and his co founders attempted to raise capital of $150,000 from seven prominent investors in Silicon Valley. At that time, the company was valued at $1.5 million meaning that the $150,000 was for a 10% stake. Silicon Valley is a region in San Francisco USA that serves as a global centre for technology and innovation and it is where some of the brightest minds are found. Interestingly, all the seven attempts failed. The founders got five rejections through email and two other investors did not respond.

Fast forward to 9 December 2020, Airbnb successfully listed on the Nasdaq Stock Exchange. The Company debuted on Nasdaq at $146 per share, far above the IPO price of $68 per share. This put its valuation above $100 billion making it the biggest IPO of the year in USA. Considering all that happened in 2020, especially with the COVID-19 pandemic and the effects it had on the tourism sector and travel in general, what a story!! Had the seven investors seen the vision of the founders and provided the $150,000 capital, their investment would have been several billions today! What a missed opportunity.

The lesson When your idea is rejected, even by the smartest of people, it does not necessary mean that there is anything wrong with the idea, you or the people who rejected it. It simply means someone did not see your vision which is perfectly fine because it is YOUR vision. This cannot be a reason for giving up. If you believe that you are on to something solid, keeping fighting until others see it. If others are not willing to go with you, as tough as it might be, never give up on what you believe in. Never give up watering that seed until it germinates. I believe there are many big ideas out there that were killed in their infancy because other people failed to buy into vision of the one who carried the idea.

When you are rejected as a person There are people who were rejected when they looked for jobs at certain institutions who went on to be game changers in the institutions that subsequently employed them. What it means is that the institutions that rejected them did not see the value that they would add to the organisation and there is nothing wrong with that. Let us normalise understanding that not everyone will see the gem hidden in the dirt. To the contrary, it should spur us to work harder to prove a point.

There are also people out there who go into depression, commit suicide or live miserable lives because they are rejected by other people. Being rejected does not necessarily mean that there is something wrong with you. It simply means that the other person has not seen the value in you. Do you try to convince them to see your value even if they don't or you would rather look for someone who will value and treasure you? Food for thought.

To the people who do the rejecting, be very sure before you make that decision, or you will live with the regret of having let something/someone valuable slip away.