The AIRBnB Story | How 3 Dudes Went Form Renting Air Mattresses to Becoming a Billion Dollar Business

Audio Transcription

Listen To the Business Coach Tell The Story Of AIRBnB : Podcast Transcript

Speaker 1: [Music] Now, broadcasting from the center of the universe and the Thrive15.com world headquarters, presenting the world’s only business school without the BS with optometrist and entrepreneur Dr. Robert Zoellner for Small Business Administration Entrepreneur of the year in your ear, Clay Clark. It’s the Thrive Time Show on talk Radio 1170, three, two, one, boom.

Clay: All right. Thrive nation, welcome back to the Thrive Time Show during your drive time home. As always, my name is Clay Clark and I am a business coach. I’m the host with the most and we are here on the Thrive Time Show today talking about things that you want to know about. We’re talking about how to start and grow a successful business. Specifically– specifically we’re going to be unpacking the story of the company we all know about. Because we all know about these successful companies, we all cheer for them when they get to the peak, to the pinnacle, but nobody knows how they started. It’s the Airbnb story.

It’s how three dudes went from renting air mattresses to becoming a billion-dollar business. But before we get started, I’m going to get us started today with a chant, because I talked to a guy today and he goes, “I found the show on the radio and now I love it,” and so I want to get stuck into your brain. Here we go, its Thrive Time Show, Thrive Time home, Thrive Time Show, Thrive time home. There we go, now it’s stuck in your cranium. Now, moving forward, just share that with four million people and then we’re all good, that’s all I’m asking, four million shares, that’s all I’m asking for.

To make this show happen today, were always surrounded by a cast of characters, great people. Dr. Z today is out expanding his vast entrepreneurial Empire. I am joined with Miss Sharita, actually, Mrs. You guys watching on Facebook live going, “Is she single?” No, she’s married, she is married. You be respectful, she’s a married lady. It’s Mrs. Sharita Bent. Mrs. Sharita, how are you?

Sharita: I’m great, happily married and fabulous and happy to be here.

Clay: Now, we have a very special guest today. He is a thriver, meaning he’s a guy that we’ve worked with. We have an honor to serve him, helping him on website updates and things like that, so he can get all that stuff off his plate and focus on his big vision. This guy played football at Boise State. Remember when Boise state beat OU, and half of the state was like– Not half of the state was like, “I hate Boise state, that was–“

Well, this guy played on the field, Mr. Brett Denton, sir, can you explain a little bit, what was your role down that team? Were you the one individually responsible for that loss? Do we need to blame you? Does the state of Oklahoma need to blame you?

Brett: Yes, 100% responsible for that loss as a matter of fact. Yes.

Clay: Okay, now what do you do now? Apparently, you’re a founder of a fitness company that’s grown from– You started it from the ground up, to now where you have 500 people that attend this fitness facility. I want to know, what’s the name of this facility, and then tell me about this performance coaching that you’re doing now for entrepreneurs who want to achieve a little bit more.

Brett: Yes. The fitness facility, it’s called Kvell Fitness and Nutrition. We just help people get in shape, lose weight, get in shape. Then performance coaching is for our executives, it’s for our busy people, busy parents and we help them reach their peak.

Clay: I have to ask you this because a lot of people want to know, when they start a business, was it scary for you and did you have overnight success? How long did it take you before you got the business to a place where you weren’t just totally freaked out of your mind? How long did it take you to get a little momentum going there with Kvell Fitness?

Brett: I think it probably took a year. I moved in with my sister. I had my car repoed.

Clay: Nice.

Brett: I was broke for a while and, yes, 12 months later, I was finally starting to make some money up.

Clay: Now, before you judge about you going, “You moved in with your sister, you got your car repoed, what’s wrong with you?” Let me tell you what’s wrong with these guys. These are the three dudes who went from renting air mattresses to becoming billion-dollar business owners. For those of you who don’t know, Shar, can you share with us a little bit about what Airbnb is all about?

Sharita: Yes, it’s awesome. It’s a peer-to-peer online marketplace. It’s a Homestay Network and people are able to list or short-term rent lodging. You’re staying right now, right Brett? We were talking about this, who’s using Airbnb right now. So you can rent a home. You can rent portions of a home.

Clay: You’re staying at Airbnb right now?

Brett: Right now. Yes.

Sharita: He’s using it right now.

Clay: What does it mean? Are you staying in someone’s house?

Brett: I am, somebody’s room.

Clay: Are they there?

Brett: They’re there.

Clay: They’re cool with you being there?

Brett: They’re cool, they’re nice. Yes.

Clay: Is it weird that you’re there and they’re there?

Brett: It could be, it could be.

Clay: Have you were asked them to leave? This is a thing though, Airbnb?

Sharita: Yes. It’s cool.

Clay: Those of you who don’t know about it, you Google this mess, it is awesome. I’m going to say this, I love Airbnb, my wife and I– I can’t remember what state we were in, we traveled a lot there for a while. Was it California? My wife’s in the studio, the man cave today, were we in California or was at Las Vegas, where we were?

Speaker 5: [unintelligible 00:05:00].

Clay: She’s not miced right now but she’s telling me here. What state was it? Was it California? They think it was California. We’re in California, and we stay in this unbelievable really nice downtown place. We’re staying at someone’s house. It allows people to rent out their homes to make extra income, it’s like turning your home into a hotel, Airbnb. Here’s their story, Sharita, are you ready for the story?

Sharita: I’m ready.

Clay: Brett are you ready for the story?

Brett: I’m ready born.

Clay: It’s story time, so here we go. In 2007, Brian Chesky and Joe Gebbia, they’re living in an apartment in San Francisco. Have you guys ever been to San Francisco? Brett, have you been San Francisco?

Brett: I have not.

Clay: Sharita?

Sharita: I have.

Clay: It’s expensive.

Sharita: It is.

Clay: I mean everything’s like a $7 hotdog, it’s like a $9 latte. That’s why people are so many– all those people who are there, it’s just super expensive. You go there and they move there, they realize, “Man, this is expensive, we cannot afford to pay rent,” but they’ve already signed the lease. What happens is they rent out three air mattresses. One of them, I’m sure it was Brian, he’s like, “Hey guys, here’s a deal. We could rent out our rooms to other people and they could stay there and pay us.”

I’m sure Joe, the smart guy, he goes, “But if we’re renting out our own house, where are we going to stay?” He goes, “In the closet.” I’m not kidding, these guys stayed in the closet. Like Michael Jackson back in the day, keep it in the closet, that’s a song of Michael Jackson. You got to Google that. You ever heard of it before? Sam, have you heard that? Our producer. No?

It’s Keep it in the closet, you never heard it? Something about you baby, that makes me want to give it to you. See, it’s awesome. It’s much better when I don’t sing it. It’s great, you got to check it out. The thing is, these guys, “We’ll rent out our house and we’ll live in the closet,” and they’re like, “Well, why would we live here then?” But anyway, they honored their lease.

What happened was, there was this industrial design conference that’s being held in San Francisco state, industrial design conference. They’ve got these–in industrial design society, they’re putting this thing on, and there’s not enough affordable hotel rooms. So people are going, “Yes, we do want to stay here.” They start renting out their room and they go, “Maybe this is a thing.” They went ahead and started a blog website, with maps called airbedandbreakfast.com.

If you check it out, it’s airbedandbreakfast.com. That was the original website and it officially launched, check it out, August 11th of 2008. Check it out, two men, I’m sure it was awkward, and a woman show up. Imagine what that was like, so it’s like, “We’re here to stay at your house.” “And me too.” You’re like, “Are you guys together?” “No, we’re all our separate, but we’re together tonight. We’re going to sleep in your house. Where you guys going to sleep?” “We’ll just chill in the closet.”

It’s got to be the most awkward– I guess in San Francisco, maybe that’s normal. I don’t know. But the thing is, this is what Brian Chesky says, he says this,”When you start a company, it’s more an art than a science, because it’s unknown.” Brian Chesky, who’s he? He is the founder of Airbnb. He says, “When you start a company, it’s more an art than a science because it’s totally unknown.” Instead of solving high-profile problems, try to solve something that’s deeply personal to you.”

Ideally if you’re an ordinary person and you’ve just solved your problem, you might have solved the problem for millions of people. Sharita, I want to ask you this but would it be weird, is Airbnb weird to you?

Sharita: I’ve never used it and stayed in the house with someone., That’s a little weird to me, so mad props to you. I’ve used it and we’ve had the whole house to ourselves. So that’s not weird to me, but I don’t know how I feel about staying with people that I don’t know.

Clay: I’m asking my wife. We’re in the man cave. My wife can’t respond, necessarily where you can’t hear her. But one of our guys, Eric Chop– Chop, if you’re listening. One of our great producers, he’s a great guy. When we went to New York, he stayed Airbnb with a lady and she was like, “So, you want some soap. You want to shampoo. You want me to serve you breakfast?” To me that’s weird. Is it weird to you Brett?

Sharita: It’s weird to me.

Brett: It’s a little weird, yes. I’m staying with a lady right now [inaudible 00:08:59].

Clay: Is she being nice to?

Brett: Yes, she’s nice.

Clay: Is she like, “Hey, you want to hang?”

Brett: Yes, she’s great.

Clay: You guys want to go rent a movie or [unintelligible 00:09:03]?

Brett: She wasn’t like that, but yes.

Clay: Okay.

[laughter]

Clay: I don’t know what the Airbnb code is. Are you able to like go, “You want to go see a movie?” Is that the weird?

Brett: Is a little weird though. Yes, [unintelligible 00:09:14].

Clay: But you’re in their house, so it’s kind–

Sharita: I have friends who’ve stayed with people before, and I think just depending on the personality of the host. They might do things together. They might go out for dinner or they might just leave you alone, just depending on what you want.

Clay: Well, these guys are renting it out for 80 bucks per person, so you’re like, “Hey, I’m doing the math here, I’m like a wizard. That’s like $240, that’s huge Brian.” And Joe’s like, “That’s huge, like $240. That will be enough money to put some food inside the closet that we live in.” This is the real talk/ Now Brian, you say, “Well who’s Brian? Was he some genius?” No, he’s the son of Deborah, Deborah big shout out to you, and Robert Chesky, his parents.

“How do I know these things?” This is what I do. Other people are watching shows. I’m making shows. The thing is his parents are both social workers. He has a young sister, Alison. As a child, Chesky was interested in art, replica paintings, design, shoes, toys, probably a normal dude, but he later got into landscaping and architecture design. But the thing is is that in 2000, what happens is these guys started to realize around 2007 this could be a thing. Work with me on this, they did not launch the site until August 11 of 2008. They thought it could be a thing back in 2007.

Quick review of the timeline, know it’s just audio only. But these guys in 2007, they’re renting out air mattresses. In 2008 they go, “This could be a thing.” How long of a time– For those of you scoring at home, Shar, for those people listening who are struggling to make a timeline in their car, how long is 2007 to ’08, that’s like a year?

Sharita: Yes, that’s like a whole year. You know, what I would love to see with their first blog, that little blog website that they put out, I would love to see what that looks like. I need to go see it. See if we can find the retro shots of that, you know?

Clay: Now here’s the deal, when we come back Thrivers, a lot of you want to know, “How can I do that?” I have a secret thunder move. I’m going to show you how to find the original website. Oh, it’s sick. It’s like he’s got swine flu. Has he got– No, I’ll be okay. I’ll be okay. I’m just [unintelligible 00:11:14] this helmet. Darth Vader, you’ll be fine. That’s what happened, Darth Vader just got a cough. Next thing you know, the Emperor, he just pulls him aside and he’s like, “Seriously, put on this helmet. You’ll be fine sir. The next thing you’ll be Darth Vader.”

No, but seriously Thrivers, it is awesome. When I come back, I’m going to teach you how to find these archive websites. It’s a secret move. A lot of people don’t know the secret move. Not that secret, but a little bit secret. Then we’re going to get into the next part of the timeline. We’re going about where these guys, they go, “It could be a thing, so let’s take our thing to the South by Southwest conference down there in Austin, Texas and let’s try to sell it.”

Let me tell you what, when they tried sell it, some crazy stuff happened. Did they have instant success? Maybe. Did they have instant player? Maybe. Thrime Time Show.

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Clay: Live, local, now. You’re listening to the Thrive Time show on Talk Radio 1170.

Clay: All right, Thrivers. What’s going on? Welcome back to the Thrive Time Show during your drive time home. If you’re listening right now and you’re going, “I’m ready to step inside my casa. I’m ready to step inside my house and to find what home’s all about,” but you still want to listen in, you can go to Facebook Live. On Facebook Live, you can join the Thrive Tribe.

We have a lady named Dona in Valparaiso, Indiana. Valparaiso, what’s up Donna? Donna, how are you? I know that my flag is not compliant with the patriotic rules and because I care so much about you, it’s on my to-do list. I’m going to flip that flag, re-adjust it. Flip it, reverse it. I’m going to make it happen for you and it’s going to be great. You’re going to love it and we’re going to have a great thing going on in Valparaiso. You guys are great people out there.

Also, for anybody who’s not listening on Facebook Live who says, “What are you talking about?” We’re in the man cave. It is the Dojo of Mojo where we come together on a weekly basis to teach you how to start and grow a business. My name is Clay Clark and I am a business coach. I’m the former SBA Entrepreneur of the Year in your ear and I am joined here– You see, hear, ear, it’s all rhyming. I’m joined here with Miss Sharita Bent. How are you?

Sharita: I’m great.

Clay: Hey, real quick. I want to brag on you. You were working today with a good friend of Mr. Brett Denton. We’ll get to Brett in just a minute. I don’t want to steal your thunder. But you’re working with a good friend of Brett’s today. They’re a company called Peak Medical Tech. Neat business, great business. What do they do? What were you doing with these people today?

Sharita: We were working on this great new software that they are launching which is really pioneering and changing the whole industry as far as pathology software laboratory work.

Clay: Pathology software. Is that a thing?

Sharita: It is. It’s amazing and it’s revolutionary. He’s helping just make that path and that process of dealing with people’s blood work, the reports, everything.

Clay: He flew into Tulsa, Oklahoma.-

Sharita: He came to Tulsa.

Clay: – with a teammate. What was her name?

Sharita: Yes. Her name is Cheryl Hammond.

Clay: Flew in to meet with you and you and Darlan work today, work flowcharts. See Thrivers, when you come to the thrive15.com world headquarters, and I’m not bragging, I’m just putting into the scoreboard, we help people start and grow businesses. We don’t walk on fire.

Sharita: Yes. We get it done.

Clay: When you came in, we’re not like, “Do you want to walk on coals? Hey, how do you feel about how do you feel?” Listen, we could take you to the next level here. The next Tony Robbins seminar. Are you ready to unleash the Tony Robinson? Tony. By the way, I always say because Tony, if you watch his Netflix especial, he curses so much, it’s unbelievable. Really, you helped him grow his real business, real deal.

Sharita: Yes, definitely. He left here with software. It’s developed, it’s ready to go. It’s beautiful.

Clay: And you didn’t try to high pressure with some back of the room high-pressure magic money system?

Sharita: No.

Clay: Crazy. I almost can’t believe it.

Sharita: Yes, it’s true. You get it.

Clay: You know what Tony Robbins had to say about that?

Sharita: What?

Clay: Unbelievable. Now, we have Brett Denton here from Boise. Now, he’s actually a Thriver. He lives up there in Boise, Idaho and apparently he worked against us in the state of Oklahoma. He played in the game and actually beat the Oklahoma Sooners in the national championship game. Sir, why would you do that?

Brett: It wasn’t quite the national championship game. It was Tostito’s Fiesta Bowl.

Clay: Tostito Fiesta Bowl.

Brett: We can call it whatever we want though.

Sharita: It felt like a championship. It felt like one.

Clay: Can I say this? Any time that we play any game, it’s a championship.

Brett: Got it, okay.

Clay: That’s how we are. We’re sold out over here in Oklahoma. No, but seriously now, so you played in that game and you were responsible for some of that victory sauce.

Brett: I was responsible for a little bit of it, yes.

Clay: A little bit of that. Now, what do you do now? Tell us about what you do and how people can get a hold of you.

Brett: Yes, absolutely. I own a gym. t’s called Kvell Fitness & Nutrition in Boise, Idaho. Also, what I do on a nation-wide basis is I coach executives, entrepreneurs, business owners to reach peak levels of performance, whether that’d be in their family, in their business, in their sport, whatever it may be. I can be contacted just by calling my phone 208-991-6537.

Clay: One more time, that phone number. One more time, just kind of slow like a pro, because I’m trying to write it down, try to driving. The congress has passed laws that state where I can’t text and drive, but I can write and drive.

Brett: Yes, absolutely.

Clay: So I’m writing and driving. Here we go.

Brett: Yes. 208-991-6537.

Clay: Boom. Now Thrivers, we’re talking today about the AirBnB story. How three dudes went from renting air mattresses to becoming a billion dollar business. Now, I told you guys they had the idea in 2007. They said, “Hey, we can’t afford rent in San Francisco, maybe we should promote our house for so, maybe for Craigslist or whatever.” They had three people, two dudes and a lady, show up. They rented it out for 80 bucks a piece. Then in 2008 in August 11th, they launch a website called airbedandbreakfast.com. Sharita’s says, “Wouldn’t it be could if you could see that site back in the day?”

Sharita: Yes.

Clay: Shar, where could people go? I’ve shown you the tools to the keys of the universe. Where could people find it?

Sharita: He show me the tools. You can go to archives.org and then when that comes up there’s this little screen at the top that says “wayback.” You type in the website that you want to see and you pull it up. We did that during the break and the website actually looks really good.

Clay: It looks really good, from the very beginning.

Sharita: It finally came up, but you have to click on the bubble after your search. I didn’t know that part.

Clay: Now, I’m going to tell you a little story in just a second, okay? So what happens is in 2007, they start to say, “It could be a thing. We’ve rented it out, we’ve got data.” We got two dudes, one lady. Boom. This is data. It’s three pieces of data. They say, “Hey, you know what? We’re going to call our former roommate.” Nathan was a former roommate.

So, you know how you have roommates where you’ve rolled together, you stick together for a long time? I don’t know the dynamic. I can’t get into that mindset. But in my mind if you’re a former roommate, there’s a reason. I mean, there’s a lot of times where you go–

Sharita: Well, you have great stories about business building and your roommates.

Clay: What happened is, I’m just telling you, I went through three roommates, all my fault. But if you’re someone who’s a former roommate and you say, “It’s time to move on.” It’s because you’re like, “I can’t live with you,” usually. Or you get married or something happens, but the thing is they reached out to Nathan and they said, “Nathan.” And his last name, I’m going to spell it for you.

Sharita: It’s amazing.

Clay: It’s B-L-E-C-H-A-R-C-Z-Y-K. They say, “You’re supposed to practice the pronunciations before the show.” Yeah, you try to pronounce that. I locked myself into a room for like a week trying to practice it. But anyway, so in 2007, they were pumped up. They had Nathan, he built the site. He’s a web developer. Their first site was a pro site. They go to South by Southwest. For those of you who don’t know, it’s in Austin, Texas. It is a huge technology conference. It’s one of the biggest in the country. They go out to this thing and they got a trade show booth. Brett, have you ever had a trade show booth?

Brett: I have, yes.

Clay: Shar, have you had a trade show booth? You’ve been in one?

Sharita: I’ve worked in one before, yes.

Clay: Okay, so you got the banners going on. You’ve have trussing. You got a video playing. You got what business cards. Brett, do you have like trifolds? What kind was your booth?

Brett: Yes, triflold brochures. Yes.

Clay: It’s a triflold or the trifecta. People are walking by, they’re trying to get food samples and all that. Everyone feels like, “When I go to the trade show, I’m going to kill it. I’m going to kill it.”

Sharita: Dominate.

Clay: By about noon, you’ve been on your feet for like seven hours and you’re just like, “I don’t know if I like this tradeshow.” Well, they killed it at the show. They dominated the show. They did so well in fact they sold an entire tradeshow they spent thousands on. Beautiful website. They had two bookings, two bookings.

Brett: Killed it.

Clay: Two bookings. Two, they just kill it. I mean not only do they have two, but it was almost double what they had before which is three, right? They have two. I mean could you imagine now the feeling of what it’s like to go to a trade show to travel from where you’re currently living in San Francisco. Let’s do the math. Just what does it cost from San Francisco to Austin? A lot. Time, energy, money, call the site, you travel and you sell too.

How many people listening right now would go, “This is good data. We have doubled the business. It’s time to move on to the next level.” I mean how many of you would hear in your ear, “Yes, you’re on the right path,” very few. You have to do it right now. If you’re listening right now, you got to ask yourself if this was your story, would you keep pressing on? Would you do what Brett did as he mentioned in the previous segment? Would you move in with your sister? Would you have your car repoed? Would you be willing to do what it takes to build a successful business?

Now, today Brett Denton, if you Google Kvell Fitness, that’s K-V-E-L-L Fitness, you will see the man has 500 people that go there to work out on a weekly basis, monthly basis members. Would you be willing to live with your sister and have your car repoed? Would you be willing to go to South by Southwest and sell two something’s or are you going to go, “I don’t know. It just didn’t seem like it’s worth [unintelligible 00:21:50] very good.”

Let me tell you why. The majority of people would quit right then. They would quit. Not you though thrivers because you are at the right place at the right time. You are listening to the Thrive Time Show during your drive time home. Stay tuned.

[music]

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Clay: You’re listening to the Thrive Time Show on Talk Radio 1170 .

Clay: All right. Thrive nation welcome back to your inspiration station right here. You’re listening Tulsa’s only local business show. It’s the Thrive Time Show and the audio dojo of mojo. We’re always broadcasting from the left coast of the Arkansas River but today we are in the man cave, yes. An undisclosed location where I choose to be undisclosed. My name is Clay Clark and I am a business coach. I’m the father of five human kids.

I’m a man who has matriculated several chickens to full maturity, many of which have been abducted by raccoons but I have coached several to success. If I say several maybe one or two that have not been eaten by the raccoon race. But, I’ve had success as a business owner and a business coach. I was a former SBA Entrepreneur of the Year because I wasn’t focusing on chickens. I am joined here today– I’m always joined with Dr. Robert Zoellner but today he’s out expanding his vast entrepreneurial enterprise. Today, I am joined with the hostess with the mostest Miss Sharita Bent. How are you?

Sharita: I’m great.

Clay: I’m joined here with Mr. Brett Denton all the way from Boise.

rett: Yes, sir. Yes, sir.

Clay: Can you tell people a little bit about the business of businesses that you’re involved out there in Boise Idaho, the potato state?

Brett: Yes, absolutely. I got a fitness business called Kvell Fitness & Nutrition and we got a performance coaching business that helps business owners, entrepreneurs, peak performers reach their peak.

Clay: Now, here’s the thing is Brett has a story. He came from– He started at the bottom, okay, kept working, working hard. Working and he’s built a very successful company today. We’re going to get into that just a little bit. But today’s main focus is we’re talking about the Airbnb story. This is a billion-dollar business started by three dudes who went from renting air mattresses to be billionaire business owners. Unbelievable.

If you’ve just missed the earlier segments, you can go back to thrivetimeshow.com and listen to the entire show, thrivetimeshow.com. But now, we find ourselves in 2007, they go to the South by Southwest Conference convinced that their idea is going to be awesome because they sold, they rented their room to two people, two dudes and one lady for 80 bucks a piece because they couldn’t pay their rent. By the way, they rented out their apartment so they could pay the rent. Therefore, they had to live inside a closet.

Then they’re like, “Okay, this is what we’re going to.” They go to the South by Southwest Conference. They only sell two reservations. In 2008, to help fund the website, they created Obama O’s. For those of you who are going, “What are Obama O’s? I thought that was a– Now, why is it– This is a political show. I don’t know if this is the right show.” No, this is not a political show. This is a business show. It’s business school without the BS.

But these guys started Obama O’s, the cereal. They created this cereal right before a major event because what happened is in San Francisco– San Francisco, it’s a big, pretty liberal, pretty democratic, it’s heavily populated by Democrats. They had a big political event coming to San Francisco. They decided to make these Obama O’s. Now, Shark, are you curious about how they made their own cereal line?

Sharita: I am but I also want to point out for people that they were equal opportunities. They represented for the Republicans too and they made some Captain McCains.

Clay: Which didn’t sell it all.

Sharita: Yes.

[laughter]

Clay: No. But they did sell maybe two boxes.

Sharita: They tried, they tried, they tried.

Clay: No, seriously. When you look it up, it’s historical fact. They didn’t sell any of the Captain McCains. But the thing is, they want ahead and made these Obama O’s. What they did is they would go to the store they would buy the generic cereal. You get that cereal, probably yellow box or something.

Sharita: The big bag.

Clay: Big bag.

Sharita: Big bag.

Clay: The big bag? You get the bag.

Sharita: I want the bag, yes.

Clay: It’s even cheaper if in the bag.

Sharita: Yes. [laughs]

Clay: It’s in the box, that’s not a good deal, right? The ultra– I forgot because I remember growing up as a kid, you had all the yellow boxes. I’d open up my cupboard, it’d all be yellow boxes. They always say great value.

Sharita: Sure.

Brett: Yes.

Clay: It’s supposed to be a great value. It was a great — every brand is a great, really?

Sharita: Great value.

Clay: Wow. I guess now, it’s in a bag. They bought the cereal in a bag. They take the Obama O’s. They take that bag and they put it in the box that they had made. So you’re like, “You mean they didn’t even make their own cereal?” Yes, because a real entrepreneur, it’s all branding baby. Now, they’re selling these boxes of cereal. Guess how much maybe they’re selling them for. I mean if you had to just speculate?

Sharita: Sure. I would guess maybe eight to 10 bucks. That’s what I would guess.

Clay: Brett, how much would you pay for some Obama O’s?

Brett: I would say five to 10 bucks, yes.

Clay: See this guy, he shows his political bias obviously. I would pay like 90 for that. Guess what party I’m a part of. I paid 90 for Obama O’s. But seriously, they sold this $40 a piece. Yes. They generate $30,000 of money.

Sharita: Suckers. I’m like the people who bought them. [laughs]

Clay: Paul Graham who is the founder of Y Combinator, okay? Y Cominator, if you Google Paul Graham. This guy started Dropbox. “Dropbox.com? You mean the billion-dollar business?” Yes. “I didn’t know that.” Reddit.com. “Reddit, Paul Graham? You mean Airbnb the same guy?” Yes, they attracted the attention of this guy, Paul Graham. Paul Graham says, and I’m repeating this. You can Google this historical fact.

He says to Brian and he says, “You guys are like cockroaches,” and they said, “What do you mean?” He says, “You guys won’t disappear. You guys keep coming back. I mean your funding, your Airbnb business, air bed and breakfast by selling Obama O’s?” He sits down with them and he says this, he says, “Guys the first thing,” this is what is what Brian Chesky said in an interview. I’m reading quote. He says, “The first thing Graham,” at this point they’re buddies, it’s like, boom, “My buddy Graham,” boom. He says, “The first thing Graham told us was it’s better to have a hundred people that love you than a million people that sort of like you.”

Sharita: That’s good.

Brett: Yes.

Clay: “Find a hundred people that love you.”

Sharita: That’s good.

Clay: Brian’s like, “I thought we were trying to make money here? Oh, good deal that we didn’t have a million people because we don’t.” So he invests $20,000 in them. They just raised 30,000 doing cereal. So like, “We’re on a hot streak. We got 30, now it’s 50, in San Francisco. We’re living in our closet, this makes sense.” Remember they rented out their own house. Imagine you’re living in Tulsa right now and you’re living in a house and to make ends meet, you go ahead and rent out your own house. Now, you’re living in a closet. I mean to what end? Ridiculous. Well, I guess they give a good credit.

Sharita: I’m like, “Don’t fart,” you know what I’m saying?

Brett: Yes.

Clay: Yes. Unbelievable.

Sharita: Was it two of them in one closet. I want to know so many details.

Clay: There are so many details there. They get the $20,000 of funding. When we get back thrivers ,we’re going to talk about– we’re going to explain to you what they spent the $20,000 on. Then we’re going to get into Brett Denton. We’re going to pick his brain and ask him during that time in his business when he thought, “Should I sell these Obama O’s or should I just fold up the tent? Should I repackage the cereal or should just end it all? I mean is it worth it? Is it really worth it?” Because every entrepreneur has hit that part of their career at some point. Thrive time show, you want to listen to your Thrive time show during your drive time home.

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[music]

Speaker 1: You’re listening to Thrive time show on Top Radio 1170.

Clay: All right thrive nation, welcome back to the inspiration station it’s the Thrive time show during your drive time home. And yes, this is the business school without the BS experience that you’ve been looking for. You’ve been working hard all day. A lot of you have been working for the man. You’ve been working for the man.

In fact, according to Forbes, 57% of you want to start a business. Then, a lot of you, “You are the man.” Like, “I am the man. I’m the man. There’s nobody more the man than me, but I, holy crap, I work all the time and my business owns me. I don’t even own my own business, what’s going on?” What happens here is we are going to teach you how to start and grow a successful business but specifically today we are talking about the Airbnb story. Airbnb. Shar, have you ever stayed in the Airbnb?

Sharita: Yes I have.

Clay: Explain it to the people listening, just quick, kind of layman’s term, what is Airbnb?

Sharita: Sure. You go online. It’s air bed and breakfast and you can rent a room in someone’s house. You can rent out an entire house. Some people, you can rent out a floor, a loft. You can rent anything that you can imagine.

Clay: We have got Brett Denton in the house. He flew in all the way from Boise, Idaho. He’s a thriver. He’s got a very successful business. He’s a very successful entrepreneur growing his business. Brett Denton, he does performance coaching. What he did is he started the business that teaches people how to get in physical shape, right? It did very, very well called Kvell fitness. But then over time, he was like, “Hey, a lot of my clients are going, ‘Hey could you help me with performance coaching to optimize my schedule, how to better manage my time, how to be more focused at work boom, boom boom.’” We started working with him in that capacity. He flew all the way in and he chose to stay in an Airbnb, how perfect, Brett?

Brett: Yes, I know right? Perfect.

Clay: Brett, are you like a paid endorser for Airbnb? You trying to–

Brett: I wish, yes I wish.

Sharita: We didn’t plan that either.

Clay: You didn’t. That’s just real talk.

Sharita: We did not plan it. It just happened.

Clay: Real talk, real Facebook live and it’s a real man, not a hologram. It’s not some old school 2pac concert with a hologram. No, this is not Michael Jackson hologram, it’s real. This is a real show. Okay. But seriously, if you’re on Facebook live, you’re in for a visual dojo of mojo. When you just look at this man, he’s just so beautiful. But here’s the thing, it’s 2007, the Airbnb guys, they get this concept. They say, “Hey, Joe.” There’s two guys, one guy’s name is Joe. He’ says, “Joe. Hey Joe. Here is the deal, we can’t pay rent.” He’s like, “Okay, why don’t we just rent out a room in our house.” “We only have a room.” “Okay. We’ll just rent out the whole apartment then?”

They rent the apartment to two dudes and one lady for 80 bucks a piece. Next thing you know, they go, “This could be a thing.” They called their former roommate, Nathan. They said, “Nathan, can you build us website?” He builds a website. They split all of their money. They go to South by Southwest. At the conference, they try to sell it. It sells so well, they doubled their sales almost.

They sold two reservations, kind of a sad time. Then they set an amount of money. Now, they started selling Obama O’s, “Obama O’s? What are those?” They took Cheerios, old school generic Cheerios, take them out of the generic bag, put them into a box they’ve created. They’re funding their business. For those of you who are political, I thought, “Was it McCain running at that time too?” Yes, they made McCain. Was it Captain McCain’s?

Sharita: Captain McCain’s.

Clay: They took all the money they raised by repackaging cereal. Now, somebody is– Because this the thing, some people are listening and you’re not listening. You’re listening but it’s like a BB, I’m shooting a BB in a battleship, but it’s like, “Bing.”

[laughter]

[unintelligible 00:35:04]. That’s how they’ve taken in their knowledge, “Bing,” they’re going, “But do they have a business permit?” “No.” Bing. “Do they have an LLC?” “No.” Bing. “How did they get their employees, were they following the Fair Labor Act?” Bing, “No, these are dudes living a closet.” Someone says, “Well, that’s not ethical.” Okay.

Steve Jobs were did he start his business? I’m going to go on a brief, just a brief rant, because I want to help you. I want to get down to your deep core, then I’m going to pitch it over to my good friend Brett Denton because some of you all– We’re in Oklahoma. Some of you all need to hear this. Some of you just need to get real. I’m going to give you some real talk and I hope this can just to sink into your head.

Here we go, Google started in a garage, “Did they have a permit?” No, it’s in a garage. Larry Page and Sergey Brin are graduates of Stanford. They rented out at a garage with their friend Susan. “Susan, was she a big corporation?” No. We move on, Apple started in the garage. Steve Jobs is not wearing shoes, right? But Ron Wayne and Steve Wozniak, they are showing up, they’re going, “Your feet smell weird.” They have a– Bing. “Did they have a permit?” Bing. “Did they have an ALC?” Bing. “Did they have a permit?” Bing. “Do they go to a local small business conference and get all their papers together to minimize their risk?” No. These are real entrepreneurs.

Amazon started in the garage. He runs out of money. His mom and dad– Jeff Bezos, he says, “I’m out of money but I wanted to see if you guys would be willing to give me all of your money?” They gave him all $300,000 of their retirement to fund the business in the garage. Walt and Roy Disney, Walt had gone into bankruptcy they started yet again in the garage.

All I’m saying is if you have a garage, you can start a successful business. You don’t have a garage, you have a closet. These homies all started in a closet. Brett, did you ever get to a point in your career where you are going, “I’m in the garage. I’m like in the mental closet. I am basically ready to just mail it in.” When did you get that mean? Did you ever got to that point when you were starting your successful company where you go, “I don’t know if it’s worth it.”?

Brett: Yes. I think I’ve been there several times every other week for a while there, but the main time I was over $100,000 in debt.

Clay: Oh, boy.

Brett: I wouldn’t tell my parents what I was doing because I didn’t want them to add any negativity to my already negative situation.

[laughter]

Clay: “Brett are you selling drugs? Brett are you–”

Sharita: “I’m making Obama O’s mom.”

Brett: Yes. I moved in with my sister, car got repoed as I talked about a little bit earlier. I had probably about 20 clients. The only problem is those 20 clients were all for free.

Clay: Yes, yes. The big tribe of free people?

Brett: Yes, the whole tribe of free people.

Clay: It has reaped people that weren’t paying.

Brett: Yes, yes.

Clay: “Bro, my six pack abs are sick bro. No money though, bro.”

Brett: Yes, it was great. That’s where I reached the turning point of I either need to do this or I need to get a job.

Clay: I will say, “What is the benefit of owning your own business instead of just having a job even [unintelligible 00:38:21]?

Brett: For me, it was control to do what I wanted to do, to build something that I wanted to build and to not have boss quite frankly.

Clay: I’m going to tell you, some of you who are listening right now and you’ve got the– Can remember back to the day that sweet, old man Obi-Wan Kenobi?

Sharita: Yes.

Clay: How did he talk? Wasn’t he always, “Luke.” He’s European and almost like, “Luke, Luke.”

Sharita: Yes, he was.

Clay: “Come join me. Luke, let’s go–“

Sharita: He was a European on Tatooine.

Clay: “What we are going to do, Luke, is we’re going to join– I’ve got this lightsaber. This is lightsaber. I’m just going to show it to you. Luke, look at the lightsaber.” Then meanwhile, he’s on the other shoulder.

Sharita: Yes.

Clay: “Startup business. Join the dark side. You don’t know the power of the dark side?” And then, “Darth, if you strike me down I’ll become more powerful than you could possibly imagine.”

Sharita: He’s so good.

Clay: Vuu, vuu, vuu. What happens is, is that you right now, listening right now, 57% of you, you go, “Why did you choose the dark side to be the good side?” Because I’m a sick freak. I don’t know. But the point is 57% of you want to start a business and you’re listening to that in your ear going, “You don’t know the power of the dark side. Vuuu, vuuu, vuu.” It could be very scary. It could be very scary to be in that middle because in the middle, it’s kind of like, “I’m starting a business, maybe I’m not. I don’t know want to do.”

Here is the thing. I’m just going to tell you a little encouragement for you is everybody has to start at the bottom. What did these guys do? They made $30,000 Obama O’s. They get the attention of Paul Graham. Paul Graham’s one of the most successful incubators business coaches on the planet. He goes, “Guys, you’re like cockroaches, you won’t go away.” He says, “You guys are like– you guys are awesome. Let’s do this.” He invests $20,000 in these guys, $20,000. Sharita, if you had $20,000 from Paul Graham, what do you think they did with their 20,000?

Sharita: Well, I would think that they would invest it in their business and try to keep moving forward with that.

Clay: Here’s what Paul Graham said to them. Remember Paul Graham says– This is Brian Chesky explaining what Paul said. Paul said, “The first thing Paul told us was it’s better to have a hundred of people that love you, than a million people that just like you. Find a hundred people that love you.” Brian took this to be literal. He’s going, “Hey, Paul Graham has said like, we got to have get a hundred people like us, bro. So we got to like go meet them.”

Their partner’s going, “We built a website. The idea is that we don’t have to physically meet them so they can book online.” No exaggeration, thrivers, they spent all $20,000 on airplane tickets. They flew to meet the six people who had booked a room and they’re like, “How do you hear about us?

Over time they found people said, “It was really hard to use and your photos were weird.” And they’re going, “Why were you coding all night? We were coding all night. We were working so hard.” Until they’re making $200 a week at this point. Three dudes, $200 a week. The people start saying, “Hey, you’re photos aren’t very good.” They start going, “Note to self, appears that the photos are not good. Stat, check. All right. Next person, photos aren’t very good, check. Photos aren’t very good, check.”

“I know what we should do, Nathan, web developer. Why don’t we make the photos look good?” “Oh bro, why don’t we skip the closet tonight and snuggle on a big [unintelligible 00:42:18]?” “This could be our thing, yes. Let’s snuggle. “We won’t even start in this business for year and a half together, bro. I’m sure we’re going to make it. This is awesome, dude.” “Dude, I can smell your feet. Airbnb is going to rock.

[music]

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Speaker 1: Broadcasting from the center of the Universe. Featuring optometrist turned entrepreneur, Dr. Robert Zoellner and US SBA Entrepreneur of the Year, Clay Clark. This is the Thrive Time Show on Talk Radio 1170.

Clay: All right Thrive nation, welcome back to the Thrive Time Show during your drive time home. It’s business school without the BS. Many, many of you have started to say, “What is this show? Where are you from? What are you talking about? I thought this was a political stage?” Let me explain this to you. We have some great political shows during the day. You weren’t talking about Constitutional law. You want to talk about who’s elected, who’s not elected. The future of the country and all the very important things.

That’s great. We have a lot of great programming but if you want to talk about the future of your wallet, hey. You want to talk about the future of your wallet. You want to talk about the future of your monetary system, not the International Monetary Fund but your own monetary fund. You want to talk about growing your business. You want to talk about creating time freedom, personal freedom, wealth. Boom, we talk about it here to Thrive Time Show. It’s a business school without the BS.

My name is Clay Clark. I’m a business coach, a former SBA Entrepreneur of the Year, and also I am recovering. I’m just working through on a therapy, a lot of therapy. Trying to take baby steps. Recovering disc jockey. I started DJ connection back in the day. Today, I’m a partner with Elephant in the Room, Men’s Grooming Lounge. A lot of other businesses partnered up with Dr. Zoellner to start an online school called thrive15.com. It’s an honor to be here with you today.

Today, we are talking about a subject that is so exciting. It is at the history, the timeline of Airbnb. How three dudes went from renting air mattresses to becoming a billion-dollar business. As always, I’m joined here with an assortment of awesome people. Typically, it’s Dr. Zoellner but he’s on expanding his entrepreneur empire today. We brought in — not as a substitute. We brought in somebody who’s really, I would say, an intellectual equal of anyone. It’s Mrs. Sharita Bent. How are you?

Sharita: I’m wonderful.

Clay: We brought in Mr. Brett Denton all the way from Boise, Idaho. We shipped him with a bunch of potatoes. He’s a successful entrepreneur. Brett, for the people who don’t know who you are, could you explain who you are and how they can get a hold of you?

Brett: Yes, who I am? I’m a man. I own a fitness business, Kvell Fitness and a performance coaching business where we help entrepreneurs, business owners, CEOs get a hold of their life and live with their peak.

Clay: If someone’s listening right now, what kind of problems do you solve? What kind of issues, dilemmas do you help them solve in performance coaching?

Brett: Yes, we solve issues where people can’t get a hold of their life. They feel like their life is living them. Their business is living them. They don’t have any family time. They don’t have control of their health. They don’t have control of their wealth. Those type of things is we solve.

Clay: Well, quick reset. We’re talking about Airbnb, these homies in 2007, they can’t pay the rent so they decided to rent out their house to two dudes and a lady. It goes so well, they end up living in a closet and renting their house to other people. They decide, hey this could be a thing. They hire their former room mate, Nathan to build out the site. He builds up a site. They are excited.

They go to the South by Southwest conference to pitch the idea whopping total of two people rented out their property. Which was now they went from three to five, they almost doubled. They realized they were kind of struggle in financially. They ran out of money. They ended up starting their own line of cereal. “Their own line of cereal?”

Yes, they take cereal they bought generically at the grocery store, they repackaged it. They called it Obama O’s. They sell it for 30,000– they sold $30,000 of Obama O’s, $40 a box. They get the attention of a venture capital investor named Paul Graham. They keep pitching to Paul Graham over and over. He helped fund the Drop Box and Reddit. He goes, “Hey guys, listen. You guys are like cockroaches. You keep coming back so I’m going to go ahead and give you $20,000.”

They spent all $20,000 flying around the country. Flying, knocking on doors, meeting with Airbnb users of which there was like 10 saying, “Hey, what did you like about Airbnb and how can we make it better?” They do that. They ended up making $200 a week at this point. Shar, you had a question for Brett about why he didn’t give up, what kind of a mindset. Walk us through, what kind of question you were asking Brett off the air there.

Sharita: Sure. Well it started when you were talking about the successful entrepreneurs that we all admire, Steve Jobs, Sergey, Google, Amazon, all those people who’d never gave up. I just wanted to ask you, Brett, like when you had to move in with your sister, when your car got repoed. You have 20 people. They’re not paying you. How do you keep going? What was inside of you? What was that mindset?

Brett: I think that’s a good question. I think it comes down to two things. Number one, I just didn’t want a boss. I had so much hatred for ever wanting a boss ever again.

Clay: Really?

Brett: I’m not that strange. [laughs]

Clay: I felt comfortable. That’s very weird, okay.

Brett: Number two, at that point, I had started looking for mentors. I believe that I could find a mentor that I could then rely upon.

Clay: You just kept pushing through?

Brett: Yes, just kept pushing.

Clay: When you’re pushing through, what kind of inner dialogue. Were you saying stuff like, “You’re so drunk, you don’t even know. You’re going to just live in this van down by the river and no one will even know that you’re not–” Were you so motivated? Were you like, “Hey, I am listening to every Joel Osteen ever? I listen to all the Joel Osteen. I’ve got T.D. Jakes. I’ve got Napoleon Hill. I’m just positive. I’m a positive life force. Were you doing yoga? Were you wearing yoga pants? How did you stay positive, bro?

Brett: Yes. At that point. It was just action, action, action. I wake up and I would work and I would work all day long. I go to bed and then I wake up and I’d work and I’d work. There was no time for anything other than that.

Clay: Conrad Hilton who started the Hilton Hotel Chain. You mean before Paris Hilton, I didn’t know there was anything before Paris Hilton. I thought Paris Hilton started the business. No, it was Conrad Hilton. Conrad Hilton, he said that — You can Google it tonight. You can verify it. He says that all successful entrepreneurs have a bias for action. Right now, somebody’s paralyzed by analysis. You got that paralysis by analysis. You’re listening right now and you’re going, “I have so many ideas. I just don’t know what I’m going to do.” Check it out, 2008, they’re flying around the country they realize people don’t like our photos. Shar, what do you think they did at that point? You spent 20,000 bucks traveling around the country. All the money you have from your venture capital partner and you discover that no one likes your photos. What would you do?

Sharita: I would get some new photos.

Clay: They went to New York City door to door to take photos of the houses. They took the photos themselves. Were they trained photographers? No and I hope I’m getting to the course. I feel like sometimes I’m just this BB gun shooting at the battleship of just, bing, bing. So many people you’ve gone to college. You’ve gone to whatever and you’ve realized, “If I just get one more more certification, I’m going to be able to be successful.”

Every time you come to me, you fly in, you drive in, you call in. We talk and you go, “Hey, I want to start a business.” I go, “You should start a business.” “I want to.” It’s like a t-shirt company and I said you should. “I want to.” “You should.” “What kind of LLC do I form?” I said, “Listen stop asking me that question. Listen, go out there and try to sell something before you worry about all the legal stuff.

I’ll give you a rule, don’t ever try to form an LLC until you’ve sold 15 somethings. Now, Paul Graham, this is what the advice he gave. This is the guy who started Dropbox, Airbnb. He’s the guy who took them to the next level. He says this, “When I tell founders is not to sweat the business model, LLC, too much at first. The most important task at first is to build something people want.”

For those of you who needed to hear that in slow motion, whaat? For those of you who are going, “What? What are those words that you’re saying? What?” Let me repeat it back. What I tell founders is not to sweat the business model too much at first. The most important task is to build something people want. “Why are you saying it that way?” If you don’t do that it won’t matter how clever your business model is.

You see how clever I was there? It won’t matter how great you– he said it doesn’t matter. You have an LLC . You’ve got a business plan. If you can’t sell it, it doesn’t matter? Shark, you meet people. You work with entrepreneurs. You help coach these people. They fly in, you work with them, you help thrivers you care. I care, we all care. Where do people get this wrong my friend? Where are they getting screwed up?

Sharita: Sure. I think some of it may come from an old mindset. Sometimes things you learn in school, how things need to work. You follow this certain step then you’re going to get this outcome.

Clay: I would never start a business until I had 27 things done. The first is I would have an LLC and after I get my LLC, when I’m going to get done as I’m going to get my– What was it? Oh yes, my papers. I’m going to get my papers and my registrations and my licenses. Then, I’m going to get my catering company started. Then after I get my papers– what was that? Oh no, I’m too old. What for the time? It’s time to die? Oh, I guess I should have started earlier. I guess a lot of people do.

Sharita: I loved that you pulled the glasses down I hope you could see that on Facebook Live. It was the best.

Clay: That’s what happens.

Sharita: Yes it is.

Clay: Is it not?

Shark: It is.

Brett: It is.

Clay: How do we move past it?

Sharita: You always talk about this and Brett just highlighted that with his answer, just action, discipline and action.

Clay: Check it out. 2008, this is a full year and a half after starting the business. They end up making $400 per week. “Why are you saying it that way? Why do you always wha- when it’s supposed to be a W?” Because it’s memorable. Memorable? Homies, I’m a purple cow so you listen to the radio right now, you’re used to this. You’re listening to somebody trying to keep it politically correct. I don’t even know what that is.

Here’s the thing is $400 per week. Shark, what would it be like if you had a business for a year and a half and you and three people are splitting 400 a week and you’re living in a closet. What would that feel like?

Sharita: I don’t want to know really.

[laughter]

Clay: Then how would you feel? You’ve got three partners.

Brett: Miserable. Miserable.

Clay: You’re splitting 400 a week. I’m very emotional right now. Shark, can you read the next part of our time on your point 14? I have to just get myself together.

Sharita: I can. Well, this also happened in 2008. They were rejected hardcore by the famous venture capitalist, Brett Wilson. Brett Wilson he’s the guy who has funded Twitter, Tumblr, Four Square and Kickstarter.

Clay: Imagine what it’s like. You go up there and you say I’m going to meet Freddy Wilson. Freddy Wilson. I’m going to meet Freddy. You know what they’re doing. They’re in the car going, “Freddy Wilson. Freddy Wilson.” If you’ve ever listen to these guys, if you’re a thriver and you ever started a business you would know what I’m talking about.

When you have a good pitch– my wife knows what it’s like for me to get ready for a big pitch. When we get back thrivers, I’m going to tell you when I pitched the founder of Sky Vodka with the preparation that you do when you get ready for the big pitch, it’s beautiful. It’s a beautiful thing. My wife didn’t appreciate I’m sure. She didn’t like me during this time.

“You get focused, you get read for your big pitch. You get a chance to meet up on the top bench of capitalists of the world. This guy has funded Four Square, Tumblr you’re going “We did it. Your friends are [unintelligible 00:55:27] Freddy Wilson and what happens is then you go meet with him. What’s he going to say? What’s he going to do? Stay tuned Thrive Time Show.

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Speaker 1: You’re listening to the Thrive Time Show on Talk Radio 1170.

Clay: All right thrivers, welcome back to the Thrive Time Show during your drive time home. We’re broadcasting today for the man cave, a place where everything is burnable. You can burn anything, you burn paper, you burn wood anything that’s good you just burn it. It’s the Man Cave here at an undisclosed location. It’s the Thrive Time Show remote edition here.

We’re talking today about the success story of Airbnb. How three dudes went from nothing, sleeping on air mattresses to starting a billion dollar business. If you really wanted to know how Airbnb or other billion dollar businesses made it, you can tune in and we teach these things. My name is Clay Clark. I’m the former SPA Entrepreneur of the Year. I have an unhealthy interest in business and I’m here to help you grow a healthy business. I’m joined here with Mrs. Sharita Bent. How are you?

Sharita: I’m wonderful.

Clay: And Mr. Brett Denton. Mr. Brett, how are you?

Brett: I’m unbelievable.

Clay: Here’s the deal. You apparently worked together with the good folks at Boise State. Is that the Blue Turf?

Brett: Blue Turf yes. Smurf Turf.

Clay: It’s Smurf Turf. You teamed up with this Smurf Turf, if you heard, Smurf Turf to team up and you beat Oklahoma back in the day. What was that the nachos, Tostitos, Tacos ball?

Brett: Tostitos yes.

Clay: What was that?

Brett: Tostitos Festival.

Clay: So I’m hungry. I was just mentioning all the food I want to eat here soon. But the thing is that you played on that team.

Brett: Yes.

Clay: You went on and you started the business. Tell us about the fitness business that you started?

Brett: Yes group training business, we help people gain shape. General fitness. We help you lose weight and feel good.

Clay: Where can people get a hold of you if they were to live in Boise right now and they say I want to get in shape?

Brett: Yes. The best thing is to go to our website www.kvellfit.com.

Clay: They can go up there. They can sign up, check it out. It’s a game-changing fitness program and regimen. You’ve done so well helping people with their performance and fitness that people began to reach out to you and go, “Hey, could you help me with other areas like my financial fitness, my mindset, my time management? Could you just– I just need some performance and prove it.”

You’ve said yes and you’ve started helping people and those people refer other people. How do people get a hold of you if they need a little bit of performance coaching outside the realm of fitness?

Brett: Yes. For a little high-level performance coaching action, you can call me at 208-991-6537.

Clay: Oh yeah. Now here’s the deal thrivers, we are talking about Airbnb. They started in 2007. These two dudes are living together. There were three dudes. They shrank now to two dudes. They couldn’t pay the rent. They started renting out their house on Craigslist and such. Two dudes and a lady rented out 80 bucks a piece. Pretty soon they’re living in the closet. They barely able to pay rent. They go, “This could be a thing.”

They hire their former roommate Nathan. Nathan, builds a website for them. They go to the South by Southwest conference filled with their ambition, excitement and optimism. They go, they sell two reservations. Two reservations not having any success, they kind of, “Well, we doubled our occupancy almost.” So they ended up turning these– they took obscure cereal. We’re talking about generic cereal that you could find in the store. They turned it into their own brand of cereal called Obama O’s.

“How did they do it? Did they get a permit? Did they have a license? Did they get it registered? Did they get a trademark? Did they get a logo?” No. They straight up just paid someone to do some graphic design. They made their own box of cereal. They took cereal out of another box, put it in a box, sold it for $40 a box during the time when Obama was trying to become president.

They make 30 grand doing this. Then they go pitch yet again to Paul Graham, who is one of the big Venture Capital funders out there. He helped to launch Airbnb, Dropbox, Reddit. They reached out to this guy and he was like, “You guys are like cockroaches. You won’t quite coming back.” He invests 20,000. That’s so small $20,000 in them.

They take the 20 grand and they spend it. They travel around the world. They discover that Airbnb people — they discover that people aren’t using Airbnd because people are saying they don’t like the photos. They changed the photos. Now, they start having rapid growth. They’re going from making $200 a week to $400 a week. Now, they get a chance to pitch to Fred Wilson who is one of the top Venture Capital Funders of all time, one of the top Venture Capitalist out there.

He’s the guy who funded, Twitter, Tumblr, Foursquare, Zynga, Kickstarter. He rejects them. He shuts him down. He says, “Not going to do it.” He shuts them down and they’re going “Why did you sound like Darth Vader? I thought you were very nice.” He says, “Well, I am very nice until I become Darth Vader and I shut you down.” The thing is he shuts them down, now they’re like, “Oh no.” But then Barry Manilow’s drummer — they go Barry Manilow–

How obscure is that? Barry Manilow who’s a jingle writer turned pop star is kind of where we’re stretching cause your like, “Barry Manilow’s drummer rented out our place though.” He rents out his whole house. They go, “That’s a thing.” They’re able to use that little bit of credibility, that little social proof and people start to go, “Barry Manilow’s drummer uses Airbnb. I should use Airbnb.”

Then in 2009 they changed the name from airbedandbreakfast.com to Airbnb. This is in March of 2009. The site’s expanded. They’ve learned more from their customers. They’re now renting out tree-houses, teepees, igloos, private islands, the whole deal, true story. Now, they get the media’s attention because they’re renting out an igloo. Where else can you rent out an igloo or a tree-house or a private island?

But I’m going to tell you how it feels. When you pitch to somebody and you get rejected, here’s the deal, back in the day — this ends positively for me. But the guy who was the founder of Skyy vodka. He reaches out and he says — his assist says, “Hey, Mr. Kanbar would like to meet with you about helping him market his properties.” If you don’t know Mr. Kanbar, K-A-N-B-A-R, he owns one-third of downtown Tulsa.

He invented Skyy vodka sold the thing for about $650 to $700 million. He claims — there’s a court thing you can look into it. But he claims that his partner bought downtown Tulsa without his knowledge, a third of it. The city — the Chase Tower, the Bank of America Tower, these big tall iconic buildings, he owns them now.

I’m like, “Oh man, I’m going to pitch this deal.” What we did, I’m going to open up my man fridge in the man cave here so I can show you thrivers. I’m sorry the audio got a little weird there, but this is what we did. I passed out Skyy vodka bottles to everybody on my team. I said, “Here’s the deal. I want you to put Skyy vodka and orange juice in a red cup, put it behind you so when he walks in the room, act like you’ve been drinking vodka, but you’re trying to hide it.”

Everybody, we have red solo cups, takes orange juice, pour vodka in there with it. When he walks by, act like you’re trying to hide the bottle. We’ve got probably 30 guys doing this. Then I read his entire biography. Vanessa knows this. His entire autobiography, read it once, couldn’t sleep, read it again, had all these notes. Made a super detailed presentation.

He walks in and we, “Hello Mr. Kanbar, how are you sir?” He’s a smaller guy and he walks in the first guy goes, “Oh–” If you’re on Facebook live, you can see me. He goes, “So sorry sir,” and he tries to hide the bottle and he laughs. Then the next guy, “Sorry sir.” We all tried to act like we’re formal, so we’re all in ties, suits and ties. We’re all hiding vodka bottles.

We sit down to do the presentation and we use the Brookings Institute as our — they have a paper on urban renewal. I totally reversed engineered that thing, had a super-detailed PowerPoint detailed, it was awesome, it was sick. I showed him how we’re going to help reinvigorate downtown Tulsa, which we did by the way.

We helped him lease all his downtown space. I get halfway through my presentation. He looks at me and I’ll never forget, he goes, “Mr. Clark, sometimes you need to know when to stop talking.” I’m like, “Okay. Did I talked too much?” He goes, “You’ve got the deal son.” I’m like, “Oh, yes touch down.”

Now, imagine the opposite of that feeling when you go meet with Fred Wilson, the top Venture Capital guy, you’re emotionally pumped up. You’re mentally lubricated. You’re doing push-ups the night before. You’re taking steroids. You’re, “I’m pumped up. I’m going to meet the Freddy Wilson. We’re going to get pumped up.”

Then you meet him and your friend’s go, “How did it go?” You go, “We got shut down.” “What was that bro?” “We got shut down.” “You got shut down?” Stay tuned, Thrive Time Show.

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Speaker 1: Live local, now, you’re listening to the Thrive Time Show on Talk Radio 1170.

Clay: Hello, thrive nation Oklahomie’s, people in other countries, people in other planetary systems, people in other universes, other galaxies, people in other vast areas of the ether that surrounds us all, welcome to the Thrive Time Show. This is your place to learn how to start and grow a business.

Today, we’re talking about the Airbnb story which is how the guys at Airbnb went from three dudes living on air mattresses to becoming founders of a billion-dollar company. If you miss the rest of the story you’re going to want to tune in, you’re going to want to go to Thrivetimeshow.com, where you can hear the entirety of the story if you missed it.

Basically, 2007 they get this idea to rent out their house because we’re out of cash. Now 2009, two years into the business, these guys get shut down by Freddy Wilson, one of the top Venture Capital people, after they’ve spent all of their money. Shark, Sharita Bent, she’s our co-hosted with the mostest. She’s with me tonight. Mrs. Sharita, how would you feel if you’ve been working on something for two years and you get shut down by the top — in your mind, you’re going to meet Yoda. Imagine your face to face with Yoda. He’s going, “No, no, fund you I will not. Bad idea it is.” How would you feel?

Sharita: I would be sad and disappointed for sure.

Clay: You would?

Sharita: Yes.

Clay: Now Brett Denton, successful entrepreneur from Boise Idaho. Sir, how would you feel?

Brett: Yes. I’m going to have to agree with that one.

Clay: You guys would feel a little bit down.

Sharita: Definitely.

Brett: Yes.

Clay: This is what happens, 2009 they’re out of space, the people start booking. Oh, they start booking one-by-one just poop, a little bit of email coming in, poop, another one, they’re going dude that’s two today.

Sharita: This is after the Manilow drummer, right?

Clay: Yes. Barry Manilow’s drummer booked with them, booked his whole house out. They’re going, “Well, at least we got Barry Manilow’s drummer.” “What’s his name?” “It doesn’t matter.” “We don’t even know for sure he even had a drummer? Can we verify this?” “Don’t worry about it, we’re on a roll.” The thing is 2009, imagine they’re just barely struggling. They now are starting to get some revenue. They’re barely making it. Revenues coming in just a little bit little.

Imagine just the sound of an email coming, boop, okay. They’re like, “Dude, we booked something. It’s crazy.” Then, boop, well pretty soon they go, there’s another boop, boops, that we now have to hire some people.

Now, in their crappy apartment on Route Street, they have 15 people. These are the guys who used to be living in a closet, they rented out their entire house as a way to pay rent and they live in a closet, now they have 15 people. These are people who apparently don’t value space, those 15 people working together.

Sharita: I could not deal with them, I could not.

Clay: Yes. All 15 employees are working in their bedroom. They’re just living their because they can’t afford office space. But here’s the deal, Google started in their garage, Apple started in the garage, Amazon started in the garage. You’re going, “Well you just keep saying garage.” Disney started in their garage, Hewlett Packard started in their garage.

“You just keep saying garage.” Listen, the garage mahal is where you all need to start. I’m going to repeat that the garage mahal is where – it’s Oklahoman – where you all need to start. That’s how you do it, okay, but I’m telling you you’ve got to do this you have to start somewhere.

2010 comes along, November 2010, early 2011. The company to continues to experience rapid growth because they’re starting to sell some things. Now, Sharita, if I’m doing the math, 2007 you know, when you look at 2010 you take seven from tenant and how long have they been working on this.

Sharita: They’ve been going at it for three years.

Clay: Yeah. Now 2011, early 2011, this is four years. The company continued to experience growth and they raised 7.2 million dollars in series a funding from Greylock partners in Sequoia and announced that they had 700,000 nights booked out. Eighty percent occurred though in sick in the last six months.

Sharita: Wow.

Brett: Wow.

Clay: So they had nothing and then —

Sharita: Suddenly.

Brett: [unintelligible 01:11:09].

Clay: That is always how it happens. The thing is on the other side, right when you’re one step away from giving up. That’s when most of the success happens.

Sharita: Yeah.

Clay: But a lot of people begin to quit right before that.

Sharita: Right when Yoda says no. That’s [unintelligible 01:11:28].

Clay: So why is that? Sharita, in your mind, you know a lot of people, a lot of you got motivated, a lot of people are good people and they just quit. What’s the deal?

Sharita: Well, I think, number one, you have to be really have a strong personal conviction. That’s what I heard Brett talking about. That’s what you hear from entrepreneurs who have been successful. I know that about you Clay as well. You have your own personal truth and conviction about, I’m going to do this I’m not going to give up on this. I think that’s the first level. You have to have that.

Clay: I’m not going to quit.

Sharita: Yeah, no matter what.

Clay: So what year did [unintelligible 01:11:57] 2007.

Sharita: Seven.

Clay: Now 2007, things are taking off and those of you who ever Google, just Google Airbnb tonight. They’re taking off. Now, my wife is on the set today. She’s on the man cave today because we live here in an undisclosed location. She’s here, but i’m just going to ask Vanessa rhetorically. But could you imagine what it would be like to have worked on a business from 2007 to at this point, okay, it’s 2011 and then to get a class-action major lawsuit against you from almost every major city who says it’s illegal to rent out your home. How would that feel?

Sharita: Worse than Yoda. I’m like worse than Yoda saying no, right?

Clay: No and you’re like, “Oh no.”

Brett: Yes.

Clay: You can imagine open up —

Sharita: She’s says stressful. She’s says stressful. She’s says stressful.

Clay: Could you imagine opening up your inbox and going, “Hey bro.” “What’s up Brian? What’s up Brian?” Here’s the deal, we’re being sued.” “Oh it’s cool. It’s cool man. We got we got funded 7.2 million dollars from Greylock, we’re being sued for like hundreds of millions of dollars.” “From who?” Probably just random people, right bro? upset random people.” “Entire cities, like the city government you know like the people who are in charge of the planet, you know in America.”

I mean imagine the sinking feeling. But check it out, YouTube ,Google them tonight. Has YouTube ever been sued? Yes. Has Google ever been sued? Yes. If you start a successful business, will you ever be sued? Yes. And if you’re going to have success, will you ever be stressed? Yes. So check it out, if you want to have success, this is how it goes. You go from stressed to some success and into some blast, that’s not working. But you start with that stress.

If we come back thrivers, we’re going to talk about how Airbnb has taken it to the next level like Aaron Neville octave. Boom.

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[music]

Speaker 1: You’re listening to the Thrive Time Show on talk radio 1170.

Clay: All right thrive nation, welcome back to your inspiration station, your audio dojo of mojo. The place where you go to learn what you need to know to start to grow a business. A lot of a lot of people have been telling me, they’re going, “I was driving down the road one day and then it was like a spiritual.” I got slapped in the face and I’m going, I didn’t know that. I did not know that.

I’ve been living life. I’ve been going to school, checking the boxes ,doing the thing, But I did not know that and here’s the thing. I’m going to give you some things I want you to know and I want you to marinate on this. I’m going to read them off to you one by one. I want you to just understand the complexity of what I’m talking about, but the simplicity of it. okay. Because complexity does not scale but simplicity does, but it requires a very pigheaded or a very complex mind to grasp this concept.

Dr. Zeollner is not on the show today because he’s out expanding his vast empire. Between he and I, there’s an auto auction called z66.com, z66aa.com. They’ll sell thousands of cars every Friday and guess what? I’m not out selling a car. He’s not out selling a car then he’s invested in a bank called bankregion.com. He’s also invested in an optometry clinic. I have a photography company called epicphotos.com, actually the world’s largest wedding photography company.

Elephant in the Room, men’s grooming lounge exists. I go on and on and on. There’s Disease Sleep Center. There’s Sprick Reality. There’s always companies I’m involved if he’s involved with and they’re all growing. Check it out, I’m not actually selling the real estate park in the car, selling the thing, putting on the glasses.

We built systems that have the capacity to work without us. That’s why this story today is so phenomenal because these three dudes, they went from sleeping on air mattresses to building Airbnb into the billion-dollar business that it is today.

If you missed the earlier segments, I’m going to give you an abbreviated version basically in 2007, they are realizing we live in San Francisco. They’re going, “We live in San Francisco and we can’t afford anything. Oh my Gosh.” Imagine what it’s like getting your utility bill in San Francisco or your rent bill and you go “oh no” and you you can’t afford to pay it.

So they said, “Here’s the deal. We’re going to rent out our apartment.” They rent out their apartment to two dudes and a lady, kind of weird but two dudes and a lady. They rented it out and basically they rented out for 80 bucks a piece and the end up we’re bringing in 240 extra dollars. They’re sleeping in the closet. They go, “This could be a thing.”

They take all their money. They hire their good friend, Nathan, he builds a website. They go to the South by Southwest Conference. They have almost no success. They only sell two bookings and then they start recycling basically cereal.They take cereal like Cheerios or generic cereal or generic O’s of some kind. They take those, they keep them in the bag. They put it in a box and they start this thing called Obama O’s.

They start marketing Obama O’s like President Obama O’s, like President Barack Hussein Obama O’s. They’re starting to sell these Obama O’s and they raised just enough money selling them for forty dollars a box during an election year that they stay in business. They go pitch to Paul Graham. Paul Graham, “Who’s Paul Graham?” Paul Graham’s the guy who helped launch Dropbox and Reddit.

Paul Graham said, “You guys are like cockroaches you won’t stop.” He gives them $20,000. They take the 20 grand. They fly in a plane all around the country. They discovered that people don’t like the photos on Airbnb.com and that’s why they’re not booking. So they fly back, shoof ,and they fixed the photos and fly back, shoof, out the New York and I take more photos, shoot, they fly back there out of money.

They’re making $200 a week. They put the new photos up. They’re making $400 a week and they now are starting to sell enough. They get 15 employees to work together at their house. Now, they’re basically all living together in some sort of weird branch Davidian Waco Texas communal. “Do we all need to share our clothes? We all need to share clothes. We all need to share our lives and our clothes because we’re all going to make Airbnb together.”

It’s like cult-ish at this point. It’s weird. I mean wouldn’t it be weird working with 15 people in a house?

Sharita: In a bedroom definitely, definitely.

Clay: It’s not weird? It’s not weird for you, Brett?

Brett: That’s weird.

Clay: Okay. Mrs. Sharita Bent here.

Sharita: Yeah.

Clay: She’s just the thrive15 hostess with the mostest here and we have Mr. Brett Denton, a successful entrepreneur based in Boise Idaho. He started a company called Kvell Fitness. It’s done very, very well and so they’re on the show today but that’s weird for you guys.

Sharita: Definitely. And sleeping in the closet.

Brett: It depends on what you’re into.

Clay: [unintelligible 01:19:22]?

Brett: That’s always your answer, right?

Sharita: True, true.

Clay: For me man, I’ll tell you what I dream of — you’re talking about dreams. I’m dreaming of 15 people living together on air mattress then we rent it out with a website. To me, that’s cool. I mean He’s throwing some Obama O’s were talking like with that’s great, Leroy. I mean that’s that — very few people have that dream.

What happens is they work hard, they work hard and grow the business. So now in 2007, they started. In 2011, they just start making some money and then they get sued. Sharita, they get sued from all of these cities. They’re still being sued.

Sharita: I didn’t see that coming. I didn’t see it coming. I thought they had made it.

Clay: You guys got to Google that’s right now. They’re all being sued. I’m going to give you– Someone listening to this right now and you go, “That’s a weird story.” I’m going to give me a wierder story. Then Sharita has got some great info for you. Sharita, do you know who Raahzel is?

Sharita: Raahzel?

Clay: Yes.

Sharita: No. I don’t think so.

Clay: The Roots. We all know The Roots crew.

Sharita: Yes, yes.

Clay: They’re the band for– I believe Jimmy Fallon?

Brett: Yes.

Sharita: They are awesome.

Clay: They have a guy who beat boxes. He’s a human beat box. Now, imagine what it would be like when you’re around your friends and you’re like, “Hey, Raahzel, what did you do this weekend?” You’re like — They are like, ” Could you please stop making that noise with your mouth?” This is what Raahzel did. Now, listen to this right now [unintelligible 01:20:48] and tell me this is a weird deal. [sounds]. Human voice. Human voice.

Audio clip: Could you add some more volume, please?”

Clay: This is all one man. [background sound]. One Mike. This could be your vision, it could be weird. [background sound] You want to be a beat boxer? You want to build Airbnb. People say, “You’re weird man.”

Audio clip: A little more volume, please.

Clay: He wants a little more volume. It’s only once. He’s working it. Here we go.

[background sound]

Here we go.

[background sound]

Now in 2007, you start that business. You get rejected. No one’s booking, you go to South by Southwest.

Audio clip: Beat that.

Clay: Nobody likes you. You get rejected by Freddie Wilson. Freddie Wilson venture capitalist rejection.

[background sound]

Now, people in 2009 are going, “I’ll book it. I’ll book it. Okay. Barry Manilow’s drummer booked it. I’ll book it. Okay. I see what you’re working with.” 2010, people are starting to book. Now real quick, 2010 they get set up worth $7.2 Million of investment capital. 2011, they were at $112 Million of investment capital.

2013, these homies are now making some cash. But this is his job now. Listen to that.

[background sound]

Thrivers, are you hearing this? This is one man. Listen to this. I’m cueing ahead. He’s filling in arenas beat boxing.

Audio clip: Faster. Faster. Give yourself a wonderful round of applause.

Clay: Here we got a man who’s going out in the arena. He’s going out in the arena as a beat boxer. How crazy is that? You go from a crazy person with this dream to make sounds with your mouth and you’re so poor. All you have is a microphone and your voice and you just focus on it. You get to be so good that if you Google right now R-A-A-H-Z-E-L beat boxing Red Bull.

You can check it out. This guy filled up entire arenas and the stuff he does with his mouth, I just want to play more audio clips. It’s so good. It makes me cry almost. It’s spiritual to me listen to this.

Audio clip: Faster. Faster.

Clay: How’s this possible? It’s one voice but now people cheer for him. Airbnb, now people cheer for them. DJ connection, I started that in my dorm room. Now, people cheer for it. People are going to cheer for it. People are going to cheer for your business. People, if you’re listening right now, I promise you if you’ve refused to quit and you’ll listen to the market and you’ll continue pivoting and continue learning and continue–

Just this is the process, the four-step process. Someone needs to write this down. You define what you want to do, then you act, then you measure, then you refine. Here we go you define, you act, you measure, and you refine. I’ll bring it back and you define, and you act, and you measure, and you refine.

One more time and you define, and you act, and you measure, and you refine. One more time, there it is. You got it? You got? That’s how it works. Now Sharita, if anybody who wants to define, act, measure, and refine, where do they need to go?

Sharita: They need to go to thrive15.com because it’s going to be really important who you study, who you partner with, who you work with in community, who you learn from, and we have so many mentors who are successful.

Clay: They’re so many.

Sharita: They can teach you. We have the guy who did PR for Nike, Pizza Hut, Michael Jackson.

Clay: Michael Levine, he’s crazy.

Sharita: Yes. We have Rustic Cuff, the owner of Rustic Cuffe.

Clay: Jill Donovan.

Sharita: All these people.

Clay: Teaching you branding.

Sharita: Yes. Giving you all this information. Lee Cockerell he managed World Disney War results.

Clay: 40,000 people.

Sharita: Amazing. David Robinson.

Clay: It’s $20 a month, homies.

Sharita: Yes. It’s a no brainer.

Clay: How could you not do it? I can tell you how you can’t do it. What you can do is you can be a happy hoper. You could hope that someday that other people come to help you and the economy gets better and so good. In fact, the people just help you to start your business for you. Or you could be a diligent doer and you could say, “You know what? I don’t want to go to your website but I’m committing the action.” That’s fine. That’s all I’m asking.

But I’m asking you to right now, to reject mediocrity and to move into a place of success. If you want to learn more about today’s guests, Mr. Brett Denton with Kvell just Google K-V-E-L-L. You can find him. He’s a very successful performance coach. He can help to take your career to the next level. If you want to subscribe to the world’s best business school, just go to thrive15.com. The world’s best business school and as always three two one go.

[01:25:34] [END OF AUDIO]