The Hockey Stick

As a VC you get pitched many hockey stick stories, but infrequently see an actual one.  This week, I came across one in the case of Airbnb (on TC).


This is the graph of summer bookings by travelers on Airbnb.  I assume there are several drivers to this growth:

  • A new market: Airbnb enables a behavior that was difficult to execute before it.  Similar to Uber, its growth benefited from the fact that it created its own market, rather than merely stealing market share from incumbents.
  • Mobile growth: As one of the earliest mobile-first companies, it was always one of the top apps in the travel category in each market it operates in.
  • Social graph: The business model requires a high-level of trust.  Airbnb used the social graph very effectively to provide this trust, and thus benefited from the  virality that social networks open up.
  • Global network effect: Travel is inherently a global market, so in each local market, the global network effect trumps the local one.

As a result, you get the beautiful shape we see above.

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