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Like a lot of great ideas, AirBNB started out as an accident – Brian Chesky and Joe Gebbia were graduates living in San Francisco in 2007, and they were looking for an extra way to make money. A design conference was coming to town, and they figured that at least some of those people would need a place to stay. They thought of renting out their apartment and providing a basic air mattress to the tenants. They put up an ad expecting no replies – but the demand for their apartment was overwhelming, complete with LinkedIn profiles and resumes from the tenants trying to prove they were legitimate. The growth of AirBNB was through building that first leased apartment’s success into a scalable model across America and the world. The company was making billions in revenue, and giving hotels a tough fight for their market share within a few years.
Cut to February 2023, and the Super Bowl was being hosted in Phoenix, Arizona. With football enthusiasts expected to land up over the weekend in hordes, it was expected to be the perfect opportunity for AirBNB hosts to make a neat profit. But the reality was disappointing – Only 52% of available rentals were booked. Ric Kenworthy, who manages 95 AirBNBs through his company Old Town Rental expected to book out all his properties at a rate of $1,200 for a five-night minimum – but even after slashing prices to $500 with a two-night minimum, only 42% were occupied. This is a mirror of how AirBNB was doing in general. After registering its first profitable year in 2022, the company is seeing its revenue decline.
Why is the AirBNB model failing? Well, the very reasons that made it successful are now leading to its decline. The company made it extremely easy for anyone with a living space to earn some extra money. This drove a lot of users to its platform, driving revenue – but with greater numbers, the competition is reducing profits while quality control is also becoming a problem. Here’s my dive into the rise and fall of AirBNB and what it means for you:
While AirBNB is a reflection of real estate woes on American soil, we have something else to worry about that could threaten the strength of the US dollar across the world. I’m talking about…
The Yuan vs The Dollar
The US Dollar has been the world’s Reserve currency for over 75 years, but its dominance is now being challenged. Foreign reserves of the dollar are at their lowest levels, and the world’s second-largest economy, China, just struck a deal with Brazil that bypasses the US dollar entirely. What does this mean for US industry and the value of the US dollar? Watch this video to understand whether we are in the middle of a paradigm shift, and what it means for you:
The Graham Stephan Show
This week, I had not one but two examples to talk about that are inspiring – Shelby Church made just $20,000 shy of a million last year, and her Millennial Money style episode on how she built up her wealth is just fantastic.
The second episode features Jasmine from Baddies and Budgets who made $850,000 last year by helping people save money and leveraging TikTok to go viral. The idea is so simple that I wonder “why didn’t I think of this?” If you’re an entrepreneur, there’s a lot to learn from this one.
And of course, there’s my weekly fix of reacting to Caleb Hammer taking apart the poor finances of a millennial – this time it’s a woman who’s maxed out her credit cards but is trying to fix her situation. There are quite a few money lessons in this one.
Getting punched in the face
And then we had two episodes of the Iced Coffee Hour this week. First, there’s a major change that you need to know about – Jack’s been reprioritizing a bit, and he’s decided that he needs to take a step back so that he can make the Iced Coffee Hour podcast better than it is now. If that sounds confusing, you should check out what he has planned – it’s sad to see him go after such a long spell as my co-host, but I’m excited about his future plans.
And then, there was this week’s guest – Michael Reeves, the only man who’s hit me in the face in a boxing ring. One year after the boxing match, we talk about our experience during the fight, the creator life, travel, how Michael has built a life around doing what he loves, and the crazy projects he has lined up that you haven’t even heard about yet.
So that’s it for my Sunday round-up. For the new folks here, in this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday over all my different channels, and on Wednesday, I will be doing my deep-dive article on one of these topics.
See you next week with another bunch of exciting videos!
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