How Airbed & Breakfast became Airbnb ?

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“Creativity is the solution to all problems”- Brian Chesky , co Founder and CEO at Airbnb

For those who don’t know, Airbnb is an online marketplace where people can lease or rent short term lodging. The $31 billion company does not own any lodging but is merely a broker.

So how did two unemployed friends(3 founder joining a little later) became the founders of a billion dollar company.

 

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Nathan Blecharczyk , Joe Gebbia , Brian Chesky (from left to right)

 

The story starts at Rhode Island School of Design where Brian Chesky met Joe Gebbia. On the day of graduation Joe says to him ‘Brian, one day we are going to be entrepreneurs’. A few years passed and one day in 2007 both of them quit their jobs and decide to start a company together. With absolutely no business idea and a $1000 in bank account and a sleeping bag Brian drove to San Francisco. Turned out the rent for Joe’s apartment was $1150. Strangled with debt they thought of an idea to provide accommodation in their apartment to people coming for a IDSA( Industrial Designers Society Of America )conference in town at the rates that were far less than an hotel. In 24 hours they built a website called Airbedandbreakfast.com and mailed the top design bloggers and in overnight Airbed and breakfast was at the top of the blogger’s page.

An idea that came 48 hours ago to save them from cash crunch was now live on the internet. To their surprise people from all over the world were writing to them. Finally 3 people who came to attend the conference , one of whom was an Indian slept on the airbeds in their living room and became their first guest.

It was then that it struck Brian what if you could book someone’s home the way you book a hotel anywhere in the world.

In 2008 they incorporated the company as Airbed and breakfast. They even called upon their “former roommate ” and “brilliant engineer” Nathan Blecharczyk, to join as the third co-founder of the new venture.  To fund the site they created special edition breakfast cereals with presidential candidates Obama and John McCain as the box designs. At $40 a box they generated $30,000 for company’s incubation. All of this created a buzz and in 2009 Y Combinator invested a whooping $20000 in the company as an initial investment ( they had joined Y Combinator’s 2009 Winter Class) . They were further funded by SEQUOIA CAPITAL . The name was now changed to Airbnb and it offered not only rooms and apartments but also castles, manors, boats, tree houses, private island and even an IGLOO, yes you heard it right.

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Today Airbnb is the No.1 lodging website in UK. Many people who were on the brink of losing their homes through foreclosure due to financial hardship, have come to depend on Airbnb for additional income. It can be said that it has been a blessing in disguise to various people out there , just as it was one for the founders who got to live their “one day” dream by solving an intricate  problem .

but you need to know that the story was not as rosy as it seems and many a days they had to live on cereals only


This is a GUEST BLOG written by my best friend Umang Mittal who like me is a huge startup enthusiast . And edited by me! I hope you enjoyed reading it and came to know the story that you might have wondered about  !

Waiting for your views and comments!

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The McDonald’s Delhi story !

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So just a few days back I was with my cousins , as we were celebrating Rakhi and the youngest of the lot my two brothers of 6 and 7 repeatedly kept on saying that they wanted to go to McDonalds , and we had to repeatedly answer them that they were closed and they would have to try a different place.

This stance got everyone to ask that why exactly is McDonalds closed in India . So here is the answer .

In India McDonald’s is a 50:50 joint venture between McDonald’s India Pvt Ltd (MIPL) and Westlife Development in south and west India (261 McDonalds and 121 McCafes ) and Connaught Plaza Restaurants Ltd in north and east India.  But there are issues revolving around CPRL which have eventually led to this closure which date back to 2013 .

In 2013, McDonald’s had voted against the re-election of Mr.Bakshi as managing director of Connaught Plaza ( due to their own internal tussle as per which the US brand believes that Bakshi was cheating them), following which Bakshi challenged his removal in the Company Law Board (now the National Company Law Tribunal ), accusing McDonald’s of mismanagement and oppression.

The same year, McDonald’s revoked its joint venture with Connaught Plaza and invoked arbitration against Bakshi. It has been pursuing arbitration against Bakshi in the London Court of International Arbitration. This was challenged before the Delhi high court.
On 23 December 2016, Justice V.K. Shali prohibited any change in the shareholding of the Indian arm of the company. This order was lifted by the two-judge bench in July.

Separately, under an order passed by the Company Law Board on 16 September 2013, McDonald’s was directed to maintain status quo over the shareholding pattern and right of call option, which is still in operation.

In June this year , McDonald’s shut 41 of its 55 restaurants in Delhi following its failure to renew their health and eating licenses. which resultantly happened due to a unstable management .The National Company Law Tribunal (NCLT) in second week of July reinstated Vikram Bakshi as managing director of CPRL. Leaving a unclear picture for the spectators on whos right and whos wrong.

So now the BIG question remains how McDonalds will revive itself in India , with competition everywhere , with Indian brands also joining the fight( Haldiram and Nirulas ) . Because at the end of the day its your presence that matters because if your shutters are down , customers would eventually go and try the next best thing , which might topple your brand eventually  .

So do these tussles actually help anyone ? Does a management fiasco really satisfy the end goal for which a company is made ?

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THE GREATEST TRADE EVER BY GREGORY ZUCKERMAN BOOK REVIEW

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“There is no intoxicant more dangerous than cheap money and excessive credit “- Benjamin.M.Anderson

So as you might have guessed from the cover above this book is about someone who ended up making huge bucks. Well to clear the mystery, Greg Paulson made $4billion in 2007 by betting against the housing marketing (his bet was that housing market would collapse like chunks of dominoes). It was the largest one-year payout in the history of financial markets.

This book overviews those who ended up making money when everyone around the world was losing it. Famously called as the 2008 FINANCIAL CRISIS”.  It revolves around GREG PAULSON, MICHEAL BURRY, PAOLO PELLIGRINI, GREG LIPPMAN, ANDREW LAHDE and JEFFREY GREENE. The ones who understood that something was wrong when everyone else was throwing bonus parties. That the financial industry was growing at a faster pace than the economy itself (a kind of financial alchemy being at work).

To me it cleared the landscape of the 2008 downturn and the years preceding it. How these few people could see and ascertain what others were oblivious about. It relays a time in the western financial world where even a kid in 4th grade qualified as a borrower. After the dotcom bubble in early 2000’s interest rates were reduced which led to excessive borrowing giving way to the housing bubble. There was a casino active at the world stage.
The book goes deep into numbers. Explaining thoroughly. The inside story of Bear Sterns, Deutsche bank, Morgan Stanley and many more are veiled out. It reveals how one side believed that the economy would grow to great lengths and another small group feared a dangerous downturn.
This books a must read for the ones who breathe and taste finance, who would love to understand the history of finance a bit better and for the ones who believe you can always be amateur and scale great mountains. And the book doesn’t bore at all.

$$$


SO WHAT DO YOU THINK OF THE REVIEW ?

DO YOU PLAN TO READ IT ?

DO SHARE YOUR VIEWS.!

PAYTM KARO! PAY THROUGH MOBILE!

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Right now my favorite pass time is going and asking and seeing whether shop vendors have paytm or not. Last week when we went for shopping, all our payment were through the one and only “paytm wallet”.

So a brief intro. of this game changer is that it was formed by Vijay shekhar sharma (Vjs), alumnus of DTU .He joined college at the age of 15 .Hailing from Aligarh the biggest drawback he faced was adapting to the alien language English. Always being a kitabi keeda (in his own words) he ended up making a company in 1997 (last years of college which he later sold).Being a true patriot he wanted to do something for India and didn’t choose a job in the land of immigrants (U.S.A)

So basically Paytm’s parent company is One97 Communications in which Jack Ma (founder of Alibaba) has 40% share, the largest shareholding and Vjs has 21%. Their business is divided into e-commerce, online recharge and payment wallet (the leader of the three).

Just a few days back they got RBI’s final approval to start with the operations of India first payment bank (which would start in a month). In which Vjs would have 51% share (making it purely Indian).

Paytm is the story of struggle to make accessibility of money easier and a pathway towards a cashless society. What was beautiful was that the day after the announcement of demonitisation Paytm had a two page advertisement in the newspaper (for which they had to make the printing press wait till 12:30 at night) .It tells there will always be people out there to challenge the status quo (SBI being so scared by it that its persuading its customers to download SBI-buddy)

Paytm got what we call in the business world “THE FIRST MOVER ADVANTAGE”

 

A payments bank in simple words,  can carry out most banking operations but can’t advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers.

A Collection Of Quotes Mentioned In MR.Basu’s Book

AN ECONOMIST IN THE REAL WORLD: THE ART OF POLICYMAKING IN INDIA

BY KAUSHIK BASU

QUOTES AND ADAGES MENTIONED IN THE BOOK

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  1. For a system resistant to change, nothing is as good as a crisis.
  2. Totalitarian control is seldom as total and controlled as appears to outsiders.
  3. History makes suggestion but rarely gives a roadmap.
  4. “Don’t live beyond your means” – arthashastra.
  5. For Manmohan Singh “he was a politician without a taste for politics”.
  6. Politics many well be the only profession in which not being good is a virtue.
  7. Contrary to what many laypersons believe, there is no one who understands “the economy” of a nation. The big challenge of economic policy is that it entails coordination among experts, each of whom understand just a sliver of this enormously complex machine.
  8. Money was not discovered one day in a moment of scientific triumph.it emerged gradually, in small measures and through little innovation. But in terms of human achievement it must stand right there at the pinnacle of inventions. Without it we would have very little of what we know today as civilized life.
  9. Knowledge generated anywhere is knowledge.
  10. The free market has many strengths , but fairness and equity do not figure prominently among them
  11. One well known feature of finance is that crisis often come in a flash. This is caused by imitative or herd behavior.
  12. If others in your society are punctual, it is worth your effort to be punctual; if others are not it may not be worthwhile for you to expand the effort to be punctual.
  13. “The ideas of economists and political philosophers both when they are right and when they are wrong are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical man who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribblers of a few years back.” – John Maynard Keynes{one of the most famous passage in his book The General Theory Of Employment}
  14. For laypersons there is something threatening about inflation because they cannot see where it comes from, and a closely guarded secret among experts is that the understanding of experts is also incomplete.
  15. One troubling feature of the exchange rate is that it is partly determined by expectations.
  16. Good policy consists of exploiting the laws of the market, not denying that they exist.
  17. When it comes to hoarding, it is the government of India that leads the pack.
  18. In an economy, finance is the classic analogue of plumbing in a house –something we remain unaware of until something goes wrong with it.
  19. Saving the company should not be equated with saving the people who head the company.
  20. [arthashastra}- “ Just as it is impossible to know when a fish moving in water is drinking it, so it is impossible to find out when the government servants in charge of undertakings misappropriate money ‘
  21. The common complaint in India ,repeated to the point of boredom in umpteen parlors and coffee houses is that “India problem is not the laws but in their implementation”
  22. There is nothing quite as concrete about the law as the traditional view supposes.
  23. In books on economic policy and economic development, we generally tend to ignore the role of norms and political institutions. But they are crucial determinants of growth and efficiency, getting these right is as important as getting our trade and monetary policies right.
  24. India has one of the most talented and most obstructive bureaucracies in the world.
  25. Much of India’s rules of administration are inherited from Britain .India’s problem is that it has held on to those rules more steadfastly than Britain and other commonwealth nations.
  26. The hustle and bustle of India today hopefully is the sound of its engine revving up.♦

AN ECONOMIST IN THE REAL WORLD: THE ART OF POLICYMAKING IN INDIA BY KAUSHIK BASU BOOK REVIEW

 

First published September 1 2015 (MIT PRESS and then Penguin Books)

A few words

For a system resistant to change, nothing is as good as a crisis.”

(Feels like an apt saying for how demonitisation has struck us making us realize that this crisis was necessary to lead us  in the direction of being a predominated digitalized economy , which otherwise would have been a long bet)

So first when my dad told me about this book and that it’s one of the necessaries for a good economics student I persona

lly felt that it would be nothing special. I stumbled on it purely by chance (chances being next to none) in the library. After giving it a thorough read I would say that dads are always right.

Written by Ex-Chief Economic Advisor of India and World Bank, alumni of Stephens, who was also professor at Delhi school of economics. The book has tried explaining Indian politics and ideologies of our leaders; which ultimately shaped our economic policy. How India adopted Nehruvian policies with Gandhian policies entwined in them (making several of our policies contradictory as both these school of thoughts were the opposites of a magnet).Explaining in brief each period of our independence and its correlated growth (and reasons behind it).

It contains of the right mixture of anecdotes, adages, facts, figures, and even good stories behind words (why Ponzi schemes are called so).it’s a book must for someone who always had a thing for economics (a teeny-weeny crush)

The book was a peaceful boat ride stopping on shores of inflation (Hungary has had the worst episode of inflation in 1946 where prices rose by 3.8*10^27.  : worse than Germany before WWII), exchange rate, flaws and improvement in PDS, policymaking, and giving us a hope that ideologies of nations can always be changed for better (Japan and South Korea were slackers a century back).And a few ideas which the author believes can be implemented in the future.

An interesting fact mentioned in the book – The wealth of the ten richest people in the world is equal to the GDP of Nigeria.

Mr. Basu has mentioned in the book that economic policies effect one and all hence it’s a must to have a mediocre society in the verses of economics. I wholeheartedly believe that this book should be part of our education curriculum. Because after reading I felt so happy and my brain felt so heavy with so many points to hold on.

So stay tuned on my blog for a mini boat ride of interesting facts and overwhelming adages mentioned in the book.

REDCARPET- THE CARPET TO YOUR FINANCIAL STARDOM!!

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So I have had the chance to meet a RBI governor (let’s say THE RBI governor – Raghuram Rajan a few months back) and now a startup co-founder (Abhay Tamaria of REDCARPET). We had a competition being organized in our college by our marketing society where this startup was a sponsorer.

I had a small chat with Mr. Abhay Tamaria (IIM B Alumnus-finance and marketing – that calls for a clapping) and what I distinctively remember him saying is that if you dream of being an entrepreneur start observing your surrounding cause the next big thing might be in front of your eyes and alongside start analyzing the market around you.

Basically red-carpet is any college student’s personal credit card (they are basically becoming the new credit raters for the future loan takers) a startup based in Delhi-NCR as of now with the plans of making big (their official site claim that it’s better to be good than to be huge). We all know about Paytm and PayPal, they are our personal debit cards so this is just the opposite of that. They stepped on this idea with their diligent thinking and business environment observation.

This indicates towards the growing micro fiancé companies in our country, that to the ones who are looking forward towards a stability. In today’s Indian economy with a 60 % population below 27 and with the new dynamics of micro finance credit has become the need of the day. Today getting loans for online purchases, movie booking, ordering food is what any college kid looks forward too. So here’s red carpet providing loans to students in easy EMI’s.

So I guess you college students after reading this blog you would go to your play store (the ones staying in Delhi-NCR region  … others it’s just a matter of time) and give this app a chance.

Made in India startup – jugnoo

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A few days back I was going through YouTube (we all do that) I came across some videos about the concept of jugnoo (the auto hailing app) which struck a chord with me.The idea of penetrating the autowalas (who signify India whenever a Hollywood movie has to refer us) which is considered such a risky and bash sector was a really huge risk. Trying to make this sector more organized and trying to give them continuous work was a huge step. We usually see autowalas waiting for rides and the moment they get one they charge a really high price. Jugnoo has tried capturing and revolving around this problem. Trying to provide them (the autowalas) as many rides as possible with the help of app and charging lower from the customers (in comparison to the already prevailing rate). They try capitalizing on the huge frequency. The founders believe in having a few good people and provides training to them too.

Jugnoo is doing its own share of promoting technology friendliness. Due to this concept many autowalas under there umbrella have started using smartphones, internet. In their own way the startup is also motivating daily auto customers of jugnoo to become part of the e-finance world.  

What works for jugnoo is that it’s an indigenous idea made for the Indian scenario. Not an idea borrowed from the already reigning startups of the world which makes it so unique and worth a write-up! For they are helping the ones who have always been so misjudged.

The baton being passed.

RBI Governor Raghuram Rajan with deputy governor Urjit Patel.

So we all have embraced the news of a new RBI governor (the media leaves no one in a loop). For the past 2-3 days the newspapers have overflowing articles on what would be expected of the to be governor on prospects such as inflation, growth, deficit, growth along with deficit. (Really huge words for a layman).

As a new legal citizen of this nation(just turned 18) , a huge fan of Raghuram Rajan and a student of commerce background here are something’s even I would like to say to the to be governor( why should I leave a chance)

RESPECTED SIR

Congrats for getting such a prestigious chair because it’s a real tough one to get. I hope you continue the legacy and by your decision zeal and aura motivate kids of this generation to pursue subjects related to finance, Economics, accounts. Well the inflation rate is on my agenda too (how I can I leave that golden word). I hope you keep that controlled so that eating pulses doesn’t become a luxury. The forex reserves shouldn’t decrease too (because we Indians love dollars). Furthermore coming on a serious note. I read that when you worked with IMF at the Indian desk we were in the midst of our balance of payment crisis and you were a huge supporter of the nation of your origin so definitely thanks for that. Further that your policy of 3% fiscal deficit motivated the Indian government to try and achieve it.Thanks for it too. And what else. I guess nothing more. I would like to say all the best for this new journey and may the odds be in your favor.