“How do you think I could boost my income?” asked my friend, Paula. The
45-year old single woman invests in a portfolio of low-cost index funds. But she’s trying to double what she invests every month because she wants to retire early.
My wife poured Paula her second (or third) glass of wine. That’s when I offered my two cents. “Buy a cheap camper van,” I said. “Then rent your apartment on Airbnb. When somebody books your place, sleep in the van.”
I was just being goofy. But Paula jumped at the idea, thanks in part, to her Cabernet Sauvignon. At least, that’s what I thought. The next morning, she sent me an email: “I spent half the night looking at vans online. I’m going to do this!”
The following week, she bought a $5000 used van and posted an ad for her apartment. She requires that guests stay at least two nights. When they book her apartment, she sleeps in the van. Two months later, she had earned enough money on Airbnb to recoup the cost of her van.
Few people would follow Paula’s lead, even if their vans (unlike Paula’s) didn’t leak when it rained. But Airbnb might have started a revolution.
Thomas L. Friedman describes the company’s roots in his book, Thank You for Being Late. It was October 2007. San Francisco was hosting the Industrial Designers Society of America. Brian Chesky and Joe Gebbia noticed that the hotel rooms on the conference website were all fully booked. That’s when they put three air mattresses on the floor in Gebbia’s home. They rented them out to three conference attendees, earning a total of $240.
Those air mattresses inspired the name, Airbnb. Before long, they had launched a multibillion-dollar company with no money down. As Thomas Friedman writes, “The idea was to create a global network through which anyone anywhere could rent a spare room in their home to earn cash.” Thanks to the Internet, Airbnb is now larger than all of the major hotel chains combined.
It might even become America’s biggest job-producer over the next ten years.
I know that sounds crazy because technology threatens jobs–much as it did during the Industrial Revolution. In fact, technology might have slashed far more American manufacturing jobs than Mexico or China ever could. And we all know how increased trade affects such jobs. In January 2017, CNN’s Patrick Gillespie referenced MIT professor David Autor when stating that U.S. trade with China erased almost one million manufacturing jobs in the United States between 1999 and 2011. Economist Robert Scott says trade with Mexico cost about 800,000 American jobs between 1997 and 2013.
But improved manufacturing technology has made far deeper cuts. Researchers Michael J. Hicks and Srikant Devaraj published their findings in The Myth and the Reality of Manufacturing in America. They report that between 2000 and 2010, just 13 percent of manufacturing job losses in the United States were a result of trade. In contrast, technology can be blamed for 87 percent of manufacturing job losses. It simply takes fewer people to do the same jobs.
But technology can boost employment for people willing to adapt. Worldwide, there are now more than 4 million homes posted on Airbnb. People, like my friend Paula, are building businesses by listing all or part of their homes online. Airbnb, in fact, might soon become the biggest “employer” in the United States. That title currently belongs to Wal-Mart. The retail giant employs 1.5 million Americans. Airbnb, however, will likely set that bar higher. Statistica.com says more than 600,000 Americans now list a room or a home for rent on Airbnb. What’s more, a growing number of people now use Airbnb to create service-oriented income.
It started when people said things like this: “If you book a place with us, and you pay an extra $50, we can teach you how to cook a Thai-style meal.” Such services, however, have extended far beyond those who rent out homes and rooms.
People can advertise holiday-like services, whether they have a room to rent or not. For example, these people in Maui say you can practice yoga with their goats (yes, people really pay for that).
For $29 per person, you can enjoy a Latin dancing experience in Philadelphia. Or, for $30 per person, you could try Aerial Yoga in Seattle. These aren’t just drop-in services. They’re often personalized–and they’re global.
Airbnb allows people, for example, to take a bicycle tour through Mexico City or take surfing lessons in Bali, Indonesia. Others advertise a “Secret, Live Jazz Concert” in Prague. There’s a pizza-making class in Florence, Italy.
To be clear, these aren’t old-school business owners saying, “Let’s advertise on Airbnb.” Instead, they represent a new employment paradigm. These people are newly inspired to make money from their passions in a way they couldn’t have done before.
As employment opportunities shift, consider Charles Darwin. He said species would survive based on how they could adapt. The same could be said for people and their jobs. Our world is changing quickly. The adaptable will thrive.
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas