How did the Airbnb name become synonymous with home sharing?
Airbnb did not use one scheme for their marketing strategy to help them reach the magnitude of success we know them as today. For Airbnb to become synonymous with home sharing, the company went to great lengths to search for ways to get ahead of a matured and already stagnant hospitality industry. The rise of Airbnb is unlike any other company.
Designers Brian Chesky and Joe Gebbia rediscovered and reinvented ways to create the disruption in the hospitality, real estate and home sharing industry.
Story Behind Air Bed and Breakfast
In 2007, Chesky and Gebbia started Airbnb by renting out their own San Francisco apartment to make ends meet. There was a design conference in town and to their surprise the idea clicked. Three guests booked their air bed and breakfast for $80 per person. Soon enough people from around the world started to email them when the service would be available in their countries. With the help of their roommate and engineer, Nathan Blecharczyk they got Air bed and Breakfast off the ground.
True entrepreneurial hustle in the face of initial resistance
Starting out in 2008, the company did not have any money. They found a way to raise money by selling cereal that had a special election-themed box called Obama O’s and Cap’n McCain’s.
Even though they made $30K from the cereal campaign, they reached a low point as they weren’t getting much traction. Soon enough they met Paul Graham and doubted the startup’s idea initially. In 2009, they joined Y Combinator’s winter class and received $20K in funding. They renamed the business Airbnb and received another $600k in seed round from Sequoia Capital and Y Ventures.
In fact, many investors in the valley doubted the startup’s potential because both Chesky and Gebbia were from the design background. Most people in the valley joked that they only made things pretty. Perhaps it was this design background that gave such innovative, unexpected solutions to the problems an early stage startup faces.
Craigslist Loophole for Integration
There is evidence of Airbnb’s platform hack of Craigslist as early as 2010. Even though Craigslist was known as the scam-filled and impersonal listing platform, they had a massive user base that Airbnb could leverage.
People who hopped onto Craigslist were people who were looking for something other than a standard hotel experience and that is exactly what is Airbnb’s target market. Airbnb offered users to post their listings on Craigslist after posting their listing on Airbnb. However, Airbnb did not have a sanctioned way to collaborate with Craigslist.
What Craigslist had was a unique URL instead of a cookie to save user’s listing information every time a listing was created. It was very clever of Airbnb to be able to leverage this loophole. Airbnb was able to build a bot to visit craigslist and snag a unique URL. Then input the listing info and forward the URL to the user for publishing as shown in the screenshot below.
Image Source: www.growthhackers.com
Leveraging the Craigslist loophole was easier said than done because they had to deal with hundreds of different versions of Craigslist, filling out Craigslist categories and dealing with Craigslist’s limited HTML support.
The integration of Craigslist not only helped Airbnb with the sheer volume of potential users accessible via Craigslist but also helped Airbnb stand out as the preferred choice as listings were more personal with better descriptions and photos. People who came to use Airbnb through Craigslist were more likely to use Airbnb in the future. Plus they could share their listings on Craigslist to boost their earnings.
Spamming Craigslist Listings
Another Craigslist hack that helped Airbnb get more people to use their product is using Craigslist anonymous email option to grow their business. According to the hack, a person who lists a property in Craigslist anonymously gets an email from Airbnb within a couple of hours to motivate them to use Airbnb for listing their property.
The approach of Airbnb was straightforward, they started listening to their customers and worked their way back to delivering what made their customers happy. Gebbia said, “People told us what they wanted, so we set off to create it for them.”
In summer 2009, Airbnb wasn’t gaining much traction in New York. Gebbia and Chesky booked 24 spaces with different hosts to figure out the problem and gathered firsthand data about the service. What they found was shocking – the listings were not attractive, hosts used mobile phones to capture photos and posted Craigslist-quality pictures.
Instead of going with a more conventional plan, they decided to buy a $5,000 camera and go door to door in New York to photograph as many host spaces as possible. The result was a two to three times increase in New York bookings and doubled their revenue by the end of the month.
This led to the official launch of the Airbnb Photography Program in summer of 2010 which had 20 photographers initially who could be booked by hosts, and they will visit your space to take professional photos. The service was an instant hit and help hosts increase their earnings. By 2012, there were 2,000 photographers contracted by Airbnb to photograph 13,000 listings on six continents.
Chesky stated “Airbnb looked at the perfect experience and worked their way backward” and that ’s how they will be successful in the future as well.
The core component of Airbnb has always been the user experience, that’s why they have been able to grow as a business at such a fast pace. The company has been able to disrupt the market from the beginning. It has provided users a place that was more than a place to sleep. The company was able to compete with the more prominent hotels because it was substantially cheaper. Even the photographers did a great job at making the listings look professional in addition to verifying addresses.
In the summer of 2011 Airbnb social connects was introduced which leveraged user’s social graph by making use of Facebook connect. And in the summer of 2012 for optimizing the product for engagement, Airbnb redesigned the site around the wishlist feature.
Heart vs. Star:
Before the Wishlist feature, users could save properties using a star. For maximum engagement, they changed the generic star to a heart, and they were surprised to see a 30% increase in bookings. Wishlists gave the product a more inspirational feature rather than utilitarian. It helped Airbnb stand out from its competitors and made it a platform based on social discovery model.
Just when things were going right for Airbnb with a company valuation of $1B – an Airbnb user’s was home ransacked. The company took a massive blow to its reputation and safety standards. But Airbnb was quick with the damage control steps.
They emailed Techcrunch about the steps taken to assist the investigation, coordinating with the hosts and educating users about their safety instructions. After the incident, Airbnb doubled their customer staff, created a dedicated Trust and Safety department, created Host Education Center, enhanced user profile verification, offered better communication between hosts and guests and offered insurance options to hosts.
After a lot of back and forth between Airbnb, Techcrunch and the hosts who suffered on August 1st, Brian Chesky made an unconditional apology via the company blog. The announcement included $50,000 in damages from vandalism or theft and a 24-hour helpline.
In May 2012, Airbnb also partnered with Llyods of London for a $1,000,000 Host Guarantee which became one of the company’s most significant assets. Later on, these incidents became like hiccups on an otherwise frantic growth curve of the company.
Current and future growth engine
Much of Airbnb’s international growth was because they were able to acquire their competitors at the right time in the market, provide excellent customer service, open strategic international offices and more.
In 2012 Summer Olympics time, Airbnb made a timely acquisition of their biggest UK-based competitors Crashpadder. They used their popular Photography program to persuade Crashpadders’ hosts to join Airbnb. That same year Airbnb opened offices in Paris Barcelona and Milan.
As Airbnb’s Rebecca Rosenfelt explained, even though Airbnb was a successful company in the US, it was still a scrappy startup internationally. They have to growth hack over and over again as they break into new regions. Mainly because Airbnb is a two-sided marketplace, meaning they have to grow the demand side (travelers) and the supply side (hosts), which is much harder to build.
In France, Airbnb noticed there was a perfect market for their product. They decided to market their product by A/B testing between sending people physically in the market vs. running Facebook Ads to get new hosts for listing. Airbnb did everything possible from throwing parties, info sessions, setting up booths around town, posting flyers and following up people with offers who showed the interest.
The result they found was astonishing, they got 5x more listings in areas where they sent people physically as compared lesser listings in areas where they ran Facebook ads. They realized sometimes doing the unscalable gets better results than doing the scalable.
How has Airbnb managed to dominate the industry?
Expansion: The entire trip
As Chesky explains: Airbnb is not only about renting a space, it’s about the entire trip and delivering a local experience. The company also used new tactics like – maid service and experiences.
An entire hospitality brand:
Airbnb continued to grow as a brand in home sharing because Airbnb is not about where you stay but what you do and whom you do it with while you are there. It gives you a chance to experience your stay like a local.
Airbnb also worked with Chip Conley, who is the ex-CEO of the Joie de Vivre hotels, now Head of Global Hospitality at Airbnb, to create a set of hospitality standards that made the guest experience more comfortable and reliable while keeping the unique flavor that each host contributes to the experience.
Local experiences draw guests to Airbnb. Airbnb is not a hotel – a major selling point and a significant drawback. People who booked a stay with Airbnb got to experience the city more locally and authentically.
In November 2012, the company’s increasing interest in local gave birth to two local initiatives – Airbnb neighborhoods which are a definitive guide to neighborhood experiences around the world and Local Lounges.
Airbnb Neighborhoods allowed guests to choose a place to stay back on local interests – beaches, nightlife, markets, etc. Additionally, street photographers, local editors, and curators were hired to show the neighborhoods in the best light and true light.
It provided a more offline experience to the user. Airbnb partnered with some coffee shops in San Francisco to give a warm welcome, free wifi and a guidebook filled with hidden gems and neighborhood secrets.
Localmind – a platform to ask questions about places to locals who can answer them, got acquired and creators started working on Airbnb social initiatives.
In August 2014, Airbnb acquired Localmind that crowdsourced queries about a locality from locals and worked with the creators on social connections. The role of social media is more important than ever in the travel industry. Thus the focus on local experiences was fruitful for Airbnb
One way Airbnb was able to increase its hospitality game was by providing cleaning service in selected cities. It included a full-service cleaning service that starts at $55 and available through a third-party.
Other initiatives and upgrades:
Airbnb took many initiatives to employ comfort and safety measures into their spaces. For example, they helped hosts to install smoke and carbon monoxide detectors in listings in the US. Airbnb has also tested Uber-style airport transportation option in New York City.
Airbnb experiences let you attend classes, workshops, guided tours, food and drink tasting, nature excursions and more. Therefore, what draws people to Airbnb is the ability to experience each destination in a unique way.
The need to go mobile was essential. Airbnb came out with a mobile product in July of 2013 which helped hosts create listings and upload photos via mobile devices. As a result, by October, 50% of Airbnb hosts started using the mobile app, replied three times faster to their guests than those using desktops, which increased bookings to eight times faster.
October 2013 Airbnb brought Scott Raymond, co-founder, and CTO of Gowalla, one of the first location-based mobile apps. Airbnb launched an all-new mobile app for Android and IOS. The new app had host-friendly features to manage listing and communicate better with guests. It included features like Host Home, Hospitality Standards, and Host Groups helping hosts go mobile
The new app also had a more immersive design for guests. It included more significant, more dynamic images, easily navigable maps and thoughtful animations. A new discover feed featured exciting spaces like lofts, treehouses, and castles. Plus, guests could explore based on destination, theme or trip type. The app streamlined the booking process and relaunched the referral program for all platforms with a mobile-centric approach. As a result of successful A/B tests, recommended contacts feature for Gmail, altruistic emails got higher conversion rates. Plus the referral users who used Airbnb continued to use it for future travels and more likely to refer someone.
With an international focus and being more inclusive as a hospitality brand, the company’s rebranding occurred out of necessity. The brand identities were created in a matter of hours due to a short deadline and temporary use only.
The concept behind the rebranding was a focus on belonging anywhere. On July 16, 2014, the company launched their site and mobile apps with a new look and feel as a result of one full year of brand study. A London-based DesignStudio assisted Airbnb with the branding.
Source: Fast Company
The new branding of the company was compared to Uber, Lyft, Dropbox, and Instagram. Chesky used many different tactics to make sure the logo gets off well as planned. They teamed up with Zazzle to print the logo on cups, stickers, postcards and more.
The redesign of the brand focused on experiences and went entirely in line with what users appreciate about the brand.
How many short-term rental platforms are there in the market?
Apart from the big players – Airbnb and Homeaway there are a few short-term vacation rentals in the market that provide a unique experience to its customers. Let’s quickly look at what some of the unique rental platforms have to offer.
Vacasa – A Portugal-based vacation rental company that curates and pays 1000 plus employees to clean and maintain the properties. They have undertaken a fair wage initiative. However do not have a peer-to-peer renting, but provides consistency in bookings.
Innclusive – To overcome the racial discrimination faced by many people trying to book on Airbnb, Innclusive was started in summer of 2016. It provides respect, dignity and love to travelers regardless of race, sexual orientation or gender identity.
Kid and Coe – If you are looking for a kid-focused vacation rental, Kid an Coe provides plenty of amenities and description of the toys, baby gear, and beds available your kids.
A few other unique vacation rental home brands you can check out include Boutique Homes, FlipKey, Overnight, Homestay, Wimdu, Tripping.com, VRBO, HouseTrip, VayStays, VacayHero.
Thanks to the effective user and address verification processes and the $1M host guarantee, the safety and liability issues of 2011 were less of a concern for Airbnb. As the company has grown, they changed from a more friendly and personal alternative to Craigslist to more personal options to hotels.
Airbnb is the fifth-largest hotelier in the world. Prices are one-sixth cheaper compared to traditional competitors. Plus, the company’s presence is in almost every country worldwide.
Some concerns of Airbnb for 2014 and beyond have been dealing with blow-back from the disrupted hotel industry. While some complained that the residents who use the Airbnb and similar sites to rent rooms tend to degrade the quality of life for neighboring residents, other’s appealed that these type of hospitality tend to use illegal facilities, lost revenues for the city and potential job losses for NYC’s tourism industry.
The company’s home base of San Francisco is also in the midst of redefining and regulating the laws governing short-term rentals. In April of 2014, Airbnb stated that the Airbnb community, will generate $768 million in economic activity in New York and support 6,600 jobs this year. This back and forth between the hotel industry, state and local government and landlords – all of whom want a piece of the cake are Airbnb’s biggest struggle.
One thing is for sure, Airbnb has become a household name around the world. Airbnb is home-sharing and home-sharing is Airbnb. The company is still on the rise and has no intentions of slowing down.