In 2007, designers Brian Chesky and Joe Gebbia couldnt afford the rent on their

San Francisco apartment. To make ends meet, they decided to turn their loft into
a lodging space, but, as Gebbia explains, We didnt want to post on Craigslist
because we felt it was too impersonal. Our entrepreneur instinct said build your
own site. So we did.[1]

There was a design conference coming to town and hotel space was limited, so
they set up a simple website with pictures of their their loft-turned-lodging space
complete with three air mattresses on the floor and the promise of a homecooked breakfast in the morning. This site got them their first three renters, each
one paying $80, and after that first weekend they began receiving emails from
people around the world asking when the site would be available for destinations
like Buenos Aires, London, and Japan. Gebbia explains:

At that point we started to brainstorm what a larger, international version of the

site would be. That was basically our market research. People told us what they
wanted, so we set off to create it for them. Ultimately while solving our own
problem, we were solving someone elses problem too. We were at a point
professionally where we were very ready to pursue our own idea. We were
anxious though, like waiting in line for a roller coaster. We didnt know exactly
what was ahead, but we knew we were in for a ride. [1]
The following spring, they enlisted former roommate and engineer Nathan
Blecharczyk to help them get Airbed & Breakfast off the ground. They planned
the launch around the Democratic National Convention in order to capitalize on
the resulting lack of hotel space. Fast forward seven years, and Airbed and
Breakfast is now Airbnba household name that has surpassed industry legacy
Hilton Hotels in nights booked. As of spring 2014, the platform had 10 million
guests and 550,000 properties listed worldwide, along with a $10B valuation
making Airbnb worth more than legacy players like Wyndham and Hyatt. [2] The

company has received $776.4M from investors like Y Combinator, Sequoia

Capital, Keith Rabois, Andreessen Horowitz, Ashton Kutcher, Founders Fund, and
TPG Growth in a total of seven funding roundsthe last of which raised $500M
alone. [3]

Image via AirBnb. Reads: 4 Million Guests, 3 Million Guests Traveled On Airbnb in
2012 alone.

Image via Venturebeat.

Image via Venturebeat.

But how did a few air mattresses on the floor of a San Francisco loft become the
most widely-used anecdote for startup growth hacking?
Early Growth
Pure, Unadulterated Hustle in the Face of Initial Resistance
As they were starting out in the summer of 2008, the founders needed a way to
raise money. They bought a ton of cereal and designed special edition electionthemed boxes, released that fallObama Os and Capn McCains, which they
sold at convention parties for $40 a box. They sold 500 boxes of each cereal,
helping them to raise around $30k for Airbed & Breakfast.

Image via source 2

Still, the site did not gain much traction initially, and the founders resorted to
living off of leftover Capn McCains (the Obama Os sold out)a time they refer
to as a real low point. This low point did not last for long, however, as the
following spring they had dinner with Paul Graham. Despite recognizing the
startups potential, Graham admits to having some initial doubts, explaining "I
thought the idea was crazy. Are people really going to do this? I would never
do this."[4] Nevertheless, Airbed & Breakfast soon joined Y Combinators 2009
winter class, receiving another $20,000 in funding. They renamed the business
Airbnb, and soon received another $600k in a seed round from Sequoia Capital
and Y Ventures. [2] Not everyone was as impressed with Airbnbs business
model, however, and the young startup was also notoriously rejected by Fred
Wilson and Union Square Venturesa decision Wilson now admits wasnt a good
one. Wilson claimed in 2011 that Union Square kept a box of Obama Os in their
conference room to remind themselves not to make the same mistake again. It
also serves as an example of an early stage startup doing everything necessary
to get off the ground. As Wilson explains:
Whenever someone tells me that they can't figure out how to raise the first
$25,000 they need to get their company started I stand up, walk over to the
cereal box, and tell this story. It is a story of pure unadulterated hustle. And I love
it. [5]
But it wasnt just Airbnbs business model that posed a concern. When Gebbia
and Cheskyboth of whom are Rhode Island School of Design alumswere
initially seeking funding for their startup, potential investors didnt know what to
make of a company with two designers, despite the fact that Blecharczyk, with a
solid background in tech, had already signed on as an engineer. Chesky explains
that it was hard for many in the Valley to see the companys potential because,
they thought we just made things pretty.[4] Yet it was most likely this design
background that helped Airbnb to find such innovative, unexpected solutions
like the limited edition presidential cereal campaignto the very real problems
that all early stage startups face. It is this ability to innovate that informs much
of Airbnbs growth strategy.
Craigslist Platform Integration

Its unclear exactly when Airbnb implemented whats become their most famous
growth hack, but there is evidence of the Craigslist platform hack as early as
2010. [6] Though the startup worked hard to distinguish themselves from the
more impersonal, scam-filled super platform, Craigslist had one thing that Airbnb
did nota massive user base. Airbnb knew through both market research and
their own experience that Craigslist was the place where people who wanted
something other than the standard hotel experience looked for listingsin other
words, Airbnbs target market. In order to tap into this market, Airbnb offered
users who listed properties on Airbnb the opportunity to post them to Craigslist
as welldespite the fact that there was no sanctioned way from Craigslist to do
so. Though fairly straightforward in hindsight, the execution was anything but
simple, as explained by writer and entrepreneur Andrew Chen. Were going to
touch on the high points without delving too deeply into the technical details. For
starters, because Craigslist saves listing information using a unique url rather
than a cookie, Airbnb was able to build a bot to visit Craigslist, snag a unique
URL, input the listing info, and forward the URL to the user for publishingas
Rishi Shah documented in the screenshot below.

Image via source 6

But thats just the beginning. The bot also had to fill out a handful of forms, the
simplest of which was the Craigslist category. Region proved a bit more of a
challenge since there are hundreds of different versions of Craigslist, some much
more specific than othersfor example, six sub-regions within a region for the
Bay Area, yet one Craigslist for the entire state of Maine. This means it was
necessary to visit every Craigslist and scrape the names and codes for every
region. Furthermore, there was the issue of the anonymous email assigned by
Craigslist. This function had to be turned off and replaced with a link to the
Airbnb listing. And to ensure that the listing stood out among the standard
Craigslist fare, the platforms limited HTML support had to be taken into
consideration as well. As Chen explains:
"This kind of integration is not trivial. I wouldnt be surprised if the initial
integration took some very smart people a lot of time to perfect. A traditional
marketer would not even be close to imagining the integration above theres

too many technical details needed for it to happen. As a result, it could only have
come out of the mind of an engineer tasked with the problem of acquiring more
users from Craigslist. [7]
The benefits of the Airbnb/Craigslist integration were numerous. Not only was it
the sheer volume of potential users accessible via Craigslist, but the fact that
Airbnb listings were far superior to the other properties availablemore
personal, with better descriptions and nicer photosmade them more appealing
to Craigslist users looking for vacation properties. Once those Craigslist users
made the switch, they were more likely to ignore Craigslist and book through
Airbnb in the future. Not only that, but those with properties listed on Airbnb
ended up making more money on their listings, which kept them using the
service as well. [7]
Craigslist Poaching
While the first integration got much needed traffic to Airbnb listings, in Craigslist
the company saw another opportunity for getting more users to list their
properties on Airbnb in the first place. Dave Gooden, who admittedly works in
the vacation rental sector, says that in late 2009 he began looking into Airbnbs
mysterious growth. He explains:
When a competing company comes on my radar, I always do my due diligence.
In my AirBnB research, I didnt find great SEO results or a gazillion followers on
Twitter or any massive advertising spends on Google or Facebook. I looked
everywhere but I couldnt find any rational or traditional reasons for this type of
growth. All of these AirBnB users cant be coming from tech blogs, can they?
Word of mouth? I didnt think so. After thinking on it for a day or two, only one
possible answer popped into my head: These guys are black hats! [50]
To test his theory, Gooden set up a mouse trap by posting a couple of rental
properties to Craigslist, both using Craigslists anonymous email option and
clearly specifying that he did not want to be contacted about other offers. Within
a couple of hours, Gooden says he received an email from a young lady who
really liked his property and wanted him to check out Airbnb. He claims that this
email alone was 99% of the evidence needed to support his Airbnb/Craigslist
spam theory. However, he wanted to be sure the email wasnt simply from an
excited Airbnb user, so he decided to dig a bit more. Over the next weekend,
Gooden built a site that used Craigslist email harvesting technology and mass
mailing technology to target Craigslist users with vacation rentals. The result was
over 1,000 vacation rental owners who signed up to list their properties on
Goodens test site. He then re-listed one of the properties on Craigslist, and
within a day he received the following email:

Image via Dave Gooden

The next week he listed two more properties, and received two more emails. The
week after that, he listed yet another property, and received two more emails. As
Gooden explains:
When you scale a black hat operation like this you could easily reach tens of
thousands of highly targeted people per dayand quickly gain 60,000 members
on the supply-side, which again, is the hardest and most important part of
growing a market place. I am pretty sure that AirBnB isnt the only company that
has used this strategy/technique, but I think they are the first to turn it into a one
hundred million dollar investment at a one billion dollar valuation. [50]
Though this hack isnt as clever as the Craigslist platform integration discussed
aboveand it and it definitely constitutes spamit certainly helped Airbnb to
grow their listings quickly and at almost no cost.
Start with the Perfect Experience and Work Backward
As we mentioned in the introduction, after hosting their first three guests in their
San Francisco apartment, Gebbia and Chesky began receiving emails from
people around the world requesting Airbnb in their own cities and cities theyd
like to visit, or as Gebbia put it, People told us what they wanted, so we set off
to create it for them. [1] Indeed, much of Airbnbs growth can be attributed to
the fact thatdespite what venture capitalists thoughtpeople wanted the
service Airbnb offered. One way in which this is apparent is with their approach

the photographs on listings. In the summer of 2009, as the company was

searching for new office space, Chesky stayed exclusively in Airbnb listings in
order to gather firsthand data about the service. [2] That same summer, Airbnb
wasnt gaining much traction in New York, so Gebbia and Chesky flew out and
booked spaces with 24 hosts to figure out what the problem was. As it turned
out, users werent doing a great job of presenting their listings. According to
Gebbia, "The photos were really bad. People were using camera phones and
taking Craigslist-quality pictures. Surprise! No one was booking because you
couldn't see what you were paying for." Their solution was low-tech but effective.
According to Chesky, A web startup would say, 'Let's send emails, teach [users]
professional photography, and test them. "We said, 'Screw that.'" [4] Instead,
they rented a $5,000 camera and went door to door, taking professional pictures
of as many New York listings as possible. This approach led to two to three times
as many bookings on New York listings [2], and by the end of the month Airbnbs
revenue in the city had doubled. What was stunting growth in New York was also
stunting growth in Paris, London, Vancouver, and Miami.[4] This led to the Airbnb
photography program, which was officially launched in the summer of 2010.
Hosts could automatically schedule a professional photographer to come and
photograph their space.[4] Though initially only 20 photographers were
contracted by Airbnb, the service became an instant hit. [2] Though this initiative
wasnt cheap for the cash-strapped startup, the founders felt that the long-term
benefitsenhanced listings resultings from this program are two and half times
more likely to be booked, and they earn their hosts an average of $1,025 per
monthwere well worth the cost. By 2012, that number had grown to more than
2,000 freelance photographers employed by Airbnb to photograph 13,000
listings on six continents. [4]

Image via Analytics Lessons Learned

As Chesky explains, "We start with the perfect experience and then work
backward. That's how we're going to continue to be successful." [4] However,

this applies not only to their treatment of listing photos. Airbnb looked at the
characteristics users valued and worked to engineer those into the entire site.
Disrupting an Established (Yet Stagnant) Market
When Chesky and Gebbia first advertised their loft-turned-lodging space and
home cooked breakfast, they were promising more than simply a place to sleep.
And as weve already discussed, as Airbnb grew, this nevertheless remained a
core component of the user experience. It was this ability to deliver more than
just a place to sleep that allowed Airbnb to disrupt the established lodging
market in such a major way. Yet in order to really compete with hotels, they had
to do more than just offer a better experience. Another major advantage of
Airbnb was that it tended to be substantially cheapergenerally 30-80% lower
than area hotels [8]. A 2008 TechCrunch article on the startup, which was still
called AirBed and Breakfast at the time, explained:
In general, the prices are usually much cheaper (rates in San Francisco, for
instance, range from $10 to $175 a night, with the median being $85). And you
get to stay with a friendly local who can steer you to restaurants and stores you
probably would never find otherwise. [9]
Yet as one commenter pointed out, there is one drawback to Airbnb:
If this ever becomes mainstream, the whole thing will come crashing down. The
kind of people that *DO* rob, abuse, rape and murder people will start using
these systems, and that will spread legitimate fear, corrupting the whole thing.
Pray that this remains underground, that's the only way it can survive. [9]
With more nights booked than Hilton and a greater valuation than Wyndham and
Hyatt, [2] theres no denying that Airbnb has gone mainstream. Yet the whole
thing has not come crashing down thanks to a number of efforts to help
overcome the inherent trust issuesnot that Airbnb hasnt facilitated its fair
share of robberies, which well discuss in just a bit. For starters, professional
photographs did a lot to inspire trust on one side of the equationnot only by
helping to ensure that listings werent complete dumps, but also by simply
verifying addresses. In addition to enhanced photos, in the summer of 2011 the
company introduced Airbnb Social Connections, which leverages users social
graphs via Facebook Connect. When Social Connections is enabled, listings show
the avatars of mutual connectionsfriends who have stayed with the host or are
friends with the host. Social Connections also allows guests to search for hosts
based on other characteristics, like alma mater. The service is also quick to point
out that the feature can be turned off with just a click, and that connections are
only visible to those with youre already connected. Of Social Connections,
Chesky explains:
This has been one of our most requested features, particularly for people that
want to have something in common with the people they are staying with. Social
Connections helps you find places to stay with mutual friends, people from your
school or university, or hosts that your friends stayed with and recommend. [10]
When the feature launched in 2011, Chesky also claimed that there were already
16,516,967 connections among current Airbnb membersa number that has
surely grown since. [10] Heart vs. Star: Optimizing the Product for Engagement
In the summer of 2012, Airbnb redesigned the site around a new Wish Lists

feature. Just four months later, 45% of Airbnb users were engaging with Wish
Lists, and over a million had been created. [54] The Wish Lists product
optimization started much smaller, however. The ability to save properties by
starring them had been possible on the Airbnb site for a couple years, but the
team wondered whether the function was optimized for maximum engagement.
As with listing photos, they began with a test and waited to see what happened.
In this case, they decided to change the generic star to a heart, and they were
surprised to when engagement increased by 30% as a result of that simple
change. Gebbia explains that the heart, showed us the potential for something
bigger. [54] That potential was aspirational rather than utilitariansomething
more than a simple accommodations search tool. "You have to have search,"
Gebbia told Co. Design just after the Wish Lists launch. "But what if you dont
know where you want to go?" [54] Its the aspirational difference between a star
and a heart that led Airbnb to develop Wish Lists. Wish Lists are functional,
designed to facilitate sharing and collaboration, but they also speak to the
aspirational potential of the heart by helping positional Airbnb listings as content
and giving users a reason to visit the site not only when theyre looking to book a
room, but when work is boring or the weather is oppressive. Users can visit Wish
Lists as a means of escape, browsing whimsical AIrbnb curated lists such as It
Yurts So Good and Castles. Ultimately, like the sites use of social connections,
Wish Lists have helped the site to stand out among competitors. Rather than
merely a place to search for accommodations, Wish Lists helped Airbnb to move
toward a more engaging social discovery model.
Early Controversy
The same summer that Airbnb debuted social connections, they received $112M
in a Series B funding round from Andreessen Horowitz, Digital Sky Technologies,
General Catalyst Partners, Jeff Bezos, Ashton Kutcherwho also joined the
companys advisory boardand CrunchFund. Then on June 22nd, just three days
after this fundingwhich valued Airbnb at over $1Ban AirBnB users home was
ransacked. [11] Its unclear whether the company actually refused to help out
the user, named EJ, as TechCrunchs Michael Arrington initially reported:
I spoke to Airbnb about EJs situation. They wont reimburse her for damages,
they say, and they do not insure against losses. They are helping police track
down the person who did this, but their help ends there. [12]
Airbnb was quick to email TechCrunch with the following corrections, which
appear as an update at the end of the article: 1. We have been assisting
investigators and they have a suspect in custody. 2. We have been working with
the host since the event and we have offered to assist her to the situation to
[everyones] satisfaction. If you read the blog post, youll see that she points this
out:
I would be remiss if I didnt pause here to emphasize that the customer service
team at airbnb.com has been wonderful, giving this crime their full attention.
They have called often, expressing empathy, support, and genuine concern for
my welfare. They have offered to help me recover emotionally and financially,
and are working with SFPD to track down these criminals. I do believe the folks at
airbnb.com when they tell me this has never happened before in their short
history, that this is a one-off case.

3. We actually have an entire safety FAQ for our users. You can find it here:
http://www.airbnb.com/safety The same day the TechCrunch article went live,
Chesky also contributed a guest post on TechCrunch entitled On Safety: A Word
from Airbnb, in which he asserted, among other things that:
We are committed to improving upon our product with safety as the cornerstone
of the Airbnb marketplace. We are fully committed to the vision that one day you
will be able to travel to any city or town around the world, and with the click of a
button, access local people and cultures safely and easily. We will work tirelessly
alongside our community until that day is fully realized. [13]
Among these improvements, Airbnb promised they were working to double their
customer support staff, create a dedicated Trust & Safety department, create a
Host Education Center with safety tips for hosts, design enhanced userprofile
verification, facilitate richer communication between guests and hosts prebooking, and offer insurance options to hoststhough the specifics of those
insurance options were initially unclear. [13] Yet in the month that followed EJs
initial post and Arringtons coverage of it, the Airbnb media circus did not die
down. In another blog post on July 28th, EJ asserted:
On June 29 I posted my story, and June 30 thus marks the last day I heard from
the customer service team regarding my situation. In fact, my appointed
liaison from Airbnb stopped contacting me altogether just three days after I
reported the crime, on June 25, for reasons that are unknown to me. I have heard
nothing from her since. I blogged my story, and all these kind and supportive
people just ... disappeared. [14]
She goes on to claim that one of the founders (though not Brian Chesky) was
the only person from Airbnb with whom she was had been in contact, and that he
had repeatedly requested she take down her initial blog post, limit access, shut
down the blog entirely, or update the blog with a twist of good news
because of the potentially negative impact it could have on his companys
growth and current round of funding. [14] To make matters worse, on July 30th
Paul Graham accused Arrington of lying about Airbnb being unwilling to pay for
the hosts damages, referring to Arringtons claims in a July 29th TechCrunch
article as bullshit. [15] That same day, Arrington responded in another
TechCrunch post, referring to the whole situation as a grossly mishandled PR
crisis. [16] The next day, Arrington highlighted the case of Troy, another Airbnb
host whod had a similarly nightmarish experience two months priorTroys
valuables and identity were stolen, meth pipes were left strewn around his home,
along with a random cat, and thousands of dollars of bizarre damage was done
to his rented home. [17] In a comment from one of TechCrunchs initial posts
about the Airbnb situation, the host explained:
I had a similar problem with haphazard communication from people at AirBnB. I
gave them multiple opportunities to make me a happy customer to which they
did but then retracted their offer after [there] was miscommunication among the
team. Sometimes days went by without hearing from anyone, while I was fearstricken, totally disoriented, and angry. It was almost the most absurd customer
service crisis one could ever imagine. But I am one squeaky wheel, and we
eventually found an agreeable solution that I was generally pleased with. [17]

The user, who had used Airbnb as both a host and a guest since the incident,
went on to accept most of the blame for the situation, explaining (much as EJ
had) that hed had a gut feeling when renting to this particular guest that
something wasnt right. Airbnb eventually gave Troy 21 free nights at up to $125
a night, restitution he was happy with. His main criticism was that, The reason
theyre able to charge these high fees is [because] they lull people into a sense
of false security. If they disclosed that, people would just use Craigslist [17]a
point that was also echoed by EJ in her initial post. Then on August 1st, Brian
Chesky issued an unconditional apology via the company blog, announcing
Airbnbs updated guarantee to cover up to $50,00 in damages from vandalism or
theft, a 24-hour helpline (something both EJ and Troy noted as lacking in their
experiences), and several more improved security measures. [18] Then in May of
2012, Airbnb partnered with Lloyds of London to expand their guarantee even
further, covering every booking with their $1,000,000 Host Guarantee. The
company points out, however, that the guarantee isnt a replacement for home
or renters insurance, and it does not cover cash and securities, collectibles, rare
artwork, jewelry, pets, or personal liability. Hosts making claims under the Host
Guarantee must also agree to cooperate with Airbnb and its insurers, including
providing documentation of the loss theyre claiming and agreeing to inspection
in the rare cases it may be necessary. [19] Though the companys initial
handling of the situation was pretty poor, they certainly seem to have learned
from their mistakes regarding damages and liability, and the $1,000,000 Host
Guarantee is now one of the companys greatest assets. By moving quickly to
address these concerns Airbnb was able to continue growing with these incidents
becoming hiccups on an otherwise frantic growth curve.
Current & Future Growth Engine
International
From the earliest days of Airbed and Breakfast when the founders received
emails from people around the world requesting the sites expansion,
international users have played a significant role in Airbnbs growth. In May of
2011, Gebbia told GigaOMs Colleen Taylor:
This year is about international growth. I mean, some of our biggest cities are in
Europe and South America, and they are just starting to emerge. China and Asia
are really interesting to us. Its about localizing the site and making it really
easy, bringing the simplicity that we brought for people in the United States to
these other countries. [20]
With the acquisition of German knockoff Accoleo for an undisclosed amount the
following month, Airbnb opened its first European office in Hamburg, Germany,
to be headed by Accoleo founder Gunnar Froh. [21] The following spring, Airbnb
acquired their largest UK-based competitor Crashpadder just in time for the 2012
Summer Olympics in London. The deal stipulated that Crashpadder shut down,
but Airbnb provided an extension of their 24-hour customer service, a 30,000
guarantee (this was pre-$1,000,000 Host Guarantee), and the popular
professional photography option in order to persuade Crashpadders hosts (1,700
of whom were based in London) to move their listings to Airbnb. [46] That same
year, Airbnb opened offices across Europe, in not only London by also Paris,
Barcelona, and Milan. [22] In August of 2014, Airbnbs Rebecca Rosenfelt gave a

talk entitled Going for Global, in which she outlined some of the companys
recent international growth strategies. Rosenfelt began by pointing out that
though people in the Valley think of Airbnb as a mature company, in parts of the
world they are still more of a scrappy startup. She explained, Weve had to
crack growth over and over and over again as we break into new regions. [51]
Part of the struggle, according to Rosenfelt, is that Airbnb is a two-sided
marketplace, meaning that in every new market they attempt to enter, they
have to grow both the demand side (travelers) and the supply side (hosts). As it
turns out, the supply side is much harder to grow, as it takes a bit to get people
comfortable with the idea of opening their homes up to strangers.
One market in which Airbnb knew they needed to grow was Francethough
people were traveling to typical tourist locations in France using Airbnb, not
many people were using Airbnb to vacation within France. They decided to take
two approaches to growing, setting up an A/B test in which they chose several
small vacation markets within France that they thought would be popular. They
randomly selected half of the locations to physically visit, and half to target using
Facebook ads like the one below:

Image via source 51

By contrast, in the markets they physically visited, teams of two to three people
would talk to the few users already in that market to get an idea of what was
going on. Theyd also throw parties and info sessions, sets up booths around
town, post flyers, and, as Rosenfelt says, do whatever it takes. [51] They also
made sure to get contact info for everyone they talked to who showed interest in
hosting, and they followed up later with more information, an offer to create a
listing for them to review, and the like. Airbnb kept meticulous track of what it
cost to send people (including the cost of throwing parties, setting up booths,

and other on the ground activities) and the listings that resulted, and
compared that to the Facebook ads and resulting listings in the markets they
didnt visit. It turned out that cost per acquisition was 5x better for actually
sending people into markets. Not only that, but after kickstarting these
markets with a human presence, they kept growing 2x faster by themselves.
Based on Airbnbs experience, Rosenfelt claims that sometimes its beneficial to
do things that dont scale, because an un-scaleable tactic might be more
scaleable than initially thought, as was the case with sending teams into new
markets. At the very least, these initiatives result in valuable feedback in terms
of whats going on and other, more scalable opportunities for growth. This push
for international growth has proven effective for the company, as the shifting
demographics of the company user base indicate. In 2011, for example, around
half of Airbnbs guests were from the United States, but as of March 2014 that
number had dropped to less than 30%, all the while more than half of its guest
over the previous year were from Europe. Furthermore, the company projected
the number of European guests to more than double in 2014. [22]
Expansion: The Entire Trip
But Airbnb didnt just focus on expanding to offer lodging in more cities around
the world; the company also expanded to offer more than just lodging. As Chesky
explained to Fast Company in early 2014, "Our business isn't [renting] the house
our business is the entire trip. [23] This has been achieved primarily through a
focus on delivering a local experience, but the company has dipped its toe in
other areas as well, including maid service and experiences.
An Entire Hospitality Brand
According to Fast Companys Austin Carr, the concept of hospitality used to be
considered a relic of Old World grand hotels. Now, by contrast, the word is used
so frequently that its somewhat of an inside joke: You hear it in the halls:
Whenever an employee holds a door open for fellow coworkers or offers to clear
their plates in the cafeteria, others tease, Oh, so hospitable! [24] It is this
concept of hospitality that drives much of Airbnbs current and future growth
initiatives. As Paul Graham explains, "If you ask Brian now what drives Airbnb's
growth, it's not that people want to get a cheaper space. Airbnb could've spread
out horizontally into the sharing of power tools and cars and stuff like that. But
Brian has decided the growth is in hospitality." [24] It all started in the winter of
2012, when Chesky somehow stumbled upon a hospitality textbook from
Cornells hotel school. The 500-page book spoke to Chesky. As Carr explains,
Airbnb would no longer be about where you stay, but what you doand whom
you do it withwhile you're there. [24] Since then, Airbnb has been working to
suffuse hospitality throughout the entire user experience, even meeting with
representatives from traditional hotel groups in early 2013. Yet, as Chesky
explains, "[They didn't] inspire us or fit with our culture. That's what led us to
Chip." [24] Chesky is referring to Chip Conley, who in 1987 was 26 years old and
fresh out of Stanford business school, when, despite having no experience in the
hotel industry, he managed to raise $1M to purchase and totally reinvent a 50s
era motor lodge in San Franciscos Tenderloin district. His model was popular
with younger travelers seeking an alternative to the standard family or businessoriented motels and hotels, and Conley went on to do the same with over 50
more hotels in the Bay Area and beyond, becoming one of the originators of the

boutique hotel concept and creating an entire brand of Joie de Vivre hotels. After
holding the position of CEO for close to 24 years, in 2010 Conley sold his stake in
Joie de Vivre to Geolo Capital and entered semi-retirement. In March of 2013,
after the meeting and realizing those traditional hotel reps werent what Airbnb
was looking for, the company invited Conley to give a fireside chat on
hospitality and innovation. Chesky says he remembers thinking, "Wow, there's a
lot of things he's done that we should apply at Airbnb." Chesky and Conley kept
in touch, and in June Chesky offered Conley a job at Airbnb. Though he initially
declined, Chesky didnt give up, and over dinner one night he convinced Conley
to consult for eight hours a week. By the end of the dinner, Chesky had talked
him into agreeing to 15 hours, and Conley, now Head of Global Hospitality at
Airbnb, has become one of Cheskys most trusted advisers. He explains, "Within
a month, it was clear that nobody does anything part-time at Airbnb. Conleys
first responsibility was to create a set of hospitality standards that made the
guest experience more comfortable and reliable while preserving the unique and
local flavor that each host contributes to the experience.
Local
It is that local experience that draws many guests to Airbnb. Indeed, despite all
the emphasis on hospitality, one of the major selling pointsand, as we
previously discussed, also one of the major drawbacksis that Airbnb is not a
hotel. Guests who use the site typically want to experience a city in a more local,
authentic way. Tapping into this desireperhaps an extension of Cheskys
starting with the perfect experience and working backward [4]the company
has been placing increasing emphasis on facilitating this local experience. In
November of 2012, Airbnb launched two local initiativesAirbnb Neighborhoods,
which the company refers to as the definitive guide to neighborhood
experiences around the world [25], and Local Lounges. In the company post
announcing Neighborhoods, Vivek Wagle explained:
"Our users have told us that location is the single most important criterion when
choosing a place to stay. And with such overwhelming choice, travelers often
have trouble planning their accommodations. But imagine if someone created
a tool that matched you with the neighborhood thats right for your trip."[25]
Airbnb Neighborhoods leverages many of the features that have proven
successful for the company in the past, including professional photography and
local perspective. For the first time, Neighborhoods allowed Airbnb guests to use
their interestsfrom beaches to nightlife to mass transitto help them select a
place to stay. At launch, Airbnb Neighborhoods featured more than 300
neighborhoods in seven cities. To pull this off, the company hand-mapped over
2,000 neighborhoods, enlisted local editors to curate content for each distinct
neighborhood, and added 70 street photographers to the Airbnb team. As Ann
Montgomery, Neighborhoods product lead, explained, We want to show
neighborhoods in the best light, but also in an honest light. [26] Local Lounges,
by contrast, was intended as a primarily offline experience. Airbnb partnered
with 10 quintessential San Francisco coffee shops to provide Airbnb guests with
a warm welcome, free wifi, and a complimentary San Francisco guidebook filled
with hidden gems and neighborhood secrets. [27] Though as of July 2014,
Neighborhoods had expanded to include 21 citieseach one with anywhere from
nine (Venice) to sixty (New York) distinct neighborhoodsthe link for the Local

Lounges program is no longer active, so it seems that initiative was phased out.
The following month, Airbnb announced their acquisition for an undisclosed sum
of the small, seed-funded startup Localmind, a platform that lets people with
questions about places connect with locals who could answer those questions,
leveraging Foursquare check-in history to help determine how qualified users
were to answer about venues. Vivek Wagle explained on the Airbnb blog, This
was always meant to be. Localminds mission centers on using online
technologies to connect people offline. At its core, thats what Airbnb does. [28]
As part of the acquisition, Localminds creators, Lenny Rachitsky, Beau Haugh,
and Nelson Gauthier, began working on social initiatives as part of the Airbnb
team. As Chesky explained to VentureBeat, The role of social in travel is more
important than ever. Weve seen connections shape the experience for our
community, so were excited to have the Localmind team join us and lead this
next wave of social products. Though an Airbnb spokesperson claimed to be
unable to share just how Localminds technology would be used by the company,
they did say that connections to authentic, local experiences are foundational to
Airbnbs offering. [29]
Cleaning Services
One of the major ways in which Airbnb is upping its hospitality game is by
offering a cleaning service in select citiesSan Francisco, New York, and most
recently Los Angeleswhich was developed through observing the workflow of
the cleaning services at Conleys Phoenix and Hotel Vitale hotels. Chesky
explains, "It's full-service cleaning, with stocking, which means leaving towels,
bed sheets, mints, and a welcome package, like Vitaminwater in the fridge. And
also staging, which is making sure the heating and lights are on. [24] Cleaning
service starts at $55 for a one bedroom, one bathroom listing, and are available
through third-party partners Homejoy and Handybook, both of which interview
and run background checks on each of their cleaners. [30] When the service
expanded to LA In April of 2014, TechCrunch shared the following email, which
was forwarded by a host:
Hi [XXX], Were excited to invite you to try a new cleaning service were piloting
for Airbnb hosts in select LA neighborhoods! Airbnb Cleaning is affordable, easy
to schedule, and can be tailored to include amenities such as linen service.
Pricing starts at $55 for a 1 bedroom/1 bathroom. We built this service to address
what Airbnb guests care about most (things like odors and refrigerators!). We
also worked with hosts like you to understand how to cater to personal hosting
styles and home setup preferences. Well save your preferences and set up your
space exactly the way you want it every time. Click here to sign up! If you have
any questions, simply reply to this e-mail and well answer it promptly. Happy
hosting, Airbnb [31]
According to the companys own help article, this experimental feature may be
extended to more cities and more hosts in the future. [30]
Other Initiatives and Upgrades
But the company hasnt stopped at cleaning services, recent and impending
improvements include both comfort and safety measures. For example, the
company has attempted to improve the safety of US listings by requiring smoke
and carbon monoxide detectors, even going so far as to provide hosts with

devices to help meet requirements. [31] As far as comfort and convenience

measures go, one unnamed source indicates that Airbnb has experimented with
an Uber-style airport transportation option, while Conley himself mentions a New
York City test involving "alternative ways to help with the key exchange." Yet
Conley goes on to assert, Were too strange to be uniform. [24] Though the
companys aim is to improve the guest experience by providing universallydesired services, they arent trying to recreate the hotel experience entirely. After
all, what draws people to Airbnb in the first place is the chance to experience
each destination in a unique and local way. As long as that holds true, the
company will work to preserve that experience as much as possible. In the spring
of 2014, Airbnb began experimentally offering experiences in San Francisco
and Paris, in line with the companys entire trip mentality. Available
experiences included nature hikes, bike excursions, guided tours, food and drink
tastings, and various classes. [32] As of July 2014, however, experiences are no
longer available on the Airbnb site. In June of 2014, Airbnb signed a promotional
deal with the UK-based social startup Citysocializer, a platform for organizing
social events offering a 25 discount to Citysocializer members travelling to
Prague. An Airbnb spokesperson explained, however, that the company had no
plans for technical or product integration, and that the initiative was simply
about marketing Airbnb to a like-minded audience. [33]
Mobile
Airbnb has been optimizing their service hosts and guests on mobile devices in
response to the increasing consumer shift toward mobilea shift that has been
largely beneficial for Airbnb. Mike Curtis, Airbnb head of engineering, claimed in
October of 2013, Were really concentrating on mobile right now, building out
our mobile team and building out our mobile product. [34] In July of 2013,
Airbnb for the first time allowed hosts to create listing and upload photos via
mobile devices, even offering a how-to guide for first-time hosts. [35] [36] By
October, around 50% of hosts were using the mobile app [34], and those hosts
tended to respond to guests three times faster than those on desktopmeaning
bookings can happen as much as eight times faster via the Airbnb app. [36] As
Chesky explains, "Can you imagine if every Uber driver had to go home first to
check their laptop in order to find their next ride?" [24] To assist with those
efforts, in October 2013 Airbnb brought on Scott Raymond, co-founder and CTO
of Gowalla, one of the first location-based mobile apps that featured Airbnbesque social travel guides. According to Raymond, Gowallas mission was to get
out and explore places in the world. That experience has been percolating in my
mind for years. [34] Gowalla was acquired by Facebook in late 2011, and
Raymond worked for the company until leaving to join Airbnbs mobile product
team. A month later, in November of 2013, Airbnb launched an all new, rebuilt
from the inside out, mobile app for Android and iOS. The new app included
features like Host Home, Hospitality Standards (as developed by Conley), and
Host Groupsall aimed at making it easier than ever for hosts to post and
manage listings and communicate with and keep track of guests via mobile. The
company post announcing the update explains:
Think of Host Home as your hosting mentoralways there when you need it.
Host Home provides you the right information at the right moment, from

coaching you through listing a space to allowing you to effortlessly manage

multiple bookings. Hosting on Airbnb has never been such a snap. [37]
The new app also included updated features for guests. Larger, more dynamic
images, easily navigable maps, and thoughtful animations contributed to a
more immersive design, and a new Discover Feed featured Airbnbs most unique
and popular properties like lofts, treehouses, and castles, and allowed users to
explore based on destination, theme, or trip type. The mobile booking process
was also streamlined. [37] In late 2013, Airbnb decided to relaunch their
underutilized and underperforming [53] referral program. Because the majority
of emails are actually read on mobile, they decided to support sending and
accepting mobile referralssomething very few apps do. Gustaf Alstrmer,
Growth Product Manager at Airbnb, describes the referral system below as
something they werent proud of:

Image via source 52

To begin, Alstrmer says they looked at all the referral data they already had,
which helped them to get an idea of how the product was doing and what was
working, as well as make some forecasts as to what kind of growth might be
possible from an improved referrals program. They also talked to companies with
successful referral programs to get a better idea of industry standards and the
potential for growth with a well-executed relaunch. Though they knew it would be
a challenge, they decided to redesign and relaunch web, iOS, and Android
referrals simultaneously, and the five person team in charge of the project rented
out an Airbnb apartment in order to work offsite and focus in on the task at hand.
After 3 months and 30,000 lines of code, Airbnbs referrals program relaunched
in January of 2014. From day one, they tracked everything about the relaunch
using their in-house event logging platform air_events.

Image via source 53

They measured invites sent via email, Twitter, Facebook, and direct link, and they
immediately A/B tested all kinds of variables to learn as much as possible. They
wanted to ensure that invites felt like gifts (rather than promotions), and It
turned out that invites with a photo of the sender helped to reinforce that feeling.
They also found that using the Recommended Contacts feature from Gmail and
Android APIs resulted in a higher conversion rate, likely because these contacts
are closer to the sender.[52] Another A/B test involved the promotional emails
sent by Airbnb to potential referrers. When testing self-interested versus
altruistic language, they found that altruistic emails resulted in more invitations
sent globallywhich is also in-keeping with the idea of Airbnb referrals as a gift.
[53]

Image via source 53

Airbnbs new referrals program has already resulted in hundreds of thousands of

nights booked by referred users in 2014,[52] and referrals increased booking as
much as 25% in some markets. [53] Not only that, but Airbnb found that referred
users tend to be better than the average userin other words, theyre not
merely in it for a free night. They tend to remain engaged with Airbnb and book
future trips, and they are much more likely to send referrals themselves. As
Alstrmer explained at a talk on the relaunch in August of 2014, Airbnb is still
experimenting with their referrals programincluding its use of the popular
Recommended Contacts functionin order to keep driving and improving
referrals. Nevertheless, he claims that Airbnbs goal is user experience over
growth, and rather than simply driving as many referrals as possible, the
company wants to gain quality users who will continue to use and enjoy Airbnb.
[52]
Rebranding
Only July 16, 2014, Airbnb officially relaunched their site and mobile apps with an
entirely new look and feel. This rebranding was the result of a full year of brand
study, for which they collected user research, interviewed guests and hosts in

more than a dozen countries, and brought in London-based DesignStudio for

additional assistance. Their research also delved into competing brands, and,
according to DesignStudios Paul Stafford, they found that too many tech
companies rely on cold, corporate blue. [47] Up until July of this year, Airbnb
was one of those companies playing it safe. The original logo for AirBed and
Breakfast, along with the Airbnb logo that replaced it, were executed quickly out
of necessity. Gebbia explains, "Those brand identities were created in a matter of
hours, for a short deadline, and only for temporary use." Chesky echoes that
sentiment, explaining,"We were growing so fast, it became one of those things
where you say you'll figure it out later, but then you never end up doing it
because you're too busy." [47] But with the companys new focus on
international expansion and becoming a more inclusive hospitality brand, it
seemed like the appropriate time to tackle the branding issue. After conducting
intense research into their own brand as well as others, Chesky claims he was
able to distill it all into a single conceptbelonging. He explains, "Airbnb is about
belonging anywhere. The brand shouldn't say we're about community, or our
international [reach], or renting homesit's about belonging." [47]

Image via source 47

Their new logo, the Blo, embodies all this and more, combining visual elements
of a person, a location pin, a heart, and the A in Airbnb. Chesky has high hopes
that the logo will grow to become a universal symbol of sharing. He explains:
Imagine one day you're walking down the street and you see the Airbnb symbol
in a windowyou'll know that it's an Airbnb and a place that can be shared. A
restaurant could put this on its window telling travelers that it's an Airbnb-

friendly place. I can't go into specifics, but you're going to see this design
continue to permeate the real world. [47]
The companys ambition for the logo is just a hint at their ambition for the Airbnb
brand as a whole. As Chesky explains, "We get compared a lot with Uber, Lyft,
Dropbox, and Instagram; these are all really good brands. It's an honor to sit next
to them. But it's not enough." To help ensure that the logo takes off, Airbnb
debuted Create, which allows users to customize their own Blos, and, through
partnership with Zazzle, have them printed on cups, stickers, postcards, and
more. [47] But the Blo hasnt been received with excitement and positivity all
around. Some have noted that it resembles the logos for Automation Anywhere,
Couchsurfing, and The Sweethome, [48] while othersin particular, a Tumblr that
was started the same day as the redesignhave made more crass comparisons
to genetalia. [49] In regard to the Automation Anywhere comparison, in which
the similarity is most marked, company spokesman Nick Papas told FastCompany
Design:
In early 2014 both Airbnb and Automation Anywhere began use of new logos
that, by coincidence, have similar designs. Airbnb and Automation Anywhere are
working cooperatively to address this issue, and Automation Anywhere is in the
process of transitioning to a new logo design that is not similar to the Airbnb
logo. [48]
Logo concerns aside, the fact that the redesign emphasizes experiences, sharing,
and community is totally in-line with what users appreciate about the brand, and
will undoubtedly help the company to move forward in the quest to deliver the
entire trip. Potential Concerns

Infographic By Valerio Pellegrini, via Fast Company

Thanks to effective user and address verification processes and the companys
$1M host guarantee, the safety and liability concerns of 2011 are less of an issue
for Airbnb. As the company has expanded and refined their business model,
theyve grown from a more friendly, personal alternative to Craigslist into a more
friendly, personal alternative to hotels. After all, based on the number of beds
offered, Airbnb is the fifth-largest hotelier in the world, with prices at least onesixth cheaper than traditional competitors and a presence in almost every
country worldwide. [24] This explains why the companys biggest concern for
2014 and beyond is dealing with blowback from the disrupted hotel industry,
along with city and state officialsboth of whom arent quite sure what to do
when it comes to taxing and regulating Airbnb transactions. On the one hand,
there are people like Richard Solomons, CEO of InterContinental Hotels Group,
who argues,"If they're selling themselves as this big brand that's going to be
bigger than Hilton and InterContinental Hotels, they ought to be thinking about
regulation and leveling the playing field." [24] The hotel industry in New York City
has been particularly outspoken about their disdain and concern over Airbnb. In
August of 2013, Vijay Dandapani, Chief Executive of Apple Core Hotels
complained, These people [who rent out their apartments] dont pay taxesThe
web sites may tell them they need to pay all taxes, but they dont require it.
[38] In February of 2014, Lisa Linden, a representative of the Hotel Association of
New York City, complained that Residents who use Airbnb and similar sites to
rent rooms to incoming travelers degrade the quality of life for neighboring
residents, take revenue from local municipalities and jobs from local employers,
and could deter travelers from returning. [39] In March of 2014, Lisa Linden
claimed, These illegal facilities are impinging on available housing stock, lost
revenues for the city, and potential job losses for NYCs tourism industry. [40]
Then in April of 2014, Lodging Magazine reported that Many hotel owners have
been up in arms because Airbnb hosts are not subject to traditional hospitality
based regulations or requirements, such as paying lodging taxes [41] Chesky,
however, who met with hotel industry executives in Davos, Switzerland, in early
2014, asserts, "We are not seeking to go to war. I left those meetings imagining
that I will be able to have a cordial relationship with some of the leaders of those
companies." [24] Theres also the issue of oversight and taxation. To determine if
theyre in violation of the state law prohibiting renters for subletting for more
than 30 days, New York Attorney General Eric Schneiderman subpoenaed Airbnb
for information on its 15,000 New York state hosts in October of 2013. After
months of fruitless discussion between the Attorney Generals office and Airbnb,
the company eventually challenged the subpoena in the New York State Supreme
Court. An Albany judge agreed with Airbnbs claim that the Attorney Generals
demand was too broad, all the while making it clear that a new, narrower
subpoena would be accepted. The very next day, the Attorney General submitted
a new subpoena within those narrowed guidelines. After more work with the
Attorney Generals Office, Airbnb announced on May 21, 2014, we now believe
we have reached an agreement that will protect the privacy of thousands of
Airbnb hosts, while allowing the Attorney General to investigate bad actors and
move us forward. [42] The terms of that agreement included Airbnb providing
the Attorney General with anonymized data about our hosts in New York not

[including] names, apartment numbers, or other personally-identifiable

information. To that effect, the Attorney Generals Office was given one year to
review the data and request more information from Airbnb about specific hosts
who might be subject to further investigation. Nevertheless, in the press release,
Airbnbs David Hantman explained:
We believe the Attorney Generals Office is focused on large corporate property
managers and hosts who take apartments off the market and disrupt
communities. We have already removed more than 2,000 listings in New York
and believe that many of the hosts the Attorney General is concerned about are
no longer a part of Airbnb. [42]
Furthermore, Airbnb promised to provide more information about the laws in New
York to both new hosts prior to listing as well as current New York hosts via email.
[42] But its not just New York thats trying to figure out what to do with Airbnb.
The companys home base of San Francisco is also in the midst of redefining and
regulating the laws governing short-term rentals. After collecting more than
15,700 signaturesenough to qualify for the July 7th deadline and appear on the
ballot in November 2014a group of affordable housing activists decided to pull
their proposed initiative restricting short-term rentals, choosing instead to work
toward a legislative compromise. While far from a long-term solution, this was
nevertheless good news for Airbnb, as the initiative called for a public registry of
all hosts, required hosts show permission from landlords and proof of insurance,
and forced hosts to follow zoning regulations limiting spaces to certain parts of
the city. The group included former planning commissioner Douglas J. Engmann
and housing activist Calvin Welch, among others. Dale Carlson, one of the
initiatives biggest supporters, cited concerns that Airbnb was allowing citizens to
subvert the very rent control and zoning laws meant to keep housing affordable
in the city, explaining: We have the worst housing crunch since the 1906
earthquake. This is not the time to be cannibalizing our housing stock for
tourists. [43] Its true that residents technically need a conditional use permit to
legally rent their spaces for less than 30 days [43], and some hosts have even
faced eviction for violating the terms of their lease.[44] On the one hand,
landlords are angry that tenants are profiting more on rent-controlled apartments
than they are, as Jenson Lam, owner of a duplex in North Beach, explains, "It's
called overcharging subtenants in rent, defrauding the landlord and profiteering
off the apartment. But there are no penalties." [44] After discovering that a longterm tenant had gone on vacation and rented her apartment for $4,500 per
monththree times her actual rentLam paid the tenant $45,000 to move out in
an attempt to avoid a jury trial for eviction. Yet theres also evidence that some
landlords claim illegal activity merely to sidestep the cure or quit notice, as
Gregory Brod, who has represented Airbnb hosts, explains:
"The landlords wanted any excuse to get them out of there ... so they could take
advantage of the skyrocketing real estate market. It was absolutely a false
pretense to evict. They decided to bastardize the administrative code to say, 'You
broke the law, you're done and don't have an opportunity to fix."[44]
In the case in question, Brod charged the landlord with harassment and wrongful
eviction, negotiating a buyout for the tenant. San Francisco Board of supervisors
President David Chiu has been working on competing legislation for the past two
years that would have made short-term rentals legal but limited them to a total

of 90 days out of the year. However, Chius legislative aide Amy Chan notes that
it would not affect individual lease agreements. [44] Chius legislation was
developed with input from Airbnb, and the company has shown a willingness to
work with officials, as in the following statement released in response to the
pulled initiative:
We have long believed that we can all work together to fashion responsible
rules that protect the public interest and let San Franciscans share the home in
which they live. We look forward to working with everyone on legislative
proposals as we move forward. [43]
As early as March of 2014, sources began reporting that Airbnb was gearing up
to collect taxes from renters. Fast Companys Aaron Carr claimed that:
When Gebbia gives me a tour of the company's stunning new offices, we stop
by one developer's desk to ask what he is working on. He tells us that he's
building an engine to handle transient occupancy taxes for a place like New York
City. [24]
In April of 2014, Airbnb released data indicating that the Airbnb community, will
generate $768 million in economic activity in New York and support 6,600 jobs
this year. [45] They also highlighted the state law preventing Airbnb from
collecting and remitting $21M in hotel taxes, asking leaders to work to change
the law and allow Airbnb to do just that on behalf of hosts and guests. Yet the
company may face some unlikely resistance. Despite previous concern over the
fact that Airbnb wasnt paying hotel taxes, The Hotel Association of New York City
claimed that if there was a proposal to allow Airbnb to contribute $21M to New
York in hotel taxes they would oppose it, entirely. As Airbnb acknowledges in a
press release on the subject, the hotel industrys shifting rhetoric is just one
piece of a larger issue, which is that any new legislation holding Airbnb
accountable for taxes would also legitimize the Airbnb business. And thats
something the hotel lobby doesnt want. [45] This back and forth between the
hotel industry, state and local government, and landlordsall of whom want
their share of the actionwill be Airbnbs biggest struggle. The shifting rhetoric
of both San Francisco housing activists and New York hotel lobbyists indicates
that a peaceable and equitable agreement might be hard to come by.
Written by
MB
Morgan Brown
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20 COMMENTS

MS

Michael Schaecher
almost 2 years ago #
While this is well written and researched, it doesn't paint a very accurate picture
of the key growth levers and strategic environment of Airbnb's growth. FWIW, no
one else has got it right either as it would be hard to do from the outside.
You did get one thing very right, even though you didn't explicitly define it
there was no silver bullet. The rocketship growth was driven by many
interconnected activities, all with effect and importance that ebbed and flowed
over time. And that the sum is always greater than the parts.
Speaking of the sum being greater than the parts, I feel like Rebecca's analysis is
fundamentally flawed in two ways:
1 - 100 people executing a strategic plan that includes 30+ tactics, all executed
at a high level, will almost always outperform a single tactic standing on its own
(unless the single tactic is an amazing super bowl ad or something at that level).
2 - her analysis is based on stuff after Airbnb reached 10M Nights/$1B+ Val, and
disregards much of what got us to there.
Source? I was employee #15 and #2 marketing who (among many other things)
managed the international growth campaign that had us hit 10M nights 3 months
after we first hit 5M nights.
No dis to you or Rebecca, I've also taken Andrew Chen and Ryan Holiday to task
over this stuff privately, just decided to start doing so not so privately.
11 Reply

MB

Morgan Brown
almost 2 years ago #
Hey @mschaecher thanks so much for 1) stopping by and 2) reading such a long
piece! I really appreciate you taking the time to do both.
I don't take offense at your assertion that it doesn't really reflect the drivers, as
all I can go on is what is out there publicly. Are you able to share what some of
the levers or at least the thought process was around growth early on? Or have
you written about it in the past that we could update with a link?

These aren't meant to be complete histories, but rather are written in a spirit of
helping other growth marketers gain inspiration from successful companies, so
any insights you could share with us would be really appreciated.
12 Reply

SE

Sean Ellis
almost 2 years ago #
Congrats on being a part of one of the great growth accomplishments of the last
several years. I had a couple meetings with Brian and Nathan in the early days
(late '08, early '09) about Airbnb growth and I never imagined that the team
would overcome the early growth challenges with such success.
I'm curious how much agreement there is among the early marketing team and
founders of the exact attribution of the key growth levers? As you mentioned the
"rocketship growth was driven by many interconnected activities, all with effect
and importance that ebbed and flowed over time. And that the sum is always
greater than the parts."
In my experience helping grow a few rocketships, I've always found that organic
growth is an important factor. Organic is largely a function of the right product in
the right market at the right time. The sum of "interconnected activities"
generally accelerate that growth, but isolating the exact causes can be pretty
tough.
Do you feel like the early Airbnb team understand and agree on the exact
causes? Who tends to be the most open about sharing insights into these growth
levers? Are these growth levers transferrable to other companies?
Our goal with these growth studies is to:
1) Improve our own understanding of how companies grow on the Internet.
2) Share and extend that knowledge with a broader community of growth
professionals.
Any insights that you can offer are greatly appreciated. Thanks!
9 Reply

NR

N Richler
about 1 year ago #
Thank you for sharing your comment - I both really enjoyed @morgan's writeup
and agree with your reply that many case studies focus too much on what

companies do once they already have a solid user base. Most of the startups I
know and work with are trying really hard just to get to the first step of having
initial traction. There are lot's of things you can do to drive a startup to
rocketship status once you have solid product-market fit, but I think the
challenge of what gets you there is much more pressing. @mschaecher would
you mind sharing what helped get you to that first 10M?
1 Reply

BG

Brandon Gains
almost 2 years ago #
Man that Obama O's story is a great example of straight entrepreneurial hustle.
We point to the success of the Dropbox and Airbnb referral programs, so it's
always great to see more content on how it's a great growth lever for them.
Another great piece on Airbnb's growth was that talk about the international
expansion (posted last week) that talked about their guerilla marketing tactics in
new cities and how they outperformed the Facebook ad spend by 5x.
5 Reply

BP

bas prass
almost 2 years ago #
What an awesome piece of writing. Agree with the previous comments, but
nevertheless this was a really good read!
4 Reply

SH

Skyler Hair
almost 2 years ago #
Bloody good article @morgan !
Wow, what a read. +1 to both Morgan's and Sean's questions.
Got something that is on my mind after reading this. With Airbnb (had I been
there at the start) I would have felt unsure about the growth potential given the

trust issues. My question to the group is: If you have an idea with a high barrier
to adoption, how do you decide if the idea is still worth pursuing? Is there some
kind of indication that everything will (most likely) be all right?
@sean Perhaps you would say the 40% rule/benchmark?
3 Reply

SE

Sean Ellis
almost 2 years ago #
@sky117 the 40% rule ( http://www.startup-marketing.com/using-survey-io/ ) is
pretty hard with a network effect business. Until you have critical mass, the
feedback is generally pretty weak.
3 Reply

RS

Ryan Stevens
almost 2 years ago #
awesome post! is there a link to buy the audiobook??
2 Reply

BH

ben hoffman
almost 2 years ago #
Watching Brian Chesky speak at TC Disrupt in SF. Really glad I read this case
study first - it really puts everything in perspective. If you liked this study, I
encourage you to watch this interview. He is talking about how AirBnB puts users
first and how they handled the bad PR a few years ago. What a great company.
2 Reply

VG

Virginia Ginsburg
almost 2 years ago #
I agree that Airbnb got so much buzz exactly because it's an uncomfortable, but
compelling concept. I think Paul Graham's quote, I thought the idea was crazy.
Are people really going to do this? I would never do this. is classic! It's also
indicative of the biggest challenge with starting a new business: some of the
most compelling ideas are deeply uncomfortable to the people who fund them!
To me, the takeaway from this story is 1) get an edgy idea; 2) test it out; 3) use
unconventional, relentless marketing to get it out there.
I love the non-traditional marketing techniques detailed!
Thanks for the article - very well written!
2 Reply

BP

Brydon Parker
almost 2 years ago #
Amazing article!
They have a very inspiring story and so many specific lessons can be learned
from witnessing how they accomplished what they have thus far.
The controversy around the topic definitely did play a role in the word of mouth
marketing of the business.Even if someone is against the concept when they
bring up the business they are still getting the name out. And it provides an
excellent base for discussion.
The referrals programs they implemented were brilliant, "Give Your Friends $25
To Travel" is some great copy. And an opportunity that's difficult to pass up.
Thanks for the interesting and educational read Morgan.
1 Reply

AD

Alessandro Daliana
almost 2 years ago #
This is a very complete article that does an excellent job of illustrating the Return
On Key Component Method. In this example, the AirBnB's "key component" is
well designed and engaging web platform that does an excellent job of managing
a marketplace for those offering lodgings and those seeking lodgings. The

company did an admirable job of building a website to manage the processes

and risks associated with such a marketplace, and those that could not be
managed by the IT infrastructure are handled manually.
Like other collaborative consumption platforms, on the one side there are people
who have non-performing assets and on the other people who want to use them.
The uncertainties on both sides of the market are reduced thereby making the
service valuable.
However, AirBnB should not lose sight of the fact that it created efficiencies in
the short-term rental market and not in the traditional hotel market. Encroaching
on this legacy market is expensive and the payback will be limited as all this
litigation illustrates. As a matter of fact, I don't think think the author, Morgan
Brown, should have illustrated the article with comparisons to the hotel market
as it would be much more telling to see the shift in ads for the short-term rental
market over time. Nonetheless, excellent article.
1 Reply

SS

sabrina saada
over 1 year ago #
What a success story. The had a visionary idea, distinguished their value
proposition and ba-da bing they hit it big!
1 Reply

UE

Ugo Ezeamuzie
over 1 year ago #
I've been following the Airbnb story for a while and this is by far the most legit
recollection of their growth hacks, strategies and tactics since inception.
Incredible job with this Morgan. Will def be sharing this with friends!!
1 Reply

AG

Alix Gallardo
about 1 year ago #

Awesome life and business project. The most important thing is how airbnb learn
about users needs and how they make decisions and improve in the way.
Thanks for sharing the hole story and huge success.
1 Reply

AS

Aazar Shad
11 months ago #
Really good read on Airbnb.
1 Reply

AP

Aleksey Polukeyev
8 months ago #
Thank you for putting this together, it's a good read. I agree with the comments,
the early footwork and challenges before the user base is established is where a
lot of the most interesting events happen. Getting to the point of receiving more
complex and challenging feedback from the world is an exciting place.
1 Reply

JE

jonah engler
6 months ago #
Thank you so much for putting this together. What a great business project!
1 Reply

DG

Doc Gunthrop
5 months ago #

very informative article. That part about poaching CL ads; some people may call
it "black hat", but it was a clever way of ensuring growth in their "supply".
1 Reply
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