What You Can Learn from Airbnb’s Successful Startup
Airbnb, Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, first moved to San Francisco, California, they couldn’t afford rent for their expensive San Francisco apartment. Needing extra money, they rented out their living room bed-and-breakfast style to a few friends who couldn’t book a hotel room in time for an event.
This sparked the idea to create an app that would allow people to find accommodation around the world, using other people’s available space – be it a mother-in-law suite, a guest bedroom, or even a couch.
Airbnb, a popular online vacation room rental platform with over 4 million hosts and over 54 million active bookers, would present a cheaper option for staying abroad than a typical lodging place, and in theory, would give traveling options to people who otherwise couldn’t afford it. The idea manifested itself in their minds and grew into what we know today as the website that serves as the everyday traveler’s ticket to exploring the world. But before it revolutionized modern traveling, it was just an idea with no funding to back it.
Creative Fundraising that Worked
To finance their idea initially, the trio thought of something rather ingenious to sell. During the Presidential election between Barack Obama and John McCain, the three roommates created and sold special-edition cereals, using the candidates as inspiration. They designed their own cereals, called “Obama O’s” and “Cap’n McCains,” and sold them online as well as at campaign rallies. With the growth of crowdfunding, making sure their idea was creative was crucial to its success, and they rise is crowdfunding is only getting bigger:
This limited edition “collectors’ items” generated more than $30,000 in sales. The roommates used this money to jumpstart Airbnb, putting it towards startup costs such as the design of their website, marketing campaigns and licensing. The money they raised worked to get Airbnb off the ground, but the three entrepreneurs were far from being in the clear.
A Rocky Start
After its initial launch, Airbnb took a turn for the worst, as so many startups do. The brand wasn’t creating a lot of buzzes or getting enough publicity, and its revenue soon flatlined at only $200 per week – an amount that was losing them money after costs of production and a three-way split between each founder. Investors weren’t willing to touch the fledgling business, and the trio was forced to max out their credit cards to keep their idea afloat.
Finally, Airbnb gained footing and convinced the co-founder of Y Combinator, Paul Graham, to fund their idea – a $20,000 investment that opened the doors to get more investors.
They soon attracted a $600,000 investment from two other investors and were soon on their way to getting off the ground for good. But not everyone was convinced – Fred Wilson from Union Square Ventures famously turned down an investment opportunity, a mistake he later admitted regretting.
The difficulties didn’t end with finding funding, however. Airbnb underwent a series of safety concerns sparked by a user whose home had been robbed by an Airbnb guest. This scare set the business back and resulted in hundreds of users who stopped using the service, afraid of the same thing happening to them.
Airbnb and its investors struggled to find a solution to this issue and came up with a variety of ways to avoid disasters in the future, listed today on their Safety FAQs page. Their solutions include identification verifications, a profile, and review system for users, and protecting users with a Host Guarantee program ensuring guests up to $1,000,000 in damages.
From Failing Startup to Multibillion Dollar Business
After covering all of its bases, the founders could focus on introducing the masses to Airbnb. Their strategy was a risky one, but it resulted in a high payout: they used Craigslist, an already-popular housing site, to advertise their own business.
They were aware that Craigslist had their ideal target audience – people who were looking for accommodations other than hotels when they traveled.
Airbnb executed a complex strategic maneuver that essentially placed hooks throughout Craigslist that directed the user to their website, instead. Since Airbnb provided better photos, more in-depth property descriptions, and a more personal nature, most people who were led to the site began to use it instead of Craigslist in the future. This campaign strategy pushed tons of traffic to Airbnb and drastically aided in its large-scale success.
After Airbnb began to grow its audience, the founders started to brainstorm ways of making their site even more popular. They decided to expand the website’s reach to cities around the world, and also started to spread its capabilities beyond simply housing. They wanted to help the user through every stage of traveling and began to alter the focus of their website from providing cheap housing to being an all-inclusive hospitality service.
Brian Chesky was especially behind this initiative, fueled by his desire to turn Airbnb into a place of upstanding customer service. The company started two new programs, called Neighborhoods and Local Lounges, to show users the surrounding area of the location they were interested in, using photographs and city mapping that showcased the beauty and hidden gems but still strived to depict the city honestly.
These programs fueled Airbnb’s already-established platform for being a site for people who want an authentic experience abroad and continue to increase Airbnb’s overall attraction for customers today.
What You Can Learn from Airbnb’s Success
Today, Airbnb is worth an estimated $25 billion dollars, catering to over 60 million guests over 190 countries. Their success can largely be attributed to their brilliant website design techniques, the determination not to quit in the face of hardship, and outside-of-the-box entrepreneurial thinking.
The founders of Airbnb may have done some risky things, but their unique strategy ultimately paid off for them. But their story isn’t alone in its startup success, and there are techniques the everyday entrepreneur can learn and adapt from Airbnb to fit their own needs. Even if you are an established company looking to make a name for itself with the help of digital marketing Companies, these tips are for you.
The first thing Airbnb did right was to think of their customers first. Airbnb was never just a way to gain a profit for its three founders; it began as a way to revolutionize traveling for those who needed a new alternative.
Through its eight years of business, Airbnb has continued to put the customer’s needs first, designing its website to be as simple and clean as possible. They exceeded competition like Priceline by enhancing the usability of their site, making it look more modern and cutting out unnecessary page fillers.
The second factor that differentiated Airbnb from other startups was that they created their own niche within an already-established (but stagnant) industry. Craigslist was already a prominent site that was already offering users accommodation options other than hotels – but the founders of Airbnb didn’t let that stop them.
Instead of becoming discouraged, they learned about what Craigslist lacked (such as high-quality photos) and built Airbnb to fill these missing needs. They continually seek ways to make their brand stand out from the rest, such as offering a maid service to users.
Finally, the founders of Airbnb didn’t give up too soon. They took the bad news in stride and turned their failures into fuel for their future success. They did whatever they had to do to get their idea up and running, and didn’t stop when investors said no.
Being an entrepreneur will always involve risks and difficulties. It’s how you react to these problems that make you stand out from the rest and marks your path to success. As an organization, if you go to one of the Top website design companies for your branding needs, the first thing you need to do is know your brand and its customers inside out. The rest will follow.
Stephen Moyers
One thought on “What You Can Learn from Airbnb’s Successful Startup”
Great example, it is really very knowledgeable. Thank you for sharing.
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How travel help airbnb kayak startup idease
With a valuation of $30+ billion, Airbnb is one of the most aspiring tech startups among SpaceX, Clubhouse, and Uber. The company that revolutionized the way we travel was founded in 2007 by two friends strapped for rent money. Airbnb history is worthy of a movie adaptation, and there are plenty of records you can find online to get inspired. Instead of going over the company’s milestones, I’d like to share seven Airbnb startup strategies you can apply to one day turn your enterprise into yet another unicorn.
Find the Solution to a Problem in the Right Time
The sharing economy’s prime examples, such as Uber and Airbnb, would not be possible at any other time. The economic slump in the late 2000s made renting a room or even a bed in your apartment more palatable than ever. Similarly, the spiking unemployment rates convinced thousands of people to take up driving for Uber as a chance to make ends meet. The timing was critical for Airbnb startup success, as even five years earlier, the concept would have been too revolutionary to consider.
However, being in the right place at the right time wasn’t enough. Joe Gebbia and Brian Chesky rented air mattresses to the attendees of the Industrial Design Conference. The shortage of hotel vacancies made their enterprise viable, and soon they had the first three clients that paid $80 each for an air mattress to sleep on and a home-cooked breakfast to go with it. Once Chesky and Gebbia understood their one-time venture could turn into a profitable business, Airbnb startup was born, though its name was Airbed and Breakfast at the time.
The company made first sales because Chesky and Gebbia identified the problem (no free hotel rooms for conference attendees) and offered a viable solution (airbed and breakfast combo). At any other time, when San Francisco wasn’t choke-full of designers, their enterprise wouldn’t have had the same success. Before you move onto MVP development or fundraising, you should have a clear idea of what problem your product can solve and how many people will benefit from it. Use our startup checklist to ensure you’ve got everything sorted.
Look for Funding Everywhere
In desperate need of funding, Airbnb founders put their design skills to use and created election-themed cereal boxes for both presidential candidates (Obama O’s and Cap’n McCain’s). After selling over 500 boxes, the team was up nearly $30,000, though they had to survive on unsold Cap’n McCain’s, which they later described as one of the lowest points in their business venture.
Airbnb team also joined the Y Combinator class in 2009 and received an additional $20,000 to develop their fledgling platform further. Despite their best efforts, the Airbnb business model seemed too far-fetched for many investors. Fred Wilson and Union Square Ventures famously rejected the pitch to regret it later. Investors had trouble believing the enterprise headed by two Rhode Island School of Design alums could produce a working product without reliable technical partners. Additionally, investors had doubts about the idea of short-term renting to strangers. Still, the startup ran a successful seed round and received the much-needed $600,000 in 2009 from Y Ventures and Sequoia Capital.
It might be surprising, but Airbnb startup followed the same steps many companies do. The founders had to be creative about found-raising and rely on savings and side hustles to get the project off the ground. You shouldn’t expect to receive the seed capital as soon as you get a million-dollar idea. Be ready to survive on your own until you get into an incubator program or gain enough attention from the investors.
Highjack the Target Audience from the Competition
Though there is no exact date for this growth hack implementation, there’s proof that Airbnb implemented its Craigslist integration in 2010 or earlier. At the time, Craigslist was the number one choice for short-term hosting opportunities, and the Airbnb team decided to tap into its vast potential. Every property added to Airbnb was automatically listed on Craigslist. The team developed a bot to generate unique URLs and fill in the form fields.
Unlike many Craigslist offers, Airbnb properties had better, more personalized descriptions and professional photos. As a result, they got more attention from the audience. Moreover, once users tried Airbnb and had an enjoyable experience, they were likely to forego Craigslist and go straight to Airbnb in search of vacation housing. Later, the startup also resorted to poaching listings from Craigslist. Both strategies culminated in a significant increase in rental offers and paying customers.
Airbnb business strategy relied on targeting a platform rich with potential customers. Some of their approaches might seem a little underhanded, but the superior quality of their services ensured all parties involved were happy with the results. Your startup growth hacks might not be as straightforward, but you should always be on the lookout for platforms, blogs, and meetups rich with potential customers.
Start with the Best Experience and Go from There
Airbnb business plan always relied on following the customer demand and providing an outstanding online and offline experience. The team focused on hands-on experience with Airbnb service to gain a better understanding of their customers. For instance, Brian Chesky booked different listings and stayed there over the course of several months. Similarly, the founders booked 24 places in New York when the market failed to explode like expected.
Their hands-on experience with New York hosts resulted in another feature – photos of the rentals taken by professional photographers. Gebbia and Chesky did the first batch themselves after renting $5,000 worth of professional equipment. Quality photos instantly increased the customers’ interest in New York properties and made them 2.5 times more likely to be booked. Now the company works with thousands of freelance photographers offering this feature across major cities.
Airbnb startup team realized that customers want to see what they are paying for, so they designed a photography program that would benefit both homeowners and their visitors. When working on your MVP, focus on features crucial to your customers, such as a user-friendly interface or one-click forms, they will pay off in the long run.
Keep Regulatory Compliance in Mind
While its popularity and profits were on the rise, Airbnb lean startup ran into legal troubles. Real estate owners started fining or evicting people renting out their flats and houses to short-term travelers. In 2014 the regulatory problems peaked, with many cities banning Airbnb rentals. The city of New York led the charge and banned all hosts. It became illegal to sublet NYC real estate for less than 30 days.
Even San Francisco, the cradle of Airbnb, restricted short-term rental deals. The company had to spend over $8 million to deal with a citizen-led ballot program designed to reduce the number of Airbnb rentals. To deal with compliance complications, the startup started collecting hotel taxes and transferring them to the host cities, as well as share some data with authorities as a part of the Airbnb Community Compact.
Airbnb set out to revolutionize the way people travel without taking into account the pushback by local and national authorities, as well as hospitality industry incumbents. Despite some financial losses, the company found ways to cooperate with city authorities and continue operations in the largest cities across the globe. Whichever niche your startup will inhabit, you should consider legal aspects and regulatory compliance from the get-go, especially when it comes to personal data protection.
What You Can Learn from Airbnb’s Successful Startup
Airbnb, Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, first moved to San Francisco, California, they couldn’t afford rent for their expensive San Francisco apartment. Needing extra money, they rented out their living room bed-and-breakfast style to a few friends who couldn’t book a hotel room in time for an event.
This sparked the idea to create an app that would allow people to find accommodation around the world, using other people’s available space – be it a mother-in-law suite, a guest bedroom, or even a couch.
Airbnb, a popular online vacation room rental platform with over 4 million hosts and over 54 million active bookers, would present a cheaper option for staying abroad than a typical lodging place, and in theory, would give traveling options to people who otherwise couldn’t afford it. The idea manifested itself in their minds and grew into what we know today as the website that serves as the everyday traveler’s ticket to exploring the world. But before it revolutionized modern traveling, it was just an idea with no funding to back it.
Creative Fundraising that Worked
To finance their idea initially, the trio thought of something rather ingenious to sell. During the Presidential election between Barack Obama and John McCain, the three roommates created and sold special-edition cereals, using the candidates as inspiration. They designed their own cereals, called “Obama O’s” and “Cap’n McCains,” and sold them online as well as at campaign rallies. With the growth of crowdfunding, making sure their idea was creative was crucial to its success, and they rise is crowdfunding is only getting bigger:
This limited edition “collectors’ items” generated more than $30,000 in sales. The roommates used this money to jumpstart Airbnb, putting it towards startup costs such as the design of their website, marketing campaigns and licensing. The money they raised worked to get Airbnb off the ground, but the three entrepreneurs were far from being in the clear.
A Rocky Start
After its initial launch, Airbnb took a turn for the worst, as so many startups do. The brand wasn’t creating a lot of buzzes or getting enough publicity, and its revenue soon flatlined at only $200 per week – an amount that was losing them money after costs of production and a three-way split between each founder. Investors weren’t willing to touch the fledgling business, and the trio was forced to max out their credit cards to keep their idea afloat.
Finally, Airbnb gained footing and convinced the co-founder of Y Combinator, Paul Graham, to fund their idea – a $20,000 investment that opened the doors to get more investors.
They soon attracted a $600,000 investment from two other investors and were soon on their way to getting off the ground for good. But not everyone was convinced – Fred Wilson from Union Square Ventures famously turned down an investment opportunity, a mistake he later admitted regretting.
The difficulties didn’t end with finding funding, however. Airbnb underwent a series of safety concerns sparked by a user whose home had been robbed by an Airbnb guest. This scare set the business back and resulted in hundreds of users who stopped using the service, afraid of the same thing happening to them.
Airbnb and its investors struggled to find a solution to this issue and came up with a variety of ways to avoid disasters in the future, listed today on their Safety FAQs page. Their solutions include identification verifications, a profile, and review system for users, and protecting users with a Host Guarantee program ensuring guests up to $1,000,000 in damages.
From Failing Startup to Multibillion Dollar Business
After covering all of its bases, the founders could focus on introducing the masses to Airbnb. Their strategy was a risky one, but it resulted in a high payout: they used Craigslist, an already-popular housing site, to advertise their own business.
They were aware that Craigslist had their ideal target audience – people who were looking for accommodations other than hotels when they traveled.
Airbnb executed a complex strategic maneuver that essentially placed hooks throughout Craigslist that directed the user to their website, instead. Since Airbnb provided better photos, more in-depth property descriptions, and a more personal nature, most people who were led to the site began to use it instead of Craigslist in the future. This campaign strategy pushed tons of traffic to Airbnb and drastically aided in its large-scale success.
After Airbnb began to grow its audience, the founders started to brainstorm ways of making their site even more popular. They decided to expand the website’s reach to cities around the world, and also started to spread its capabilities beyond simply housing. They wanted to help the user through every stage of traveling and began to alter the focus of their website from providing cheap housing to being an all-inclusive hospitality service.
Brian Chesky was especially behind this initiative, fueled by his desire to turn Airbnb into a place of upstanding customer service. The company started two new programs, called Neighborhoods and Local Lounges, to show users the surrounding area of the location they were interested in, using photographs and city mapping that showcased the beauty and hidden gems but still strived to depict the city honestly.
These programs fueled Airbnb’s already-established platform for being a site for people who want an authentic experience abroad and continue to increase Airbnb’s overall attraction for customers today.
What You Can Learn from Airbnb’s Success
Today, Airbnb is worth an estimated $25 billion dollars, catering to over 60 million guests over 190 countries. Their success can largely be attributed to their brilliant website design techniques, the determination not to quit in the face of hardship, and outside-of-the-box entrepreneurial thinking.
The founders of Airbnb may have done some risky things, but their unique strategy ultimately paid off for them. But their story isn’t alone in its startup success, and there are techniques the everyday entrepreneur can learn and adapt from Airbnb to fit their own needs. Even if you are an established company looking to make a name for itself with the help of digital marketing Companies, these tips are for you.
The first thing Airbnb did right was to think of their customers first. Airbnb was never just a way to gain a profit for its three founders; it began as a way to revolutionize traveling for those who needed a new alternative.
Through its eight years of business, Airbnb has continued to put the customer’s needs first, designing its website to be as simple and clean as possible. They exceeded competition like Priceline by enhancing the usability of their site, making it look more modern and cutting out unnecessary page fillers.
The second factor that differentiated Airbnb from other startups was that they created their own niche within an already-established (but stagnant) industry. Craigslist was already a prominent site that was already offering users accommodation options other than hotels – but the founders of Airbnb didn’t let that stop them.
Instead of becoming discouraged, they learned about what Craigslist lacked (such as high-quality photos) and built Airbnb to fill these missing needs. They continually seek ways to make their brand stand out from the rest, such as offering a maid service to users.
Finally, the founders of Airbnb didn’t give up too soon. They took the bad news in stride and turned their failures into fuel for their future success. They did whatever they had to do to get their idea up and running, and didn’t stop when investors said no.
Being an entrepreneur will always involve risks and difficulties. It’s how you react to these problems that make you stand out from the rest and marks your path to success. As an organization, if you go to one of the Top website design companies for your branding needs, the first thing you need to do is know your brand and its customers inside out. The rest will follow.
Stephen Moyers
One thought on “What You Can Learn from Airbnb’s Successful Startup”
Great example, it is really very knowledgeable. Thank you for sharing.
Leave a Reply Cancel reply
Craving
for a Digital Transformation?
Hey there, we are determined to help a enterprise grow. Our only question is, will it be yours?
Get awesome web related content every month. (No spam, we promise)
Filter By
Connect with us
Search The SPINX Blog
About SPINX Digital
At SPINX Digital, our team of innovators and digital marketers in tech and design bring skills above and beyond the ordinary to every project. Our Los Angeles web design and development team is involved in professional B2B and B2C web design and development, mobile applications, digital strategy, user experience, advertising, social media, content management systems, and email marketing initiatives.
Source https://www.spinxdigital.com/blog/what-you-can-learn-from-airbnbs-successful-startup/
Source https://freshcodeit.com/freshcode-post/7-airbnb-startup-strategies-to-adopt
Source https://www.spinxdigital.com/blog/what-you-can-learn-from-airbnbs-successful-startup/