How Airbnb Became Successful?

By: Mahnoor Awan

AirBnb is an online platform that allows you to rent, or rent out, unique accommodations from around the world. Whether you’re looking for a spare room or an entire home, cottage, mansion, villa, castle, island (I know right?) to get away, you can find truly extraordinary accommodations.

The concept of such a service originated in 2007, when founders Brian Chesky and Joe Gebbia couldn’t afford to meet rent for their San Francisco loft, and decided to rent the extra space. Their first three guests were attendees of a sold out design trade show, and their first attempt at turning their extra space into a bed and breakfast involved air mattresses and Pop Tarts for breakfast.

Joe Gebbia, Co-Founder

Brian Chesky, Co-Founder

Nathan Blecharczyk, Co-Founder

In 2008, their friend Nathan Blecharczyk, a Harvard graduate, joined the team and they launched their initial website as and since then, a simple idea they had in their apartment one day, began to take root and grow into the business it is today.

So, in an industry dominated by big hotel chains, how did three guys from San Francisco made it to the top?

Here are 5 reasons why AirBnb became so successful:

  1. A Disruptive Business Model
  2. In a market dominated by big hotel chains, AirBnb came up with a concept that was different and ground breaking. Just when customers were so used to going on to multiple sites like Expedia - to compare hotel rates and find the best one that suits their requirements - AirBnb came out with a model, which was user-focused, cost-efficient as compared to other travel booking sites, plus offering a cultural experience.

    And not just that, AirBnb also had another type of customer - those who had spare spaces to share and enlist themselves. These customers then have the choice to choose who they want to stay at their place.

    This approach is definitely different from what people are used to and creates a sub-market within the larger hospitality market.

  3. Easy to use platform
  4. AirBnb is not just creating a platform, but one that is super easy to use. It connects hosts and renters, where they both have the power to choose what they want, through a sophisticated filtering system.

    Renters are able to filter by location, price, amenities, etc. while hosts have the ability to deny access to their homes. Users also have the ability to leave reviews for hosts or renters whom they’ve come across, adding another layer of transparency when it comes to selecting accommodations and/or guests.

    Considering the age we are in of limited time and budgets, a platform that is less time consuming and more user friendly - it’s a no brainer, people will easily switch to it.

  5. Pricing
  6. The pricing is not a reflection of the hotel market prices, but based on what the hosts would like to charge for what they’re offering (that is also comparable to other nearby airbnb hosts). The guests then have the ability to choose the price range and find the best accommodation for themselves. This makes them different from the regular hotel chains, as it provides more flexibility, in terms of accommodation options for users.

  7. Branding
  8. Another important aspect that has really helped their success is their branding. AirBnb has truly understood the importance of creating a brand, which is about more than selling your product or service - an almost intangible feeling or emotions generated when people hear your company’s name. To get more tips on how to create a brand for your company, check out our article about how to create a killer brand.

    With AirBnb’s branding, they go above and beyond merely renting accommodations. It’s a lifestyle tool that offers "unique travel experiences” and creates “a sense of belonging around the world."

    While it’s true, that despite the unique experience AirBnb offers, there have been quite a number of horror stories as well. Hosts have returned to find their homes damaged or reported that some of their possessions had been stolen. Guests have also complained about non-communicative or less than polite hosts.

    But another part incorporated in their branding that makes AirBnb so outstanding is their customer service. Despite such incidents, they take various steps to make sure they can do their best to protect both the guest and the host with features such as verified ID’s, profiles, reviews, messaging, and their Host Guarantee program, which offers protection of up to $1,000,000 for property damage.

  9. Company Culture
  10. According to James McLure, AirBnb’s general manager for the UK and Ireland, "the [company's] culture and ways of working [were] set before the first employee was hired."

    The company has a set of values that they make sure is followed through by all their employees. For the company to bring about any change, they encourage all their employees to get in the customer’s mindset. For this purpose, they send their employees on a trip in their first or second week of work and then ask them a series of structured questions and those answers are shared with the entire staff. By generating a continuous feedback loop they are able to address any new problem in a timely manner, and come up with out-of-the box solutions to implement change and see how those changes pay off in the long run.

Because their business model is still relatively new and unique, and not to mention, disruptive, governments in various countries are still working on how to regulate AirBnb. There have been legal concerns in many cities that make AirBnb difficult to operate as hosts are unable to rent their spare homes for short-term listings.

But that’s what’s special about startups who make it to the top - they come up with out-of-the-box ideas that people fall in love with and the world eventually follows them - including governments.