What I learned about success from Airbnb founder Joe Gebbia

I’m going to do my best to to tell you the story of Airbnb directly from Joe Gebbia. It’s a story of rejection, resilience and creativity, I hope you’re as inspired as I was.

First of all, you might not know this but Airbnb was born out of necessity. Joe and his flat mates were broke and they couldn’t make rent. A design conference was coming to town and as hotels were fully booked they decided to host people on air mattresses! Air Bed B&B was born (not as a catchy right?). They set up a website, emailed some bloggers and suddenly people were talking about it. People were tracking them down, sending them letters and asking if they could stay with them… There were economically empowered and saved their apartment. For a little while.

After the design conference, they lost traction. Airbnb was no overnight success, they launched and relaunched five times before everything clicked into place and it took off. They weren’t the first ones to the market either. The key was resilience, every time they ran into a dead end they kept going.

“Rejection is an invitation to keep going”

Success formula

It was this early on that Airbnb realised what business they were really in – “providing hospitality and making guests feel like they belonged.” They just needed to tweak their customer persona… after focussing on design conferences and South By SouthWest in 2008, they took advantage of the Presidential Election campaign making it’s way to Denver. There were no hotel vacancies left and the city of Denver were talking about setting up camp sites in the park! Could you imagine? Joe rode those coat tails all the way to 800 homes signing up in four weeks – ABC News and CNN both covered the story, it was great. But, there was another problem…

There isn’t a political convention every weekend. They ended up in the trough of sorrow and $20,000 in debt on credit cards. Once again, resilience and creativity led to an idea to get them out of the trough. Obama Os. I won’t go into it, I’m sure you heard the story of how they sold Obama cereal for $40 a box – it was genius. They sent the cereal boxes out to as many journalists as they could and the Airbnb story was once again covered by CNN.

After the VISA round of funding and the win with the cereal, four dismal, difficult and painful years later, Airbnb finally had air in their bed. Surprisingly, marketing and funding weren’t even their biggest challenges. It was building trust.

When we are taught from children not to trust strangers, how do we then ask people to let out their homes to complete strangers? Airbnb eventually took off despite that and the company founder says it’s because of design. Design is the whole end to end experience, carefully considered and crafted. By asking themselves, ‘what experience do we want for guests and hosts, and how do we inject trust into the process?’ Airbnb created an offer that was adopted by the market and packaged it with effective branding.

Here’s what Airbnb did to build trust

  • They created a reputation system so that people could write open and honest reviews. Social proof has become key in buying decisions of consumers.

  • When people opened up a little more than usual it built trust with guests. When there was a sweet spot of exchange the service grew so they provided communication training to their hosts.

  • They created hospitality standards, a set of codes for all.

  • Airbnb uses design as a trust-building tool and to create a competitive edge. For example, great photography was key. Joe himself starting going door to door in New York with a professional camera to help hosts capture quality pictures for the site. Bookings increased exponentially! This also created raving fans out of the guests and led to more growth.

  • Expansion and growth were also key, ensuring that if someone searched for a location that there were products available.

If you’re not innovating, you’re dying

Innovation doesn’t sleep at Airbnb. The company have a dedicated team to constantly explore ways to expand the experience. They are always talking to customers and using the feedback to innovate.

Always consider what business you are really in and what business you will be in.

Just remember, innovation isn’t always something groundbreaking. It can be many micro-innovations that together make a big difference in the business.

So, what is success? Airbnb founder Joe Gebbia has shown me that it’s simple. It’s solving a problem out of frustration or in this case necessity, it’s having a clear understanding of your clients and what business you are really in, resilience and innovation.

It’s a brilliant example of how they’ve taken a concept which isn’t new (b&b) and just added technology. The sharing economy is just getting started… What else can we see in this arena in the future, imagine renting your washing machine to others when you’re not at home? Well maybe it will exist soon, there are many idle resources in this world and it’s time to leverage them through the sharing economy. Maybe that’s another blog topic, until then let me know what you think is next!

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