Airbnb continues to grow at an impressive rate. The online lodging business was recently valued at $31 billion.
Airbnb is one of the most recognizable members of the sharing economy, where other businesses like Uber and Snapgoods have found success. In fact, ride-sharing giant Uber is worth $68 billion. These wildly successful businesses clearly all have aspects that startup owners and entrepreneurs can learn from.
Airbnb in particular has a number of business strategies that helped make it successful. For startup owners, mimicking these strategies or basing ideas off them can be a wise move.
1. Monitor your communities attentively
One of the reasons Airbnb has found such success is the high rate of satisfaction among those staying at their listed properties as well as those renting them out. A big reason for this is active policing to ensure both sides are following the rules.
Airbnb has a list of community standards and expectations that all members should read. It emphasizes its motto: "A community built on trust."
Chip Conley, Airbnb's head of global hospitality and strategy, says tens of thousands of hosts are booted off Airbnb each month for not meeting these standards and expectations. This opposes a fairly popular viewpoint that deems services like Uber and Airbnb an easy source of profit, with people doing most of the work.
In reality, Airbnb devotes a large chunk of its time and budget to monitoring and making sure everyone is playing nice.
Airbnb knows how personal a living space can be, even if it's temporary. To achieve that goal and retain users as a result, they enforce their community standards and expectations very seriously. That, combined with all funds remaining in escrow, provides a feeling of security that many modern businesses cannot compete with.
2. Make sure customers know exactly what they're getting
The age of commercial TV and internet has made many realize expectations aren't reality. Many of us have purchased a product or service before, only to be left disappointed.
Airbnb and many successful startups try to evade consumer disappointment in any way possible. One of the most surefire ways to prevent disappointment is to show buyers precisely what they're getting.
In 2009, as Airbnb was trying to get off the ground, co-founder Joe Gebbia and others sat at a roundtable, trying to figure out how to improve. At one point, they came to a fairly simple realization: The photos of the listings were terrible.
Rather than stick with blurry phone pictures, the company decided to invest in traveling to these listings themselves and professionally photographing them. This doubled the company's weekly revenue.
While some issues are sorted by improved code, this particular situation revolved around one thing in particular: showing buyers precisely what they're getting. Sometimes this means improving the photo quality, so buyers see an attractive property, not one that's poorly lit. It goes to show two things:
Aesthetics are important, and people are much likelier to purchase something if the product page doesn't look hastily put together.
3. Test, test, and test some more
Data can sometimes be an accurate predictor of results, though sometimes a new idea or feature needs to be put in action to truly see how effective and scalable it is.
Airbnb operates under an approach where a creative hypothesis is implemented, with the team then reviewing its impact. If there's a meaningful return on an idea or feature pushed on a small scale, more resources will be brought in.
"We're trying to create an environment where people can see a glimmer of something and basically throw dynamite on it and blow it up to become something bigger than anyone could have ever imagined," said Gebbia.
While some more risk-averse businesses may see this as overly experimental, it's difficult to argue with a business that keeps on growing.
4. Tackle an archaic industry head-on
It's no secret that the hotel industry isn't exactly fond of 76 percent of Millennials think Airbnb is a great business idea.Airbnb, just as taxi companies aren't enthused with Uber. Still, Airbnb's daring and bold approach to revolutionize the lodging and billion-dollar hotel industries is precisely the breath of fresh air many people, younger ones especially, find appealing. In fact, a survey by the David Binder Institute found that
Although there are a number of costly obstacles in taking on an older industry, Airbnb is a fine example of taking one on and prevailing.
Airbnb seized on the popularity of the sharing economy, while emphasizing the importance of respecting consumer expectations, regularly enforcing communally accepted rules, and idea testing and implementation.
These are all winning strategies that can help any business succeed.