

Why Airbnb Failed To Gain Traction Twice Before Hitting It Big - timjahn
http://www.beyondthepedway.com/why-airbnb-failed-to-gain-traction-twice-before-hitting-it-big

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nopinsight
First of all, thanks for sharing your experiences.

I read the whole thing, but it isn't clear at all what really brought success
on the third try. I did notice things about working hard together in the same
room and getting insights and investment from good investors.

But were there clear, concrete changes to marketing and the product then? A
few people would definitely benefit from what you could share on that. Thanks!

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lallouz
I recently had the great opportunity of speaking with one of the founders of
AirBnB and asked him a very similar set of questions. I do not want to quote
him, and it was definitely an informal conversation, but I will paraphrase
some of the very important points that he made about startups in general and
the approach they took to gaining users. I have found this information really
useful in my own startup and I would love to share with all of you.

One thing they focused on was their core users. Listening to them, almost to
the point of not being scalable. Going to the houses of the people that were
registered and asking them questions like "What is the hardest part or most
undesirable part of using our product?". That kind of engagement has 2 real
benefits: 1. You get real concrete answers about what to fix and 2. It turns
your users into excited, advocates for your product. A key point here is
scalability. Sometimes it's a good thing to ignore scalable solutions in a
startup in order to get things going ( a common mistake I have made on a
number of occasions).

Another point that he made about their work was providing high quality
pictures and content on their website. They spent time going with (rented)
wide lens cameras to users house's to take high quality pictures to put up.
This aesthetic change can produce a much stronger sense of trust in a service
and is something that all founders should think about.

Hope that can be helpful to someone :)

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timjahn
Hey, Tim Jahn here, the interviewer at Beyond The Pedway!

Nathan told me a similar story. He mentioned in our interview that they went
to New York and literally talked to every Airbnb user there to get major
feedback.

Thanks for the supplemental info!

~~~
lallouz
Hi Tim! Glad I can provide more info. Yep, apparently it was in the middle of
winter too. Trekking camera gear all over the place. All in all, their
grassroots story is very inspiring to any startup founder. I have a lot of
respect for those guys.

~~~
timjahn
Agreed! I love stories like theirs and so happy to see those kind of folks
achieve success.

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csallen
Good interview, but it's a bit weird that while the majority of it focuses on
the failures, there were only a few sentences that highlighted what changed to
bring success. More or less, they were:

 _"And I would say the most value [from YCombinator] comes at the end of the
program when you get to get in front of a whole bunch of, a room full of
investors ... I think what we needed the most at that moment in time was to
get the same room together and really just work 110%"_

But if I recall correctly, didn't PG recently mention that Airbnb was one of
only two YC companies that didn't present at demo day? I guess that's
irrelevant, because the reason is that they already had sufficient investment.
Still, he only mentions two points: (1) they got an investment, and (2) they
worked harder.

I'd love to hear more things specific to the task of achieving critical mass.
How much did the free press from being a YC company with a big seed round help
out? Did they abandon tying their site to particular events? What were their
SEO strategies? etc

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timjahn
Csallen -

Thanks for the suggestions and the feedback, I really appreciate it!
Reflecting back on the interview now, I do agree that there were a few
additional useful snippets I should have included in the final edit to round
out the story.

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jasonjei
AirBnB is a great program, clever and cheeky (real people), but the one thing
that they'll always have to reckon with is that they have no rewards program.
This might change in the future, but people are incentivized by rewards.

I travel regularly to Starwood hotels, sometimes under Cash and Points, or I
use my free weekend nights. Rewards are real and incentivize people to be
loyal to a particular service or brand. Because of the credit card program and
because they offer free nights as a regular promotion (stay 3 nights, get 1
night free at category 1-6 hotel), I'm heavily incentivized to lean towards
the Starwood chain, and 2 out of 5 times I'm staying for free or under a
discounted rate because of Cash and Points.

And the hospitality industry, in general, has real people (not the faceless
org we're used to) and provide excellent service. AirBnB has individuality,
which is a great selling point, but for some others, that is a risk (at least
if you're going to a St Regis or Westin, you know it's going to be nice and
reliable; with AirBnB, you don't know if you're going to be compatible with
the people or the housing arrangements). But, AirBnB offers a cool incentive
to meet new people and make friends outside of a professional arrangement that
a hotel would usually entail.

Of course the difficulty of administering rewards program is it that it
requires the program to flex its muscle to require that some rooms are offered
available to the program at a discounted rate. Chains have this power, but
AirBnB wouldn't be in a great bargaining position for a rewards program.

They're not cheaper than the hotel chains, so it doesn't give any excuse to
provide less service. If anything, they need to step it up a bit by offering
just a bit more. A rewards program would level some of the differences.

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rishi
this was a really great story! I really love airbnb.

Does anyone know how they are currently acquiring new customers? It seems like
a lot of it is Word of Mouth and Press. Are they doing anything else?

