Airbnb has one of the most inspiring business come up stories that you’ve ever heard. See how their organic approach to marketing took them from the bottom of the apartment rental pool to a global rental company.
By now we’ve all used or at least heard of the massive online rental application called Airbnb. You can visit their website, or download their app on your smartphone. The concept is simple; you can rent your home or rooms in your home, or you can look for rooms or homes to rent.
The great thing about Airbnb is that it allows all of their users to run a bed and breakfast business without a headache. Simply take a few pictures of your property, do a quick write-up about yourself, the location, and what makes it great, then wait for somebody to rent it out from you. For those who are just looking for a place to stay while they are traveling, renting an Airbnb can be cheaper, nicer, offer more amenities, and create a far more personal experience that they can get in a traditional hotel.
So how did Airbnb grow into such a big company? You might think that the founders had tons of money to throw into advertising, but the reality is that they started from very little. Today, we’re going to taking a look at what they did differently with their business strategy and why it could help you grow your business.
The Story Of Airbnb
Airbnb was founded in 2008 in San Francisco, California by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. Brian and Joe were roommates in 2007 and had the bright idea of putting an air mattress in their living room and renting it out to help them afford their rent every month. For those of you who’ve ever lived in the San Francisco area, you know just how expensive it can be.
At first, it was a simple idea, but they quickly realized that they could turn it into so much more. The next year Nathan (who was a former roommate) joined the team, and together they worked to create their first website; Airbedandbreakfast.com.
Then they had the idea the idea that sparked their entire company into existence. It was 2008, and there was a large design conference that was happening in their area. As a result, almost all of the local hotel rooms had been booked up, and prices were sky high for lodging. They decided to do a bit of advertising and found three people who hadn’t been able to find a hotel room to stay in.
They plopped three mattresses down in their living room, charged each person $80 a night, cooked them breakfast in the morning and offered their services as local tour guides. One of their guests that night actually went on to help them design their later website and presentations.
Despite their first success in their own living room, however, they found it very hard to grow their business in the first couple of years. They presented their idea and site to angel investors and various venture capitalists only to be turned down time and time again. Over the next year, they advertised their idea to multiple investors and targeted big events in their area, barely scraping by.
One day, a venture capitalist by the name of Paul Graham took an interest in them and invited them to join a startup acceleration program called Y Combinator. Despite their greatest efforts, though, they still couldn’t get solid support.
Still not disappointed, they went to some of their users who were listing spaces in New York City and offered to help them spruce it up. They took better pictures, stayed in the listings, and wrote solid reviews. This would be the organic approach that would really boost their success.
A few months later, they ditched the long name and simplified it to Airbnb, continued to hustle, and picked up their first investment of 600 grand in April 2009. With this money, they were able to massively grow their business, and take their small company global.
By 2011, Airbnb was listed in 89 countries around the world and won the famous “breakout mobile application” award at South x Southwest. They gained more investors along the way, and they became one of the hottest apps in the world.
Today, they are currently valued at $25 billion.
What They Did Differently
If you look at many businesses that made it big, you’ll see one recurring trend. The owners never gave up. They were relentless in the pursuit of their dream and knew that they could achieve whatever they set their mind to, despite the hardships and disappointments that they faced along the way.
As you can see Airbnb faced many. They were turned down by every investor that they approached for several years. Once they finally began to grow, they faced even more legal troubles from people who criticized everything from their business model to their logo. They never stopped trying, and they never stopped improving.
One of the other very important things that they did differently was that they stayed focus on one thing. They didn’t try to branch out and work with hotels or official property rentals, even though they could have easily done so. They stuck to their dream of creating the ultimate living room bed and breakfast platform, and eventually, it stuck.
How Can You Implement This Business Strategy Into Your Company?
Now, of course, it’s impossible to completely copy anybody’s business strategy. However, there are a couple of things that are very important to the success of any business strategy. At their core, they are very simple, but can sometimes be forgotten by the entrepreneur whose struggling to get off of the ground.
Narrow Your Focus In Your Business Strategy
The first thing that you need to do is to narrow your focus. Stop trying to be the company that does it all, and instead focus on providing one service or product and perfect it. Create a sales model and business model that works for your business and make sure everybody knows it.
When Airbnb first faced rejection, they could have grown their website to accommodate local rentals and classified listings. It certainly would have put some quick cash in their pockets. However, they were set on remaining focused on their bed and breakfast idea, and they eventually made it perfect.
Unless you’re a department store, you shouldn’t be trying to offer everything. You should focus on what you’re great at. If you’re a local gardening and landscape company, stick to that. Don’t try to be the jack-of-all-trades that does landscaping, painting, and construction at once. You should seek to be known as a business who is perfect at one thing instead of average at a lot of things.
Once you’re able to provide a perfect product or service with a narrow focus, then you’ll be able to charge higher prices and attract better clients.
Act First, Scale Later Like Airbnb
If you look at what Airbnb did in the beginning, they clearly didn’t do a whole lot of preparation and planning. They had a great idea, put together a simple and neat website, and did it in a time crunch. They knew that their success depended on having something in motion by the time that first design conference came to town.
The roommates didn’t sit there spending months to strategize, plan, and worry about every single detail. They went out and acted, and worried about scaling later on. While it’s important to be able to scale your business, many companies make the mistake of making scalability their sole focus.
Some spend so much time looking at the numbers that they’ll miss out on all the money that they could be making.
Your business doesn’t have to be perfect when it launches. It just needs to work and serve a purpose. You can improve your website and upgrade your office space later. The primary focus of your business strategy should be on generating revenue that you can pour back into your business.
Once your business starts to see the growth that you’d like, then it’s time to worry about scalability. By this time, though, you’ll already have the funds that you need and the existing clientele to justify a large-scale expanse.
Final Thoughts About Air BNB Business Strategy
There you have it. The success story of one of the biggest companies in Silicon Valley. Like many great business ideas, they started simple; three roommates living in an overly expensive San Francisco apartment. They created a service based on a gap they saw in the hospitality industry and stuck with it for years.
They never gave up on their dreams and stayed focused on their central idea as a company. They worked for years, just barely scraping by. They did all of the marketing themselves, they were personable and relied on nothing but their drive to take their company global. When they got their first seed money, they simply took their existing work process and scaled it up.
If you’re working with a startup or even an established business, the key to your long-term success is focused action. Don’t be afraid to try new ideas. Launch the product first, and improve it over time. Stay focused on your primary goals as a company and don’t try to be the jack-of-all-trades. Helitech provides two services for example Micropiles or minipiles but they are the same thing don’t overload yourself with more than one trade its okay to be a one trick pony.
If you can follow these two rules, you’ll be on your way to taking your business to the moon.
Sources(in the order used):
Images(in the order used):