Why Airbnb Failed To Gain Traction Twice Before Hitting It Big | Hacker News Reader

Why Airbnb Failed To Gain Traction Twice Before Hitting It Big

beyondthepedway.com

67 pointstimjahn11 comments

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!

Agreed. Also, how many of the 800 apartments were booked for the Denver DNC?

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 :)

Very good points. Every time I go to www.airbnb.com, I'm always struck by the extremely high quality of the photos on their home page. It's a small thing that definitely goes a long way in getting people excited to use the site. When I see a beautiful photo of a beautiful home, I want to stay there.

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!

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.

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

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

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.

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.

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?

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