Successful eCommerce case: the story of Airbnb (I)

There are few ideas that are few worth millions. People who can get millions from a simple idea (on paper) as Airbnb´s temporary rentals there are even fewer. 

We talk about the story of one of the Internet  monsters that has been able to understand and apply better than anyone else that creative use of analysis, that concept that is increasingly becoming more popular, called growth hacking. 

The pioneers of the digital environment started in garages in the 80s, this changed in the following generations that set up their millionaire business in students´rooms and flats.

In the case of Joe Gebbia and Brian Chesky, the situation was the following. In 2007 both shared a loft and had more square meters available compared with their salary. (Yes: just over 10 years ago). 

One day they came up with a quite little revolutionary but very practical idea: a design convention took place in the city at that time. There were no available rooms so they decided to temporarily rent that extra space including an inflatable mattress, Wi-Fi, a desk, and while we are in it, breakfast.Basically a Bed and Breakfast (B And B) with an air cushion (Air), both concepts together and we have the domain: Airbnb. 

How is it possible that something that came up as a way to "win a few bucks", as they said, became a business? But not just a business, one that, according to some reports, has already reached a value of 31,000 million dollars. All that empire began billing $80 the first guests. 

Airbedandbreakfast.com, the original name of the project, was not a reality until 2008. The page itself and the original concept were really well if we compare it with any other similar service at that time. 

In the development of the work greatly influenced the fact of counting on Nathan Blecharczyk who had been working on a specific service to put flatmates in contact. 

His first choice, feeling that they were going to have much growth margin, was to seek funding. Therefore, they presented their project to 15 investment funds: none was interested in Airbnb in the least and they will now be regretting bitterly. 

They were flat broke so they looked for an event with enough impact to fill all the hotels in a city. They used the film festival SSX 2008 in Austin, a massive event that left them the disappointing figure of 2 reserves in total. 

They did not give up, they thought that the Denver Democratic Convention was quite favorable to try something completely different. I insist that they were practically flat broken but they were very creative so they thought of using cereal boxes as a lure. 

Yes, you read well. Breakfast cereals saved Airbnb that already owed $40,000 and managed to regain 30,000 in few days. They released a limited edition of cereal inspired by the two candidates: Obama O´s and Captain McCain's. Only 500 units of each, numbered, designed by themselves and filled with cereal bought in any supermarket (they were sold at $40 a box) ... and they ran out. 

The important thing was not so much the income from direct selling, not even the branding that could have been done.The real boost came because this action aroused the interest of Paul Graham who wanted to catch these kids and their idea for their business accelerator: Y Combinator (one of the references) 

The subject of cereals was appealing (even it was rumored that Facebook was raised to enter strong in breakfasts, if they did not have enough with the cookies) but it was only the access. When Airbnb partners presented Graham his idea of temporary accommodation, he found it bright and already funded, they spent a full year to polish and improve the idea.

In the U.S. and Canada Craiglist was the platform par excellence of those who sought accommodation as alternative to hotels. They created a bot and began to advertise their flats on this website automatically. Everybody is happy: the owners had more exposure, more reserves and more commissions for the company. 

They automated the generation of these publications and thus, they began to generate a source of valuable reference traffic. For sure: the key was not simply to attract visits, this strategy which resulted so effective was it because they were able to measure and analyze data and make decisions based on them. 

By the way: Craiglists was not happy with all this and although Airbnb stopped offering its users using this feature in 2013, it has ended up blocking posts that introduce properties of Airbnb. 

Then they went on to worry about the product, actually they visited all users who had signed up in New York area, they went to their flats, spoke with them, got their own conclusions...and made professional photo shoots of each apartment. 

Enhance the quality of the content happened, at least in this case, not to put 100% of its generation in the user´s hands since photographs are one of the key points in hotel websites, chains and comparators. 

Airbnb was supported directly by current guests and hosts to generate new. 

From the beginning it worked very well offering up to €80 to the host who was capable of acquiring new clients through a system of vouchers. This strategy remains in place and works really well because, at the end and after all, we are talking about travel credit that pays for itself very quickly and strengthens the recommendation between equal and the social proof. 

Read the complete serie here:

Successful eCommerce case: the story of Airbnb (2) 

Images | Unsplash y Airbnb.