How do you look at segmenting the supply side of Airbnb?

Airbnb certainly grew as a consumer hosting platform. I differentiate that then to a professional hosting platform. Again, there were some platforms out there. Things like HomeAway, VRBO or Stays in Australia is a good example. Each country might have their own little one. Again, most of those were probably focused on the vacation rental market or holiday rental market, which was often professionally managed. Might not have always been, but it was always secondary or professionally managed home. Therefore, the tools and systems and things that it did very much catered to a professional market.

Airbnb really started by focusing on how you actually overcome some of those challenges for a consumer side. As I said, payment was a big one. A professional is probably going to have their own payment system, POS system, that they can actually process credit cards and do other things. An individual just looking to rent out a room on Airbnb is not going to have that. Airbnb really focused on that. From the first few years of Airbnb being established, it was really predominantly focused on that side of the market. Professional certainly existed on Airbnb, in vacation rental, you had property managers and different things that did exist. They didn’t really start to facilitate those guys to grow on Airbnb until around a few years ago, around 2015/2016 was when they started looking at it.

From then, there was a big split between what you might call a consumer, which is just individuals and professionals. Then under professionals, you have two main sides of things, one of which is called traditional hospitality, which is really about things like hotels and apartments hostels. Your normal things that have been around for decades that you can book that are very much traditional accommodation option. Then second to that is your property managers, really. People that might be managing anywhere from ten to ten thousand property. There are some really large enterprise sized property managers and so on that exist out there.

Most property managers are probably in the 20 to 200 range of properties that they manage. They might be managing properties on behalf of individuals that own those properties that are investments, or a holiday home for themselves. That sits unused for 50 weeks of the year, therefore, they give it to a property manager to manage. Or they could be just managing a number of homes themselves that they own. That’s how you would segment them in terms of consumer professional and then under professional, your typical property managers and your traditional hospitality, as well.

Focusing on the early days on the consumer side then, you mentioned how you aimed to drive trust, to drive community, the payment system was crucial, the review system was very important. How would you market to these consumer hosts?

There are a few things there. First of all, Airbnb was generating a significant amount of awareness. That didn’t necessarily translate into actual people listing their homes on Airbnb. A lot of people heard or Airbnb, thought, yes, cool, I might use it as a guest, but to actually get them to convert and use as a host was a difficult thing. I would say that some of the things that Airbnb did in terms of above the line marketing didn’t really necessarily stick in terms of acquiring hosts. That was because it was really about overcoming those barriers that those prospective hosts had in terms of problems and seeing a billboard or something like that isn’t really going to change their mind.

Now, that certainly can work in terms of intent to travel and people booking and staying. That works really well. In those early days, it was a number of things. To use a quote from Brian Chesky, it was really about being focus on, say, 100 people that really loved you. Those absolutely in love with the brand versus a million people that sort of liked you. That was a big thing that we did in the early days, especially locally in market it was about building that relationship and saying, what can we do better to make your lives easier? That helped support and drive word-of-mouth growth. In order to further drive some of that consideration, I think again it was really about leveraging the PR opportunity as much as possible.

Whenever there was an opportunity to put Airbnb’s case up there through the radio, through TV, through the news and stuff, we did that as much as possible. A lot of the ways Airbnb could do that was by showing the things that are unique on Airbnb that you can’t potentially find anywhere else. It could be special, amazing properties. It could be amazing stays. Different partnerships and so on.

I think one of the early things that Airbnb also did was really leverage things like events. Events played a huge part in the early growth of Airbnb. When I say events, I mean, big, external events. A good example would be South by Southwest in Austin, Texas. Which, again, is an event that brings hundreds of thousands of people to Austin. It’s not the biggest city in terms of hotel and accommodation supply. Therefore, the elastic supply you can build from a platform like Airbnb was huge for that city. Really, it was about getting in place in those cities, showing the success of using Airbnb as a platform then and helping that to spread to other places. Certainly, with the Olympics in 2012, but also the World Cup in Brazil in 2014, Olympics in Rio in 2016. Obviously, huge events. I remember in the early days not necessarily directly partnering those events, but Airbnb knew that in order for those events to be successful, they needed to help boost supply to that. We were success enough that I think in 2016, the Brazilian government actually came to Airbnb and said, “We do need help in this front.” That was certainly one of the ways they did it. Also, if you talk about the ways you can scale rapidly, for a platform like Airbnb that existed in 191 countries from effectively the get-go.

When Airbnb started in 08’, anyone could list anything anywhere. There were no restrictions, with the exception of a couple of countries. Really, anyone could list anything anywhere. From a product and engineering point of view, it was about releasing as many products that could touch those markets as possible. It was difficult where markets needed to some specialized engineering support or payment support and so on. Certainly, parts of Asia do things very uniquely to their geographies. It was really about as broad a coverage as they could do there. Then in terms of the local teams, really enabling that local presence in market. That was through things like community events that were managed, seminars, educational events. Different materials and so on that they would then disperse out to more local areas and cities and towns.

Sign up to read the full interview and hundreds more. No credit card details required.
Sign up to read