ABC of Scale: What marketers can learn from Airbnb’s growth hacking
by Charlie Mathews (@CharlesLeeZA) It was 2007, the year the world got to meet the Tesla Roadster, Apple introduced the iPhone, and the US financial crisis took hold. Two designers, Joe Gebbia and Brian Chesky, were in a bind. Chesky had just moved into Gebbia’s San Francisco home but didn’t have a job and couldn’t afford the rent. To make ends meet, the duo decided to turn their loft into a revenue-producing space.
“We were always starting companies together. Always being a little rebellious, a little different to our parents,” Chesky said in an interview with NDTV. The Airbnb founder had quit his job and left home to go live with Gebbia, but only had US$1000 in the bank. His portion of the rent was US$1150.
That very weekend, an international design conference was happening in San Francisco. The pair went to the conference website and noticed that all the hotels listed for the event were sold out. That’s the moment they came up with the idea to create a bed-and-breakfast for the design conference to make some quick cash. But they had no beds — just the loft floor. Luckily, Gebbia had some air beds from a camping trip. The friends pulled the air beds out the cupboard, inflated them and decided to call their effort the Airbed & Breakfast.
Chesky had never considered being an entrepreneur. Instead, he went to art school. The day he told his social worker mom that he was going to be an artist, she said to him: “Oh my god, you’ve chosen the only path that pays less than a social worker. You’re going to be an artist and you’re going to get paid nothing.” Back then, her big dream for her son was that he’d get a job that would pay health insurance.
“I’d never even heard the word ‘entrepreneur’ growing up. Nobody ever said you could be an entrepreneur,” Chesky said in the interview. “In hindsight, the only entrepreneur I knew was Bob from Bob’s Pizza.”
Arrived as strangers, left as friends
Despite this, the pair managed to get three people to stay with them — and their guests all slept on air beds on the floor. But the experience generated an epiphany; the guests had arrived as strangers but left as friends. It was this experience that made the friends realise they were onto something. A few months later the pair got engineer Nathan Blecharczyk to help them build out the site that would become the first iteration of Airbed & Breakfast. And that’s when the real hustle began.
“We were one of the companies that launched a couple of times. We kept on launching to get a lot of press. If you launch and nobody notices, you can actually keep launching,” Chesky says. And so, Airbnb kept launching, and the media kept writing about it as if it’d just launched.
Other growth drivers
How else did the founders of Airbnb drive growth for what is now one of the world’s biggest hospitality marketplaces?
GrowthHackers.com details the founders’ first bid to raise cash. “The founders needed a way to raise money. They bought a ton of cereal and designed special edition election-themed boxes, released that fall—Obama O’s and Cap’n McCain’s, which they sold at convention parties for [US]$40 a box. They sold 500 boxes of each cereal, helping them to raise around [US]$30k for Airbed & Breakfast.”
At Medium, Jonathan Golden, former product manager for Airbnb, tells another story about what he noticed shortly after joining the startup. “As I scrolled through the listings I noticed something: Those faces in the reviews? Several were walking around the office. My face became flushed. Had I just made the biggest mistake of my career? Did I join a pint-sized marketplace that was running off of the credit cards of its employees?
The early days were hard. Traction was a daily obsession, because getting growth was really tough. But the big breakthrough came in the form of a #growthhack that has now become legend. Let’s call it the Craigslist Platform Integration. Airbnb didn’t have the cash for traditional marketing; that would have bankrupted the business. Instead, it had to hack a solution to putting its brand in front of the faces of millions of people who wanted to rent, or rent out, parts of their home. Growth guru Andrew Chen, formerly with Uber, explains this hack really well on his blog. He wrote that Airbnb “picked a platform with tens of millions of users where relatively few automated tools exist, and have created a great experience to share your Airbnb listing. It’s integrated simply and deeply into the product, and is one of the most impressive ad-hoc integrations I’ve seen in years. Certainly a traditional marketer would not have come up with this, or known it was even possible — instead it’d take a marketing-minded engineer to dissect the product and build an integration this smooth.” Read the whole hack on Chen’s blog and you’ll be amazed, particularly the part that this hack was done without a public API on Craigslist’s part.
Just 10 years later, Airbnb has a market value of some US$31bn, is active in over 191 countries worldwide, and has managed well over 3m guest arrivals. The company’s revenue for 2017 was recorded at some US$2.6bn
The big takeouts from this story?
- Early growth stages are often a grind. Keep grinding anyway but measure everything so the hard work pays off by becoming iterative.
- Traction doesn’t always come from marketing or sales. In a digital world, engineers and coders can often help crack solutions to scale.
- Growth isn’t a linear path but endless cycles of risk and experimentation aimed at getting growth.
- User experience is everything. Friction is the enemy of scale.
- You don’t have to be born an entrepreneur to build the next big thing.
For deeper insights, watch Reed Hoffman, LinkedIn founder, interviewing Chesky for a Stanford University class on growth taught by Hoffman.
- Medium: Lessons Learned Scaling Airbnb 100X
- Business Insider: How 3 guys turned renting an air mattress in their apartment into a $25 billion company
- Mashable: What in the world is growth hacking, and why you should learn how to do it
A serial entrepreneur who founded — and sold — two marketing companies, Charlie Mathews (@CharlesLeeZA) is a #growthhacker at WorldBrain.io and Continuon
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