Airbnb is worth 113 Billion Dollars.
It clearly did not happen overnight, as all good things take time. But really, how did they achieved this ?
More importantly, what did they learn in the journey that will be valuable for us too?
Chasing a seven design experience for their customers.
CEO of the company, Brian Chesky, is an alumni RISD, Art and Design University.
He says, they are told that “They can do anything” in there.
Brian’s mom and dad were social workers. After graduation he was living in L.A, working as a industrial designer.
One day he thought, “the road ahead of him in life, was looking almost exactly the same as the ones he’s already passed”.
This terrified him. So, in an impulsive moment, he left his comfort zone completely. With a thousand dollars in the bank, Brian drove up to his buddy Joe to San Francisco, with his old Honda Civic.
It was October 2007.
When he got to the San Francisco, Joe told him that the rent is $1,150. So their money wasn’t enough.
Funny, for a guy that now is worth more than 8.8 Billion, right?
That weekend, an international design conference was coming to San Francisco. And every single hotel was sold out in the area.
They thought for this idea for solving the problem.
“A Bed and Breakfast for Designers”
Designers needed a place to stay, Brian and Joe had no money to pay the rent.
The perfect match!
Unfortunately they had no beds, and Joe came to the rescue with his 3 air beds, thanks to his camping background. That’s where the name comes from.
One year in, the business was not going well, they were in debt. They kinda had to pull a miracle. One night Joe and Brian thought:
We’re Air Bed and Breakfast and the air beds aren’t working out.
Maybe we could sell breakfast.
I mean everyone needs to eat! Let’s just get in the breakfast business.
They decided to make cereal. A presidential-themed one in fact.
They literally hand crafted every box of them. Numbered them, wrote “Limited Edition” on them.
Truly desperate times.
And that’s actually how we funded the company. And now we have a core value. It’s called, “Be a Cereal Entrepreneur” with cereal with a C.
I know it’s a bad joke, but… And that’s basically how we started.
Airbnb got into and Y-Combinator and the guys met Paul Graham. Brian said they learned about a valuable idea from him that goes like:
“All you have to do is get 100 people to like you.
Don’t worry about millions of people.”
And they focused on the closest people they knew to the product. They did things that does not scale.
They applied the seven star design.
On the internet, especially in most marketplace businesses, the best rating you can get is a 5 star. An anything lower than 5 is generally a bad news. Especially if the service/product was getting consecutive 4’s or 3's.
Brian wanted to build a product that users would e-mail to the company to ask for a sixth star. Cause the product was so good, you had to almost go above and beyond.
He explains his thought process as follows:
Let’s take airport pick up, for example.
What’s a five star-check-in experience on Airbnb?
The five-star check-in experience is, they give you the address, you get to the house, you knock on the door and they’re there. And they open the door and they let you in the house. And that’s five-star.
So we asked, “Well, what’s a six-star?”
Well, a six-star is, they probably pick you up at the airport. So you don’t knock on their door, they actually pick you up at the airport.
So what’s a seven-star review?
Well, seven stars is, they don’t pick you up at the airport, they send a limousine. And you open the limousine door, and they know that you like Potato Chips. So there’s some snacks there and there’s coconut water and they know you are into surfing and there’s some surfing magazine, even though you’re in San Francisco, you’re not going to surf, that’s fine.
So that’s a seven-star.
And this also can apply to almost anything.
Brain designed a product, where value was given exceedingly for what’s paid.
All I’m saying is that, we can apply this principle to our daily lives.
When we genuinely listen to others, share their hard times, their losses. Our lives can become infinitely better.
With all the noise in the world, people barely listen to each other.
And if we really listen to someone, remember a small detail about them a week later then we talked. It really astonishes them, sadly.
It’s just giving beyond expectation, after all.