Case Study: Airbnb - Danny Crichton · PDF fileCase Study: Airbnb July 8, 2015. How do you ......
Transcript of Case Study: Airbnb - Danny Crichton · PDF fileCase Study: Airbnb July 8, 2015. How do you ......
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Case Study: AirbnbJuly 8, 2015
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How do you Disrupt an Industry?
• Completely reimagine the business model of an industry
• Completely change the way that you conduct marketing
• Airbnb did both, and today is worth about $25 billion
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What is Airbnb?
• Airbnb is a peer-to-peer nightly room rental network
• People can put their spare bedrooms or entire apartments online and rent them out
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Marketplaces• One area of metrics we didn’t talk a lot about is
around marketplaces
• Marketplaces are incredible difficult to build because you don’t just have one side of a transaction, but both sides
• On Airbnb, you need people to rent and people to provide rooms – at the same time!
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Network Features
Airbnb has to do an incredible amount to make
its marketplace function
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Scheduling
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Payments / Instant Book
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Insurance
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Insurance
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Reputation Systems
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Reputation Systems
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Matching Supply and Demand
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No wonder 1000 people work at the company!
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Why is Airbnb successful?
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Community
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Sharing Economy
• Airbnb invented the idea of the sharing economy – that people could use the property and assets they own and rent them out and share them with others
• An enormous part of Airbnb’s branding is based around the idea of community – that this isn’t a profitable venture
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Sharing Economy
• Today, the sharing economy is a massive area of growth in the United States
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Branding
• Airbnb has built its brand about being responsive to both its hosts and its renters
• Key themes include exploration
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Business Model
• Airbnb also completely re-envisioned the idea of a hotel
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Traditional Hotels• For Customers:
• Same experience at every location
• Professional, but sterile
• Massive and impersonal
• Have lots of amenities
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Traditional Hotels• As a Business:
• Expensive – have to own real estate in expensive cities where people want to stay and pay workers
• Growth is challenging – new demand requires constructing a new building
• Competition is severe - hotels constantly compete against one another
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Airbnb’s Transformation
• For Customers:
• Economy of Abundance - We can have whatever we want at many different prices
• Memories – We can have unique experiences around the world that are very different than typical hotels
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Airbnb’s Transformation• For Customers:
• Economy of Abundance - We can have whatever we want at many different prices
• Memories – We can have unique experiences around the world that are very different than typical hotels
• Aspirational – Sharing aspect targets a different consumer who desires a more personal relationship
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Airbnb’s Transformation• As a business:
• Immense Flexibility – they can expand their supply of rooms simply by marketing
• Expense management – if a room isn’t rented, Airbnb loses nothing – all risk is held by the hosts
• Emphasize Technology – Hotels are traditionally service businesses. Airbnb is a technology company
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New Competition
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Policy / Regulation
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Final Thoughts
• Airbnb is a movement company - it has become the defining example of a new way to do business (the sharing economy)
• Therefore, it has not just built a great business, but has had tremendous influence on the rest of the startup ecosystem