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SEED Guide

5.2. Airbnb

As a tech start-up Airbnb began as a simple website where its founders, Brian Chesky and Joe Gebbia, rented out air mattresses in their San Francisco apartment to attendees of a local Silicon Valley conference. Airbnb used design thinking to disrupt the hospitality industry. By empathizing with travelers' desire for unique and authentic experiences, Airbnb created a platform that connects hosts with guests in a user-friendly and intuitive way. Airbnb is considered a role model for “designpreneurship”, where entrepreneurs with backgrounds in design professions work together to start companies. In an environment of digitalization, the three pillars for success of Airbnb have been identified as innovation, persistence, and scalability.

Empathizing: Since they started as hosts, they knew that they needed to get to know the users of their service. First, they carried out empathizing strategies with their guests, asking specifically:

"What do people do when they are traveling?

How can they learn how to get from the airport to their lodging quickly?

How can one recommend their favorite place to eat in the neighborhood?"

As the company grew, the founders decided to live exclusively in Airbnb rentals to better comprehend the challenges both hosts and guests faced in using their platform. This hands-on approach gave them firsthand experience with the pain points users encountered. Among the insights, they found the major problem related to the poor-quality photos of the listings. They realized that people were reluctant to book stays because they could not visualize the properties clearly. To address this issue, Airbnb began offering free professional photography services to its hosts. As a result, bookings increased significantly, demonstrating the power of empathy in driving effective solutions.

Re-defining to understand: With the initial success of implementing the process for hosts to secure high resolution and better-quality images, Airbnb founders dedicated further time to better understand the needs and desires of the guests, who were looking for affordable, easy to access, and unique travel accommodations. Conversations with their customers to understand these needs led to many significant breakthroughs.

Ideating: Listening to the hosts and guests’ comments after using the service has been a source of ideation, where many ideas are generated based on the acquired insights from empathizing and re-defining to understand. To improve Airbnb platform services, the 11 star concept was created, which proposes that Airbnb properties can exceed the traditional five-star rating system commonly used in the hospitality industry. The 11 star concept suggests that hosts can go above and beyond in providing exceptional experiences for their guests, offering amenities, services, and personal touches that elevate the stay to a level beyond what is typically expected.

Prototyping: Airbnb prototyped the 11 star concept by encouraging hosts to provide exceptional experiences and amenities that went beyond what traditional hotels typically offered. They incentivized hosts to innovate and personalize their listings by introducing features such as Superhost status, which recognizes hosts who consistently receive high ratings and provide exceptional hospitality. Beyond the photography services, Airbnb introduced design consultations and educational resources to help hosts improve their listings. By empowering hosts to showcase their creativity and hospitality, Airbnb encouraged the development of unique and memorable experiences that aligned with the concept of 11 star hospitality.

Evaluating: Airbnb's success can also be attributed to constant experimentation and an iterative approach to problem-solving. The company has continuously tested new features and improvements, making small but impactful changes to its platform. For instance, Airbnb discovered that guests were more likely to book a rental if the host had a complete and detailed profile. To encourage hosts to fill out their profiles, the company introduced a progress bar, which nudged hosts to add more information (for more on paternal libertarianism and choice architecture, see the references to Richard H. Thaler, distinguished with the 2018 Nobel for economics. This simple tweak resulted in more comprehensive profiles and improved the overall user experience.

Implementing: Launched in August 2008, Airbnb has grown into a global online marketplace for lodging, offering a wide range of accommodations from apartments and houses to unique properties like castles and treehouses. Through innovative initiatives and support for their hosts, the 11 star concept underscores Airbnb's emphasis on creating unique and memorable experiences for travelers, encouraging hosts to showcase their creativity and hospitality in ways that set their listings apart from traditional accommodations.

Further reading: 

Discussion questions related to Airbnb

  1. How did Airbnb's founders use their own early hosting experiences to understand what both hosts and guests needed? Can you find more information about their origin story?
  2. How did the founders’ empathetic approach, particularly through first-hand experiences as guests, contribute to the identification of pain points and the development of innovative solutions?
  3. What did Airbnb do to solve the problem of low-quality photos in their listings, and how did the solution help boost bookings and improve the experience?
  4. How did the introduction of the 11-star ranking make Airbnb stand out in the hospitality industry? Describe some examples of how hosts can enhance their listings and provide exceptional hospitality.
  5. What were some key factors contributing to Airbnb's successful implementation and growth from a small startup to a global online marketplace?
  6. How did Airbnb leverage principles of what Richard H. Thaler has called paternal libertarianism and choice architecture? Can you ideate other areas where this influential strategy could contribute to greater sustainability in other areas?
  7. How did Airbnb use continuous experimentation and an interactive approach to improve its platform over time?
  8. What challenges has Airbnb faced in scaling its platform globally and how have they addressed these challenges?
  9. How did Airbnb's iterative approach to problem-solving, as seen in their constant experimentation and introduction of features like progress bars for profile completion, contribute to the overall improvement of user experience and platform functionality?
  10. What pain points can you identify for Airbnb and its competitors in offering greater sustainability in the hospitality industry? What future innovations would you like to see to make Airbnb more sustainable?