STORY of Airbnb
Taking its inception in San Francisco on August 2008 with Joe Gebbia and Brian Chesky and Nathan Biecharczyk as the father figure of such a revolutionising on-demand online service for the travel industry – Airbnb created a space online for the masses to uncover and book one-off accommodations situated every side of the world, very much at their convenience using a mobile gadget.
The Secret Mantra of Airbnb’s Big Fat Number Returns
Airbnb all started with three basic elements that brought a lucky charm to the get the big fat number in return – a map, rented out three mattresses and promised home-made breakfast. It took the build, when the trio founders distilled the website with the money earned by vending cereal boxes throughout the presidential campaign that was held in 2008. They took careful efforts in taking pictures in good quality of the rented space to enhance click-rates.
The schema designed for people to rent out rooms from strangers was just too alien. From the start until now, Airbnb and its co-founders are on their way constructing a platform business that is efficient in disrupting the hotel industry to transform our travel experience.
Reaching out its market presence over 191 countries and more than 34000 cities, Airbnb – the online service is now one of a kind that welds people to outrageous travel experiences as per their budget. Right from serviced apartment for a day to a villa for an entire month – Airbnb stands a resource.
Airbnb platform empowers people to showcase their extra living space and earn additional income to their pocket through rent while it also benefits the travellers to book distinctive home stays from the house owners of any locality that they are looking for. Airbnb unleashes on-demand service to the travel industry outsmarting the conventional alternative.
Thought-Provoking facts on Airbnb & How Airbnb works
Funding until December 2015 – $3.89 Billion
Airbnb valuation as on June 2015 – $25.5 Billion
Places listed on Airbnb has served 140,000+ people for their stay at comfort
Airbnb has grown a tour de force with technology underpinned just within a short notice. It takes its space in the Billion dollar club with 31 different investors who opted to give a mighty funding of $2.3 Billion that rolled out Airbnb to pose a successful business model. Airbnb has contributed a funding of $1.5 Billion at a single shot while it seems to be the largest funding ever.
Value Proposition & Customer:
Airbnb is online focused to connect the online community who are looking for a living space for a required duration to the owners who have showcased their living space on the list. It has provisioned a wide coverage to entitle travellers to rent homes for their private and leisure stay at any part of the world. The system includes personal profiles; rating and reviewing the service provided by the host and also would help the users understand deals and offers instantly. On the other side the hosts are furnished a space to choose the kind of users who want to rent out their living space.
Mission and Value:
Airbnb can be the most pocket friendly travelling accommodation on-demand service option. The mission is to unfold a sumptuous living space for travellers for them to ensure a “feel at home” while they are in any part of the globe. The aim is to build transparent connections between the users and the local hosts and help them access to typical culture of the place they choose to stay.
In simple terms, Airbnb works as mediator between the travellers who are looking for stay at their favourite destinations and the local hosts who have listed their living spaces for rent with a perfect rating system – to build further trust within the community. User reviews and profiles take a vital role play to establish reputation amongst the marketplace.
Now it’s double revenue well planned by Airbnb. It gets monetary benefits from both the guests and the hosts on every booking. Airbnb takes a commission of 6-12% from the guest and a 3% from the hosts per successful transaction.
Organization: While at Y-incubator, Airbnb intended to serve on what the community wanted and turning them to identify their demand, by tell tale techniques and inviting the users to join its logo redesign campaign. Airbnb goes beyond the virtual space by partnering with city authorities in San Francisco to identify hosts and help displaced people to get connected with a local hosts for their stay in any case of an emergency.
Key components that worked up to a successful business model
- TLegal institutions
- Travel community operators
- Insurance companies
- A repository of accommodation information listed
- A community of home providers
- A community of travellers
- Community of home providers & travellers
- Data base with accommodations
- Reliable plan
- Membership at no cost
- Insurance covered for properties
- 24/7 customer support team
- User friendly
- Unique spaces rented
- Exploiting technology to establish infrastructure & design
- Focussed management of community
- Customer support
- Customer association
- State of Art Marketing techniques
- Intense development of the product
- Managing international payment mechanism
- Mobile app
- Social media
- Press Releases
- Word of mouth
Cost to Investment
- Design and development of the application platform
- Human resources
- Payment system maintenance
- People who like to rent out their place for additional income
- Crucial Resources
A Collaborative Support Team
- Mobile applications
- Types of Customer Segments
Source of Revenue
- 6-12% of booking fee from the renters
- 3% of each rented place when booked
Insights from the Airbnb business platform
- Orchestrating a perfect Airbnb business model is critical to withstand amongst the competitors in the marketplace so who requires a business model
- Founders or Owners of small enterprises and start-ups
- The company leaders who are to create additional value
- You, when you’re willing to learn the insights of the Airbnb business model
- Airbnb holds well in the market place disrupting the travel industry by getting hooked with the technology
Case Study: AirBnb’s Business Model
Any business needs customers – A Customer’s Perception is any Business’ Reality. While a business exists in the market only when a business meets the customer’s demand. Look at what the community desperately needs – make it core to build on your business – by that way find your set of customers, create answer to your customer’s solutions and that is how Airbnb rolled out its business model.
Airbnb Business Model is a duo-sided platform that serves to fetter customers who are on the lookout for a decent space to rent during vacation and sellers who are convinced to share their homes with an intent to add extra money to their pocket. So looking at the service model – the business deals with two different customer segments, the guests and the hosts while the business happens only if both customer segments are there.
“Price is what you pay, Value is what you get”- Warren Buffet, this statement says it all. Value Proposition equals to products or services that generate value for a particular customer segment.
Making the difference in the industry amongst the competitors is where you create value to your customers. The core of business strategy should be directly proportional to customer value proposition with consistent alignment of the process and capabilities. A right value proposition in place equips your business to stand out and makes it a reason for your business to be the customer’s choice. From design, to service, to support, to pricing and what not – anything done to convince customers – is all about value proposition.
What did Airbnb do about its Value Proposition
Airbnb chose to frame out a value proposition to give mutual benefits to both the customer segments – After all any customer cares about it.
Benefits of Airbnb to Customer segments & How Airbnb works
- A room, a villa, a castle, an igloo and what not in the list of people’s interest – Airbnb found a way to hook it up with solutions with a community who are ready to share their living space for rent.
- Searches are streamlined to customize places according to user’s budget, room type, amenities, period of stay and such.
- Airbnb – worked carefully to build trust between the customer segments through a rating and reviewing system. It stood as community marketplace building a brand of trust for people to browse and discover unique place over the globe from the Airbnb list.
- Mutual benefits to guests and hosts were made possible.
- Hosts were given an option to monetize their living space for an extra income.
- Option to rate and review the stay experience offered by the hosts listed on Airbnb.
Reaching customers the right way is one effective ingredient to showcase your market presence. Put all that is best to stay ahead of the customers’ alternative.
What are Airbnb’s hands on marketing their service?
Integration of Craigslist: Airbnb exploited Craigslist (classified advertisements website) to the maximum, to increase and sustain their user base. The backroom boys of Airbnb were super smart that they drilled their minds and came out with provision for the users an instant link to post it on Craigslist when Airbnb’s users filled out forms to list their bedrooms. By this way, Airbnb walked a different strategy covering the craigslist audience.
Advertising: From conventional to the state of the art advertising techniques, social media and what not in the list, the marketing team sourced all types of advertising means to target its customers.
Referral Schemes: Airbnb implemented the referral scheme way of promoting its market presence to its customers through exclusive referral URLs. It worked this way, each time a new user signs up through the existing users’ referral, the existing users are to get credits that can be used for their future trips. The referral program seems to be alluring that the new users are tempted to try the new deals that come their way and it anchors users to the community to use the service.
“Your most unhappy customers are your greatest source of learning” – Bill Gates.
Losing Customers is not happening for a business to thrive the industry. Retain your customers – is all what you have to work on.
The strong bonding of Airbnb and its Customers – Know how
Airbnb serves two ranges of customer segments – renters and owners, one segment cannot benefit without the other customer segment. Owners make renters provide with awesome experience to retain them while they monetize their properties. Airbnb worked to maintain strong bonding with customers with a high quality website and a fast and reliable customer support as well.
Every business looks at better revenue in return. Revenue stream is directly proportional to the type of customer segment. Airbnb looks at its revenue based on commission in return for the service it mediates to the community. When a booking is confirmed over the Airbnb platform, a 6 to 12% service charge is taken from the travellers and 3% from the local hosts. Earning while just connecting to people to a secure stay place.
How much do you invest and on what do you invest – the prime factors of every business
Airbnb’s Cost Structure
Airbnb looks into developing and maintaining website platform where the two customer segments meet. The cost structure is also patterned to incur investment plan for its marketing and sales purposes as well.
Consistency in generating value proposition to your customers and implementing new techniques to defy outdated business structure while sketching out innovative methods to move forward should be your prime goal to create value to your customers and set a benchmark in the competitive marketplace.
Airbnb has rolled out on-demand service business model that is less common while labelling it a trail blazer with innovation as a new gaming technique to the travel industry. It has created great and significant value to its core customers and the society.
Built-In Native IOS App for Hosts & Guests
Built-In Native Android App for Hosts & Guests
Unlimited Property Listing
SEO Friendly URLs
Paypal & Authorize.net for credit card
Alert for Hosts and Guests
Sign in Using Facebook
Export Properties, Hosts, Guests,Accounts
Coupon Code Modules
Elegant Search By City, State Name and Country
Msg Communication System between Guest & Host
Sub Admin Management & Privileges
Wish List Features
Traveler Service Fee
User Registration Fees
Integrated Google Analytics
Review Management System
Water Mark Features
Trust And Verification System
Website Backup through Admin Panel
Phone Verification of Hosts Using Twilio account
Stripe Payment Module
Booking Status Management
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Google Maps Integration
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IP Based Currency
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