Airbnb: The journey from an exhausted startup to a billion-dollar business
In 2009, Airbnb was nearly bankrupt. Like many startups, they had founded a company but attracted little attention. Revenue lingered at USD 200 a week, split among 3 founders in San Francisco, meaning ongoing losses and no growth. Co-founder Joe Gebbia acknowledged that the company’s growth chart was a flat horizontal line, while everyone knows venture capitalists seek companies with impressive upward growth. They were forced to empty their pockets.
Using machines is not always the best solution
At the time, Airbnb was still in the Y Combinator incubator. One afternoon, the founding team and Paul Graham reviewed New York City search results on Airbnb, trying to identify what was wrong and why the company was not growing. Then Gebbia realized,
“We identified the problem. All 40 search results had one thing in common: the images were terrible. Every photo was bad. People simply took pictures with their phone cameras or downloaded images from the internet. It was no surprise that no one wanted to book a room when they could not even tell what they were paying for.”
Graham proposed a very manual, decidedly nontechnical solution: go to New York, borrow a camera, and work with partners to take beautiful, high-resolution photos to replace the poor amateur images. The group of 3 took the earliest flight to New York to carry out the task. No specific data supported the decision at the time. They simply did it. After a week, the better photos had doubled revenue to 400 dollars per week. It was the company's first financial improvement in 8 months, and they knew they were on the right track.
That was a turning point for the company. Gebbia said the team initially believed everything had to be done in a very ‘modern industrial’ way. Only when they allowed themselves to experiment with ‘manual’ methods did the company move beyond its difficult stretch.
“In Silicon Valley, we are biased toward solving every problem with modern technology because that is the beauty of programming. A piece of code can solve one, 10 thousand, or even 10 million similar problems. In our first year, we stared at computer screens solving problems with code. It was baseless dogma. Only when we met Paul Graham at Y Combinator did we first feel we had permission to work manually. I will never forget that moment, which opened a new chapter for the company.”
Designers Must Experience Users’ ‘Pain’ Themselves to Create a Good Product
Gebbia's experience with improving images showed that lines of code cannot solve every problem customers face. Powerful as computers and software are, they have certain limits. The […] entrepreneurship in Silicon Valley tend to feel comfortable as ‘keyboard warriors.’ However, going out to meet customers is almost always the best way to develop smart solutions to their problems.
Gebbia believes his first lessons at design school shaped his thinking about customer development,
“If we were developing a medical device, we would also go out into the world. We would speak with investors and everyone who uses medical products — doctors, nurses, and patients. We would experience moments of insight by lying in a hospital bed, being examined with that very device, and learning what the patient's discomfort feels like. From there, we could find ways to improve the device.”
This prompted Gebbia to make the “patient experience” a core value of the design team. Every new member immediately feels the desire to “become a patient” upon joining.
“Everyone spends their first week or two touring the company and then writes down what they observed and heard. We give them a set of questions to answer, and they later share their responses with the whole company. It is crucial that everyone in the company understands how strongly we believe in this core value—and that we are willing to pay people to spend their first week exploring the company.”
Why Join the Navy If You Can Be a Pirate?
Although Airbnb operates largely on metrics, it does not let those numbers dictate its actions. Rather than developing reactively in response to measures and data, it usually starts with a creative hypothesis, introduces a change, examines its effect on the company, and repeats the process.
Gebbia says,
“I do not know what use data is if we do not have a good way to verify it. Data can be completely wrong. Our approach is to act on an idea even when it is not yet scalable. This approach has become part of the company’s culture. You become a pirate, setting out to explore and seek treasure, then returning to tell your stories.”
Each Airbnb team member bets on new features, then measures whether they produce meaningful results. If so, more pirates are sent in that direction. This structure encourages employees to take calculated, productive risks on the company’s behalf, leading to the development of bigger features. It allows Airbnb to move very quickly and continually discover new opportunities.
Gebbia explains this idea more fully as follows:
“We try to build a work environment where, the moment people see the faintest spark of something promising, they throw dynamite at it so it explodes into something much bigger that no one has ever imagined.”
Everyone Learns to Contribute Directly to the Product on Their First Day
As part of Airbnb's new employee training, the company encourages everyone to contribute new features from their first day. This helps them gain confidence and demonstrates that great ideas can come from anyone. The approach can produce unexpected results. For example, an Airbnb designer was once given the small task of reassessing the star-marking feature. In Airbnb's original product, users could ‘star’ a listing to add it to their wish list—a basic feature. Gebbia recalled:
“Our new designer came back and said, ‘I have it!’ I asked what he meant by ‘have it’—he had spent only one day examining the issue. He continued: ‘I think a star feels dry, like an ordinary tool. Our service should feel full of aspiration. Why do we not reconsider this? I will replace the star with a heart.’ I said ‘Oh,’ and replied, ‘All right.’ It was very interesting, and we did it. When we made the change, we also added code to track changes in user behavior.”
As expected, the simple change from a star to a heart increased sales by more than 30%. In short, let people be pirates, going out to find and bring back new things.
Closing words
We often have to move very quickly when building a product at the startup stage. It is extremely demanding because we need to get the product out. Gebbia tries to balance this reality with the need to renew their thinking by constantly pushing his team to think more broadly.
“Whenever someone brings me something, my first instinct as I examine it is to think bigger. That is also my instinctive advice: think bigger. Whatever it is, break it into pieces and see what happens. Then come back to me after you have thought about it a hundred times and tell me what it looks like.”
Source: collected
Chương trình liên quan tại YUP Education: X-Startup – khóa học khởi nghiệp «Khởi Chánh Nghiệp» · The Journey – lộ trình phát triển doanh nhân
