Your Direction Needs a Road

In the latest December INC.  online magazine I was reading the article about the unique Start-Up with the name “AirBNB” (page 64ff).  I was wondering about the name “air” and that kept me reading on.

Three guys had a start-up idea with no demand by a market at all.  Normally, people say:  you need to solve a problem!  That means as a start-up you need to find a problem in the market to create a demand.  But this was not what the guys started with!  They broke a rule….. and then, what happened?

They decided to offer overnight stays in their own private apartment for people who flew in to visit the 2007 Design Conference in San Francisco, for 80.00 $ a night.  Their offer was to sleep on air mattresses instead of a bed and with this idea on their minds they called and emailed every design company in the Bay Area to get the word out.  Involving Craigslist back then, they found hundreds (!) of hosts who signed up on their website,  offering “cheaper” overnight stays in private rooms than a hotelroom cost.

It worked well for quite a while but then, although they had gotten people open-up their homes, just a few people signed-up to stay and pay.  The trouble was – lack of conferences!  Their original power engine was gone.  Now the 3 start-up people could have decided “to give up” and leave their own self-built stage.  They now had a problem with their original idea.  It just worked with a certain connection (or link) which wasn´t permanent.  But instead, they decided to connect with someone and ask for advice – and as a reward they got a great idea delivered:  turn to NYC, tourists travel frequently and always look for a good price for overnight stays!  NYC is also short in cheaper hotels.

What was their next decision?  They called the hosts who´d signed-up already and asked to come along to make a professional photo of the accommodation/room.  And no, they couldn´t afford to hire a photographer so they rented a Nikon (!).  Your take-away as a HINT:  start-ups need to nourish their help-yourself mentality.  Then they quickly simplified the payment process on their website, knowing that people shared all their experiences and photos on other social media (as in Facebook)….. it was the right time!  Their hosts also posted their AirBNB on Craigslist, to boost getting the word out  (= no longer available)

Deciding for such quick and smart improvements and refinements made the idea run again!  They required an aura of style, respectability, safety, and trustworthiness.  These tiny initial differences were their displayed “value proposition” in the internet.  In 2010 their start-up took off!

Their provoke thought was:  “A stranger is just a friend who hasn´t slept in your spare bed yet”.  And the benefit for the strangers was saving up to 250.00 $ per night in San Francisco.  What was or is the risk for the person who offers the private room?   YES:  it´s trusting a stranger.  So there was another broken rule but now on the other side.

…..but still AirBNB seems to violate the law!  (the zoning law mainly)  Do people run illegal hotels now?  What caused their decision and start-up idea long-termly?  Some voices like the Hotel Association “x” turned loud but didn´t disturb the running system of AirBNB.  And a necessary legalization “only” leads to taxing the money making landlords!

Right now, twenty million users are hard to beat and also hard to ignore –

BE A DECISION MAKER.  BE OUTSTANDING.

rita jaskolla – Leadership Architect –