The National Bureau of Economic Research announced that on December 1, 2008, the USA had entered a recession in December 2007. but as a matter of fact, the recession was not only hindering the US perhaps nations all around the international have been feeling the consequences of the monetary nightmare. There have been two-point six million people were in unemployment, numerous billion-greenback businesses filed for bankruptcy, and the arena economic system changed into a hit with a $2 trillion bill.
The 2008 monetary disaster changed into so intense that it changed into dubbed the worst monetary meltdown withinside the United States since Great Depression. And it lasted for almost a year and a half. Now, if I requested you, "Would you want to set up a commercial enterprise?" in the course of this dreadful period, could you assert yes? What could be your response? You'd probably declare me insane, here.
Airbnb started at this time of recession besides they have become a billion-greenback enterprise due to the paradigm alternate that the recession delivered approximately.
So, what is the idea behind Airbnb that makes it so unique? How did they manipulate to be successful withinside the midst of the recession? And, most importantly, what are the commercial enterprise lessons that you could inculcate from this business study.
We often normally feel that on every occasion maybe it's a disaster of any type, whether or not it's far a political disaster, a monetary disaster, or maybe a pandemic, it continually results in a paradigm shift in social behavior.
When the recession hit America, hundreds of thousands of people misplaced their jobs and have been in dire want of cash. In fact, at that period, the perspective towards their lifestyle changed, now no longer to shop for a pleasant vehicle or assets rather the people were earning for their survival, now it was the matter of existence and death.
THE IDEA
In reality, the founders of Airbnb could not pay their rent so that they commenced web websites hosting strangers of their domestic in change for rent. At the equal time, people who have been journeying wanted an inexpensive preference due to the fact, after all, they did not have lots of cash, right? And it changed into then that Airbnb related the host with the guest, growing a commercial enterprise version that allowed the host to earn passive earnings at the same time as supplying a less expensive and higher opportunity to inns for the guest.
This is why the idea of Airbnb changed into a sport changer, and what was observed changed into the beginning of a billion-greenback enterprise that redefined tour for Millenials, which we now recognize because of the short-time period domestic condominium enterprise. And this behavioral paradigm shift is referred to as the collaborative intake movement, wherein society believes in sharing possession of assets instead of retaining them to themselves. And the economic system that emerges from it's far referred to as 'The Sharing Economy.'.
Interesting reality According to a report, the sharing economic system will develop from $14 billion in 2014 to $335 billion with the aid of using 2025, primarily based totally on the valuations of Uber and Airbnb. And it's far due to the emergence of the sharing economic system that, beginning in 2008, some of the startups primarily based totally on the idea of collaborative intake have long gone directly to grow to be million, if now no longer billion-greenback businesses. And because the twenty-first century progresses, society will become greater hospitable to this form of enterprise. This is the primary and critical answer to our question of why Airbnb has been this type of large success.
The query is, wasn't Airbnb one among many startups with this same base idea, but the question is why then Airbnb in particular succeeded. This brings me to the second element of Airbnb, which is designing for belief/relationship. earlier, people have been renting out locations out of necessity, but the problem here was both guest and host were no longer up to the comfort level due to the fact the rate of belief couldn't be set up among the host and the guest, however, thankfully, Joe and Brian have been layout college students who understood the significance of layout in constructing human relationships. As a result, they took it very severely and commenced experimenting with a consumer enjoy version too.
After a few trials and errors, they located that if the host delivered himself and defined a bit approximately himself that is if the host is elaborating about himself, then the guest or the visitors will come at greater comfort level than they were before if they handiest knew approximately the assets.
Second, they carried out a joint look with Stanford to decide the elements that make contributions to interpersonal believe. That's after they located that the greater numerous human beings have been, the greater tough it changed into to set up belief.
For example, think you are a 23-yr-vintage Pune resident who meets a number in Delhi who's a local Punekar. You will start to believe that individual ton greater effortlessly than you'll a 40-yr-vintage Gujarati host residing in Delhi. However, they located that whilst you upload social recognition to an individual, no matter how numerous their backgrounds are, the rate of belief will increase significantly. In this case, the social recognition changed into completely decided with the aid of using the reviews.
And visitors would feel more comfortable and more likely to believe if the host has more than three reviews, And for the visitor, they created a small questionnaire to assist them to introduce themselves speedily and in a manner, this is neither formal nor informal.
The X element of Airbnb
The main element of Airbnb which distinguish from their competitor is the relationship among their customers, Paul Graham founder of Y combinator particularly mentioned the importance of customer relationship and even suggested interacting and making a cordial format to Airbnb boys. After at the time when Airbnb was just started as a company, they literally interacted with their customer even though financially they were not stable at that time but still they tried to travel and had kept a friendly relationship with all their customer, they stayed for weeks and had discussions, and at the end, they actually got many insights from them which eventually helped the company as a whole.
Most importantly, when they finished, they invited the host over for a lager later that night, sat with them, and constructed a friendly relation with them. They exchanged stories, had good communication, or even informed them approximately the potential flaws of Airbnb. And bet what, They shaped this type of robust bond with the hosts that they have been in a position to name them later and inform them that they knew their fee changed into too excessive or that they had to write a higher description. Soon after, all of those listings commenced to get hold of lots greater traffic, and those from all around the international who has been journeying New York commenced to book those Airbnbs, permitting the hosts to earn lots greater cash.
In reality, traffic to New York speedy have become hosts, and that they commenced listing their assets, and suddenly, assets listings commenced shooting up all around the international, together with Germany, Spain, or even Hong Kong. This is how Airbnb laid a strong basis for the maximum effective shape of marketing, phrase of mouth, with the aid of using reworking hosts into logo ambassadors. This is how the aggregate of timing, layout for belief, and empathy have become the proper recipe for Airbnb's success. Today, Airbnb is so massive that it has 7 million listings in 191 nations and made $4.7 billion in sales in 2019.
