Monday, September 08, 2014

Airbnb co-founder discusses the nuts and bolts of the company on Econ-talk

Nathan Blecharczyk, the CTO and co-founder of Airbnb is interviewed by Russ Roberts of Econtalk. It’s a great interview with lots of insight into the nuts and bolts of Airbnb.
Also, there are some amazing recent facts: There are now 800.000 properties on the platform, and recently 375.000 rooms were rented out in one night. It’s big.

I’ve picked a sequence, where Blecharczyk talks about the turning point of the company, when the founders, at the suggestion from their Y-combinator mentor Paul Graham, went to New York and visited the people who were using Airbnb to rent their flats:

“So, we went to New York, and before we showed up, we called every single user, every single host.
Russ: How many were there?
Guest: About 30.
Russ: Okay. That's 30.
Guest: It was not a monumental task by any means. And we said, How would you like a professional photographer to come by your home and take some pictures? And I think that question was a little bit out of the blue, but people were curious and they said, It's free? Yes. And they said, Okay, sure, why not. And, you have to remember, at this time camera phones weren't that great. They were lower resolution, poorly lit. So we noticed the photos could be better. So we offered to take them, have a professional take them, for free. What ended up happening was that Joe and Brian would go to the camera store, rent the camera for the weekend, and show up themselves, knocking on the door. So the host would open the door expecting the professional photographer, and it was Joe and Brian, the founders of the company. But they let them in anyways, and Joe and Brian took the photos. And while they are in there, sat with them at the computer, showed them how to use the website, got product feedback, as well as invited them to share beers later on. And so we'd get together anywhere from 5-8 people in the evening, have a beer, tell them our story over the last year. And once people had heard the story and gotten to meet us, they became our advantage list. They wanted us to succeed at that point. So much so that even once we came back to San Francisco, we could call them up and give them advice, such as: you really have a beautiful apartment but you've only written a paragraph describing it; could we add a few more paragraphs? Could we perhaps start with your price being lower, and then raise it if you are getting too many inquiries? And so once we had great pictures, lower prices, more complete profiles, and cooperative hosts, that was the special combination. It was then that those properties started getting booked by travelers coming from all around the world. The travelers had great experiences and then would go home to their home cities--Paris, Berlin, Hong Kong--and the guests would oftentimes say, Hey, I want to do this, too. And the guests would become hosts. And so, within months there was a global cross-pollination of the idea in a way that might not be true of other businesses”.

Another quote:
So events are a great catalyst for Airbnb. And just recently during the World Cup down in Brazil, we hosted about 150,000 guests in Brazil. It was actually about 20% of all international visitors, stayed on an Airbnb property. We now have 20,000 properties in the city of Rio. So, Airbnb is a great solution when there's an event that brings an influx of people and there's a lack of the existing hotel capacity to kind of flux and accompany all that”.

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