Famous Growth Hacks Used by Airbnb

Product Alliance

14 Aug 202003:56

Summary

TLDRIn 2007, Airbnb co-founders Joe Gebbia and Brian Chesky turned their financial struggles into a business opportunity by offering air mattresses and breakfast to conference attendees. Despite early challenges, they used creative marketing hacks, including selling collectible cereal during the 2008 presidential campaign, securing Y Combinator's backing, and taking professional photos of listings. Their most pivotal growth hack involved cross-posting Airbnb listings to Craigslist. These strategies helped Airbnb grow from a small startup into a global lodging giant. The founders' creativity and viral marketing expertise were key to their success.

Takeaways

🏠 Joe Gebbia and Brian Chesky struggled to pay rent in 2007 and launched AirBedAndBreakfast.com to rent out air mattresses during a conference.
💡 They charged $80 a night for a stay on an air mattress with breakfast (Pop-Tarts), providing an affordable option for attendees.
💸 Despite attracting some customers, convincing people to stay in strangers' homes was challenging, leaving the founders in credit card debt.
📈 The 2008 Democratic National Convention in Denver helped AirBedAndBreakfast gain traction as there were more attendees than hotel rooms.
🥣 To raise money during the 2008 presidential campaign, they sold limited-edition cereal boxes (Obama O's and Cap'n McCain's) for $40, raising $30,000.
🚀 Paul Graham, co-founder of Y Combinator, accepted Airbnb into the accelerator program, believing in their ability to sell unconventional products.
📷 In 2009, to improve New York City listings, the founders personally took professional photos of hosts' properties, doubling revenue overnight.
📤 Airbnb executed a clever growth hack by automatically cross-posting their listings on Craigslist, attracting more users to their platform.
⚡ Craigslist eventually blocked this cross-posting hack, but by then, thousands of users had discovered Airbnb and continued using it.
🌍 Airbnb’s rapid growth was driven by creative growth hacks, viral marketing, and bold strategies, making it a global success with millions of nightly users.

Q & A

What was the initial problem that inspired the creation of Airbnb?
-Joe Gebbia and Brian Chesky were struggling to afford their increasing rent in San Francisco, which led them to come up with the idea of renting out air mattresses during a major conference in the city.
How did the founders first test their idea for Airbnb?
-The founders bought three air mattresses and created a website called airbedandbreakfast.com, offering accommodations for $80 a night, which included an air mattress in their loft and breakfast in the morning.
What was the initial response to their air mattress rental idea?
-Though the offer wasn’t glamorous, three people accepted the offer and were happy to save money on lodging. However, convincing more people to stay in strangers' homes was initially a challenge.
How did Airbnb's founders raise money after going into credit card debt?
-In 2008, they created limited-edition cereal boxes called 'Obama O's' and 'Cap'n McCain's' during the U.S. presidential campaign, selling them for $40 a box. This raised $30,000 for Airbnb.
What role did Y Combinator play in Airbnb's development?
-Paul Graham, co-founder of Y Combinator, accepted Airbnb into the startup accelerator after seeing the founders’ creativity with the cereal box sales, believing they could convince people to stay in strangers' homes.
What was Airbnb's first major growth hack?
-In 2009, the founders noticed that Airbnb listings in New York City had poor quality photos. They rented a $5,000 camera and took professional photos of all the properties, which doubled their weekly revenue in NYC overnight.
What was Airbnb's second significant growth hack?
-In 2010, Airbnb created a way to cross-post all their listings to Craigslist, a popular platform at the time. This increased visibility and attracted a large number of users to Airbnb’s platform.
How did the Craigslist growth hack benefit Airbnb?
-By cross-posting listings to Craigslist, Airbnb reached hundreds of thousands of users who might not have otherwise known about Airbnb, significantly expanding their user base before Craigslist disabled the feature.
Why did professional photography play a crucial role in Airbnb's success?
-Professional photography helped Airbnb listings stand out from others, especially when compared to low-quality images. This not only enhanced user trust but also increased bookings and revenue.
What essential traits helped Airbnb’s founders build the company into a global success?
-The founders’ creativity, knowledge of viral marketing, and bold use of growth hacks were crucial to Airbnb’s success, allowing them to grow the company despite early financial challenges.

Outlines

00:00

🏠 Struggling with Rent, Founders Create Airbnb

In 2007, roommates Joe Gabia and Brian Chesky struggled with rent in San Francisco. A major conference was coming to town, and hotels were expensive. They decided to offer air mattresses for rent on AirBedAndBreakfast.com for $80 per night, including breakfast. Despite its simplicity, three people accepted the offer, giving the founders their first taste of success. However, the idea of staying in a stranger's home was a hard sell, and within a year, they were in significant credit card debt.

📈 Airbnb's First Growth Opportunity: Denver 2008

Airbnb's first breakthrough came during the 2008 Democratic National Convention in Denver. With attendees vastly outnumbering available hotel rooms, Airbnb set up shop and received a surge in bookings. Despite the success, they still faced financial struggles. To raise funds, the founders sold limited-edition cereals (Obama O's and Captain McCain's) during the 2008 presidential campaign. These boxes, which also advertised Airbnb, helped the team raise $30,000 and catch the attention of Paul Graham from Y Combinator, who accepted them into the startup accelerator.

📷 Improving Listings with Professional Photography

Airbnb continued to grow but faced challenges in New York City, where listings were not attracting enough guests. The founders realized that poor-quality photos were turning people away. They rented a $5,000 camera, flew to New York, and took professional photos of the properties themselves. While not scalable, this strategy paid off, doubling Airbnb’s weekly revenue in NYC almost instantly.

🚀 A Viral Growth Hack with Craigslist

In 2010, Airbnb executed a clever growth hack by targeting Craigslist users who preferred cheaper lodging. The team developed a way to cross-post Airbnb listings on Craigslist, automatically redirecting users to Airbnb’s platform, which offered free professional photography, making their listings stand out. While Craigslist eventually blocked this practice, it had already introduced hundreds of thousands of people to Airbnb, significantly boosting their user base.

🌍 Airbnb's Success through Bold Growth Strategies

Today, over 2 million people stay in Airbnb rentals every night. The company’s success is not just due to its product and user experience but also the founders’ creativity, viral marketing strategies, and bold growth hacks. Their willingness to take risks and experiment with unconventional tactics played a crucial role in making Airbnb the global platform it is today.

Mindmap

Keywords

💡Airbnb

Airbnb is the company founded by Joe Gebbia and Brian Chesky, which started as a way to help them afford rent by offering air mattresses for rent in their apartment. The video highlights how Airbnb grew from this small idea into a global company by using creative growth hacks and innovative marketing strategies.

💡Growth Hacks

Growth hacks refer to unconventional and creative strategies used to quickly grow a company’s user base or revenue. In the video, Airbnb used a variety of growth hacks, such as offering free professional photography and cross-posting on Craigslist, to gain visibility and attract more users.

💡Democratic National Convention

The Democratic National Convention, held in 2008 in Denver, was a major event that provided a key opportunity for Airbnb. The high demand for lodging during the convention allowed Airbnb to get a large influx of customers, marking a significant turning point in the company’s early growth.

💡Obama O’s and Captain McCain's

These were limited-edition cereal boxes created by Airbnb’s founders to raise money during the 2008 presidential campaign. Each box was sold for $40, helping the founders raise $30,000, while also serving as an advertisement for Airbnb. This creative fundraising approach demonstrated the founders’ resourcefulness.

💡Y Combinator

Y Combinator is a prestigious startup accelerator that provides funding, advice, and networking opportunities to early-stage companies. Airbnb’s acceptance into Y Combinator was a key moment that helped the company secure investment and improve its product, setting the stage for future success.

💡Professional Photography

Airbnb’s decision to offer free professional photography to hosts was a significant strategy that helped the platform stand out. By improving the quality of the listings’ images, Airbnb was able to attract more customers and double its weekly revenue in New York City practically overnight.

💡Craigslist

Craigslist is a popular classified ads website where Airbnb identified many potential customers. Airbnb’s founders found a way to automatically cross-post their listings to Craigslist, driving traffic back to their own site. This strategy helped Airbnb grow its user base quickly before Craigslist disabled the feature.

💡Paul Graham

Paul Graham is a renowned venture capitalist and co-founder of Y Combinator. He believed that Airbnb’s founders had the ability to sell a difficult concept—convincing people to stay in strangers' homes—because they had successfully sold $4 cereal for $40. His support was crucial to Airbnb’s early growth.

💡Modest Growth

Modest growth refers to the period of steady but unspectacular growth that Airbnb experienced after its initial success. Despite some challenges, such as credit card debt, the founders continued to refine their product and marketing strategies, leading to a more sustained growth trajectory.

💡User Experience

User experience (UX) refers to how users interact with a product and how satisfied they are with that interaction. In Airbnb’s case, the company focused on improving its user experience by offering better-quality photos, seamless listing processes, and eventually, a platform that provided an easy and enjoyable way for people to find and book lodging.

Highlights

Joe Gebbia and Brian Chesky were struggling to pay rent in their San Francisco apartment in 2007.

They took advantage of a major conference in the city, offering air mattresses and breakfast for $80 a night.

The duo created airbedandbreakfast.com to advertise their offer, allowing people to sleep in their loft during the conference.

Three people took their offer, saving money on lodging, while the roommates earned extra cash.

Despite some initial success, they struggled to convince more people to stay in a stranger’s apartment.

Within a year, Gebbia and Chesky were in $20,000 credit card debt, facing major financial difficulties.

The turning point came in August 2008 during the Democratic National Convention in Denver, where Airbnb capitalized on a shortage of hotel rooms.

Airbnb founders sold limited edition 'Obama O's' and 'Captain McCain's' cereal boxes for $40, raising $30,000 in funds.

Y Combinator co-founder Paul Graham saw potential in their creativity, accepting Airbnb into the startup accelerator.

Airbnb’s breakthrough came when the founders went to New York City in 2009, offering free professional photography for hosts to improve their listings.

This photography strategy helped Airbnb double its weekly revenue in New York almost overnight.

In 2010, Airbnb used a major growth hack, cross-posting listings to Craigslist, reaching a wider audience.

Craigslist eventually disabled the cross-posting feature, but by then, Airbnb had gained a significant user base.

Airbnb's success came from its founders' creativity, bold growth strategies, and viral marketing tactics.

Today, over 2 million people stay in an Airbnb every night, marking its massive global reach and popularity.