Airbnb: Transforming the Hospitality Industry

What Airbnb Teaches You About Building and Scaling a Product

No one wanted to live in strangers' houses until Airbnb.

If Airbnb’s co-founders had presented you with the idea of “Living in strangers’ houses” 17 years ago, you would've had the same reaction as many did at that time: “What are you talking about!” The idea of living in someone else’s house you don’t know anything about was unfathomable.

Many even thought this was the strange, weirdest idea that would never work. But guess what? Here we are, 17 years later, Airbnb is one of the most successful tech companies in the world. What started as the weirdest idea is now a company with a total market cap of $85 billion—making it one of the leading platforms in the hospitality industry.

Airbnb’s story is both inspiring and remarkable.

When the company’s co-founders started the initial idea of Airbnb “Airbed and Breakfast” they weren’t thinking of building a billion-dollar company and trying to change the world. None of those big visions. They were just two guys trying to make ends meet in San Francisco in 2007.

But the world is beautiful, you know. When you try to solve a problem, it rewards you with many upsides—opportunities, financial gains, recognition, and whatnot. And this is exactly what happens to Airbnb. The company is very fascinating, so I devoted hours studying Airbnb's founding story, strategy, financials, culture, how it went from a “Weird idea” to a company worth $85 billion in market cap, and how it does things differently that sets it apart from its competitors.

And I can tell you, whether you are a founder, leader, or investor, Airbnb has a lot to teach you about building and scaling a product. By studying Airbnb, you can apply the knowledge and learnings to your own work and company.

Get your popcorn ready, and let’s dive in!

1. What is Airbnb

Airbnb is a marketplace that connects two spectrums of users—hosts, who have properties, can list on the platform—guests, who want to book properties for short or long-term periods to stay. Airbnb works as a middleman that connects these two parties, just like Uber. But it’s worth saying that Airbnb is no longer a short-term rental platform since the platform allows you to live in strangers’ houses for days, weeks, and even months.

But the idea of Airbnb isn’t similar to traditional hotel chains. Airbnb is a company that says Belong Anywhere, meaning, it doesn’t really matter who you are and where you live, you can rent or book anyone’s houses or properties (boats, treehouses, villas, etc) on Airbnb to stay like a local. And unlike hotels, the guests would welcome and greet you personally when you reach your destination—most of the time, in most places. And for that reason, the big difference between traditional hotel chains and Airbnb is “Experience” and “Belonging.”

Here’s what the co-founder and CEO of Airbnb, Brian Chesky said about Airbnb in one of his Medium posts in 2014, when the company was fairly new:

“Airbnb is returning us to a place where everyone can feel they belong. Like us, you may have started out thinking you were just renting out a room to help pay the bills. Or maybe you were just booking a bed for a night on an unexpected layover. However we first entered this community, we all know that getting in isn’t a transaction. It’s a connection that can last a lifetime. That’s because the rewards you get from Airbnb aren’t just financial—they’re personal—for hosts and guests alike.”

This begs the question: What’s wrong with traditional hotel chains?

When Airbnb’s co-founders were trying to grow the initial idea: the “AirBed & Breakfast” they weren’t thinking of differentiating it from traditional hotels. Instead, it happened by accident because the “Idea” worked. But today if you look at traditional hotels and Airbnb, you’ll find that both are completely different on their own—different operation styles, values, and user demand.

Airbnb stood out because it focused on community building and personalized experience. On the other hand, hotels are not only expensive, but they also come with no unique experience and are less friendly. And that’s why when you book a hotel, you generally have a decent-to-bad living experience.

Airbnb is different. The company’s core value is “Belong Anywhere” This means when you Airbnb a room, house, villa, boat, castle, treehouse…or anything on Airbnb, you want to have a unique experience living in someone else’s possession for a few days to months. This doesn’t give you a rough experience because you basically get a host who welcomes you and makes sure you are having a good time in their place—allowing you to live like a local.

Why is Airbnb unique?

Airbnb is unique because of the way it operates. Unlike traditional hotel chains, Airbnb hosts don’t throw the room’s keys to you and say “GoodBye.” Airbnb doesn’t own the properties listed on the platform, instead they are all hosts’ properties. So when you book a room or any kind of accommodation service on the platform, you get to see the hosts’ credibility, trust, reviews, ratings, and whether the host is verified, superhost or not, which is just beyond traditional hotel chains operating style.

This helps build trust and friendly relationships between both hosts and guests on the platform.

And since the hosts directly welcome you (most of the time, in most places) when you onboard to their place, you can even have more friendly conversations with them. So you don’t just travel for the sake of travel, you travel like a local by communicating and exchanging ideas with them on what to do, where to go, what to eat, get to know their culture, get urgent help, etc, which makes the experience 10x better and unique than what you get from traditional hotels.

The better Airbnb does this, the more it grows as a platform.

Founding Story

The founding story of Airbnb is about turning adversity into an opportunity.

Two guys, Joe Gebbia and Nathan Blecharczyk were living in San Francisco in 2007. Joe was a designer, and Nathan was a software engineer. One month they found out that their landlord had raised the rent by 25% ($1050!), which was definitely not good for them. The guys barely had money to pay the room rent in that price range. Seeing the new rate, Nathan told Joe “He is Outta here.” So shortly Nathan moved out of the apartment.

This increased the pressure on Joe to pay the rent.

So what did Joe do? Joe started brainstorming ideas to make money so he could pay the rent. While he was brainstorming and researching, he found out that an Industrial designer conference was coming to San Francisco next month, but he also found out that most of the rooms and apartments were sold out—making it hard for all (attendees) designers to stay in the city.

Joe was a designer, and he had this renting experience before, so he thought it’d be worth trying this out again to grab the opportunity. To kick off the “Business” Joe sent an email to one of his designer friends Brian Chesky, who was also a designer living in Los Angeles at that time. Both Joe and Brian had graduated from the Rhode Island School of Design (RISD).

This is the email Joe sent to Brian:

Brian was doing a job in LA, but since it was Joe’s email, he had to move to San Francisco—as he did. When Brian moved to San Francisco, he already had an idea of the situation. Both designers, Joe and Brian had an entrepreneurial mindset despite being broke and unemployed living in San Francisco.

So seeing this coming opportunity, they thought of renting their living room with 3 air mattresses and breakfast. They made a simple website and called it Airbedandbreakfast.com:

Once they had the working website live, they asked a few design blogs and design conferences to promote it, which they kindly did. Magic happened, and within a few days of working website, they had secured three guests: Kat, a 30-something designer based in Boston, Michael, a father of five in his forties from Utah, and Amol Surve, a native of Mumbai who’d just graduated from Arizona State University’s master’s program in industrial design.

Joe and Brian did their best to service those three people— awesome breakfast, three separate air mattresses, and a good living experience. But Joe and Brian didn’t just want to give them an experience like hotels do, so they took one step further and helped these three people tour them to their best places, restaurants, museums, and traveled around the city for a few days. Now this was beyond the guests' expectations because they had never experienced this type of hospitality ever in their entire lives.

This was also a breathtaking moment for Joe and Brian. The idea clicked that you could do something like this and let strangers live in strangers’ houses for a small monetary exchange.

Joe and Brian made around $1,000 with the 4-day event opportunity, which was enough for them to pay the next rent. But the problem was that the event was only for a few days, so it was not a sustainable income source for them. The good news was, since the idea had worked, they wanted to try it more, and not just because they were unemployed but because they had no other option than trying this “Air Bed and Breakfast” business—as they also had to make money to pay their rent.

Fortunately, they saw a new opportunity and thought of relaunching the website in March when the SXSW festival was coming out in 2008. For context, SXSW, an annual festival, combining film, interactive media, and music, attracts tech and media-savvy audiences in Austin, Texas, every March. A few weeks before the festival, they redesigned, improved, and published the website again. But sadly few cared, and they only secured two guests, one of them was Chesky himself.

Chesky flew to Austin, as he had booked a room. The host picked him up and provided food and great hospitality. But since the website didn’t process payment online, the hosts asked him to pay in cash, but Chesky had forgotten to go to the ATM, promising he’d pay the money by tomorrow night.

When the second night came, the hosts asked him again to pay the money, but Chesky again had forgotten to bring the cash. This was a whole awkward movement for both. This led to the host doubting whether Brian/website was legit or not.

Although things got sorted. But this experience made Brian realize how difficult it is for the customer to trust a stranger. So they thought of making some new changes to the website that’d increase brand loyalty and trust. These are the major changes they made:

• Change #1: Facilitate payments on the platform

• Change #2: Three-click booking, inspired by Steve Jobs

• Change #3: Let the hosts and guests see the ratings and reviews

Once they made these changes, they were ready to relaunch the website.

They saw another coming opportunity—decided to relaunch the website on the Democratic National Convention (DNC) where Barack Obama was going to be receiving the party’s nomination in August 2008 in Denver—hoping to make a few thousand dollars. They realized that this could be a real opportunity since Dever only had 17,000 rooms and the venue was held for 880,000 people—not having enough room to stay for attendees.

After 3 months of rebuilding the website, they finally launched it two weeks before the event started. The website attracted a ridiculous amount of traffic, where more than 800 listings were available on the website, and they successfully secured 80 room bookings. And with that success, they also got a little media coverage from CNN and local newspapers.

The only problem again was that it was an event—not a permanent source of income!

In this up-and-down battle to generate consistent income, they started looking for new ways to monetize the website. Guess what? They again saw a new opportunity—the 2008 election in November. But instead of selling “Room” they wanted to do something different. So they leveraged the media coverage and some popularity the website had received through those previous launches—in selling “Cereal boxes.”

Founders bought cereals from the supermarkets, and repackaged them into their custom-designed cereal boxes, that they’d called Obama O’s and Cap’n McCain’s. The plan was successful and they sold $30,000 worth of cereal. This was again enough to survive for a few months, but not for so long.

What was needed to change in the company?

Early Days

Now the Airbnb journey has begun.

After a few successful campaigns, it was no longer “AirBed & Breakfast”, the co-founders had changed the name to Airbnb. But the company was still struggling financially as $30,000 was nothing, and after running Airbnb for nine months, seeing no success the founders wanted to give up. According to Nathan Blecharczyk, who joined Airbnb in February 2009, “The profit from cereal sales barely covered the costs of the product”, making it hard to improve and scale the product. The founders were making $200 a week.

But luckily, one of their advisors advised them to seek funding and join Y Combinator.

Guess what? They did. Airbnb co-founders joined Y Combinator, where they met Paul Graham who initially didn’t believe in their idea. But after the 13-week accelerator program, Joe handed one of the cereal boxes they had to Paul Graham which impressed Paul Graham and he said:

"If you can convince people to buy cereal, you might be able to convince people to rent air beds.” He continues…”You guys are like cockroaches. You just won't die. The cockroach of startups.”

Seeing their enthusiasm about entrepreneurship, Paul Graham advised them to “Do things that don’t scale” and the guys received the first funding from Y Combinator of $20,000 in exchange for a 6% equity stake in the company. Now it was time for the co-founders to do things that don’t scale. In this context, Airbnb’s founders did the following things:

• First: Fly to hosts' places in New York with professional photographers and help them list the property with high-resolution infographics.

• Second: Guide hosts about pricing strategies and how to better serve guests.

• Third: Brian Chesky would fly city-to-city, and live in different Airbnbs to get the real experience so they could improve the product.

Since Airbnb’s largest customer base was in New York, Brian hired a professional photographer and flew to New York to help hosts capture professional photos to list on the website. Brian personally met 30-40 hosts and helped list their property properly.

The idea of “Do things that don’t scale” worked, and the company shortly started gaining popularity in major cities like San Francisco, New York, and Austin. Seeing the company’s growth the investors started to pour in, and soon the company had raised $600k from Sequoia Capital.

In November 2010, Airbnb launched its app and secured a $7 million funding. The company quickly gained recognition in the international market, the majority in places like Barcelona, Hong Kong, and Berlin.

By Jan 2012, Airbnb hit 5 million in cumulative night bookings, and just six months later in June 2012, it had passed 10 million. In 2016, Airbnb launched “Experience” to upsell the guests, through which Hosts can offer unique experiences to the guests.

Fast forward to today, Airbnb has 8 million active listings, 5 million total hosts, with over $250 billion in total revenue earned by hosts, which is just mind-boggling.

Why It Worked

The idea of “Live Like a Local” worked.

Airbnb worked because it started offering a unique experience to its users. Because Airbnb’s goal was simple: "We want to have the best experience possible for any guest in the world.” When the traditional hotel chains were too focused on improving the room quality, Airbnb focused on improving the customer experience.

One of the major factors that was holding Airbnb back from growing was trust issues. People didn’t want to live in strangers’ houses for many reasons. So Airbnb had to fix it. And they did it by launching features like ratings and reviews that anyone could see on the platform. Also, the guests have a verified badge option which further adds extra layer of trust.

One thing to keep in mind is that I’m not saying it’s always been the case for all the hosts and guests. If that was the case, then Airbnb was a trillion-dollar company, not a billion. Of course, there are still many challenges and problems Airbnb has to fix including cleaning fees!

Whether you love it or not, Airbnb has something that its competitors don’t. And that’s why the company is worth billions of dollars. So you saying “Hotels >> Airbnb” has a point to a degree, but it doesn’t move the needle.

It’s been 17 years since Airbnb has come to the market and it remains one of the top, most popular websites for renting short and long-term accommodation all around the world.

2. Business Model

Unlike Stripe, Airbnb doesn’t have complicated and 10 different revenue streams.

Airbnb is a marketplace that helps hosts list their properties on the platform, and guests book those properties (home, room, treeboats, boats, etc) in exchange for a small service fee. Airbnb has two main offerings, hosts can offer Rents and Experiences—each comes with a different service fee that the hosts have to pay. Airbnb also charges a fee to guests who use Airbnb to book accommodations.

Airbnb's business model to make money is pretty simple. Here it is:

• Hosts: Hosts can list their properties to rent for free on Airbnb. They only get charged if they make a sale. Usually, hosts on Airbnb pay 3% as a service fee to Airbnb of the total booking amount—this is for rent. When hosts on Airbnb offer Experiences, Airbnb charges a flat 20% service fee on each booking.

• Guest: Guests also have to pay a service fee to Airbnb, which is usually around 14-16% of each booking they make. However creating an account on Airbnb is free, but one has to verify the account before booking anything on the website.

If we look at this graph, you’ll find that Airbnb has significant pricing power over its competitors. Booking.com doesn’t charge any fee from guests, but charges a flat 15% service fee to hosts! Where Airbnb charges service fees to both parties—Hosts and guests. This is one of the main reasons hosts prefer Airbnb over its competitors is because of the low service fee.

No host wants to pay 15% a flat service fee, which is why Airbnb stands out in the market.

Think this way: a guest may Airbnb a couple of times a year through the platform, so it makes sense to charge more from guests than hosts, because hosts have to list the property as long as they want to make money on the platform. So if it were a 15% fee for hosts, that would have been a disaster for hosts in service fee.

To minimize this risk, Airbnb has lowered the risks and prioritized “The hosts” to be satisfied with Airbnb’s service. Because no hosts, no business—Airbnb knows this. Of course, guests matter, but without hosts, there is no guest. And it’s easy to find guests, but hard to find hosts.

3. Airbnb’s Strategy

Airbnb’s unique strategy sets it apart from its competitors.

Let’s face it: Building a multi-billion dollar company is not easy. Any founder or builder can grow a product to $10k a month, $50k a month, or $100k a month in monthly or annual recurring revenue. But Scaling a product to tens of millions (and billions) of dollars in monthly or annual revenue just takes a boardload of strategic steps and decisions.

And Airbnb did it. The amount of features and benefits platform has increased the value of Airbnb over time. Airbnb wouldn’t have become what it is today if it hadn’t implemented some of the following strategies that I’m shortly going to cover.

And I promise you, it doesn't matter whether you’re a founder, builder, or leader of your company, I believe that if you apply these strategies in your business, they’ll 100% help you grow and enhance the quality of your product.

Let’s explore Airbnb's strategy!

P2P Marketplace

One of the biggest advantages Airbnb has over its competitors is the way Airbnb works. If we talk about traditional hotel chains, they generally have to own properties, which massively influences their revenue, growth, and cash flow. But Airbnb is different, it doesn’t own a single property to its name. All it does is connect two groups of people—Hosts (who have properties) and guests (who want to stay and live)—and let them make transactions on the platform.

This also allows Airbnb to offer a wide variety of booking services, for example, guests can not only book rooms but also villas, treehouses, boats, castles, cabins, etc, which is hard for its competitors to do the same.

Not owning properties not only saves a ton of Airbnb’s capital, but it also reduces the risk of losing the market valuation, cash flow, growth, and user trust. Because running an accommodation business through owning properties comes with many setbacks, which Airbnb has clearly avoided by not operating in that business model.

A huge win for Airbnb here.

The Product

Airbnb is about trust, experience, and community. If we talk about what Airbnb actually offers, Airbnb has two main offerings: Stay and Experience. Now here’s what hosts and guests can do on Airbnb.

Guests

Airbnb makes it a seamless process for guests to find places while they’re booking, filter through amazing features while they’re searching, and verify the hosts to make sure they’re trustworthy while booking.

Searching for a favorite destination on Airbnb couldn’t be easier. When you open Airbnb’s website, your eyes directly go to the search option where all you have to do is, type where you want to go, select the date you want to prefer, and then tell how many people are going, then hit search, easy actually:

Airbnb also gives you personalized recommendations based on your zone and the place you’re living in—as you can see in the above screenshot. The point is, unlike other crappy hospitality websites, Airbnb doesn’t confuse and overwhelm users by showing a million things at once.

The founders are designers, they truly know how to design, right?

Once you have clicked on the place you want to book, now you can see the details of the place—along with hosts and property’s ratings, reviews, total pricing, and whether the host is verified or not.

What’s more…once you have booked a place, you can now message the host (also the host can message you) to talk about the further plan, or if one has any doubts or questions. This helps both ends of the customer to save time by not doing back-and-forth emailing, calling, and messaging like many traditional hotel booking websites do.

Hosts

It might sound cliche to you but Airbnb prioritizes hosts more than anything. Because hosts are the backbone of Airbnb (And Airbnb knows it). Airbnb wants hosts to have the best experience possible using the platform.

A couple things Airbnb does for hosts:

• 24/7 customer service: Airbnb has 24/7 customer service for hosts to solve their questions, queries, or specific issues they have.

• Ecosystem: Once the host’s place is booked, Airbnb makes it easier for the hosts to track, manage, and schedule the further process—all on the platform.

• Analytics: Airbnb allows hosts to see and track their financial gains, profitability, total earnings, or how they are doing in terms of numbers on the platform. This means hosts don’t need third-party tools or applications to track their finances.

• Extra: Hosts can also add “Experiences” to upsell to their guests on the platform.

• Community: Airbnb allows hosts to join the community of hosts to streamline the work and make the experience good for hosts all around the world, absolutely for free.

• Educate Hosts: Airbnb has this thing called “Host training” where Airbnb teaches hosts about pricing, travel trends, and how one can make the most off of Airbnb to generate more income on the platform.

Co-Hosts

Hosts on Airbnb can find nearby (also abroad) hosts to collaborate with—who can take care of the service the main hosts provide on the platform. Co-hosts can facilitate many things since they get access to the host's Airbnb dashboard. Co-hosts can manage and schedule bookings, message the guests, set prices & availability, and many other things.

This makes the work 10 times easier for the hosts if they get ill or are out of town for a week or two. However, the host has to pay the co-host a portion of their income, since co-hosts work as a team members. But it’s beneficial because it allows you as a host to find local hosts near your town, collaborate with them, exchange ideas, and get the most out of Airbnb.

You can easily find your co-hosts using the Airbnb website or App, you don’t need to run around your city and grind for hours. Airbnb’s competitors don't have a feature like this, which helps Airbnb stand out in the rental market.

Leadership & Culture

I don’t want to write about leadership and culture as a separate topic, because I believe it’s also a part of Airbnb’s strategy that helps grow the company. What Airbnb is today is massively influenced by its leadership and cultural style.

Airbnb’s co-founders are some of the most ambitious people you’d know in Silicon Valley. Do you know who was the reason Paul Graham wrote the “Founder Mode”? It was Brian Chesky, the CEO of Airbnb, who gave a talk at a Y Combinator event about how founders should approach their companies when scaling—not following the conventional wisdom.

The company has a unique culture that sets it apart from its competitors, for example, Cookie Time Tuesdays. New hire tea time. Hosted bar. Human tunnels, where Airbnb’s employees get involved and meet the employees who work at Airbnb.

The CEO of the company often encourages teammates to set wildly ambitious goals and push the limit of the work they can do at a given time. By doing so, the company not only reaches its goals, but also increases their self-beliefs, which ultimately helps them work even harder for the company—Airbnb.

Just like Amazon’s building philosophy is “Working Backward” the same philosophy Airbnb also uses. When building a new product, Airbnb first gathers feedback from the customers about the product they’re about to build. How? They do many press releases until they understand what they really need to build. By doing so they are accountable for the work, and if the work or project goes in the wrong direction, they can instantly catch it by looking at those press releases and feedback, and get back on track again. Read more about it here, here, and here.

3. The Magical Covid-19

The year 2020 was brutal for Airbnb.

When COVID-19 hit in early 2020, the world started finding “Safe Shelters.” As the coronavirus started to spread all around the world, people preferred traveling less and less. This caused Airbnb to shut down its operation in most places as there was no demand for hospitality, and restrictions. What’s more…people started canceling their trips and bookings which they had booked in advance, and as a result, Airbnb (Hosts) had to refund the money to the guests.

Truly a nightmare, right?

But this was also an opportunity for Airbnb to build trust and honesty with its customers, which it did by providing funds, securing faith, and recovering the losses of its hosts and guests.

Since the conditions were tough, Airbnb had to make some critical decisions which it did by laying off 25% of its workforce. But also to make sure no one is harmed by the company, Airbnb refunded $1 billion worth of bookings to its customers and promised to cover the cost of cancellation up to $250 million for hosts.

This immense bold step showed how much Airbnb cared about its people. When most rental companies were trying to save money, Airbnb thought of deploying money to its people, which worked because it helped build trust, companionship, and authority in the market.

Also In those tough days, Airbnb made the decision to focus on the core business model and focus on local travel experiences. In Airbnb’s S-1, which is a document that a company files before it goes public in a stock exchange, the founders noted:

“When the pandemic hit, we knew we couldn’t pursue everything that we used to. We chose to focus on what is most unique about Airbnb—our core business of hosting. We got back to our roots and back to what is truly special about Airbnb—the everyday people who host their homes and offer experiences. We scaled back investments that did not directly support the core of our host community.”

When many companies struggled in COVID-19, Airbnb thrived.

4. Airbnb’s Numbers

The big question is: How is Airbnb doing financially?

And the answer is pretty well. The company has kept growing since its launch until the Covid-19 pandemic shattered Airbnb’s business for a while. But now back on track, it seems that the company has successfully overcome those dark periods. Since Airbnb’s IPO in November 2020, the market cap of the company remained relatively unchanged, although the company did see a surge in share price after the IPO and stayed quite high for a while.

In early 2020, the company saw a revenue drop, down to $3.3 billion from $4.8 billion. But after going public in late 2020, the revenue of the company has slightly increased each year. In 2021, Airbnb generated over $5.9 billion in total revenue and over $11 billion this year in total revenue—singling a strong growth.

The company’s net and operating income has kept growing since 2021 from -$542 million in net income in 2020 to $1.8 billion in LTM, whereas the operating income jumped from -$3.4 billion in 2020 to $2.4 billion in 2024, showing a strong indicator that the company has well reduced its costs and expenses.

North America remains the largest revenue zone for the company in the last couple of years—the revenue from Asia is lowest, but showing a strong revenue potential in Europe, the Middle East, and Africa. However, the company’s co-founders have said that Asia still remains the top priority to scale the company's availability.

After the pandemic, the company has kept the operating margin pretty stagnant to around ~20%, which shows that it has well established itself as building and expanding its core products over the years around the globe without needing to burn extra cash.

As said earlier, the company’s market cap remained unchanged in the last couple of years. When it first went public in 2020, it traded at around $85 billion. For a year or two, the company saw a surge in the share price up to $131, but now it has had a steady price since last year, hovering around $85 per share.

But despite this, one thing is worth pointing out and that is, the company has seen a consistent increase in the total revenue by 16% year over year, which shows a strong signal that the company is making profits regardless of market price and circumstances.

A few more things about Airbnb:

• Airbnb CEO: Brian Chesky

• Airbnb HQ: San Francisco

• Airbnb total employees: ~7000

• Airbnb’s current share price: $136

Note: For more information, read Airbnb’s 3Q 2024 shareholder letter and newsroom here and here. The analysis above is only for education purposes. The author doesn’t encourage readers to invest in the company through this article. But if you do so, make sure you do your own due diligence.

5. Lesson From Airbnb

Airbnb has many lessons to teach us about building and scaling a product.

When a company is an underdog, we underestimate its potential, as the world did with Airbnb when it was one. Now that Airbnb is one of the most successful companies in the world, people crave to learn from Airbnb. The same people who once doubted Airbnb’s co-founders' idea now seek to get help and ask for investment opportunities.

Now that Airbnb is a global icon, it’s worth saying that Airbnb has well established itself from its competitors. And the sole reason it happened is because of Airbnb's strategic improvement. And for that reason, Airbnb has a lot to teach about building and scaling a service-based “Product” business. Although not all the lessons are valuable and worth your time, thus I have brought you the five most valuable ones.

Let’s dive in!

Customer-Centric Approach

Did you see how seriously Airbnb takes its customers?

If you can’t satisfy the customer with your product, there must be something wrong with your approach. And that’s why you gotta have to be a company that prioritizes “Customers” above everything—just like Amazon and Airbnb do.

Seek customer feedback and let them tell you the problems and issues they are having with your product, and then solve the problems and issues they tell you as soon as you can. This is how you improve and scale a product, fast.

Conversely, if you don’t listen to the customers and do not care about what problem they are having with your product, you’re going to have a hard time building a great product. What’s the Lesson? Care about your customers. Go, learn from Airbnb, because it’s the company that cares about its customers above anything else.

Trust is Everything

In business or let’s just say in general in life, trust is everything.

Airbnb understood this very early and did everything it could to build trust with its customers—launching reviews and rating systems, having full transparency on the platform, and refunding and supporting financially when the time was hard.

Because Airbnb understands this: if customers doubt your product, and they can't be sure whether you are trustworthy or not, they are not going to use your product in the long run.

Well, how do you build trust?

Building trust is a process, you can be a trustworthy company or product if you do what you say you do. On top of that, be as transparent as possible about your people, numbers, and what's going on in the company.

Also, the best way to be trusted is to have a “Word of mouth” marketing engine. Because it allows people to recommend your product to their friends, family, and colleagues. But you can only have good “Word of mouth” marketing if your product is good.

Keep Your Product Simple

Whatever you’re building, keep it as painfully simple as possible.

You can learn this from Airbnb. Go to Airbnb.com and see how they design their homepage, the search results, and the overall user experience. Everything is so easy to use and go through. Because Airbnb understands that if we confuse the customer, it’s our loss, it’s our fault. And It’s not only just Airbnb, you can see this approach in Apple, Stripe, Uber, and many other big tech companies.

Founders and builders, if you have a complicated onboarding process, dashboard, and search page, make it as simple as possible—doesn't really matter whether it takes you two months or two years, costs you $10k or $100k—just do it.

Because it’s all going to be worth it in the long term.

Create Core Values and Culture

You can’t build a unicorn alone, you need a team.

And the team needs motivation, vision, mission, and culture to perform its best. And if you’re the CEO or founder of your company, you’re the hero of the company. Your company’s culture and values will be mostly shaped by the way you act and behave—good and bad.

So your job as a leader in the company is to motivate your team, encourage them to set high standards, and tell them the company’s mission and vision again and again. This will allow them to know why they are there—working for the company.

Set daily, weekly, and monthly rituals, where employees and team members of the company can participate and have fun together—just like Airbnb does with its employees. Your company’s goal shouldn’t just be to “Work and Grind” it should be to have fun and work on the most ambitious projects that’d change the world in some way or another.

Think in Decades, Not Years

No great company has found success in years, but decades.

If you’re building, and thinking that you’d have a successful company in one or two years, please I’m asking you to change your mindset. Because great companies aren’t built in years, but in decades. Don’t believe me? Have a look at these companies:

Apple is 48 years old, Uber is 15 years old, Meta is 20 years old, Stripe is 14 years old, Airbnb is 16 years old, Netflix is 27 years old, Oracle is 47 years old, NVIDIA is 31 years old, Google is 26 years old, Amazon is 30 years old, Microsoft is 49 years old, and Salesforce is 25 years old.

You see?

Here’s what Jeff Bezos says about long-term thinking:

Short thinking does nothing but waste your precious time. So stop thinking in years, and start thinking in decades, only if you really, really want to build a multi-billion dollar, most valuable company in the world. And remember, nothing happens, then everything happens, so keep going.

And to be clear, there’s nothing wrong with thinking in the short term. But if you’re just chasing new hot trends, following what’s new in the market, then you’ll fail to see the big picture. Because all these hypes will distract you over and over again.

And I think it’s a mistake that you should avoid, instead you want to work and build products and projects that will still matter in not two or three years, but ten or twenty years from now.

Thanks for reading, catch you on the next one.

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