Airbnb is a two-sided marketplace with two users, hosts who rent out their spaces for vacation stays, short-term rentals, or creative experiences and guests, who seek accommodations or activities in a specific locale.
Our primary focus will be on the host experience for stays.
Why did you pick this particular product?
Airbnb allowed me to graduate college debt free. Growing up, home sharing was an integral portion of my life. My mother and I hosted international students through university programs, Sulekha, and Craigslist.
As I was searching for place to stay while visiting UC Berkeley, a friend recommended I try renting a space through Airbnb. I gave it a shot and as soon as I entered my rental, I realized it was exactly what we had been doing for the last 5 years. That same night, I created a listing and within 24 hours we had our first booking at 3x our current nightly rate.
Airbnb allowed us to generate high-quality demand, increase pricing, ensure payment, and protect us against physical risk and within 6 months, I funded my first semester of college.
What makes this product truly transformative? How is one's life or experience different, having encountered it?
Airbnb’s objective is to create a world where everyone belongs. For the business, this means to develop a loyal supply and demand base by maximizing the number of diverse listings, guest traffic, and ratings.
Airbnb has transformed the host experience by creating:
A safe and secure platform to earn income generated through guaranteed secure payments, guest identity verification, and a customer agent staff that supports you 24/7 when things go off plan
Scalable demand generation developed through the core product being a centralized marketplace with strong brand loyalty and awareness
The opportunity to learn, iterate, and enhance your listing achieved through a guided onboarding flow, dynamic tips, guest reviews, researching competition in your area, and a community to learn from hosts via “Ask a SuperHost” or the “Community Centre”
Let’s dive into Kavita, a host whose experience has transformed through Airbnb
Before using Airbnb; Circa 2008
Kavita is a 45-year old single mother in Los Angeles, CA who is looking to generate income while staying close to her daughter. She finds an ad in the newspaper for Sulekha, a marketplace to find short-term rentals. Through this platform she lacks the following:
Safety: Sulekha doesn’t vet listings so she receives daily scam offers, has last minute cancellations, and puts herself at risk when meeting potential tenants. To combat this, she holds introductory calls at a nearby Starbucks and runs self-funded background checks.
Payment Security: During their stay, tenants send a check on the agreed upon date but in some instances Kavita had to consistently remind tenants for rent and due to the lack of community support, she hopes that tenants pay without the need for authorities.
Scalable Demand Generation: Sulekha doesn’t have a listing ranking algorithm. To stay ahead of competition, she re-posts her listing every week to ensure it ranks at the top.
During Airbnb; Circa 2015
Airbnb transformed their hosting experience by providing:
A safe and secure platform to earn income Airbnb’s initial competitive advantage against unmanaged marketplaces was financial safety and identity verification. For example, we were always paid when guests arrived and during our first cancellation experience, we directly chatted with agents to be compensated without hassle.
Scalable demand generation We witnessed the power of Airbnb’s loyal demand and no longer had to worry about generating upper funnel traffic.
The opportunity to learn and iterate Through learnings from Airbnb’s community, we hired a complementary photographer, increased guest interaction, and offered snacks. Over 6 months, we saw our listings’ occupancy rate triple and ratings increase from 4.3 to 4.7.
What impact does this product have on its users? How do they discover and engage with this product?
Airbnb has empowered ordinary people to become entrepreneurs in the travel economy by fostering a community of hosts and guests. The product embodies community through the methods in which users discover and engage with the platform.
Word of Mouth
Airbnb attracts new individual hosts mostly through organic channels, 79% of listing were generated through non-targeted channels. These are mainly through the power of Airbnb’s strong product, brand recognition and word of mouth.
When Airbnb first launched, they were met with concerns from hosts and travelers wondering if they could trust a stranger. To develop trust with potential users, they relied on their past users to become advocates through a double-sided referral system which is still used today.
Double-sided benefits system
Ease to share:
Unique shareable linkthat users could post anywhere
Gmail import that allowed hosts to import contacts from Gmail and send personalized invitations to each contact.
Personalized Experience: The referral emails and landing page include the referer’s photo and city-based income earning potential to help build social proof and trust with potential new users.
Social Media Marketing
As a host, sharing your home is a big commitment and requires an extensive amount of consideration. Unlike traditional marketing, Airbnb’s approach is centered on communicating and describing the benefits of hosting. These stories then take prospective hosts to the host onboarding flow to convert discovery into listings.
After a host has discovered Airbnb through one of the above channels, they must onboard their listing. During onboarding, potential hosts are required to verify their identity, answer questions about the listing, upload photos and define pricing.
Once a host has published a listing, Airbnb handles the ranking of the listing so Hosts can sit back and relax. Once a Host has received a booking, they can view the Guest’s profile/reviews and chat with them to decide whether to accept, reject, or cancel the booking. On the arrival date the host will again greet the guest via chat and send check-in instructions. During the Guest’s stay, both parties can communicate via chat for any questions or concerns.
Reviews are one of the key features that have helped build Airbnb’s trust with users. After a guest has finished their stay, a host can leave a review about the guest and reply to the guest review. Hosts can also view their dashboard to view ratings and key stats such as conversion, retention, and views against city-based competition
Interact with the Community
Airbnb’s differentiator is the social community and support it has built for Hosts. Hosts can use a variety of methods to communicate with Hosts such as:
Community Centre: Hosts can view and engage with localized conversations or start a conversation
Ask a SuperHost: New hosts can chat with a SuperHost to ask questions prior to hosting
Host Partner Program: Top-rated hosts can jump in at any step of the hosting process for a fee
What do you believe is the source of the magic? Has anyone else (that you're aware of) tried to replicate it? Have they been successful?
Airbnb has revolutionized the travel space through its product, turning ordinary people into hosts that offer a unique fully immersed experienceto travelers. And though there have been successful competitors such as VRBO, Bookings.com, etc., Airbnb has mastered the art of building strong relationships with users that isn’t built overnight, this community was built over years of listening and executing on user needs.
Referral: A two-sided referral system that jumpstarted Airbnb’s growth by building social proof
Identity: Hosts are empowered to list any safe space and as long as they remain transparent, they are welcome
SuperHost: Hosts with effective communication, high ratings, and low cancellations are rewarded w/ higher ranking and badges
High intent demand: Achieved through a lengthy ID process and prompt payment verification
Community Centre: Hosts are empowered to converse. The platform is organized to help users find what their looking for and foster community.
Eligibility in Programs: SuperHosts are eligible to enter programs that generate incremental income to them such as “ask a superhost” or offer consultant services
Customer Representative Staff: Staff that is available to chat 24/7 to solve problems
1-1 Support: Hosts who need help are able to chat w/ SuperHosts or hire a host to help with hosting
Reviews: A community that shares their candid experiences to help hosts and guests choose their best fit
There are no rows in this table
If you were the PM for this product, what features would you prioritize building and why? How would you measure success?
Host User Groups
Professional Host: Hosts with multiple locations around the nation who often have property managers managing a group of rentals (18% of nights booked)
Individual Hosts: Individual entrepreneurs who list their primary/vacation homes or private rooms and manage their spaces directly through Airbnb (72% of nights booked)
Individual Host Needs
As an individual host, I want to learn specific strategies to increase my average rating
As an individual host, I want to increase the number of nights booked per month
As an individual host, I want to communicate with guests more effectively so I don’t need to consistently repeat myself
We will focus on increasing number of nights booked per month because this captures value for both guests and hosts
North Star: Increase Average Occupancy Rate (nights booked/nights available per month)
Feature Prioritization Matrix
Price is Right Travelers on a budget can opt-in to a gamified experience where Airbnb selects a few pre-determined spaces based on traveler’s city and date preferences. Hosts who opt-in to this marketing program will pay a higher service fee
Campaign Building Hosts who are looking to advertise can create marketing campaigns through Airbnb for Facebook and Instagram
Sponsored Listings Hosts that opt-in will appear at the top of the search feed results under “Sponsored Listings”. Sponsored listings will have a maximum of 2 spots available and hosts will pay a higher service fee.
Video Uploads Hosts can upload videos of their listing to provide guests a full view of the space. With videos, Hosts don’t have to worry about angles which is often more challenging for smaller, private room spaces.
Furniture Suggestions Curated item recommendations based on listing type (ex. rugs, lamps, plants, microwave) in a registry form
Event Based Booking Listings within a certain radius of venue are badged and ranked. Badges and rank is only applied when a traveler searches with event filter. (i.e. Coachella)
Price is Right: We will prioritize Price is Right based on a 50-50 weighted impact vs feasibility matrix.
In order to measure success on occupancy rate, we will run a 30-day A/B test with the following conditions:
Group Requirements: All listings with a rating of 4.4+ and active within the last 60-days are eligible to participate in the test
Group A: Offered the opportunity to opt-in to this program.
Group B: Remain as is
GTM will include email marketing, in-app notifications, and an “Increase Bookings” button on the Host homepage
Occupancy Rate (increase)
Conversion Rate (maintain or increase)
Average ratings under Price is Right (maintain or increase)
Cancellation rate (maintain)
Guest NPS (maintain or increase)
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