Legendary Hacks: The Early Days of AirBnB 🏡🏆

Posted by Anant February 1, 2023

Say what you will about AirBnB, but they’ve earned their place in the start-up hall of fame. For real, no doubt. And they wouldn’t have achieved their Success Story status without some high-end growth hacking in their earliest days.

AirBnb’s Most Famous, but Second Best Tactic

You’ve probably read about their “Craigslist Hack,” which has basically become the stuff of legend. If not, here’s the rundown. Basically, they began with a tactic that they knew was unscalable. The founders would browse San Francisco’s Craigslist listings, waiting for short-term lodging, B & Bs, etc. to be posted. As soon as one would drop, they would pounce. The strategy was to invite all of these hosts to their budding platform and persuade them to list. Not the easiest sell, but not the hardest either— sure, AirBnB was new, but it was more specialized than Craigslist. And it’s not like Craigslist has a reputation for trustworthiness. Plus, the hosts were incentivized: they’d earn referral benefits for joining.

From there, they were able to write the right code to automate the process and the right copy to persuade potential renters. Boom. Big step. Not only did the emails they sent out direct every potential host in the Bay area to find their way onto their new site, but the hosts would also spread the word to others they knew who had potential listings, or even people in need of accommodation.

The Craigslist Hack was a great way to develop a consistently generative source of organic traffic, as well as listings. It was manual, it wasn’t scalable, but they did it anyway. It was a start.But my take? That’s only the second best growth hack that AirBnB ever pulled.

Optimizing Quality

A closer look at AirBnB’s early days shows that the growth hacking ethos was present in less obvious ways, too. Sure, some of their other strategies may not have the same storytelling cache. Still, I argue that the Craigslist Hack deserves a silver medal at best. (And I’m right).

Interested? Well, here’s what’s up.

Maybe you’ve heard about their photography strategy before. It’s definitely been covered. But more often it’s cited as evidence re: the power of photography in marketing in a more general sense. From the analyses I’ve read, the photography strategy is rarely seen from the growth hacking lens (sorry, no pun intended, I’m trying to delete it, sorry).

At this time, AirBnB had just expanded from San Francisco into New York City, but they were definitely struggling financially.  They knew most of the suites they were offering were nice enough, but something wasn’t clicking. Basically, they were able to identify one core issue: the listings themselves didn’t look particularly appealing to the consumer. The amateur pictures snapped by homeowners themselves didn’t do the suites justice. This is obviously a problem, since it was these listings that the site’s potential users were encountering.

So, they pivoted.

Airbnb-Graph

Unreal.

Persuading potential customers to sacrifice the sure bet of a hotel room for some random site renting random spaces? Not easy. But it became way easier once they invested in professional photographers. Improving the photo quality on each listing proved to be an absolute gamechanger.

One move. One investment. A single switch in strategy. Exponential growth. Line. Goes. All the way. Up.

shoot graph

cities graph

Clearly, they milked this for everything it was worth (Slides from Joe Zadeh’s Airbnb presentation at Lean Startup SXSW, Austin)

This strategic shift in quality generated massive growth re: many metrics. Revenue, activity, attention, referral rate. Suddenly, their conversions, viral coefficient, site traffic- everything, basically- went through the roof.

In my opinion, THIS is the REAL story of  how growth hacking made AirBnB into what it is today. The Craigslist hack was clever and it for sure paved a way, but the discovery that professionally photographed listings could boost so many metrics is even truer to what it means to hack growth.

By this I mean it gets to the core of what growth hacking is all about: optimize the hell out of one metric, watch and learn from how it amplifies others.

The founders were on it from the start, and they took a multi-faceted approach to growth.

They developed a solid referral program.

They pumped out travel content.

They traveled from SF to NYC and met ground-level users to get their feedback.

They tried (and failed) to get Angels to invest (check this incredible email exchange where Paul Graham almost gets Fred Wilson to invest— an opportunity Wilson regrets missing to this day).

You can’t deny the importance of any of it. But you’re not convincing me the top growth hack that defines AirBnB’s rise isn’t the photography.

Moral of the Story

So, what’s a growth hacker supposed to learn from this? Good question. There’s a few things, at least.

1. The right qualitative shift will lead to massive leaps in important quantitative metrics. Maybe it’s obvious, but sometimes the most obvious things need to be reiterated, or even re-reiterated. When you’re in the moment, it might seem counter-intuitive. But the time will come when increasing your spend to optimize a qualitative element is necessary to trigger massive gains. AirBnB was struggling financially when they flew out to NYC, met with users, bought a good camera, and brought their photography hypothesis into reality.

2. Growth happens in stages. Don’t try to move on from the first one until you’re sure that you’re fulfilling a need, and that people are willing to have that need fulfilled. AirBnB did that early. Setting up your next stage needs to be based on what you’ve learned from clearing the first. Getting your cash-flow into the green depends on that proof of concept. And, even if you stack nothing but Ws in round one,  you’ll need to adjust your business model based on the experience for that dub-stack to keep growing.

3. Growth engines are necessary, but not sufficient. There’s an evolution from manual Craigslist poaching, to automated Craigslist poaching, to user-end optimization. And it’s instructive. Keep innovating, don’t get complacent. Can you imagine if AirBnB had just kept refining their Craigslist poaching rather than pivoted to user-end optimization? Loser behavior. Whenever you get the opportunity to think bigger? Seize that.

Airbnb timeline

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