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airbnb

What is Airbnb? (1 slide)
Airbnb is an online marketplace that connects those people who want to rent their
homes & people who looks for accommodation.
Who found it & when?
Airbnb was founded in San Francisco in 2008 by Brian Chesky and Joe Gebbia.
How did the idea come into mind?
A sudden brainwave converts the thinking in reality.
Structure & size of Airbnb (2nd slide)
- There are 5.6 million active postings on Airbnb
- Successfully working in 100,000 cities around the world
- Around 150 million people are working as host to arrange stays
- Airbnb hosted over 1 billion guest till the date
- Around 6100 employees are working with Airbnb
Business goals of Airbnb (3rd slide)
- Providing information that how it is different from other competitors
- Hiring new hosts to expand their business
- Always try to make it easy & simple for guests to make changes in their schedule
- Always ready to provide quality services to the guests
Target market of Airbnb (4th slide)
-Hosts of Airbnb
-Guests of Airbnb
Target marketing segmentation of Airbnb
- Demographic segmentation
- Geographic segmentation

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2. Strategic Issues Analysis (Internal and External) Using the relevant analytical tools, conduct an analysis of both the internal and external environment as presented in the case. - Relevant analytical tools can include PESTEL, SWOT, Stakeholder mapping, Porter's Competitive Forces Analysis, BCG matrix, strategic capabilities, strategic resource, positioning analysis, etc. "Nothing is a transaction. Everything is a transformation" (Chesky as cited in Ive, 2015). We are living in a world which is powered, to a large extent, by a shared economy. To view business as usual will no longer work. Airbnb's success story, what it has done and achieved, is not just a celebration of creativity - it is the very definition of game-changer. Company overview Avid travellers will know Airbnb, an online lodging rental platform. People can become a host on Airbnb by listing their spare rooms while travellers can search for their holiday locations and ideal accommodation. Brian Chesky and Joe Gebbia, both graduates of Rhode Island School of Design, founded AirbedandBreadfast in 2007 to rent out air mattresses and provide breakfast options in their apartment to visitors attending a design conference in San Francisco. They did so to pay for their own rental fees. The idea was to offer visitors a way to save some money by not having to pay prices charged by hotels. A concept totally unheard of in those days, they only managed to interest three guests. In 2008, they were joined by Nathan Blecharczyk, a computer engineer trained in Harvard who was also Gebbia's roommate before Chesky. Their initial intention was to target visitors at large-scale events and conventions, where hotel rooms were expensive and alternative accommodation was scarce. This effort produced a few thousand listings in 67 countries. Advertising on Facebook together with email campaigns worked well during the events. However, revenue dropped to a paltry sum at other times. In 2009, upon advice from Paul Graham, Founder of start-up incubator Y Combinator, Chesky and Gebbia went to New York City to gather feedback and learn from their successful hosts. After the visit, they revamped the website based on the experiences of these hosts and high-quality photographs of the apartments were added. This was in sharp contrast to the less professional-looking photographs common on websites such as HomeAway and TripAdvisor. They changed the company name from Airbedandbreakfast to Airbnb in 2010. The site's offerings were extended to include the rental of a variety of properties such as entire homes and apartments, private rooms, castles, boats, manors, treehouses, tipis, igloos and even islands. Business grew steadily and by 2011, Airbnb raised more than USD 7.2 million and acquired several of its competitors - Accoleo in 2011 and CrashPadder in 2012. In addition, the company acquired travel guides NabeWise and Localmind in 2012 which allowed it to provide localised information on various destinations. By .

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As there long coveted IPO is around the corner, I felt this was the proper time to release this analysis. Airbnb is a company that I’ve been fascinated by for quite some time. Their ability to reverse engineer and push through market resistance is undeniable. Airbnb has revolutionized our viewpoint on hotel and lodging. This analysis will evaluate the company's long-standing history and the barriers of entry endured. I believe it is important to understand the pure resilience of these founders. This analysis will also dissect their current performance as they recently reported an astounding $2.6 billion in revenue, bringing home $93 million in profit. These metrics blew away all internal forecasts which landed them a $31 billion-dollar valuation in May. Additionally, Airbnb is a private company making key performance indicators difficult to determine. As a result, I exhibit the factors I believe were used in evaluating Airbnb’s valuation. This report will discuss micro-level and macro-environmental factors that help and inhibit Airbnb. All of these subsidiaries have impactful effects on Airbnb and its outlook moving forward. Lastly, I discuss the effects of an economic disaster, and the problems it will cause when it happens. I also provide solutions that I believe would be extremely effective in a state of turmoil.

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W16782 AIRBNB: BUSINESS MODEL DEVELOPMENT AND FUTURE CHALLENGES1 Sayan Chatterjee wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-11-24 In 2007, Brian Chesky and Joe Gebbia founded Airbnb. Chesky and Gebbia had met several years earlier as students at the Rhode Island School of Design. After initially working in Los Angeles after graduation, Chesky decided to move to San Francisco, where Gebbia was living. The two shared an apartment but were struggling to pay their rent. While brainstorming ideas to earn more money, they came up with the idea to rent out the three airbeds they had available. There was an upcoming design conference in their neighbourhood, and all of the nearby hotels were sold out. They set up a quick website to advertise their offer for an overnight stay on an airbed in their apartment, along with breakfast in the morning. One would normally expect to find a few younger 20-somethings who might be interested in sleeping on someone’s couch during the conference. However, the three people who stayed with them were a 45-year-old father of five from Utah, a 35-year-old woman from Boston, and a man from India. Given the interest in their apartment airbeds from a wide variety of people, Chesky and Gebbia decided to expand their small idea and Airbnb was formed. Engineer Nathan Blecharczyk was added as the third co-founder.2 From this serendipitous beginning, Airbnb grew into a business that spanned 16 countries and was valued at $10 billion3 in the most recent round of financing in 2014. However, as of early 2014, its business model had hit a major road bump. At the request of the State of New York attorney general, Airbnb was forced to hand over anonymous listing information of hosts who rented out apartments in New York City. While the listings were anonymous, the attorney general was determined to subpoena some of the hosts that might have violated a New York law that prohibited any private rentals under 30 days where the host was not present.4 This caused some consternation among hosts based in New York, and some pulled their listings. The founders had to evaluate if these short-term rentals in large citi.

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W16782 AIRBNB: BUSINESS MODEL DEVELOPMENT AND FUTURE CHALLENGES1 Sayan Chatterjee wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-11-24 In 2007, Brian Chesky and Joe Gebbia founded Airbnb. Chesky and Gebbia had met several years earlier as students at the Rhode Island School of Design. After initially working in Los Angeles after graduation, Chesky decided to move to San Francisco, where Gebbia was living. The two shared an apartment but were struggling to pay their rent. While brainstorming ideas to earn more money, they came up with the idea to rent out the three airbeds they had available. There was an upcoming design conference in their neighbourhood, and all of the nearby hotels were sold out. They set up a quick website to advertise their offer for an overnight stay on an airbed in their apartment, along with breakfast in the morning. One would normally expect to find a few younger 20-somethings who might be interested in sleeping on someone’s couch during the conference. However, the three people who stayed with them were a 45-year-old father of five from Utah, a 35-year-old woman from Boston, and a man from India. Given the interest in their apartment airbeds from a wide variety of people, Chesky and Gebbia decided to expand their small idea and Airbnb was formed. Engineer Nathan Blecharczyk was added as the third co-founder.2 From this serendipitous beginning, Airbnb grew into a business that spanned 16 countries and was valued at $10 billion3 in the most recent round of financing in 2014. However, as of early 2014, its business model had hit a major road bump. At the request of the State of New York attorney general, Airbnb was forced to hand over anonymous listing information of hosts who rented out apartments in New York City. While the listings were anonymous, the attorney general was determined to subpoena some of the hosts that might have violated a New York law that prohibited any private rentals under 30 days where the host was not present.4 This caused some consternation among hosts based in New York, and some pulled their listings. The founders had to evaluate if these short-term rentals in large citi ...

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