The Art that saved Airbnb from bankruptcy

Airbnb survival

Who doesn’t know Airbnb, the famous portal that allows anyone to “sell”, for one or more nights, their personal home in exchange for a fee?

Born in 2008 in San Francisco , by the intuitive genius of Nathan Blecharczyk , Brian Chesky (now CEO of the company ) and Joe Gebbia , Airbnb is essentially an online bazaar of rooms, apartments, villas, castles: a virtual storefront with strong social components that in a few years has literally revolutionized the way we travel. Not for nothing is it now considered the main competitor to sites such as Booking and Trivago, which sell “traditional” hotel rooms.

The numbers, after all, do not lie: thanks to the huge financing received in recent years, Airbnb is now available in 192 countries and more than 33,000 different cities, with more than 500,000 listings present and more than 8.5 million customers. In 2011 the company was assessed at $1 billion.

Truly a worldwide success. Fast and unstoppable.

Few know however that, in 2009, Airbnb risked bankruptcy.

Yes, you read that right: bankruptcy.

Indeed after a little less than a year, the company’s turnover was very low, around $200 a week. Clearly insufficient to guarantee a salary for the three founders, or the survival of the company. The fundamental issue was that the activities and transactions were unable to grow significantly. Actually, they were invariably stable. Not good news for the three founders.

What was the problem? The business model? Technological deficiencies? Miscommunication? Was the product unsuitable for the target audience?

In reality the problem was much simpler, and tied to a specific factor… aesthetic appeal.

At the time, the pictures of the houses on the site were largely taken by the owners, directly from their mobile devices. The result: they all looked like horrible houses. Hardly anyone will spend money to rent a house if they can’t “see” what they are buying.  And if what they do see is ugly … then they’ll never buy it at all.

What to do then? Blecharczyk , Chesky and Gebbia went to New York to try to find a solution . They booked one of the rooms available on Airbnb (one with bad pictures), spent time with the owners and, after discovering that the house was actually very nice, took several high resolution photos inside the house, with which to replace the amateur images on the site. Of course, the system wasn’t technological or scalable, but in rotation all three founders began to visit the rooms of New York and replace all the low end photos with high quality images.

There was no numerical ratio behind this operation. Nor was it a scientific or verified program.

After only a week, the replacement of photos generated an immediate doubling in revenue, bringing in $400 that week. For the first time in its 8 months of life, the company was growing!

Perhaps they had found the key to the problem. Adding art to science, creativity to data, fantasy to metrics, they managed to improve their product and make it more attractive to their customers.

Since then, all new employees to Airbnb make, within their first few weeks of work, a trip to the proposed locations, documenting the places where they spend the night with quality photos.

The AIRBNB founders

What do we learn from this? Surely that, in a web company, programming and code are not enough to solve every problem. Sure, they are a key part, but so is knowing your own product, your customers, meeting them, listening to them, spending time with them. All without forgetting the importance of art, taste, and aesthetics.

As witnessed by another, seemingly trivial, episode, which also occurred with Airbnb.

Thanks to the suggestion of an internal programmer, the icons used to rate the structures available online were replaced: the “classic” stars became hearts. Nothing revolutionary perhaps, but this simple change increased navigator engagement by more than 30%. Transforming a utility button into an emotional icon. Even in this case we see art, emotion, in combination with science.

It is therefore unsurprising that Joe Gebbia, one of the gurus of Silicon Valley claims that: “Anytime somebody comes to me with something, my first instinct when I look at it is to think bigger. Whatever it is, blow it out of proportion and see where that takes you. You go be a pirate, venture into the world and get a little test nugget, and come back and tell us the story that you found.”

A small, but great, truth that has been, for so long, the secret of generations of  “old style” entrepreneurs.

And today, more than ever, it should be taken up and dusted off. Especially for those who believe that the key to success is simply a few lines of more or less complex code.

Airbnb success


Italian version of this article here.


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