Airbnb: A Successful Business Model Where Everyone Wins
Airbnb, a fairly new, online company that was founded on a simple concept - providing people who need a place to stay and people who have a spare space a tool to connect - recently achieved one million nights booked. It's an impressive step for the company (particularly given that they're under five years old), but it's a giant leap for the collaborative consumption movement, which Rachel Botsman says is in its "nascent stages" and has the potential to be a cultural and economic catalyst for widespread changes in the ways in which we live and do business.
Airbnb's success is a good sign for a number of reasons. First of all, it's just plain comforting to see page after page of reviews about positive user experiences. It seems that, on the whole, strangers on the Internet tend to behave well. "I'm staying overnight with this guy I met online" doesn't have the same scary vibe that it would have just a few years ago. Now it's "I'm staying with a guy that has a great spare room with an ocean view and 180 five star reviews - and the address is registered."
Beyond the feel-good factor though, Airbnb's continued success is evidence that collaborative consumption isn't just something that people consider when the hotel/motel options are booked out, nor is the primary reason simply to save a buck when the economy is down. Sure, lots of people tap into Airbnb's services in part to find a good room at comparatively cheap prices - but there are plenty who use the site to find places that go for thousands of dollars per night. If the company was merely driven by a response to a bad economy, now that the markets are up and unemployment rates are taking a downward turn, one would expect Airbnb's business to slow, or at least taper a bit. But instead, it's growing - and fast. The company reported a month-over-month growth of 65% last January. A diverse crowd of people that span the full range from rich to poor have obviously found value in their Airbnb experience - a value that extends beyond financial incentives.
Coupled with the fact that Airbnb spans multiple continents, it seems that the business has tapped into more than a simple pragmatic solution for travelers and people with spare rooms. It's more than just collaborative consumption - it's collaborative culture - or rather, cross-culture, if one considers that the listings span 170 countries.
With regard to the business model: Airbnb takes a 10% cut of the booking price, which means that 90% of the money for one million nights booked went directly into the hands of 'normal' people. And the 'click' down economy is surely more benefitial for the majority than the 'trickle down' theory.
The United States has been widely criticized for its overly capitalistic and greedy/corporate-heavy business culture, but it seems that crowd-sourcing entrepreneurs and betapreneurs like Airbnb are finding a happy medium where everyone wins. So congratulations, Airbnb. Sharing is caring indeed.