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AirBnB’s growth hack

In 2009 AirBnB’s revenues were stuck at $200 per week. This quote from a blog on the First Round Capital site explains how they got back to growth:

At the time, Airbnb was in Y Combinator. One afternoon, the team was pouring over their search results for New York City listings with Paul Graham, trying to figure out what wasn’t working, why they weren’t growing. After spending time on the site using the product, Gebbia had a realization. “We noticed a pattern. There’s some similarity between all these 40 listings. The similarity is that the photos sucked. The photos were not great photos. People were using their camera phones or using their images from classified sites.  It actually wasn’t a surprise that people weren’t booking rooms because you couldn’t even really see what it is that you were paying for.”

Graham tossed out a completely non-scalable and non-technical solution to the problem: travel to New York, rent a camera, spend some time with customers listing properties, and replace the amateur photography with beautiful high-resolution pictures. The three-man team grabbed the next flight to New York and upgraded all the amateur photos to beautiful images. There wasn’t any data to back this decision originally. They just went and did it. A week later, the results were in: improving the pictures doubled the weekly revenue to $400 per week. This was the first financial improvement that the company had seen in over eight months.

Growth hacking is a heavily  used and poorly defined term these days, but this is a great example of what I consider to be true growth hacking – inspiration based and with the sole aim of getting growth moving rather than be part of a beautiful, scalable system. It’s amazing how many successful startups have a moment like this in their early history where they found a clever hack to scrap themselves up to the next level knowing that it wouldn’t scale them to the level after that. And that’s ok. It’s usually a little hairy at the time, but simply getting to the next level often unlocks resources and customer understanding that make it much easier to build the scalable processes that will underpin fast growth at scale.

  • myLovelyParent

    Great article Nic. I agree ‘growth hacking’ is a term that has lost understanding recently. It’s definitely more often associated with rapid scale than combining insight and instinct to unlock that next stage. Love the AirBnB example, great find. Right, where’s my camera…
    - Matt

  • http://RogerEllman.com/ Roger Ellman

    Thanks for this. This is Hugely Valuable. Just shows Steve Jobs was right (no, just kidding…well he was) to be inspired and decisive and Gi With It.!

    What’s so good about this is that it is a rare expression of what is so true and immutable, inspiration, action and plundering in are often, so much more the birth of great results than the “ideas” in many of the plethora of “they succeeded because they used the secret key technique” quasi-business books , created by people in retrospect to explain something they didn’t quite understand themselves, until it came time to explain in a way that sounds accountable and creditable.

    Oh what appalling writing above,,,..on of those mornings….want to say it anywyay…however badly. Sorry! Ugggh!

  • http://www.theequitykicker.com brisbourne

    Thanks Roger. People like to rationalise their success as down to their own genius rather than because they were adept at hacking around, which can be dangerous when they impart advice to other entrepreneurs.

  • http://RogerEllman.com/ Roger Ellman

    Soooooo True!

    I’ve had lots of luck. Also something that can certainly be encouraged, but not entirely calculated and controlled!

  • http://www.theequitykicker.com brisbourne

    Yes – luck plays a huge part too. People often recognise that in the abstract but rarely in specifics of their company histories.

  • http://RogerEllman.com/ Roger Ellman

    Yes, it’s a shame as it’s all part of the weave in creatting success – would be more encouraging to starters, founders and all who sail within, to have all these parts of the whole picture expressed. Perhaps a new generation of more perceptive business book and business biography writers/ghost writers will start to open their apertures to see and reveal more. There’s an (another) idea!

  • Christy Spackman

    Cool.

  • http://RayRenk.org/ Ray Renk

    Great share. In trying to promote my listing it became apparent that I needed to redo my photos. Thanks!