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Editor’s Note: This summer while spending the month of July living in an Airbnb rental in Madrid, Spain, Skift’s Editor-in-Chief spoke to Fortune reporter Leigh Gallagher as she reported her book The Airbnb Story. Gallagher’s is the first book dedicated to the phenomenon known as Airbnb. We’ve covered the good and the bad of the brand for the last five years, so we welcomed a book devoted to the brand and the new space in travel that it’s carved out.
An excerpt from Gallagher’s book, below, looks at what we’ve long argued was and is Airbnb’s smartest move: really good design. It allowed the brand to leapfrog established players, position itself as a serious player, and, most importantly, signal to users that user experience was the only experience that mattered.
One question frequently posed about Airbnb is why it took off when so many other similar sites already existed — Couchsurfing.com, Home Away.com, VRBO.com, even Craigslist itself. Why did Airbnb succeed in popularizing short-term rentals while others did not?
Much of the explanation lies in the product itself. “Product” is a vague and all-encompassing term in the tech world for everything after the idea: it’s the actual website or app; the way it looks, the way it works, the things it can do, the engineering that powers it, and the way you use it and interact with it (the “user experience”). The very first Airbnb product was simply the oddball idea and a WordPress website, but when it came time to get ready for the third launch, at the DNC in Denver, the founders had expanded their vision, going from a simple platform for housing supply for sold-out conferences to a website where you could book a room in someone’s home as eas ily as you could book a hotel room.
But from the start, Chesky and Gebbia were emphatic about certain things regarding the website and the experience: specifically, it had to be frictionless, it had to be easy. The listings had to look beautiful. And, based on the famous three-click rule from Steve Jobs, a design hero of Chesky and Gebbia’s — when Jobs conceived the iPod, he wanted it to never be more than just three clicks away from a song — the founders wanted their users to never be more than three clicks away from a booking.
In fact, what so many investors had seen as a red flag during those early pitch meetings — that Chesky and Gebbia were designers from RISD who lacked technical background — turned out to be one of their biggest assets. To them, design was not just about an object, or in their case a website; it was about how something worked — from the product to the interface to the experience. Later, this approach would infiltrate every aspect of their business, including the way they built the culture, conceived the offices, structured the company, and ran board meetings. But in those early days, it was mainly about the look, simplicity, and overall experience of the website. In tech terms, that’s what they “optimized” for.
The focus on design, along with the fact that it traffics in homes, rooms, and travel, sometimes feeds a perception that Airbnb isn’t a technology company, but the depth of the technical challenge the platform presented from the outset was significant. There were many elements that the site needed to handle: payment, customer service, and reviews, each a significant engineering undertaking, each taking time to build and refine — and for a very long time, there was only Blecharczyk to do it.
The most complicated part of getting all this right was payments. To reach their goal of booking a room on the site as easily as book ing a hotel, the founders knew they needed a seamless, sophisticated online payment mechanism —and, unlike hotels’, theirs needed to handle not just taking payment in but also remitting 97 percent of it back to individual hosts.
In the run-up to their launch at the DNC, Blecharczyk turned to Amazon to build this mechanism; thanks to the web retailer’s new cloud-payments service, it had the ability to collect money from one person and remit it to another without giving Airbnb any of the responsibility of being a bank. It was brand new at the time and therefore not that well documented in the engineering world, so it took Blecharczyk a month to get it working.
But when he showed Chesky and Gebbia, they were under-whelmed: they thought the user experience was terrible — it took too many steps, and there was too much Amazon branding involved. They scrapped it and decided to try becoming the middleman; they would collect money, hold it in their bank account, and then remit it to the customer. That presented its own complications: if they were caught in the middle of a fraudulent, late, or contested transac tion, they would be responsible for the chargeback, the make-good amount refunded to the customer. They had steered clear of this ap proach for that very reason.
But they decided this would be the easiest, most seamless experience for the user, so they had to figure out a way to make it work. In time for the DNC, Blecharczyk replaced the Amazon effort with the solution that relied upon PayPal, but he ultimately built an end-to-end payments system that was able to handle the complexities of global markets and currencies and could remit payments to individuals hundreds of thousands of times a day. Airbnb’s payments system has evolved over time, and while its sophistication may barely register among travelers who use it, it is considered a feat among engineers.
Excerpted from The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions . . . and Created Plenty of Controversy by Leigh Gallagher. Copyright © 2017 by Leigh Gallagher. Used by permission of Houghton Mifflin Harcourt Publishing Company. All rights reserved.
Click here to find out more about Leigh Gallagher and The Airbnb Story.