Analysis is the critical starting point of strategic thinking.

Kenichi Ohmae

The story behind AirBnB is truly inspirational. Anyone, anywhere in the world, can, through the website, rent a spare room in somebody’s house, a whole flat or mansion, a castle, a luxury boat, a treehouse or a private island. By January 2018, the company had 3 million listings in 191 countries and 65000 cities across the world and hosted 40 million guests. The company has been valued at 25 million dollars.

Air BnB was the brainchild of two design graduates living in a shared loft flat in San Francisco in 2007. Joe Gebbia and Brian Chesky were struggling to pay the rent every month. Joe suddenly got a nugget of an idea. What if we set up a very simple BnB website. The problem was that the only available space was their living room floor! But not deterred, they went ahead, bought 3 airbeds and advertised their use at 80 dollars a night. They got a few bookings, but it sparked their imagination.

What if they constructed a proper website, advertising not just their own airbeds, but got others to advertise accommodation on their website. Nathan Blecharczyk, a friend and computer geek, designed a professional website which they launched in 2008.

The idea rapidly took off and the number of listed properties in America soared, but the company wasn’t making money. There was a lot of traffic on the site but few actual bookings. It was time for some strategic thinking.

They analysed sample listings in New York, and what immediately hit them was the poor quality of the photos and information available. So they bought a professional camera and visited every single property in the city. The owners allowed the guys to take several shots and with their design background knew how best to present the photos and associated material. Within a month of adopting this strategy, sales doubled and then tripled.

Outside investors started to take interest and funding allowed the whole concept to be taken to a new level. Professional photographers were employed at no expense to the owners, cash handling facilities set up, cleaning services available, references obtained and feed-back from clients. They started to provide local information for travellers and a 24 hour support website. They employed 500 people across the world, but it was not till 2016 that the company started to make real profits.

The boys had grasped an idea at the right time. The concept of a ‘sharing economy’ was taking off – the growing popularity of ‘collaborative consumption’ – sharing, swapping and renting your possessions. It appealed to young people used to sharing books, music and films, but older people have also latched onto the idea. As one grandmother explained, ‘it’s nothing new to me. That is the way we were taught to behave when we were young. I got involved faster than my children’.