[Detailed Summary]

• [Ideas do not come fully formed] Focused on sold-out events in SF, where hotels were fully sold out and renting a room was the only way forward
• [Metrics] Focused on network effect. The more landlords/hosts there were, more renters came.. so the focus was to grow the hosts
• [PR] in the early days, just to get the word out, the founders used very creative ideas where they placed a tent just outside of the iPhone shops, coz iPhones were just a craze and they wanted to ride off the iPhones news buzz
• [Dog Fooding] The head of product was a big user of his product himself. He used the arbitrage of price (between 2 locations) to clear his debit card debt
• [Dog Fooding] The CEOs insisted that they use their own products once a week, to get a sense of what’s wrong with their product and to get it fixed. They even gave their staff free credit to use the product and that usage alone drove awareness of what can be improved about the product
• [Core Product] What made ABNB successful was simply that it was a 10X product at the offset. It was 4X the space for half the price. It differentiated itself.
• [Knowing what makes you different] ABNB did not ever focus on fancy towels or beautifully smelling shampoos. For those folks, the hotels were the go-to. They focused on what the others could not offer [Avoid competition]
• [Customer Love] What worked is that while no one ever talks about my grab ride to the hotel, everyone talks about their experience of where they stayed and what they say. So that really helped give a lot of momentum thru word of mouth [Referral] growth
• [Data-Driven] something they discovered was how most of their hosts and rentees were naturally at NY vs SF. NY was known to be notoriously expensive for hotels and were located in non-strategic locations
• [Talking to customers] To develop NY, they explored using professional photography to get Hosts more sales. It ultimately led to the platform being more trusted [being professional looking] among renters. The initial photography was done by the founders themselves who had design backgrounds
• [Talking to customers] Overtime, Hosts started asking for the option to rent out the whole place, rather than just a room
• [Talking to customers] Payments was initially managed thru Cheques but later changed to CC payments, again to build trust because Credit card payments have an element of raising disputes that gave ppl the comfort
• [Talking to Customers] International growth was purely organic where renters started asking for similar requests
• [Self-Discovery] As their platform used to grow, they started discovering interesting host sites that were unique and nostalgic, that ppl rented out of curiosity. It became the ABNB Experience product, a more premium product that they could charge higher. It created virility coz ppl naturally wanted to let others know, and that got the name out
• [Leading Indicator] Look for founders who are willing to take feedback, but are on the borderline passionate about what they believe to be true [unstoppable vision]
• [Culture] Zapos was a big inspiration for the ABNB founders. They invested time & money for employees to mingle and get to know one another. They decided on what to spend on NOT based on ROI, but based on conviction. They invested in good office spaces. They didn’t want to be penny wise and dollar foolish
• [Cold Start & 2 sided market place] Most of the supply was always going to be empty anyway. Thus, hosts were always willing to wait it out since there weren’t an alternative. They were finally able to unlock value from their homes. This wasn’t the case for businesses like UBER that had competition which made ppl switch. There was also a strong 10X product that was fundamentally cheaper and better. That alone drove bulk of the demand

[Key Takeaways]

• [IMPT] Look for products that are 10X better (fundamentally better) than what’s in the market today. While incremental (10-20%) products are beneficial for the society, it requires a lot of investments and effort to differentiate it