Most Disruptive Sharing Economy Business Airbnb

AIrbnb is a website for people to rent out lodging. It is a community marketplace for people to list, discover and book unique spaces around the world through mobile phones or the internet.From an apartment for a night, a castle for a week, or a villa for a month, Airbnb connects people to unique travel experiences at any price point. The company is one of the most disrupted business models in sharing economy sector.

Airbnb was founded in August 2008 by Brian Chesky and Joe Gebbia, and is currently headquartered in San Francisco, California, USA. The company is privately owned and operated by Airbnb, Inc. The company reports over 500,000 listings worldwide, and having served over 17 million guests across 33,000 cities and 192 countries.

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Business ModelIf I have an apartment in San Francisco, and I'm going to be away for a week, and you want to stay in my apartment, I should be able to charge you for the privilege. You get a furnished room for less than the cost of a hotel, and I get to put my apartment to work making money back when it would otherwise be empty. That the Business Model of Airbnb. It is upgraded business model of the company.

Airbnb runs on a marketplace platform model where it connects hosts and travellers and enables transactions without owning any rooms itself. This platform disrupts the traditional industries by creating new sources of supply and relying on curation (management activities required to maintain research data long-term) for developing quality. Unlike traditional hotels, Airbnb scales not by scaling inventory but by increasing the hosts and travelers and matching them with each other

AIrbnb has used the network orchestrator model where they leverage the power of network in creating a new cross-industry transformation to the hotel industry.

Its very unique model which it incorporated is that with a growing community of users, Airbnb also provides an easy way for people to monetize their extra space and showcase it to an audience of millions.

Registering on WebsiteUsers are categorized as “Hosts” and “Guests;” both of which must register with Airbnb using a variety of means. A valid email address and valid telephone were initially the only requirements to build a unique user profile on the website, however as of April 2013, a scan of a government issued ID is now required.

Profiles include details such as user reviews and shared social connections to build a reputation and trust among users of the marketplace. Other elements of the Airbnb profile include user recommendations and a private messaging system. This social connection which was integrated in 2012, completely transformed the search experience on Airbnb. Airbnb's implementation of Facebook's social graph adds an important layer of context that given users more confidence in the booking process.

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In addition to providing personal information, hosts display listing details including price, amenities, house rules, imagery, and detailed information about their neighborhood. Due to the nature of the business, a merit system is in place to allow guests and hosts to leave references and ratings which are displayed to the public in order to provide an evaluation method.

Signup ProceduresIt is free to create a listing using Airbnb. Users fill out a form with initial details. Changes can be made at a later date. The listing will not go live until the user is ready to publish. Pricing can be determined by the user. Users can charge different prices for nightly, weekly, and monthly stays as well as seasonal pricing. The Titles and Descriptions sections can be used to advertise their space. They can outline house rules or other descriptions regarding the residence. Airbnb allows users to publish up to 24 photographs of the place. Airbnb, on a limited basis, is offering free professional photography in most of the listed areas. Profile is a place where the guests can research more about the users. This section is often used for users to display who they are as well as their philosophies on hosting.

Guests are required to message the user directly through Airbnb to ask questions regarding the property. Users have 100% control over who books their place. When a potential guest puts in a reservation request, the host has at least 24 hours to accept or decline the request.

After the user accepts a reservation, they can coordinate meeting times and contact information with guests. After the reservation is complete, users are encouraged to leave a review. Reviews help build validity and references both for the guests and the host

Mobile ProcedureAirbnb also has mobile apps on iOS and Android OS. As of September 2012, users had downloaded the mobile application over 1 million times which accounts for over 26% of the company’s overall traffic. In November 2013 Airbnb launched new versions of its iOS and Android apps, adding the ability for hosts to communicate with guests and respond directly to guest messages. This service was previously not available on mobile app of Airbnb.

Payment ModuleAirbnb facilitates online payments from guest to host through its Security Payments feature which processes payment transactions 24 hours after check in. This protocol offers a guarantee for guests and helps to uphold host cancellations policies before processing payments. Additionally, the Airbnb website facilitates security deposits and cleaning fees, the former of which is held until the property is vacated. The company’s revenue comes from a 6% to 12% commission of the guest payment and 3% of what the host receives.

FundingTill now AIrbnb has received $794.8 million investment from 20 investors in 6 rounds of funding.

Merger & acquisitionFounded in August 2008, Airbnb has acquired several of its competitors, including Accoleo, CrashPadder, NabeWise, and Localmind.In total the company has gone through 7 strategic acquisitions.

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Pencil Labs-Dec 2014Pencil Labs, creator of Wyth-the schedule maker app, was acquired by Airbnb for an undisclosed amount.

Localmind-Dec, 2012Localmind which is a location-based information platform providing real-time answers for destination-related queries was also acquired by Airbnb to___

Fondu-Oct, 2012An online community for sharing bite-sized reviews about places to eat and drink was also acquired by the company in 2012 for $575k.

NabeWise-July, 2012The mobile app that structures local data and performs a qualitative analysis to provide users with insight into neighborhoods-Nabewise was bought by AIrbnb in 2012. This acquisition shifted the company focus toward offering hyperlocal recommendations to travelers

Crashpadder-March, 2012London based peer-to peer accommodation website was acquired by AIrbnb to get hold of sharing economy in London which was made prior to 2012 Summer Olympic .This acquisition made Airbnb the largest peer-to-peer accommodations website in the United Kingdom.

DailyBooth-Jan,2012San Francisco based photoblogging website that enabled its users to take photos of themselves was acquired by Airbnb in all cash deal.

Accoleo-June,2011The acquisition of Accoleo, based in Germany, a marketplace that allows students to rent out their flats, extra beds or couches to other students also was a part of their strategy to increase their sharing economy presence in Germany. This was the first international expansion of the company.

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InvestmentAIrbnb, Inc has invested $3 million in loungebuddy in February 2015, which is the only single resource for travelers to be able to locate, review, and access airport lounges around the world.

Scandinavia's leading holiday rentals websites-SunnyRentals, TUI groups’ online vacation rental market-Atraveo, private community of people which allow renting and letting short term accommodation to each other – 9flats are some of the competitors of Airbnb.

Awards In December 2012, Apple honored Airbnb with the Editor's Choice award for the Best Mobile

Application of 2012 in the UK market. Airbnb was also awarded Most Disruptive Service of 2012 Best Design Awardin 2015 by Annual Crunchies Awards.

Apart from this there were some negative news coming up for Airbnb like that apartment burglarized and vandalized by an Airbnb guest. In response to this Airbnb recommends hosts obtain insurance which covers damages caused by guests. Airbnb themselves offers secondary insurance, calling it a host guarantee.

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Ref:http://techcrunch.com/2014/09/18/airbnb-cfo-andrew-swain-has-left-the-company/https://www.crunchbase.com/organization/airbnbhttp://mashable.com/2011/05/10/airbnb-social-connections/http://gizmodo.com/5918204/read-these-tips-or-nobody-will-ever-let-you-be-an-airbnb-guest-againhttps://www.airbnb.co.in/support/getting-started/how-to-hosthttp://upstart.bizjournals.com/news/technology/2012/12/14/app-store-best-apps-of-2012.htmlhttp://www.cnet.com/uk/news/whatsapp-tops-apple-2012-list-airbnb-and-iplayer-honoured/https://hbr.org/2014/11/what-airbnb-uber-and-alibaba-have-in-common

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