Leadership the AirBnb Way

Sometimes the best leaders are the ones at the back of the pack, helping to drive everything forward and sometimes they are out front, and other times it benefits to be both, just like AirBnb.

Today’s post is by Joseph Michelli, author of The AirBnb Way (CLICK HERE to get your copy).

Around 2007, Simon Cooper was the CEO of the Ritz-Carlton Hotel Company, where I was working with their senior leadership team. Simon and I were exploring how Ritz-Carlton could adapt to meet the needs of changing luxury travelers without losing the company’s legacy customer base. Simon offered an example of the challenges faced by the luxury hotel company in 2008, “I had a guest complain to me that he saw one of our bartenders serve a young guest a bottle of beer without a glass. When I looked into it, I informed the complaining guest that the service was a result of the young guest having asked for his beer to be served that way a day before. That is the challenge … to customize the experience to the guest, ensuring that traditional and new-generation guests are each treated respectfully in accord with their wishes.”

In that same year, two men in San Francisco (Brian Chesky and Joe Gebbia) were facing a very different accommodation challenge. They were trying to make rent for their apartment after a third roommate moved out. Since Brian and Joe had recently graduated from the Rhode Island School of Design and given that a design conference was coming to San Francisco, the roommates decided to create a make-shift website targeted to conference attendees. They planned to place three air mattresses in the spare room and offer breakfast (in the form of uncooked pop tarts) for $80 per night, per guest, for the duration of the conference. A little over a decade later, that air mattress bed and breakfast arrangement has turned into Airbnb (a company that lists more than seven million properties on its well-evolved digital marketplace – 14,000 listings are tiny homes, 2,500 are tree houses, and 5,000 are castles).

In my book, The Airbnb Way, I detail the business strategy that fueled Airbnb’s meteoric rise. For the purposes of this article, I’ll focus on the three elements of leadership, which set the foundation for Airbnb’s impact on the hospitality sector. Those three components are:

Identification of a Disruptive Gap and Innovation to Fill It

Open Mindsets of Founders and Leaders

Clarity of a Branded Experience

Identification of a Disruptive Gap and Innovation to Fill It

As you likely recall, Martec’s law for business suggests that leaders tend to drive incremental improvement. Those year-over-year enhancements (e.g., serving beer in a bottle at the Ritz-Carlton) assure success for companies if those changes keep pace and are directionally consistent with the changing wants, needs, and desires of customers. However, if consumers change dramatically, incremental business improvements will leave a company vulnerable to disruption. The difference between the speed of change for customers versus the speed of change for a company essentially represents a company’s disruption gap.

The founders of Airbnb (Joe Gebbia, Brian Chesky, and Harvard trained software developer Nathan Blecharczyk) identified a variety of consumer trends that were not being addressed by legacy players in the hospitality industry in the late 2000s. Those consumer behaviors included:

Increased reliance on mobile technology

The desire for efficient self-service

Quest for maximal choice across a range of cost options

Interest in traveling “local” and having memorable and shareable experiences

Willingness to share existing resources as opposed to incur the environmental impact of new construction

As such, the founders created a mobile marketplace that sought to fill the gap between customer trends/behavior and the accommodations sector.

Open Mindsets of Founders and Leaders

Through their extended odyssey at the helm of Airbnb, the company’s founders have been life-long learners. When faced with a business challenge, the leadership team has consistently humbled themselves to read and/or seek the counsel of established experts. An example of this is that Brian Chesky realized the company needed to develop a core competency in hospitality delivery, so Airbnb could help hosts provide memorable guest experiences. As such, Brian read books from hospitality guru Chip Conley (founder and former CEO of Joie de Vivre Hospitality) and then invited Chip to present at a fireside chat for the company. With persistence, Brian convinced Chip to join as the Global Head of Hospitality and Strategy for Airbnb. Similarly, the founders have sought guidance from industry and thought leaders such as Tony Hsieh, CEO of Zappos, and Warren Buffett, CEO of Berkshire Hathaway. In an effort to drive life-long learning throughout the organization, Airbnb founders have developed open-mindset training with the assistance of Stanford Professor Carol Dweck, the author of Mindset: The New Psychology of Success.

Clarity of a Branded Experience

Even though Airbnb’s core product is a digital marketplace, leaders realized they needed to do more than craft technological solutions. They needed to view themselves as being in the people business. The success of their brand depended upon delivering positive experiences for hosts that list on the platform and inspiring those hosts to deliver loyalty-building experiences to guests. After much consideration, the founders of Airbnb defined and consistently communicated their desired experience. It is one that requires more than creating safe accommodations. It addresses higher-level needs on Maslow’s Hierarchy of Needs. Specifically, leaders seek to have everyone who interacts with Airbnb (team members, hosts, guests, members of the community, etc.) to experience a world “where anyone can belong anywhere.” In keeping with their communication efforts, the icon incorporated in the Airbnb logo is referred to as the Belo – a symbol of Airbnb’s commitment to belonging.

Driving an open mindset, filling disruption gaps, and clearly identifying optimal and branded human experiences are drivers for Airbnb’s success. What role might they play in the growth of your leadership abilities and your overall business growth?

Joseph Michelli has a phD and is the author of  The Airbnb Way: 5 Leadership Lessons for Igniting Growth through Loyalty, Community, and Belonging (CLICK HERE to get your copy).

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