Airbnb – The Social Housing Evolution

Siddiqi    October 20, 2015

Title of Post: Airbnb – The Social Housing Evolution


Organisation: Airbnb

Industry: Hospitality (Powered by Good Design)

Contact: Airbnb was contacted for comment through social media. At the time of publication, there was no response.

Web References: Sharing EconomyeBay; Facebook; Airbnb; SoundcloudCocreation Platforms; Uber; LyftAirbnb Verification; Symbol Creator; Data Mining; Nerd Blog; Meaning of Opening SourceAirbnb Open Source

Product Development & Design Through Social Media:

People need stuff (read: products & resources). People want stuff. People find ways to acquire stuff. Offline, we go to a store and buy what we need. Prior to the adoption and mainstream use of web 2.0, people acquired stuff online much the same way they acquired stuff offline. You went to the url rather than the brick and mortar location. If you ran into trouble with your stuff you would return it, call the company or get in touch with the online customer service. However, web 2.0 switched things up. People realized they could harness the power of community and democratize the marketplace. This meant there was a burst in technological innovation. Companies like eBay exploded onto the scene and became spaces where consumers could sell to other consumers and the online sharing economies were born. As web 2.0 matured and Facebook became more of a force; folks realized the value of data mining and algorithms. More on that in a little bit!

Airbnb is one such company that inhabits the sharing economy. “Founded in August of 2008 and based in San Francisco, California, Airbnb is a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet (About Airbnb).”


In the old economic model folks like Hilton Hotel or the Fairmont chain own large swaths of real estate and rent it out to users. However, the founders of Airbnb through need and necessity took their underused resource (an air mattress) and generated income from it. This led to the idea that others might want to do this too! Thus Airbnb was born. Here is Brian Chesky speaking with about “the worst idea ever.” The flow chart to the right shows how Airbnb became a company valued at $10B in 2014. Not bad for a company whose only job is to manage the cocreation platform and facilitate the marketplace. So how exactly does Airbnb facilitate the marketplace? Well, through providing the online platform (superstructure). Users create online profiles, upload photos, seek references and referrals from friends, and are verified through providing online cross-referencing. For example, I’m a user of Airbnb and I was asked to provide my Facebook ID in order to verify my human existence. I was also asked to provide verification through a few other online or offline methods. Here is a interesting article about a woman who didn’t have enough friends on Facebook and therefore couldn’t be verified on Airbnb. All of this is to say that Airbnb is consciously using social media to develop their cocreation platform. Users are required to have a digital footprint!

Airbnb has even taken its cocreation model to its brand. In 2014, the company launched a new website and along with it a new symbol that users could cocreate for their own pages. The handy dandy tool Createconnects with users profiles and provides an opportunity for users to tell their own personal story. Yet another example of how social media is being used for product design and development. This lovely video illustrates the thinking behind the symbol and the brand change and invites you in to be part of the creation.

Now for the heady stuff! Algorithms! To be very honest, I don’t quite understand it myself. I just know that all the major players online are doing this as their bread and butter. Google uses algorithms for their searches. Youtube uses them to push users “things they might like.” Many of the big players are using them to push content they feel that users might like. Essentially, some math wizards (read: computer scientists with special algorithm writing skills) are writing code to mine our data. What is data mining? Here is the very lay explanation, social media invites us to share large quantities of our personal information and our preferences. The algorithm takes all of the information, reads it and then using artificial intelligence and machine learning establishes a pattern. This pattern then gets spit back out to us in the form of “things we might like” or some other permutation. In the case of Airbnb, it spits out a price pattern; location; or type of listing. Airbnb has three separate blogs that speak to various parts of the business. The Nerd Blog goes into detail about algorithms and experiments they have been conducting to improve the utility of the site. The other two blogs aren’t pertinent to this post; however, interesting that Airbnb uses blogs to share information about the business.

Aside from the blog, the company also believes in open source sharing which allows other math wizards to utilize formulas and computer science stuff that Airbnb has tried and tested. If you’re into wizardry, the open source projects can be found here.

Lessons for Others:

  1. Don’t be afraid to test out your theories and your math and conduct experiments. Airbnb is a dynamic company as a result of these experiments. It is a living, breathing entity that is tweaking things on an ongoing basis
  2. Digital footprints are valuable and can help to build trust within your networks. Airbnb’s verified ID process builds legitimacy for each and every user. Not to mention it is an innovative use of people’s social media presence to build a product.
  3. Data mining is a valuable tool for cocreating and the sharing economy. In the case of Airbnb, their price tips powered by Aerosolve take the complex and uniquely individual problem of pricing and manage it through machine learning. This information is then shared with the user to help them make decisions on how to price their housing stock.
  4. Open source is good for everyone. Having open source coding available for others demonstrates confidence and transparency in your work/product which therefore leads to buyer trust and confidence.
  5. Take risks and keep trying, as outlined in the interview with, Brian Chesky detailed how they kept re-launching the company until it finally caught on. While not directly related to social media, this demonstrates a perseverance that is necessary in business and in product development. Keep trying until you find the right combination of factors that create a product that works.

Submitted by: Saara Siddiqi, University of Waterloo

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