Rating Qualities

7
Background
Well Structured
Concrete Examples

The Airbnb Way

5 Leadership Lessons for Igniting Growth
through Loyalty, Community, and Belonging
Joseph A. Michelli | McGraw-Hill © 2019

Five factors – belonging, trust, hospitality, empowerment and community – drive Airbnb’s
remarkable success, according to customer experience expert Joseph A. Michelli. He reports that
the company tries to encourage people to see one another as trustworthy and to foster the concept
that travelers can experience a sense of belonging everywhere. To that end, he says, Airbnb wants
to assist its hosts in offering service with warmth and compassion. Michelli’s super positivity
about the company can be a little overwhelming, but he provides value for travelers seeking
more information about Airbnb and for executives who are passionate about customer service.

Take-Aways
• Airbnb accommodates millions of travelers worldwide. Five values drive its success:
• “Belonging” – Airbnb wants people to feel as if they fit in wherever they are.
• “Trust” – The company encourages people to see others as trustworthy and strives to discredit
the notion that strangers bring hazards.
• “Hospitality” – Airbnb helps hosts offer service with warmth and compassion.
• “Empowerment” – Airbnb believes technology should enrich the customer experience.
• “Community” – Airbnb fosters a sense of community and promotes service to others.

Summary

Airbnb accommodates millions of travelers worldwide. Five values drive its success.

Airbnb, an online service that enables travelers to book guest rooms in private homes or to pay to
stay in houses or apartments belonging to other people, tallied about 400 reservations, total, in

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 2008. By 2018, it was racking up some “400 bookings every two minutes.” The company believes
that five factors account for its success:

1. “Belonging” – Airbnb wants people to feel as if they fit in wherever they are.

Creating a sense of belonging means fashioning situations in which people can experience feeling
at home anywhere. From the inception of Airbnb, its founders Joe Gebbia, Nathan Blecharcyzk
and Brian Chesky sought inspiration for how their organization should function. They looked
for insight from leaders in different fields to help broaden their perspective beyond technology or
customer recruitment.

“Immigration spread economic prosperity. Integration promoted diversity. Innovation

expands our horizons. And exploration is about the future of our species. But what travel
has done that is as important is support belonging.” (Chris Lehane, SVP of policy and
communication, Airbnb)

Existentialist philosopher Paul Tillich (1886–1965) said that listening is the first imperative of
love. For Airbnb, listening means seeking opinions about its purpose from within the organization
and from hosts and guests.

In Simon Sinek’s TED Talk and best-selling book, Start with Why, he encourages leaders to
think about the “why” of their brands. Unfortunately, when company leaders try to identify
their organizations’ why, they tend to focus exclusively on their own ideas and thoughts. By
contrast, Airbnb’s founders wanted each part of its ecosystem to identify its own whys. They asked
employees, hosts and guests to participate in an exercise that identified Airbnb’s reason for
existence as a desire “to create a world where anyone could belong anywhere.” Eventually,
Airbnb’s mission became simply, “Belong Anywhere.”

Airbnb’s senior managers pledged to broaden the scope of this fundamental but profound idea.
Their efforts included trying to eliminate “national wage gaps” and committing to making
their workforce more diverse to reflect local demographics. The company encountered problems
with its hosts regarding diversity. In 2015, Harvard Business School researchers found that hosts
accepted 16% fewer applications from potential guests with “distinctively African-American
names” than from guests with the same profile but distinctively white names.

CEO Brian Chesky accepted responsibility for failing to address this problem quickly enough.
Subsequently, Airbnb pursued a series of planned steps to address host bias. It sought the
assistance of former US attorney general Eric Holder and of the former head of the American Civil
Liberties Union, Laura Murphy. In 2016, Airbnb began asking all its hosts to sign an agreement to
treat everyone equally. Uncooperative hosts are not allowed to book guests through its service.

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 2. “Trust” – The company encourages people to see others as trustworthy and strives
to discredit the notion that strangers bring hazards.

Nick Shapiro supervises trust and safety at Airbnb. Before joining the company, he worked at the
CIA as deputy chief of staff, and he was a White House spokesperson for President Barack Obama.
Shapiro suggests that trust is the core of everything Airbnb does.

“We intentionally designed our community to help earn and build trust within and
among our millions of hosts and guests in more than 191 countries worldwide.” (Nick
Shapiro, Airbnb global director of trust and safety)

Airbnb aims to gain trust by stressing the importance of three factors. First, it
emphasizes the safety of the people who use its service, both hosts and guests. Second, it
prioritizes transparent information and clear instructions about how to use its website. And third,
it provides customer support to help resolve complaints or conflicts when something goes wrong.

The company also undertakes a number of steps to protect the personal information
and finances of its community of hosts and guests – for instance, it uses multifactor
authentication to verify the identity of hosts or guests when they log in from a new computer. By
applying sophisticated technology to evaluate the potential risk in every room reservation, the
company can highlight possibly hazardous situations.

Airbnb used background checks and feedback from its user community to revoke bookings linked
to a mid-2017 rally of white supremacists in Charlottesville, Virginia. It continues to use multiple
methods to detect people who identify themselves fraudulently or try to defraud the Airbnb
system.

Airbnb guides both guests and hosts in using practices and methods that promote safety. For
instance, it suggests that guests thoroughly read the feedback from a home’s earlier guests to make
sure the accommodations will suit them. Guests can use Airbnb’s messaging tool to ask hosts
questions before they book. The firm suggests that guests use its platform for all their booking and
payment transactions to protect their personal and financial information.

3. “Hospitality” – Airbnb helps hosts offer service with warmth and compassion.

Chesky says that when the company started operations, it didn’t really understand hospitality.
Its executives collaborated with its head of hospitality Chip Conley to draw on the energy of
millions of small-business entrepreneurs. Chesky points out that when hosts invite customers into
their homes, the hosts try to embody hospitality. When they get to know their guests and come
to understand their stories, these interactions can result in long-term friendships.

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 Laura Chambers, the general manager of home hosts at Airbnb, says the company wants its hosts
to succeed, so it gives them ideas about hosting and about the business transactions involved.
It advocates that hosts work on delivering excellent service and helps them shoot for five-star
reviews. Airbnb asks hosts to respond promptly to guests’ requests and to try to fulfill their needs.

“Consumers have come to avoid businesses that can’t address their inquiries and needs
immediately.”

Host profiles on the Airbnb website provide information about how quickly, on average, a host will
respond after receiving a message from a guest. The profiles also provide data on the host’s recent
performance. These metrics guide potential guests to the most diligent, respected hosts.

Airbnb tries to reduce the effort a customer must expend. For example, a host can enable guests to
make an instant booking, which means they don’t have to wait to learn the availability of a home
or whether the host approves their bookings. Leading Airbnb hosts recognize that they must speak
and act quickly to show their guests that their needs come first.

Brooke Ashley Johnson has stayed at several Airbnb properties. She liked most of them, except
one in Berlin. She and her husband had booked two nights, but when they arrived, they found that
the home had inadequate wireless connectivity. Johnson needed Wi-Fi to finish a project for work.
Their host also failed to respond to their issues with the wireless and the faulty air conditioning.

Johnson reached out to Airbnb’s customer service, which help her and her husband get out of
their commitment to stay a second night. Johnson says that if Airbnb hadn’t helped them, she
might not have used it again. But considering how well it handled the situation, she feels more
loyalty to the company. Johnson reviewed the host unfavorably, both to suggest that she should do
more for her guests and to warn other travelers.

4. “Empowerment” – Airbnb believes technology should enrich the customer

experience.

Airbnb leaders know they can’t rely on technology alone as the core of their strategy. Instead,
they believe their technology should enrich their customers’ experience. It pushes back against
the notion that businesses want to exploit communities rather than assist them. The company
works to foster community progress, preserve ecological systems, and help those affected by
natural disasters.

At Airbnb, “empowerment” means giving people the authority to enrich their communities as
they see fit. In 2015, the professional services consultancy PricewaterhouseCoopers reported
that participants in the sharing economy – such as Airbnb hosts and guests – feel that by
being part of this ecosystem, they are gaining autonomy, saving money and developing closer
relationships.

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 Airbnb charges no listing fees and allows hosts to set their own prices. The company provides
hosts with access to a “Smart Pricing” tool that calculates optimum rooming fees according various
factors, including demand, seasonality, location and comparisons with similar listings.

“The core success of Airbnb is linked to how the founders crafted a convenient way for
people to find and share available spaces.”

Hosts keep 95% to 97% of the profits – without deductions for processing credit card transactions
or for the $1 million of insurance coverage the company provides. Airbnb also covers the costs of
marketing, payment processing and customer service support.

Airbnb recounts that in 2017, it expanded fastest in African-American, Latino, and other
minority communities. It reports that 62% of its hosts in the United States say that hosting helps
them defray their home expenses. In addition, Airbnb notes that 12% its hosts in North America
feel that Airbnb helped protect them from losing their homes due to failure to pay their mortgage
or rent.

5. “Community” – Airbnb fosters a sense of community and promotes service to

others.

In 2018, Chesky wrote a letter to the Airbnb community explaining his belief that the
company can help transform the world by promoting the concept of community in large and
small spaces. Each of the three founders demonstrated his commitment to social change by
affirming the Giving Pledge spearheaded by billionaires Warren Buffet and Bill and Melinda
Gates. The program calls on the richest families and individuals to give the bulk of their fortunes
to philanthropic causes.

Airbnb lobbied for changes in the laws that govern its ability to distribute equity. At present, US
Securities and Exchange Commission rules don’t allow companies to grant equity to individuals
who aren’t employees or investors. This prevents Airbnb from granting corporate equity to
its hosts. It says that its efforts to change such rules demonstrates its willingness to share the
financial gains that its hosts help generate.

“Airbnb leaders…focus both on the long-range sustainability of their business and the
importance of mitigating unintended negative environmental impacts.”

In 2013, Airbnb initiated its Global Citizenship Champion program, which pays employees
their salary for four hours of their time to work as volunteers in their communities. In 2015,
the company issued its Community Compact to set out the values governing how it relates to
its communities around the world, including its attitude toward providing data, paying taxes and
dealing with specific local issues.

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 Airbnb also responds to extreme human needs. In January 2017, President Donald Trump issued
an order which brought travel to the United States from Iran, Iraq, Libya, Somalia and Sudan to
a standstill for 90 days. The order prevented Syrian refugees from entering the United States for
four months. Airbnb pledged to provide housing to affected refugees through its Open Homes
program until their situations could be resolved.

About the Author

Joseph Michelli, PhD, is a prolific best-selling author, speaker and organizational consultant
who focuses on the customer experience. His other books include Driven to Delight, Leading
the Starbucks Way, The Zappos Experience, Prescription for Excellence and The New Gold
Standard.

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