In the final post of this current series on innovations in the market, we turn to a fast-growing start-up that is tapping into the emergence of the ‘sharing’ economy and a new phase in the growth of the Internet.
A new force in the ‘sharing’ economy…
The idea for Airbnb was born in the loft of a shared San Franciscan townhouse. With a prominent design conference coming to town and all local hotels fully booked, three flat mates decided to rent their rooms out and look after their guests for the weekend. The experience led the trio to realise that there was a lucrative business opportunity in enabling homeowners to do exactly what they had just done – through the medium of the web.
In 2008, Nathan Blecharczyk, Brian Chesky and Joe Gebbia created Airbnb - a trusted online marketplace for users to post, discover and book unique accommodations around the world. Users can rent out their accommodation through the site and travelers can book rooms from them. Airbnb acts as the trusted middleman and takes a 15% commission on every transaction. Not only does it enable renters to make rent out of extra space, it provides guests with a local, authentic experience of the place they are visiting.
In June 2012, Airbnb announced that 10 million guest nights had been booked worldwide through the site since it had been founded. This number had doubled in the last five months alone (techcrunch.com). The company was valued at $1.3bn in mid-2011 and continues to grow at a staggering pace.
CEO and Co-Founder Brian Chesky argues Airbnb is leading a new phase in the growth of the Internet – from a one-way hub of information at its inception, to a tool for sharing and connecting people, and now to a global community where goods and services can shared by all over the world.
He describes trust as the “currency that lubricates the entire system” and optimistically believes in the ‘good’ of people not to abuse the system (BBC News). However, a couple of high-profile incidents in which homes were ransacked, forced the firm to pledge a $1m insurance protection for homeowners who rented their places out through the site.
Airbnb is successfully tapping into consumers’ desire to be part of a community and to share experiences. Perhaps this trend represents a reaction to the individualistic mindset that brands have tried to engender in consumers over the past two to three decades.
What other companies can you think of that are at the forefront of the ‘sharing’ economy?
This entry was posted on Monday, 17 Sep 2012 at 10:30 am and is filed under General, Innovation.
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