20th Jan 21
Do you know how Airbnb not only started but are surviving the pandemic?
Two friends couldn't afford the rent on their shared accommodation in San Francisco, so they decided to get air mattresses and offer their services as part time tour guides to convention attendees.
They managed to attract 3 weekend guests and made enough money to pay their next month's rent.
That little success inspired them to recruit a third friend to help them make affordable room rentals a long-term business.
And lo, the website was built which allowed anyone to make their sofa, guest room, second property etc. available to tourists and travellers.
The rest, as they say, is history.
But what about the pandemic?
AND they are surviving the pandemic - they had a drop in bookings of over 70% that cut its valuation in half
BUT they have pulled off a recovery and are heading towards an IPO with an expected valuation of $30B
And how have they survived?
Well, they had a $1 billion lifeline from Silver Lake PE firm in April for starters and I imagine that helped a little
BUT they also cut nearly $1bn. in marketing costs AND reduced executive salaries by half AND reduced their workforce by 25%
But how can they continue to thrive?
By knowing and focusing on their key priorities:
They focused on their core business of home rentals and streamlining ancillary offerings, they scaled back on other markets they had been keen to enter and focused entirely on their core business
AND they implemented a blanket refund policy offering last minute cancellations and full refunds, an upgraded ‘enhanced cleaning’ process and asked hosts to increase the time between guest stays – not mandatory but those who adopted their new policies were given a badge to display on their listings
And what about their employees?
Well, they seem to have worked really hard at doing the best for both their employees and their hosts.
For their employees, well:
They needed to lay off almost 2,000 employees (25% of their workforce) in May 2020 BUT they allowed those employees to keep their company laptops AND the US employees received a year of health insurance
They also set up a Talent Directory of departing employees to make them visible to other employers
And the hosts?
They pledged $250m to help reimburse hosts for cancelled stays AND launched a $10m fund to help them pay their mortgages
AND they have just announced an endowment fund to give hosts grants to cover educational support, safety tools, or aid in natural disasters