Essay Example on Airbnb's Journey: From Struggles to Success

Paper Type: 
Pages:  5
Wordcount:  1232 Words
Date:  2023-08-08


Currently, Airbnb is successful and a big firm, but the path towards its current success was not that easy. During its start-up, the venture was slow as it never took off as planned by its founders, and the funding was less, which was done through personal credit cards. The founders made a lot of effort to market and grow the firm through staying and talking with their customers, which assisted them in shaping the policies and website of the company.

Trust banner

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Improving the Existing Product and Services Strategy

Airbnb, during its early growth stage, increased its revenue by improving its product or service by making its website more convenient to be navigated by customers and enhancing its product from which then increased its price and value. The founders Chesky and Gebbia improved their website during the growth stage by redesigning the site by replacing small pictures of their apartments with larger ones for clear vision.

The advantage of the strategy is that the value of the products and services offered increases. With higher value, the prices of the rentals increase, which also increases the commissions earned by the company.

The disadvantage of the strategy is that it is was very expensive to improve the products and services of the company during its early stage, which forced the company founders to design cereal boxes to sell them and approach Y combinator, which is an accelerator of start-ups to raise enough start-up capital.

Increasing Market Penetration of their Products and Services

During the early growth stage, the company focused more on marketing its products in both San Francisco and New York City. They were traveling with the Y combinator team for mentorship, and there they spread the news about their start-up (Yang and Mao, 2020). The Airbnb team marketed the company in several events, like major sporting events, music festivals, and conventions. The team also used what they referred to as the turning on markets that involved traveling from city to cities like London and Paris to meet the company hosts. The company made social media efforts by increasing site advertising to reach more customers.

The advantage of the strategy is an increase in sales via more significant marketing efforts. The efficiency of the company increases. It increases the awareness of the company services being offered, which will then attract and retain customers who rent the rooms, apartments, and homes offered by Airbnb. With more customers, the company sales increases, and it propels its growth. Also, Airbnb, through market penetration strategy, enables the company to have a greater volume of hosts and homes to be rented.

The disadvantage of the strategy is the expenditure that is utilized in marketing the company. Airbnb used a lot of dollars in creating awareness all over the United States and other countries that the company has ventured.

New Service Development Strategy

New service development occurred in two stages of the company lifecycle process; at the introduction stage and maturity stage. Firstly, During the introduction stage of the company, new products were developed by the founders to raise money to help them in running their venture, according to Yang and Mao (2020, p. 289). The founders Gebbia and Chesky in 2008 during the U.S campaign came up with an idea of developing two boxes that contained names of both Obama and McCain; then, they sold to their party members at 40 dollars each to raise money to assist them in growing their company.

Secondly, the strategy was also introduced at the maturity stage when the company growth slows. Airbnb, in this stage, decided to announce a new service offering in the year 2016 to assist the company hedge against regulation that slows its growth. The 2016 announcement marked the first departure of Airbnb from its rental products (Yang and Mao, 2020). The new product that was developed by the company were `Experiences. ` The service was the first shift of the company from rentals services. It was launched in twelve cities. The major cities included were Tokyo, London, Paris, and San Francisco. The Experiences the company offered from that year were food tasting, stargazing, mountain biking, murder-mystery tours, and surfing. The Experiences were to be provided by hosts who will be charged a commission of 20% for bookings (Yang and Mao, 2020). The company is also working on adding another new service that is referred to as end-to-end. The new concept comprises services offered to accommodate the needs of all travelers. They are city guides, airport transfers, restaurant bookings, and air travel.

This approach advantageis that it results in more rewards through increased revenues sales to be utilized in running the company.

The disadvantage of the strategy is the high-risk involved in the development. A new product might fail to be sold in the market because customers are now aware of the new product (Barringer, 2015). The company is required to be innovative in the process, which is not an easy task as it is generally risky, slow, and expensive.

Geographic Penetration Strategy

Airbnb started penetrating to other geographic locations within the United States in the continuous stage of the company lifecycle process. At first, it revolved around California, then New York City. It then moved to new locations such as Orlando, Lake Tahoe, and Cape Cod for the vacation market.

The advantage of the strategy is that it allows a company to grow or expand to new markets or locations which have more clients and hosts (Barringer, 2015). It allows expansion to cities with vocation markets that attract more people to such places, which then results in more individuals looking for rental houses.

The strategy has a disadvantage in that it increases the capacity of the firm, which drags profitability downwards. Expanding to new locations forces the profitability of a company down, especially in a market that is crowded by competitors.

Extending Service Lines Strategy

The company added new versions of products and services in the continuous stage of its lifecycle process. It extended its rental services from renting one room by the Airbnb hosts for about one to three nights to a rental service that involved renting out of the entire hosts home to the company customer for a short period. It started with sublet market or rental services to customers who need to rent a room or apartment for a period of one or more months. The services of the company were also expanded to the third market, which is the vacation rental market, and it comprised homes owned by individuals at vacation destinations, which are rented to the company customers by the hosts for a short-term stay.

The advantage of the strategy is its ability to enable the company to take one existing product and extent to various other products without utilizing additional development expenses. The company will be able to sell several versions of its products and services, which results in increased sales.

The strategy has some disadvantages. More service lines mean the company has a lot of different services to offer. More services mean they are of lower quality as the company management might lean on one side of the service line, and the other lines are mismanaged.


Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson Education, India.

Yang, Y. and Mao, Z., 2020. Location advantages of lodging properties: A comparison between hotels and Airbnb units in an urban environment. Annals of Tourism Research, 81, p.102-861.

Cite this page

Essay Example on Airbnb's Journey: From Struggles to Success. (2023, Aug 08). Retrieved from

Free essays can be submitted by anyone,

so we do not vouch for their quality

Want a quality guarantee?
Order from one of our vetted writers instead

If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal:

didn't find image

Liked this essay sample but need an original one?

Hire a professional with VAST experience and 25% off!

24/7 online support

NO plagiarism