Question everything

I first heard about AirBnB a few years ago. I remember thinking two things at that moment. The first was that the website was beautiful. The second was that I thought it was a strange idea - couchsurfing was already doing the exact same thing, for free. Indeed, my wife and I had used couchsurfing while traveling, and some of our best friends in the bay area are friends we met while couchsurfing. I didn’t think AirBnB would fly.

If you are competing against an existing product or service, you either need to offer something that is a substantial value add, or you need to offer it at a lower price. From my own experience, I think it’s quite true that if you compete with an existing product, even at the same price, it has to be at least 10x better. The friction of abandoning a familiar product and using a new, unknown product is just too high. And I doubt the average AirBnB experience was 10x better than the average couchsurfing experience.

As for my prediction that AirBnB wouldn’t fly: I couldn’t have been more wrong. Today AirBnB is the poster child of the sharing economy. Every single day, more than a quarter million people will have one of those amazing experiences I had a few years ago, either as a host or as a guest. Money will change hands, from guest to host. AirBnB is growing fast and is already valued at $10 Billion.

I love this story. I love it because I love seeing AirBnB being so successful. I love the concept of the sharing economy. I love new companies taking on huge, slow-moving, over-regulated industries. I love the AirBnB website and the app - they’re jewels that are worth looking at for their aesthetic beauty alone. But most of all, I love the story for reminding me to question everything.

In hindsight, it’s blatantly obvious that AirBnB did not succeed by competing in a crowded market. AirBnB did succeed because it created an entirely new market that wasn’t there before.

I think about AirBnB every time now when I think I know why an idea won’t fly.