{"id":4463,"date":"2015-12-09T02:24:27","date_gmt":"2015-12-09T07:24:27","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/airbnb-a-business-based-on-sharing-experiencing-and-truly-making-the-world-your-home\/"},"modified":"2015-12-09T02:29:04","modified_gmt":"2015-12-09T07:29:04","slug":"airbnb-a-sharing-business-so-you-can-belonganywhere","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/airbnb-a-sharing-business-so-you-can-belonganywhere\/","title":{"rendered":"Airbnb: A sharing business so you can #BelongAnywhere"},"content":{"rendered":"

Airbnb is one of the global unicorns that has catalyzed the start of the sharing economy phenomena. By successfully leveraging technology, recognizing the global need for human interaction and identifying slack in the rentals ecosystem, it has revolutionized the way we rent spaces. Launched in Summer 2008, \u2018Airbed & Breakfast\u2019\u00a0<\/em>(1)<\/sup> has experienced radical growth with a current estimated valuation of over $25B and presence in over 190 countries.\u00a0(2)<\/sup><\/p>\n

Business Model:<\/span> <\/strong><\/p>\n

Airbnb is essentially an online platform that facilitates individuals (\u2018hosts\u2019) to rent out their primary or secondary residences as lodging for travelers (\u2018guests\u2019).\u00a0The uniqueness of its business model is rooted in its disruption of the rental industry. Instead of the traditional B2B model, it transformed this process into a\u00a0C2C model, dramatically increasing its scalability and global impact. Strongly leveraging the technology wave and addressing the consumer need for convenience, Airbnb has provided an easy service, acting both as an information provider (ability to search, browse) and service provider (ability to book).\u00a0(3)<\/sup><\/p>\n

Airbnb does not own any physical assets and the entire value creation is based on increasing transaction value. \u00a0The money making scheme is simple \u2013 it gets 3% cut of each booking from the hosts, with a 6% to 12% service fee from guests.\u00a0(4)<\/sup>\u00a0Its unique business model makes it part of a group of companies that can be termed as Network Orchestrators<\/em> – \u201cThese companies create a network of peers in which the participants interact and share in the value creation. They may sell products or services, build relationships, share advice, give reviews, collaborate, co-create and more\u201d.\u00a0(5)<\/sup><\/p>\n

Operating model: <\/strong><\/span><\/p>\n

The operating model is completely in sync with the business goal of increasing transaction value by increasing number of guests\/hosts and capturing more value from existing guests.<\/p>\n

Grow the network (Increase supply, demand to increase # transactions): <\/strong>The company has invested in growing both the demand and supply networks to further bolster its strongest competitive advantage \u2013 the network effect.<\/p>\n