Monthly Archives: January 2012

Airbnb and the Competitors.

Its interesting how Airbnb has evolved from a crazy little YC startup, to the ebay of spaces it is today.

Almost every other technology startup of its generation – Dropbox, Groupon, Tumblr, Foursquare etc. has managed to attract tons of competitors, Airbnb has none, it has managed to keep everyone out.

And although, each one of these other startups have also almost created an entirely new industry and stayed at the top of it, they have faced competitors left and right. Other startups coming up with better prices or better features, big tech companies entering their markets, even plain old look alikes.

What makes Airbnb command this exclusive position then?

I believe its a combination of various key differentiators:

1. The crazier the idea, the more time it takes for others to follow:

Who would have imagined people would be buying almost every item that they need online, without trying and testing it first? That gave Amazon the lead, for a very long time, long enough that it is almost impossible for any new entrant to beat Amazon in e-retail today.

2. Its difficult to earn user’s trust: had a very simple and powerful yet seemingly non workable idea. Asking people for their bank account details and storing all that on your own servers!! I still cannot imagine how Mint got their very first tide of early adopters, but now the idea seems more and more plausible and lucrative.

3. Its easier to build better technology than it is to build a community around your service:

Think Facebook, think community, think how tough it has been for Google Plus to even enter. Airbnb not only is a crazy idea and has earned its user’s trust, it has built a huge and growing community around its service. Its possible to compete with Dropbox on better tech or with Groupon on better deals, but to beat the community advantage is a tough game. Airbnb’s potential competitors know this, I hope they do before starting out.

There might be lots of other awesome things that Airbnb does right, but these 3 things they definitely do.