Three things Airbnb could have done to avoid #ransackgate

BY Martin Eriksson ON AUGUST 1, 2011

The billion dollar start up Airbnb is in the midst of a battle for it’s brand reputation as stories of trashed homes are revealed in what has become known as #ransackgate. A lot has already been written about this, but most of the coverage has centred on the seemingly uncoordinated response from their customer support and PR teams, but how could the product team have acted differently?

1. Be up front about security – Throughout the Airbnb site, whether as a prospective renter or landlord, they give the impression that they screen renters and take care of your security. Contrast that with Craigslist who litter the ad posting and response pages with warnings about how to protect yourself when dealing with others. Maybe Airbnb thought putting up scary notices would harm their conversion rates but written well they should act to increase a user’s trust, not decrease it.

2. Managing the transition from early adopter to mass market – Your early adopters are by their very nature going to be more forgiving of bugs, more open to new ideas and ways of doing things, and from vastly different demographics and psychographics than the majority mass market you pick up later. It’s crucial to understand this difference and to adapt the product accordingly – whether it impacts the choice of browsers you support, how much help text you need on the site or how much security you need to add. In Airbnb’s case it’s a very different proposition to rent your home out to an early adopter – most likely from an educated, higher income bracket – than to the mass market which by its nature includes every man and his dog.

3. Find the upside – A normal renter’s or homeowner’s insurance generally won’t cover subletting, so Airbnb is in a unique position to source insurance policies (at bulk discount) and resell it to their landlords as an additional upsell. And what better way to kill two birds with one stone – by having the choice to buy insurance you show landlords that they need to think about security and insurance when renting through Airbnb, and you also unleash a potentially huge new revenue stream.

When something bad like this happens, there’s no replacement for good service and being there for the customer (bringing it back to the original point about the bad PR on service/responsiveness), but good product management could have prevented it in the first place.

UPDATE Airbnb announced yesterday that they are going to provide $50,000 worth of coverage “for loss or damage due to vandalism or theft caused by an Airbnb guest”. This may have been necessary given the hammering their reputation has taken in the last few weeks but at what cost? The insurance they will include in their fees could have been worth $millions of additional revenue but they’ve also taken a hit to their own margin – a double whammy their investors must be cringing over.

Martin Eriksson

About

Martin Eriksson

Martin Eriksson has 20+ years experience building world-class online products in both corporate and start-up environments for global brands such as Monster, Financial Times, Huddle, and Covestor. He is the Founder of ProductTank, the Co-Founder and Curator of Mind the Product, and an Executive in Residence at leading private equity and venture capital fund EQT. He is also the author of best-seller Product Leadership, How Top Product Leaders Launch Great Products and Build Successful Teams (O'Reilly, 2017).