As I suggested in my recent post/video entitled “I’m Pretty Optimistic,” worth is often defined by valued differentiation. In the process of scaling, most companies commoditize and, in so doing, lose some of their uniqueness. To use language from my post last week, they lose their knack for creating delectable chocolate brownies.
So, what’s fueling Airbnb’s value? Here are four quick thoughts that are relevant to all of us in our careers as well as who doesn’t want to be resilient or breed loyalty?
- Resilience. Unlike virtually any other global travel company, Airbnb’s summer and fall rebound showed its marketplace could adapt to the changing demand of customers.
- Loyalty. 91% of its business comes from customers directly or by organic means rather than by paid (and expensive) online advertising approach that their competitors, like Booking.com, are forced to use because of their lack of differentiation.
- Brand. You know a brand is strong when it becomes a noun or verb (let’s “Airbnb it”). Arguably, the most powerful brand in travel today, Airbnb could evolve into more than a travel company just like Apple evolved into more than a computer company. Through personalization, Netflix serves up “what to watch,” Amazon “what to buy,” and Spotify “what to listen to”, so what if Airbnb’s long-term value prop is knowing us well enough to offer us “what to do, where to go and who to do it with?” Airbnb could be the world’s lifestyle curator.
- Community. You don’t see people wearing Expedia or Marriott memorabilia but you do see that curvaceous Airbnb logo (the “belo”) gracing t-shirts on the streets. Part of the bump in stock price is due to that engaged community believing in the brand and wanting to be shareholders
Should Airbnb’s stock price be this high? I’ll leave that to the analysts. But, you might want to watch this short video of Michael and Debbie Campbell, the Senior Nomads, who happened to be here in Baja at MEA the week of Airbnb’s IPO. Corporate worth is accelerated when companies offer a service or product addressing the “unrecognized need” of the customer that no one else offers. As this video shows, The Campbell’s could not have lived this way for the past seven and a half years without the existence of Airbnb.
The question all companies should ask themselves is, “Why does it matter that we exist and, if we didn’t exist, would anyone really care?”