Connectivate! AIRBNB – Beds for Rent

Connectivate! AIRBNB - Beds for RentOrganizations still have a long way to go to to fully integrate the social web to connect to their customers. Here are some great examples, curated by Hult International Business School and Center for Innovation, Excellence and Leadership (IXL Center). Their book Connectivate! is a collection of real world stories from 54 innovative companies whose breakthroughs are changing the world.

By leveraging today’s confluence of technological and analytical breakthroughs, these companies connect people, businesses, governments and entities in novel and meaningful ways, capturing win-win propositions on the value chain. These companies have created a new economic context, increasingly accessible in a space-time singularity called Always Available.

Real world stories about innovators and innovative companies are an important way to learn, and we place high value on them at Innovation Excellence. The next case study in our Connectivate! series is:

AIRBNB – Beds for Rent


Find a low-cost place to stay with local people, or make money by renting my space to a visitor


“Bed renters” with extra short-term sleeping space, but no practical methods to find and secure renters. “Bed seekers” who are looking for sleeping space that is cheap and/or unique all over the world.


A website with an easy interface to search, filter, pay, and communicate with potential hosts that enables anyone to rent out a bed, a single room, or an entire apartment. Booking and payment logistics is managed in exchange for a renter’s fee of 6% to 12% depending on booking value. The service unlocks a perishable product —beds — by enabling anyone to become a “virtual innkeeper” for free — Airbnb only charges a fee when a rental is made.


Traditional hotels, vacation rentals, and sublets which are often more expensive or require credit checks and paperwork. Craigslist and newspaper ads had no mechanism for securely managing payments or rating / reviewing potential guests.


Airbnb has raised over $100 million dollars. Airbnb’s popularity has exploded recently, growing more than 800% in 2011, and booking over 2 million night stays in other people’s homes since 2008. Co-founder Brian Chesky claims that more people stay each night in New York City via Airbnb than in New York’s largest hotels.


Beds are a perishable product whose value disappears every night, but reputation is critical for customers to trust it.


  • Integration: Enables individuals to rent their beds to others without travel agents, but with the safety of the social curation and peer review
  • Access to Information: Airbnb combines the range of activities required to list, rent, collect money, and leave feedback in an easy to use web-based or mobile app


  • Convenience: Drives supply of beds by providing all the services bed renters need including payment processing, reservation management, and even a free photoshoot with a small booking fee of 3%
  • Safety & Security: For people to rent beds to each other, reputation and transparency are everything — the service is as invested as renters / tenants in creating a safe, enjoyable experience


Airbnb is a simple application built on top of multiple platforms, ranging from mobile networks and social graphs to mapping and payment processing systems, focused on a clear problem with no existing, acceptable solutions.


Market Makers: Free to list, free to browse — the service matches beds to heads!

  • Right Size: Started as a way to safely and easily rent out beds, but has grown to be a one-stop shop for beds, bedrooms, and entire houses depending on what customers have and are looking for — including a $5,000 per night vacation house in Colorado!


Airbnb invests in photos for new renters; it enables security deposits and holds rental money in escrow until 24 hours after the tenant checks in.


An eBay-type rating system tracks feedback in real-time. Mobile application finds beds near you and enables renters to handle all aspects of renting anywhere in the world.


Website and mobile application with deep social links — members can sign up with their Facebook profile and see which of their friends are also using the service.


Airbnb is really about making renting as simple as possible and has over 50,000 listings so far — in the process, people looking for beds benefit from a wider range of sleeping options at lower costs.


Facebook’s social graph brings a layer of transparency; the largest payment process in the US (ACH), PayPal, and a range of national banks safely manage the money for Airbnb; Google provides map / calendar functions.

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team-ixl-hitendra-patelteam_ixl_ronald_jonashSteve WyattConnectivate! Victor Fernandes Dr. Hitendra Patel, Ronald Jonash, Steve Wyatt and Victor Fernandes are co-authors of Connectivate! Companies Innovating in New Ways to be Always Available; and members of leadership and the team at IXL CENTER, the Center for Innovation, Excellence & Leadership at Hult International Business School.

Hitendra Patel and Ronald Jonash




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