howuber,airbnb,andetsyattractedtheirfirst1
New business often struggle finding their first customers.
The challenge is even more difficult with startups in the sharing
economy that launch as platforms connecting independent
rvice providers with consumers.
Take Uber. Its platform is two-sided, connecting people who
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need rides with people who have rides to offer. (Same idea as
Airbnb, which connects people needing rooms with
home-owners.) So to launch as a platform rvice, the
companies need to find urs on both the supply and demand
sides.
“Poaching customers is something all competitors do in
different ways ”
“When you have a two-sided platform, you have to acquire both
the customers and the rvices, ”says Harvard Business School Thales Teixeira, Lumry Family Associate Professor of Business Administration.
“It ’s the classic ch i c-a kn e d n-e g g problem, ”he says. You can ’t
have one without the other, but which one do you find first —the customer chicken or the rvice egg? “As a small company you cannot afford to focus on both with the same amount of effort.
You may need to prioritize one side. ”
Preparing to teach a new cour on e-commerce marketing next
spring, Teixeira made it his goal to find an answer. He studied
three of the best-known and most successful startups—Uber,
Etsy, and Airbnb—hoping to find some commonalities in how
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tho business solved the dilemma.
Spoiler alert: it ’s the egg that needs incubating.
As Teixeira reports in a new HBS ca, Airbnb, Etsy, Uber:
Acquiring the First Thousand Customers, all three platforms车胤囊萤夜读
春感concentrated on getting the rvice side of the equation first,
customers cond. But there ’s a catch. “It ’s not just the chic and the egg, you also want to lect the right eggs, ”expla Teixeira. “If you a cqu ie rew tr hon g eggs and ostriches come out,
then you are in trouble. The chickens will run for the hills.
LESSON ONE: THINK LIKE A CUSTOMER
From the beginning, it was clear to the founders of
apartment-sharing site Airbnb that they ’d need to find people willing to list their homes before finding people interesting in
staying in them.
Airbnb expanded its business by finding customers who
怦然心动台词needed
rooms in cities hosting popular events. Source: GoodLifeStudio
“If you don ’t have a supply of hous and a p a r tm e o n p tsl e, pe
are not going to come, ”says Teixeira. The problem was, where
to find people willing to let strangers stay in their places. It
like they could go around San Francisco knocking on doors.
Instead, founders Brian Chesky and Joe Gebbia thought like
customers themlves, trying to figure out where they would go
if Airbnb didn ’t exist. It didn ’t take them long to figure out the answer: Craigslist. The entrepreneurs figured they could do a
better job of making apartments appealing than the online
classified site, but first they had to siphon away its customers.
To do that, Chesky and Gebbia created software to hack
Craigslist to extract the contact info of property owners, then
nt them a pitch to list on Airbnb as well.
The strategy worked. With nothing to lo, property owners
doubled their chances of finding a potential renter, and Airbnb
had a ready supply of homes with which it could attract
customers.
“Poaching customers is something all competitors do in
different ways, ”says Teixeira. a w“e b I f s y i t o e u a a n r d e you are
providing content to urs publicly, others can grab that
information. ”It ’s not enough to just take someone el ’customers, though, he warns—you’ve got to give them
something better than they had before.
LESSON TWO: CREATE A BETTER EXPERIENCE
Once they had apartment owners on the hook, the Airbnb
founders realized they had a problem: the subpar photos that
property owners were taking for Craigslist on their iPhones
would never work for customers looking for an alternative to a
hotel.
“The first time a person goes on Airbnb, they are comparing the
quality of photos to hotels that take glamorized shots, ”sa Teixeira. “They needed to compete at that level. ”
In order to do that, Chesky and Gebbia did something that
would never be scalable: hired professional photographers to go
to property owners ’homes to take inviting pictures. The gambit worked, making the site much more attractive than the
competition, and tting a standard for photography that later
property owners ro to match in order to compete against other
天庭饱满面相图片homes.
“The underlying principle of this is you should help your
suppliers portray themlves in the best way possible, even if
网件路由器that is not scalable, ”concludes Teixeira. “If you don ’t customers, there is nothing to scale. ”
Ride-sharing app Uber pursued a similar strategy. Rather than
starting out with Uber Pool or Uber X, in which drivers u their
own cars, the company started with black cars driven by
professional drivers. That way, they could ensure that customers
would have a great experience virtually every time they ud the rvice—and they could then rely on customers to spread the
news of that experience by word of mouth. “That ’s why you g the supply side first —if you get the right suppliers, the
customers will experience their high quality rvice and then do
the marketing for you, ”says Teixeira.
Etsy also pursued a decidedly non-scalable strategy in finding
the right eggs with which to launch its business. The platform,
which rves as an online marketplace for craft vendors, started
its business with an offline strategy: scouring craft fairs across
the country to identify the best vendors at each, and pitching
them on opening up an online store on the site. “They first brought their customers, and then they brought other artisans
战鼓齐鸣who followed the customers. ”Once Etsy h a d-ti t e h r e first
artisans on the site, the next tier naturally followed them.
LESSON THREE: SEQUENCING IS EVERYTHING
Uber and Airbnb were also smart about how they cho to
expand, picking the right cities at the right time to maximize
their success.
