Airbnb Strategy Teardown by CBInsights

Airbnb reimagined hotel accommodation, creating a niche in the travel industry. Now it’s expanding its inventory, targeting luxury and business travelers, and going up against Priceline, Expedia, and others. Its success will hinge on whether it can compete with these giants while retaining the identity that set it apart. Since its founding in 2008, Airbnb has grown from a small startup that let users rent out their air mattresses, to a global player in international travel and hospitality.
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Airbnb company Airbnb s luxury Retreats patent travel
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Airbnb company Airbnb s luxury Retreats patent travel
Airbnb Strategy 
Teardown
Ahead of Potential IPO, Airbnb Looks Beyond The 
Hotel Industry
I
Airbnb reimagined hotel accommodation, creating a niche in the 
travel industry. Now it’s expanding its inventory, targeting luxury 
and business travelers, and going up against Priceline, Expedia, 
and others. Its success will hinge on whether it can compete with 
these giants while retaining the identity that set it apart.
Since its founding in 2008, Airbnb has grown from a small startup 
that let users rent out their air mattresses, to a global player in 
international travel and hospitality.
• 
Now, as it sets its sights on an IPO, it is evolving from a 
home-sharing platform to an expanded travel services 
company, challenging incumbents like Expedia and Priceline.
• 
It’s getting into real estate, targeting larger property manag-
ers, and building an Airbnb-branded property in Orlando.
• 
And it is expanding internationally, with certain markets in 
Asia emerging as a key area of growth and hiring, as we’ll 
show.
As it looks to become a full-service travel platform, it faces a new 
host of competitors.
Online travel agencies like Priceline and Expedia, which own a slew 
of online travel booking platforms, have already added features that 
make them more competitive with Airbnb. They have tremendous 
online marketing resources for capturing comparison-shopping 
travelers.
Just as Airbnb distinguished itself as an alternative to the hotel 
experience, it will need to do the same against the major online 
travel players.
In addition, the company faces regulatory challenges fanned by 
the hotel industry. The hotel lobby in some cases has successfully 
pressed local governments to regulate short-term subletting. It 
has also had to improve the trust and safety associated with its 
home-shares, as it seeks to make home-sharing more mainstream.
Thus far, the company has successfully navigated many of the 
hurdles it’s encountered. Unlike Uber, the only private company in 
the US valued higher than Airbnb, the company has had relatively 
stable leadership, with most of its senior executives in their 
positions for at least 2 years. It has made effective legal hires that 
have helped it navigate the regulatory challenges it’s faced.
In this analysis, we examine Airbnb’s strategy and future prospects 
using CB Insights data on funding, investments, acquisitions, 
partnerships, and patents.
II
Background & Leadership 
Hiring & Geographic Analysis 
Financials & Valuation History 
Acquisitions & Investments 
Patents
Regulation
Forward-Looking Strategies and 
Competitive Landscape
Final Words
1
4
6
8
11
16
17
23
Table of 
Contents
1
Background & 
Leadership
Airbnb’s present-day business is a far cry from its early inspiration.
As of August 2017, Airbnb has:
• 
4 million listings in 190+ countries (up from 2.3M in 2016)
• 
Over 200 million customers that have used the platform to 
book accommodations (up from 140M in 2016)
• 
Total listings that exceed those of the top 5 hotel chains 
combined (the company did not specify how it compared 
listings)
CEO Brian Chesky has said that the company is still a year or so 
away from a public offering, insisting the company intends to 
be “ready” to IPO but will take its time and be “methodical and 
thoughtful” about the process.
As Airbnb readies itself for corporate adulthood, it has put in place 
a seasoned leadership team with significant tenure at the com-
pany, adding structure to a sprawling home-sharing marketplace.
Employee Organizational Chart
Nearly all of Airbnb’s senior leadership has been with the company 
for more than two years, but some notable gaps remain.
The departures of Chip Conley, who left his position as Head of 
Global Hospitality & Strategy to take on a part-time advisory role, 
and of Varsha Rao, former Head of Global Operations, is straining 
the company’s leadership as Airbnb seeks to grow internationally.
The org chart below shows Airbnb’s current senior leadership and 
is color-coded based on employees’ tenure at the company. As 
evidenced by the abundance of blue, nearly all senior staff have 
been with the company for more than 24 months, a positive sign 
for the company’s stability and its ability to execute in the ramp up 
to a public offering.
As reflected in our chart, nearly all of the newest employees in lead-
ership positions have been added by way of Airbnb’s acquisition of 
Luxury Retreats. Joe Paulin, President and CEO of Luxury Retreats, 
will likely spearhead the company’s luxury efforts.
“Brian,
I thought of a way to make a few 
bucks—turning our place into a 
designer’s bed and breakfast—offering 
young designers who come into town 
a place to crash during the 4 day 
event, complete with wireless internet, 
a small desk space, sleeping mat, and 
breakfast each morning. Ha!”
– Joe Gebbia, Co-founder & Chief 
Product Officer at Airbnb
2
Digging into the chart, it’s worth highlighting how key hires have 
helped the company navigate regulations and tighten up Airbnb’s 
finances. The org chart also provides a window into challenges in 
China, an important market for growth. 
Regulatory Risk 
Chesky’s first senior executive hire was Belinda Johnson in 2011. 
A lawyer who positioned Airbnb to navigate its regulatory risk, 
Johnson has more than 20 years of experience representing tech-
nology companies, and from the outset expertly guided Chesky 
to open lines of communication with regulators and government 
officials. Today she is the Chief Business Affairs & Legal Officer.
Johnson’s hiring of Chris Lehane (Head of Global Policy & Public 
Affairs) has also added to Airbnb’s public affairs chops. Lehane, a 
lawyer and political strategist, is an alumnus of the Clinton White 
House. He brings to Airbnb a cutthroat and formidable resume in 
opposition research and crisis management.
Together, Lehane and Johnson will continue to play a crucial role in 
pushing for friendly regulation in key cities like San Francisco, New 
York, Barcelona, and Paris, among others.
3
Path to IPO
The company’s most significant hiring move in preparation for 
an IPO was its decision to bring aboard Laurence Tosi as Chief 
Financial Officer. Tosi previously worked as Chief Financial Officer 
of The Blackstone Group.
Besides tightening up Airbnb’s finances, Tosi has also reportedly 
taken an outsized role in its operations and corporate development, 
demonstrating his value as the most experienced executive at the 
company.
Notable Departures
Notably absent from Airbnb’s executive structure (and seen 
floating awkwardly near Brian Chesky in our graphic) is Chip 
Conley, formerly Head of Global Hospitality & Strategy. Conley is no 
longer with the company officially, and is instead now serving in an 
advisory role as Strategic Advisor for Hospitality & Leadership.
Conley brought deep hospitality experience to the company and 
is credited with defining the company’s priorities and setting 
standards for hosts.
Changes In China
The departure of Hong Ge, vice president of Airbnb’s China entity, 
has raised questions about the health of Airbnb’s China business. 
Reports indicated that Airbnb hired Ge from Facebook after Airbnb 
was unable to sucessfully hire from Chinese companies. Ge 
departed only four months after assuming the role.
Recent reports suggest that Ge might have violated the company’s 
code of ethics, but Airbnb’s official stance has been that he left to 
pursue other opportunities. With Ge’s exit, Nathan Blecharczyk, 
co-founder and Chief Strategy Officer, will take over as head of 
Airbnb’s China operation.
Faced with growing pressure to expand globally, and with 
Blecharczyk taking on more responsibility for the China operation, 
it will be interesting to see if the company tries to hire another sea-
soned executive as chief operating officer to manage international 
growth. 
In March of this year, Airbnb renamed its Chinese entity “Aibiying” 
(translated as “welcome each other with love”) to better position 
itself within the Chinese market. Whether the company can 
succeed in finding an executive to lead its efforts there full-time is 
an outstanding question.
4
Looking into Airbnb’s jobs listings further shows the importance of 
China to the company’s strategy. It also highlights the emphasis 
the company is placing on its nascent luxury business.
We analyzed Airbnb’s open job listings (as of 10/16/17). We also 
cut the data around how open listings were distributed across 
Airbnb’s offices internationally.
After San Francisco, Beijing, China had the second highest number 
of open listings, with 17% of the available openings. Close behind 
in third was Montreal, Canada — the home of Airbnb’s latest 
acquisition, Luxury Retreats. 
Hiring & 
Geographic 
Analysis 
5
The below graphic shows the distribution of Airbnb’s 200+ open 
jobs by department. Engineering and operations roles take the 
lion’s share of open listings. 
Focus on Engineering, Operations, and 
Luxury Retreats
Engineering and operations roles accounted for the bulk of the 
company’s available positions, at 25% and 16%, respectively.
Analyzing job listings by focus area (not shown in graphic), we also 
found that jobs for Airbnb’s Luxury Retreats business accounted 
for 18% of total listings, with a heavy concentration in operations. 
Luxury Retreats operations roles accounted for 62% of the total 
operations listings. 
6
Airbnb has become a household tech company name. Within the 
global unicorn club (private companies valued at $1B or more), 
only a handful of private companies are valued in the tens of 
billions. Airbnb has a “double deca-corn” valuation of $29.3B.
As a major travel company, Airbnb sits in 5th place on our unicorn 
tracker, behind ride-sharing behemoths and Chinese hardware and 
e-commerce companies. It is the second most valuable private 
company in the US, after Uber.
Our funding and valuation data highlights how quickly the company 
has raised funding and increased its valuation. 
Airbnb has raised money from a variety of investors, including both 
traditional sources of venture capital as well as larger financial 
institutions and crossover investors.
Financials 
& Valuation 
History
7
Since it originally received seed funding as a Y Combinator alum 
in January 2009, Airbnb has raised from a cohort of traditional 
venture firms, including Sequoia Capital, FirstMark Capital, Kleiner 
Perkins Caufield & Byers, Andreessen Horowitz, and others.
The firm also saw early angel investment in its Q4’10 Series A 
round, which included Elad Gil, Jeremy Stoppelman, and Keith 
Rabois, while Ashton Kutcher joined the Series B round in Q3’11.
Later in its investment cycle, the company raised money from 
growth equity firms and larger institutional and crossover 
investors. Airbnb’s $1.5B Series E round in Q2’15 included General 
General Atlantic, T. Rowe Price, and Tiger Global Management, 
among other investors.
8
Corporate and strategic investors are largely absent from Airbnb’s 
investor cohort, though capitalG, Alphabet’s growth venture capital 
investment vehicle participated in Airbnb’s $556M Series F in Q3’16. 
To date, Airbnb has made 16 acquisitions and one investment. The 
company has leveraged M&A deals to acquire market share, talent, 
technology, and strategic edge. 
 
Core Business
While Airbnb famously rebuffed offers to partner with or acquire its 
early German home-sharing counterpart Wimdu, the company has 
not shied away from making acquisitions to improve and expand its 
core business.
In 2011 and 2012, the company bought home-share websites 
Accoleo and Crashpadder, both operating in Europe. And in 2015, 
the company acquired RentMethod, an apartment rental website, in 
an acqui-hire.
Acquisitions & 
Investments 
9
Experiences
Recent acquisitions tie directly to the company’s strategic goal of 
building out its Trips and Experiences services: an integration of 
in-city tours, experiences, and guides discussed in further detail 
below.
In 2015 Airbnb purchased Vamo Labs, a Seattle-based multi-city 
itinerary and cost-planning travel site. The Vamo team joined 
Airbnb post-acquisition. In 2016, less than a month before 
announcing the rollout of its new Trips feature, Airbnb also 
purchased Trip4real, a Spanish startup that connects travelers with 
locals offering unique travel experiences in Spain.
2017 Investments
Airbnb’s 2017 investments have been relevant to a few of the 
company’s key strategies including: building trust in its homes 
investory, improving and expanding the Airbnb platform, and 
targeting luxury travelers.
Mobile
In May of this year, Airbnb acquired Deco Software for an 
undisclosed sum. Deco constructed an integrated development 
environment, or IDE, to allow developers and designers to collab-
orate on mobile apps. The acquisition underscores Airbnb’s focus 
on improving the mobile experience and could help encourage 
developers to create new Airbnb tools for travelers.
Marketplace safety
In June, Airbnb acquired Trooly, bringing in the company’s engineer-
ing team and intellectual property. Trooly uses public and private 
sources of data to construct “digital scorecards” on individuals.
The conventional use cases for Trooly’s product include 
background checks and credit scoring. Airbnb will likely use the 
company’s technology to protect its marketplace from fraud and 
bad actors.
According to Bloomberg reporting, Airbnb had been a Trooly 
customer since 2015. (We discuss Trooly in greater detail below in 
the patents analysis section.)
Luxury
Airbnb’s February acquisition of Luxury Retreats for $200M marked 
an aggressive move into the luxury market. Luxury Retreats is a 
home-share company offering high-end villas that the company 
thoroughly vets and curates.
Luxury Retreats seems like a choice target for Airbnb. The 
company says it does $150M in annual bookings, with 40% of its 
clientele becoming repeat customers, in over 100 destinations. 
10
The company also says it accepts less than 5% of homes that 
apply to the platform. 
Bloomberg reported in June that Airbnb was working on a luxury 
tier of accommodation called “Airbnb Lux,” as well as a pilot 
program called “Airbnb Select.”
Airbnb Select homes are inspected by the company and cosmet-
ically improved. Both efforts come as part of a broader push to 
improve the company’s accommodation inventory.
As of now, it is unclear whether Airbnb Lux will be integrated into 
the core Airbnb platform or continue to live in the Luxury Retreats 
property. Both options come with risks, and the former could 
possibly alienate Luxury Retreats’ core user group, muddy its 
branding, and (if non-exclusive listings were included) forfeit the 
platform’s exclusivity. 
11
Restaurant reservations
In January, Airbnb participated in a $13M Series A investment to 
restaurant reservation app Resy. The investment solidifies the 
companies’ partnership and Resy’s integration as a feature in 
Airbnb’s mobile app experience, allowing Airbnb users to discover 
restaurants and book reservations at their destination. Airbnb’s 
Resy partnership is a component of the development of its “Trips” 
service.
AI
Reports about Facebook’s acquisition of Ozlo, an AI company that 
suggests restaurants based on chatbot conversations, noted that 
Facebook competed with Airbnb to acquire the company.
Mike Curtis, VP of engineering at Airbnb, says the company is 
focusing on AI talent, with the purpose of increasing personaliza-
tion. “I will say we have a keen eye out for companies innovating in 
this space.” said Mr. Curtis. 
Airbnb’s patent application volume is low. However, the patents the 
company has applied for in marketplace management show it is 
working to further improve the trustworthiness of its service. Its 
internet connectivity patent points to its efforts to make Airbnb a 
full-service travel resource available wherever its users go.
Note: This analysis comes with a few caveats, primarily that the 
patent filing process involves a significant time lag before the 
publishing of patent applications. This delay can range from several 
months to over two years.
Patents
12
Improved Services in Remote Locations
In April 2017, we uncovered a newly published patent application 
by Airbnb titled “Beam Device Architecture.” The patent describes 
a data compression system that enhances internet services via 
cellular transmission in remote regions with poor connectivity. The 
patent explicitly references countries like China and Cuba.
Specifically, the application details an orb-shaped device called a 
“beam modem” and a “beam API server” that act as intermediaries 
between a user’s device (e.g. smartphone) and an external web 
service, compressing the request from the user before sending it 
on, and then compressing the response before passing it back to 
the smartphone or other device.
While it is possible that the device would be used to provide 
improved internet services to users visiting remote locations, the 
device could also be used to further differentiate Airbnb’s mobile 
efforts. By improving the connectivity of Airbnb’s app in remote 
regions, users would be more likely to remain within the Airbnb 
ecosystem for the ancillary services the company is currently 
layering on (e.g. guest-host communications, destination guides, 
experiences, restaurant reservations, etc.).
13
Prototypes of the device might already be testing in the field. The 
below photo was pulled from LinkedIn, where Alex Blackstock, an 
Airbnb employee whose name is on the patent application, posted 
it. There is a clear similarity between the photo to the right and the 
drawing in the patent (left).
Trust and Standards
Each of the below patents relate directly to Airbnb’s emphasis on 
maintaining a safe and high-quality marketplace, which is critical 
as the company looks to become a mainstream alternative to 
hotels.
In response to a handful of well-publicized home vandalism, 
robbery, and other criminal incidents that have occurred in Airbnb 
homes, Airbnb instituted the Host Guarantee, a $1,000,000 liability 
insurance protection against damages that affords hosts peace of 
mind.
What’s more, with the rollout of its new program Trips, Airbnb 
now requires that all users (hosts and guests) scan a government 
ID into their platform. The company claims that “a more robust 
standard of authenticating identity will make the Airbnb community 
stronger and reaffirms Airbnb’s ongoing commitment to authentic-
ity, reliability, and security.”
14
Verification Using Online and Offline 
Components
In June of this year, Airbnb was awarded a patent that describes 
“methods and systems for verifying identity and trustworthiness.” 
The patent describes a two-layered process of verification that 
compares information received online and offline to information 
presented by the user at registration.
Additionally, the patent defines the inclusion of a “third party online 
system” that calculates a “confidence score” measured on the 
difference in identity representations.
The patented technology is intended to negate fraud within the 
Airbnb marketplace, by preventing hosts or guests from using 
fake identities. In addition to gathering offline information like 
a user’s government ID, credit score, banking information, and 
criminal history, the system goes beyond simply verifying identity 
by introducing a metric of “trustworthiness” based on third-party 
information like social networks, email servers, blogs, etc.
15
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