The great PIVOT of Airbnb Experiences
The path from vision to product-market fit is never straight
Hello dear builders! Another week passes and we’re here again. I’ve been cranking out 2,000 words a week for the last few weeks and there is still somehow so much more to write about. How does one find the time? If you’re new here, welcome! This newsletter is written for product builders and operators who have the most fun and somehow also most miserable job of building products. I hope today’s story hour is as interesting to read about as it was to live the work. Please share any PIVOT stories that you think I need to hear. I hope you learn something! -Nickey
I wouldn’t be a good child of the Internet if I said the word pivot in the title of this piece and did not immediately use this gif:
Now that we got that out of the way… we can begin in earnest 😜. First, why tell this story? This newsletter is for product builders, who are often in the driver’s seat on the path to product-market fit. This path is extremely hard to chart and even the best-laid plans (by people who have been shipping for a long time) sometimes result in a big sad fail. To build is to fly close to the sun and occasionally burnout, and we should normalize the hard parts of this job more!
Most builders I know skew type A and get stress hives when they think about failure. Last week we talked about building resiliency and psychological safety to give teams a solid foundation to work from, and this week we’ll talk about how to pivot if the thing you’re building isn’t working. We assume that what we build will be successful on the first try, and often completely mismanage our people, our process, and our time because we’re planning for something that probably won’t materialize in the way we imagine it will from the onset. There is a #FAIL content drought and that content could teach us a lot and make us better builders. I want to read more of this. So I nominate myself to start and to share a little anecdote about something I saw play out while I was at Airbnb. This one is personal because I worked on it, but it’s also an interesting story that illustrates how strong vision can carry you forward, even if the initial execution of the thing is wrong. And it’s extremely easy to get it wrong, even if you’ve been right many times before.
The background
When I joined Airbnb in 2017, I came on board as a product manager on the Airbnb Experiences team. I was supposed to roll on to a different team when I joined but was told when I showed up that suuuuuurprise you get to work on Experiences. This is actually a terrible candidate experience, and I would highly discourage you from doing this to anyone except me in this very specific case because Experiences was super new and super cool and ended up being right up my alley. It was an epic product-market fit ROAD TRIP and honestly, I was just excited to be in the car.
When I joined it was six months after the initial launch. The original vision for the product was a multi-day, hosted, fully immersive travel experience that got you out of your comfort zone and deep into a new cultural experience. The average price point was high, it was typically in the thousand-plus dollar range because it included activities, food, accommodations, and some travel. You might remember this launch because of the incredible art they launched with, where they created “movie posters” for each experience host. Still drooling over these years later.
When the Experiences product was initially launched in 2016, Airbnb homes had already been in market for over eight years. The brand was well known for home rentals and there was established trust amongst their core user base and host community. There was a hope that launching a new product would neatly bolt on to the core product/customer base and the two groups would cross-pollinate in healthy ways. I say hope because they had a winding path to product-market fit for Airbnb homes and knew this new path forward was pretty unclear, and put some of their smartest people on the task of figuring it out.
It turned out that trusting Airbnb to host your stay was quite different than trusting Airbnb to host your entire trip. People responded favorably to the idea but didn’t readily pull the trigger and they needed a push.
💣🥜 Because you have product-market fit with one product doesn't mean that same market will welcome another.
So when I joined, some six months after launch, this product was being booked but not at the rate needed to sustain a larger growth flywheel. The team was heads down figuring out how big of a push it needed to blossom.
The initial vision
I think it’s important to note the original vision for this specific product because, as much of what Airbnb puts out into the world, it was novel and it uniquely positioned itself amongst a sea of competitors. This vision ended up being important because even though its initial execution wasn’t successful, it helped it succeed on the other side of a pivot, and it set the standard and expectations for the long-term direction for the team to run in.
💣🥜 Strong vision and solid, aligned-on first principles can help you navigate through stormy seas or a pivot or two (or three).
When I was onboarded, I had never seen a vision so clearly communicated. It was very clear what the purpose of the entire exercise was, how it was to contirbute to Airbnb’s core business suite and I still draw from this crisp vision years later. I can’t go deep on what the vision was, but it included strong opinions even more strongly held on what makes a good trip and how the product experience would bring that to life both online and offline.
The pivot
So once it was discovered that higher price point experiences weren’t quite pushing that flywheel into drive, the team switched gears quickly to test a slight twist on the original vision. That twist was to shorten the experience, reduce the price point, yet continue to focus on the core principles outlined in the original strategy. Lower commitment, lower price point, less risk to just try it out and see if you like it, yet still high, high quality.
💣🥜 Pivoting can be simple twists on the original idea, or a full overhaul of what you’re building. Start with what’s cheapest and get it in market quickly.
We all hands on deck’d the team, started shortening currently listed supply and then went after new hosts who would have not necessarily qualified for the original version. This pivot allowed for a larger supply base, even though the quality bar was still exceptionally high.
The growth flywheel
Let’s quickly break down a healthy flywheel, because they are extremely important for marketplace business where the balance of supply and demand can make or break the entire enterprise. For marketplaces, the system needs to have carefully balanced momentum before it’ll start to move on its own (or you’ll have mad sellers who don’t get booked, or mad buyers who don’t have anything to buy - lose lose).
It’s very normal to prop up one side of a marketplace (supply or demand) to get the wheel to start to move, even if it’s not scalable to start. An example of this could be aggressively buying ads to generate demand, that you can build away from later.
💣🥜 Price matters! If you can, start higher and move downward. Customers have long memories and unless you’re adding new value, charging more doesn’t always fly.
For experiences, a shorter version at a lower price point was much stickier. The shorter format allowed for more hosts, more creative activities, more breadth for people to try and see what they liked. Repeat purchases for the new versions were much higher, and people on a trip often liked them so much they’d book another. A new format and lower pricepoint, mirrored after the original vision was what was needed to get the thing to spin.
The initial oh shit moment ended up pushing the team to pivot to a more scalable product that would serve many more customers in the long run. And the great thing about this pivot was that later the longer and more immersive experiences were actually brought back and re-launched when the new system could support them. You should take one, they are incredible.
Second product syndrome
A lot of companies struggle to launch anything after their first big success. Second product syndrome, coined for Steve Jobs’ commentary on the failure of Apple III, touches on how it’s hard for companies to have a second success because it’s not always easy to understand why your first business was successful. A colleague of mine recently nudged me to read about the Ansoff Matrix and made a salient point about how companies often go for diversification when they should actually just start with more product development. Here’s The Ansoff Matrix:
Risk grows as you move up and outward. A lot of companies try different products across this matrix, and quite often they fail because building net new products is not a science, markets evolve and are hard to read, and you get cocky after you deliver your first success. Companies also tend to de-resource new products well before the product-market fit dance has truly ended. They then write off the idea like it wasn’t just poor execution and lack of commitment to see it through. I have a theory that you should try the same idea later, with a new team and new market conditions to see if it sticks on the second or even third landing. If it don’t work the first time, try, try again!
The learnings
Alas, it’s time to wrap up story hour. I’ll leave you with a few more final thoughts:
Markets bite, hard. Do everything you can to understand the market, but know that the sum of the decisions you made about the product you’re shipping is hard to predict until something is actually in market. Sorry!
Talk to customers, but be careful not to over-index on your current users who might not be the best customer for the new thing you’re building. This sounds obvious yet I’ve seen it happen more than once.
User trust doesn’t immediatley transfer to new products, even if your brand has high trust already. You’ll need to rebuild to some extent each time your customer uses a new product. Be sure not to chip away at the larger trust foundation you’ve built by shipping low quality second product (ie. Apple III).
Pivot quickly when it doesn’t work. Remove ego, celebrate failure, build resilient teams who can do this well.
Building towards a core vision matters, even if your first execution is wrong. Solid early vision and good first principles make all the difference.
And finally, just because you have an already established flywheel spinning away, does not mean you can just bolt on another product and assume it’ll spin at the same speed.
If you have any fun #FAIL or #PIVOT stories, please share in the comments below or send me an email! 💌 📬
Thanks for sharing.
This is insightful "trusting Airbnb to host your stay was quite different than trusting Airbnb to host your entire trip"
Would love your thoughts on Articulating a strong product vision.