How Airbnb and Uber Used Growth Hacking For Early Traction
Most of the new age businesses like Uber, Facebook or Airbnb, are launched as platform business models, wherein typically they connect 2 sides of a platform, like buyers and sellers, or riders and drivers and so on.
The challenge is to understand which side to grow first.
It’s a classic chicken and egg situation.
For e.g. in the case of Uber, Its platform is two-sided, connecting people who need rides with people who have rides to offer.
In general, platform models work on getting the supply first, for e.g. In Airbnb if there is no supply, people will not come. However, if the platform has listings available, then there is value for people to come to the site. After this- the demand will accelerate supply and supply will accelerate demand.
In the case of Uber, it’s quite evident that the supply side is limited, and that’s what Uber should attempt to grow.
But how do you get the supply side going?
Here are a few ways to build traffic and traction for your platform in its initial days:
- Piggyback– When Airbnb wanted to get listings on their site from homeowners. The founders of Airbnb started thinking about where would people go if there was no Airbnb? The answer was clear- Craigslist! They found volumes of people who are renting out their apartments via craigslist. The property owners had nothing to lose by listing in Airbnb, and suddenly Airbnb was blossoming with huge volumes of listings. The supply side is sorted.
2. Choose your suppliers carefully: In order to get a huge volume of suppliers or listings, platforms should very carefully choose their suppliers. They should invest in moderation and filtering out the bad eggs. Supply will build the demand so platforms should have zero tolerance here.
Etsy, for example, went on to craft fairs across the country to identify and onboard the best vendors
3. Focus on user experience: Help your supply side sell better and look better: Just getting the listings was not enough, those listings needed to look very attractive and provide a great user experience for dead side well. Airbnb hired professional photographers to go to property owners’ homes to take inviting pictures. This made the site much more attractive than the competition.
Uber also started with ‘Black’ cars first in the US, wherein they accessed a pool of professional drivers and enrolled them.
This created a professional experience for riders and Uber instantly had a huge fleet running on the road.
These great user experience spread via word of mouth and a the platforms start receiving referral customers and repeat customers.
Remember- If you are not getting repeat users, you will not get referrals. That’s why building a great supply side with great user experience is the no.1 task for any platform-driven business.
4. Find strategic gaps– E.g. Uber did not launch in all cities on day 1. They identified which cities show the widest gap in terms of supply and demand of taxis. Then they identified which time bands show this wide gaps, and launched in specific cities and specific time gaps only.
Airbnb followed a similar strategy with its rollout, launching in Denver in 2008 to coincide with the lack of hotel space during the Democratic National Convention and adding new cities at times when they had major conventions or other events.
Launching in situations of high demand and low supply also helps startups acquire the right type of customers—the early adopters
So, these are a few ways and best practices that few of the top platform companies adopted to get their first thousand or few thousand customers.