Unbundling Airbnb

“Go to Airbnb, pick a niche and execute it 10x better.”

This was the opening to my recent social media post.

So far, it has gained 2 million views on Linkedin and Twitter—Nuts!

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I promised to dive deeper, so let's do it!

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Unbundling, huh? ‍

There are only two ways to make money in business: One is to bundle; the other is to unbundle. 

Those are not my words. That statement was popularized by Marc Andreessen, co-creator of the hugely influential Mosaic Internet browser, co-founder of Netscape, and a famous VC.

So the idea behind unbundling of Airbnb is simple: Pick a niche use case with passionate but unsatisfied guests and then build a business around it. We will soon go into specific examples.

Craiglist can help us understand unbundling. Many popular startups "just" picked a category on Craigslist, “unbundled it” and made it 10x better.

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Airbnb picked vacation rentals, and Zillow gobbled up everything else related to real estate. Unbundling Craigslist is a great concept that helps explain the growth of internet marketplaces in the last decade. 

Would these marketplaces exist without Craigslist? Probably. But that’s a different story.

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Unbundling Airbnb - the wrong way

After my post went viral, startup founders started pinging me with messages. 

Many saw it as confirmation of their own business approach:

1. Pick a niche on Airbnb 
2. Create a niche marketplace that looks like Airbnb
3. Collect $$$

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So easy! But they all kind of struggle with the last step.

I'm a big fan of Airbnb, I believe in the long-term vision of the company and I wouldn't bet against Brian Chesky!

Airbnb created an amazing business with a massive inventory, strong brand, security, simple payments, and a comprehensive user experience. Their support is not in the best shape right now but that's definitely fixable mid-term. 

But don't think you can create a significant business simply by copying Airbnb in a niche market. 

At least once a week someone pitches me an idea for the “Airbnb for digital nomads” marketplace and they are totally convinced that it’s going to work. 

Bad news to share here: nobody is going to book a trip on some no-name platform instead of Airbnb unless that platform is doing something 10x better. 

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One approach would be to build a unique inventory that fits your target niche but isn’t available on Airbnb. 

Airbnb is already unbundling itself, and this trend is probably going to continue.

Here are some examples:

• Airbnb for Work - accommodation for business travel
• Airbnb Luxe - luxury villas 
• Airbnb Plus - standardized high-quality homes

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Unbundling done right

Some projects are finding success, and I see a pattern emerging: build a unique inventory (by buying or leasing assets long term) and perfect the user experience:

• Upscale villas for remote workers: Wander
• Tiny houses for a digital detox: Unplugged
• City apartments for business travelers: Sonder
• Mid-term room rentals in large cities: Common
• Affordable weekly rentals: Padsplit
• Villas for creators: Launch House, Creator Cabins
• Airstreams in national parks: Autocamp 

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So what are some new opportunities in unbundling Airbnb?

Well, you can take any of these projects mentioned above and replicate them in different locations, make them in a different niche or add some twist. 

Let’s use Wander as an example: 

• 📍 Different location: They have only a few properties across California and Oregon but this concept can exist near any larger city with enough wealthy people 
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• 🔎 Different niche: Remove the Tesla, move from top locations, keep some amenities people love (e.g. Herman Miller chairs) and make it way more affordable
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• ✨ Twist: Same as Wander but add only locations where you can do water sports

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And of course, there are other niches that are not unbundled yet. I might go deeper into this topic in the next newsletters, but no promises.

If you liked Wander's concept, you might want to read about new business opportunities in hospitality that are emerging because of remote work.