Regulatory Crackdowns Drive More Businesses for Airbnb, Says CEO

By Cameron Scott 

airbnb, social media, social networks, Regulatory clampdowns have paradoxically driven more users to Airbnb, but the company continues working with municipal governments to negotiate regulations that protect consumers without impeding sharing, said CEO and co-founder Brian Chesky.

“Every time some regulatory happens to dissuade people from using it, more people start using it,” he said speaking at South by Southwest. Use grew dramatically after New York City passed regulations in 2010 that put the New York-based company “in an extremely gray area.”

Chesky acknowledged that what Airbnb presents regulators with a business model that very different than what they’re used to. But he also cleverly noted that staying in people’s homes had existed long before “mass-produced tourism.”

Chesky said that Willie Brown, the San Francisco’s former black mayor, had told him that in the Jim Crow era, African Americans had stayed at people’s homes when they traveled because they were banned from hotels.

Chesky was optimistic that a compromise could be found were consumers are protected without shutting Airbnb down, since 92 percent of people are renting their primary homes rather than taking rentals off the market, a practice that many city regulations are intended to limit.

The company started by working labor-intensively with early users to ensure that it the user experience it became associated with was extremely positive. Its growth is a counterpoint to other startup models that promote focusing on strategies that can scale.

“If you get the first hundred users right, the next thousand will look the same. It’s hard to change a thousand, but it’s easy to change a hundred,” he said.

The company has lately considered taking the growing market for “the Airbnb of” other resources as well but has decided to remain focused on doing a one thing well, according to Chesky.

“What we want to do is design every single frame of that experience. We want to be vertically integrated end-to-end,” he said.

But he designed the one thing alternately as travel and, even more broadly, as new experiences.

Airbnb has increasingly branched into recommending activities for users in the cities they visit. The company is nearing 100,000 bookings every day, Chesky said.