AirBnB – Case background AirBnB is a website that was founded in 2007 by Joe Gebbia, Brian Chesky, and Nathan Blecharczyk. AirBnB’s story begins in the living room of Joe and Brian’s San Francisco loft in 2008. The name AirBnB stands for “Air bed and breakfast”. AirBnB is a community marketplace that allows property owners and travelers to connect with each other for the purpose of renting unique vacation spaces around the world. It is an alternative to a hotel giving the user a more fun, cheaper and local experience.
AirBnB has everything from private homes to private islands in over 16,000 cities in 186 countries. It has rooms, couches, homes, islands, castles and an airplane sticking out of a tree. Famous people like Conan O’Brien rent out their homes as well. With 1,000 more new listings a day, a number likely to accelerate to 3,000/day as it expands in all the major tourist markets. AirBnB is expected to surpass Hilton (600,000) in number of rooms by 2012 with their current growth rate. AirBnB also offers a free iPhone and iPad application for booking accommodation on the run.
With AirBnB’s over a billion-dollar valuation already it is every entrepreneur’s dream of a perfect start-up. Things seemed too good to be true for the San Francisco based company. The company was largely build on social media, since the users engaged with the page through Facebook and Twitter. AirBnB had a social crisis management issue in the summer of 2011, caused by a lack of corporate culture and values. AirBnB has become a classical example, showing the importance of social media in reputation management, especially in a crisis.
AirBnB was caught off-guard by a social media storm after clients had their property vandalized. A member of AirBnB known as EJ posted on her blog about a bizarre and brutal destruction of her home by someone who rented her space through AirBnB. Her things were stolen, her identity documents photocopied and her apartment destroyed. After the ordeal, she contacted AirBnB, with some difficulty, to let them know what had happened. AirBnB did not have a situation like this before and they responded to EJ that they would not reimburse her for damages and they do not insure against losses.
They are helping police track down the person who did this, but their help ends there. What AirBnB did not know, was that EJ had her own blog (ejroundtheworld. blogspot. com). A late Wednesday night on the 29th of June 2011, EJ published a 10 page blog post about her experiences with AirBnB and the visitors she had in her apartment. Quoting EJ: “They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals… y entire life. They found my birth certificate and social security card, which I believe they photocopied – using the printer/copier I kindly left out for my guests’ use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. They found my coupons for Bed Bath & Beyond and used the discount, along with my MasterCard, to shop online. Despite the heat wave, they used my fireplace and multiple Duraflame logs to reduce mounds of stuff (my stuff?? to ash – including, I believe, the missing set of guest sheets I left carefully folded for their comfort. Yet they were stupid and careless enough to leave the flue closed; dirty gray ash now covered every surface inside. They did weird stuff too: moving things around in a spooky, psychotic kind of way – creepy little things that I am still discovering as I dig through the wreckage – like cutting the tags off my pillows, and hanging a painting of Paris on the wall that I had never hung before… probably while wearing my now-missing Ugg boots and Roots cap. EJ was at first satisfied with the customer service quick response, but after only 3 days, all communication from the company stopped. After EJ’s blog post began circulating around the web, other users became concerned, and in order to keep people’s trust about the security of using a site like AirBnB, they needed to act. But they didn’t. Brian Chesky, the CEO and co-founder of AirBnB, chose to write a blog post “On Safety – A word from AirBnB” on Techcrunch on July 27th, making statements that would later show to damage the company beyond imagination.
This post made EJ react and she wrote her next blog post titled “AirBnB Nightmare: No End In Sight” where she criticize all parts of Brian Chesky’s statements. EJ quoted Brian Chesky statements in her post and wrote about her own experience of the same events. Quite a substantial amount of statements were made, this is therefore a excerpt of EJ’s blog post, commenting on her experience of the situation: Brian’s post: “While we are not at liberty to discuss the details during the investigation, we understand that with our help, a suspect is now in custody, and our information will now become important evidence. EJ response: “As of today, July 28, I have received no confirmation from either the San Francisco Police Department or the District Attorney that any culprit is in custody for my case. ” Brian’s post: “We have been in close contact with her ever since, and have worked with the authorities to help find a resolution. ” EJ response: “If the “her” he is referring to is me, then the first part of this statement is false (the second I cannot attest to). During the first week of my nightmare, the customer service team at AirBnB was – as I stated in my June 29 blog post – helpful, caring and supportive.
In particular, one customer service manager – and the company’s freelance photographer – were wonderfully kind to me, and both should know how grateful I am. On June 29 I posted my story, and June 30 thus marks the last day I heard from the customer service team regarding my situation. In fact, my appointed “liaison” from AirBnB stopped contacting me altogether just three days after I reported the crime, on June 25, for reasons that are unknown to me. I have heard nothing from her since. And since June 30?
On this same day, I received a personal call from one of the co-founders of AirBnB. We had a lengthy conversation, in which he indicated having knowledge of the (previously mentioned) person who had been apprehended by the police, but that he could not discuss the details or these previous cases with me, as the investigation was ongoing. He then addressed his concerns about my blog post, and the potentially negative impact it could have on his company’s growth and current round of funding. During this call and in messages hereafter, he requested that I shut down the blog altogether or limit its access, and a few weeks later, suggested that I update the blog with a “twist” of good news so as to “complete[s] the story”. Brian’s post: “Once our host’s safety was secured, our attention moved to further strengthening our system. ” EJ response: “I am not clear here if Chesky is trying to convey the message that AirBnB was involved in securing my safety, but the company was not. My safety was secured by my own efforts. I arranged alternate accommodations, in the safety of a friend’s home.
I arranged and paid for my own transportation while dislocated (with Airbnb’s assurances that this expense would be compensated – which it has not been). I contacted the police, and insisted on a visit from CSI to dust for prints. I called a locksmith and had my locks changed. ” EJ took care of everything herself and the co-founder unfortunately showed a mismatch of almost everything in their communication. Additionally there were the “suggestions” of EJ taking down her blog. This situation had a bad timing for AirBnB since they were in a round of funding and had an upcoming IPO.
AirBnB clearly had problems handling a social media crisis, corporate culture and values. AirBnB had been living highly on their users satisfaction and admiration of their marketplace for accommodation. It was the same people, who also turned their backs on the company caused by its way of dealing with a struggling customer. The company had never been in the middle of a crisis and did not know how to handle it, since valuable principles and culture were missing inside the company. One thing AirBnB should have known is the massive rise and fall of social media.
When working with social media you do not got days, you got minutes and maximum and hour to handle a crisis like the one mentioned. On AirBnB’s own blog they posted a new entry on august 1st titled “Our commitment to trust and safety” wherein AirBnB write Brian Chesky CEO and Co-founder apologize to EJ and AirBnB’s community for its way of handling with these issues. Brian Chesky writes: “In the last few days we have had a crash course in crisis management. I hope this can be a valuable lesson to other businesses about what not to do in a time of crisis, and why you should always uphold your values and trust your instincts. “On August 15th, we will be implementing a $50,000 AirBnB Guarantee, protecting the property of hosts from damage by AirBnB guests who book reservations through our website. We will extend this program to EJ and any other hosts who may have reported such property damage while renting on AirBnB in the past. ” In addition, AirBnB mentions several new initiatives to improve the company, such as: 24-Hour Customer Hotline, 2x customer support team, a new Dedicated Trust & Safety Department, new algorithms to detects fraud, social features to check out renters and a “Contact the CEO” feature where customers and write directly to Brian Chesky.
AirBnB posted the famous tweet ““We Have Really Screwed Things Up. ” Newsletters were sent to all customers of AirBnB with the same title explaining the whole event of things with complete honesty to the rest of the customers who did not know. The first paragraph of the newsletter said: “We felt paralyzed, and over the last four weeks, we have really screwed things up”. The message was tremendously well received among its users and the public. AirBnB saved themselves in the last minutes before their whole business platform were swiped away.
Only a couple of months later, the company is still growing at rapid rate and has become an example of how not to handle social media in a crisis situation. AirBnB even survived lobbyist from the hotel industry trying to promote the use of hotel rooms instead of AirBnB. The users demand more safety features, which is rolled out almost weekly. If the founders would have known more about creating corporate values and principles, they could have avoided a crisis like EJ’s case to evolve to such widespread reputation management issue.
