Airbnb had only one engineer for their first year of existence. Here’s how he hacked growth

When Nathan Blecharczyk graduated from college, he was not just a skilled programmer but the embodiment of a new Silicon Valley hero: the growth hacker.

The following is an edited excerpt from The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World by Brad Stone. The excerpt was provided by Little, Brown and Company. You can buy a copy here.

Nathan Blecharczyk, image courtesy of Berlin Factory

To understand the spark that finally ignited the Airbnb inferno, it’s imperative to explore the background of Nathan Blecharczyk, the tall, seemingly unflappable engineer of the group, the co-founder who always stayed behind while his partners traveled the world.

When Nathan Blecharczyk graduated from college, he was not just a skilled programmer but the embodiment of a new Silicon Valley hero: the growth hacker. Growth hackers use their engineering chops to find clever, often controversial ways to improve the popularity of their products and services. Blecharczyk, it turned out, was an exceedingly good one. That makes the mysterious rise of Airbnb in the year after its graduation from Y Combinator  (YC) easier to understand.

Airbnb fights Couchsurfing and Craigslist

Two other apartment-listing services were far larger: Couchsurfing, which was still laboring under the disastrous effects of its nonprofit status, and Craigslist, the popular and practical online bulletin board that hadn’t changed much in 13 years. Craigslist had a huge audience; in 2009, it had 44 million unique visitors a month in the United States alone, with active apartment rental and home-sharing channels in many of its 570 cities.

Recognizing this fact, Airbnb designed two clever, somewhat devious schemes to usurp Craigslist’s advantage. While Airbnb has always minimized the impact of these programs, each bore the unmistakable mark of Nathan Blecharczyk. In late 2009, a few months after it had graduated from YC, Airbnb appeared to create a mechanism that automatically sent an e-mail to anyone who posted a property for rent on Craigslist, even if that person had specified that he did not want to receive unsolicited messages. If the apartment was listed in, say, Santa Barbara, the email would read: “Hey, I am emailing because you have one of the nicest listings on Craigslist in Santa Barbara and I want to recommend you feature it on one of the largest Santa Barbara housing sites on the web, Airbnb. The site already has 3,000,000 page views a month.”

All these emails were identical except for the city, and they typically emanated from a Gmail account bearing a female name. Dave Gooden, another online real estate entrepreneur, recognized the soaring popularity of Airbnb in 2010 and became curious about it. Suspecting what was going on, he posted a few dummy listings on Craigslist and then wrote a blog post in May 2011 about his findings, concluding that Airbnb had registered Gmail accounts en masse and set up a system to spam everyone who posted on Craigslist. He described Airbnb’s activity as a nefarious, “black-hat” operation. “Craigslist is one of the few sites at massive scale that are still easily gamed,” he wrote. “When you scale a black-hat operation like this you could easily reach tens of thousands of highly targeted people per day.”

The opposite strategy

A few months after the bulk-emailing campaign to Craigslist users, Airbnb tried a new tactic. Instead of luring Craigslist users to Airbnb, the company did the opposite: it allowed users to take a streamlined version of their elegant listing on Airbnb and then cross-post it with a single click on Craigslist. “Reposting your listing from Airbnb to Craigslist increases your earnings by $500 a month on average,” the site informed prospective hosts.

“By reposting your listing to Craigslist, you’ll get the benefit of more demand, while still being able to use Airbnb to manage and moderate your inquiries.” The tool, which Chesky says was originally the idea of adviser Michael Seibel, was a boon for the company. It established Airbnb as a way to create more visually appealing Craigslist ads and, in effect, dropped ubiquitous Airbnb ads into the network of its largest competitor.

“It was a kind of a novel approach,” Blecharczyk says. “No other site had that slick an integration. It was quite successful for us.” Other growth hackers noticed this and applauded it as a sophisticated technical achievement. Craigslist has different versions of its site in hundreds of cities, each with different web domains and menu formats. Blecharczyk had designed a way to make it simple for Airbnb to post seamlessly onto the right site.

“It’s integrated simply and deeply into the product, and is one of the most impressive ad-hoc integrations I’ve seen in years,” wrote Andrew Chen, a fellow growth hacker who would later work at Uber, in an admiring blog post. “Certainly a traditional marketer would not have come up with this, or known it was even possible. Instead it [would] take a marketing-minded engineer to dissect the product and build an integration this smooth.”

Cease and desist

For years Craigslist did not seem to care about Airbnb’s cross-posting tool. Then, in 2012, Craigslist suddenly woke up to this type of activity and sent cease-and-desist letters to several businesses using similar tactics. [Airbnb co-founder Brian] Chesky says he could not recall whether Craigslist sent such a letter to Airbnb but noted that the cross-posting tool also helped Craigslist because “it made their ads look better. There were people that wouldn’t have posted to Craigslist, and Craigslist got new inventory.” Airbnb dutifully removed the tool after Craigslist objected to these tactics, but by then it was too late. Like sucking through a straw, Airbnb was pulling listings and users over from Craigslist.

It helped, of course, that its site was better designed and far easier to use and that it was constantly working to provide easier forms of payment, better mobile apps, and a safer experience where hosts and guests used their real identities and reviewed one another. Blecharczyk also ran productive online ad campaigns during these early years. If people searched Google for an apartment in Boston, for example, Airbnb ads would pop up at the top of the page. Blecharczyk and his marketing team became experts at finding the cheapest and most frequently searched keywords and generating crisp and somewhat pointed ads. “Better than Couchsurfing.com!” some of Airbnb’s early search ads blared.