Why Airbnb is an Amazing Thing

Joe Zadeh is Head of Product & Innovation at Airbnb, a community marketplace for people to list, discover, and book unique spaces around the world. He spoke (video available for Intuit insiders) at Intuit's CTOF (Create the Offering Forum) 5/2/2012 on their little-known Network Effects (i.e. more than just 'the more people that host, the more travelers are attracted and the more travelers that come to Airbnb, the more people want to host'). Their entire service helps you get more mobile (via travel) and their iPhone and Android apps are killer in terms of both design and usefulness.

I always wondered why it was called "Airbnb" and just figured it was people that fly to their destination and stay in a BnB (bed and breakfast), but its actually a story about the founders. They lived in San Francisco but they could no longer afford it.  To make the next rent payment, they setup an airbed on the floor of their living room and advertised it to designers coming into town for a huge conference.  They served breakfast too.  So Airbnb really stands for Airbed & Breakfast.

Trust and Safety are A#1 at airbnb - for example: you cannot message someone unless you have a verified phone number.  You are not renting a place from an email address, you are renting from a real person.

 

Joe's three steps to make a great product:

• Step 1 : Go meet you users.
• Step 2 : Remove their Hurdles.
• Step 3 : Connect the Dots.

 

• Met hosts and travellers: Whats the biggest shortage of places to stay in a city in the US? Austin, Texas during South by Southwest.  So they went there and learned. 
• Hurdle: It's awkward to exchange money with a stranger after they stay at your house.  "Yes, I had a great time meeting and hosting you here this weekend....now...uhh, could you give me the money?"  They saw this as a big enough that it would prevent adoption.
• Connecting Dots: So lets automate payments.  

• Hurdle:  Hosts worry that their place will be trashed or items stolen.
• Connecting Dots:  Airbnb has a guaranteed $50,000 theft or vandalism coverage now.

• Hurdle:  Online reviews are not trusted. Anyone can go on Yelp and berate a restaurant or make it sound much better than it is. And forget about hotels and their reviews on their own sites or on something like tripadvisor--they fall in the same untrusted category.
• Connecting Dots:  Each of the reviews on Airbnb is tied to a financial transaction, so you can only flame/praise if you have hosted that person or stayed at the host's place.  This ensures no fake reviews.

Users can help break down your mental walls:  For Airbnb, that meant changing their view that it was only for use during conferences (when places to stay are scarce), or only for sharing a place (you can now list your entire place while you are out of town).

They were thinking that if only the pictures of each listing looked better, more people would book. So in true Lean Startup fashion, they built a concierge MVP (minimum viable product that uses human effort and little to no code) to test the hypothesis: Will hosts want pro photography?

Sending emails to hosts of listings with regular pics, they found that just about everyone replied with a "Yes, Please!" when Airbnb offered to send a professional photographer to their place.

For their second hypothesis, Will they get more business? they used metrics to track pro-photo listings vs. regular-photo listings.  The answer was an astounding YES.

They continued sending emails and offering to pay for pro photography for hosts and business was growing, growing, growing.  Then it stalled and went down/flat.

Joe recommends every team build a dashboard!  It lets you measure and find out why stuff happens.  So they found that the reason for the down/flat trend was because their employee that was in charge of cutting checks to professional photographers was just overwhelmed and getting behind.  They thought, instead of cutting checks manually to pro photographers, who do they know that has an automatic payment system?  Thats right, they already had it in-house, and just applied it to their photography program.

What started as a bad photo, the resolution wound up fixing many hurdles and encouraging their stratospheric growth.

Try things that don't scale!

 

Hurdle: Guests want to see complete guest profiles of the Hosts; Hosts don't want to fill them out.

Removed this hurdle by auto-connecting with Facebook: Hence was born Airbnb Social Connections. Try it, its quite amazing!

Build dogfooding into your culture.

Eat your own dogfood to the extreme: One of the co-founders went homeless and only sleeps at places he books on Airbnb. He has been doing this since June of 2010!

Airbnb has 3 PM's, 7 designers, 29 engineers. Very cross-functional and team leads are any role.

Whose World is Certain? - Lean Startup with Eric Ries

Eric Ries, author of The Lean Startup, spoke at Intuit at the 1/23/2012 Delight Forum. If you work at Intuit, watch the video replay (sorry, not available outside our firewall). Here are some takeaways. The mobile product team I work on has implemented some already, others are on the docket. All are amazing and the man speaks the truth.

Eric defines a startup as “a human institution designed to create something new under conditions of extreme uncertainty.”  That’s pretty much everyone out there, not just those small companies so commonly associated with a startup. As he put it, "who feels like the world is getting more and more stable every day!?"

Nowadays, "we can build anything we can imagine. The question of our time is not can it be built, but should it be built?"

Entrepreneurs are typically obsessed with the length of the runway, but in the wrong way: how much time until we run out of money.  Instead, we should look at it as how many times we can pivot and learn.

Code not to ship products; code to learn.

A software company is really just about transforming ideas into code.  Then measuring data, and learning from it, which influences our next stage of ideas.

Agile and Lean are supposed to drive out the waste from his development process, yet Eric committed the biggest waste of all: building something nobody wants.

3 Learning Milestones:

• Establish the baseline - Build an MVP (Minimum Viable Product) and measure customer behavior. (e.g. The Leap of Faith assumption is the % of customers that will sign up for the new trial
• Tune the engine - Experiment to improve metrics towards ideal.
• Pivot or persevere - Got diminishing returns in your experiments? Time to pivot

 

Case studies / real-time coaching:

Problem 1: After swiping a credit card, it takes 2-3 days for it to show up in your bank account, leading to alot of confusion & wondering.

Leap of Faith: Sign-up rate of merchants will double if they know they will get their money sooner.

• Eric's take:  "What if we did a split test and just told some people [when they are signing up] that they would get instant settlement?"
• The product team: "And...?"
• Eric: "And they didn't."
• (Audience chuckles but then realizes it's actually pretty smart and cheap)

There are alot of reasons to NOT do this, but Eric addressed each:

• Pissing off customers:  Just limit it to a small number of customers.  If they get pissed, we know we were right.  Having pissed off customers is actually one of the best things! It means:

1. 1. We know to find them 
   2. We got them to try your thing
   3. They actually wanted it
   4. We're in sync with them on what the key features are 
   5. They cared enough to yell at you!

Just do not be deceptive about it.  The product team should commit to taking all phone calls, apologizing to any upset customers, etc.  Make it right for them.

• What about letting the cat out of the bag and competitors one-up us?  
  • If you expose only a small number of people, the odds are astronomically high that a product manager at a competitor is NOT going to be one of them.
  • Most customers don't care enough to instantly blog about some new feature/product.
  • On the landing page, there is just a bullet list of features and we are adding one new bullet.  It's almost no change and tough to notice.
  • OR decide to do it under a separate brand name if the above still is too risky.

"If I went to the competitor's office and I looked at their road map, I bet you a million dollars this is on their roadmap somewhere. They are probably thinking about doing it. They are probably having the same problem that we all have--they've got a million good ideas and they can't figure out how to prioritize them. It's not like knowing that you are doing it gives them any information."

"You are in a battle to out-learn your competition. If you go through the Build-Measure-Learn loop faster than them, it doesn't matter what they know and this is not a big deal. If you are NOT faster than them, you deserve to get beaten."

 

Problem 2: More new Mint users than we'd like are not sticking with it.

Measurment of success:

• Total and % of offering clicks, engagement
• Number who switch banks.
• Long term engagement (frequency of use, explore offers)

Eric's take: Just take a small subset of Mint customers, and tell them you can get them a better bank account (even if you can't). Right in the beginning. I think it will actually cause more users to leave than stay (because I hate when someone tells me to switch bank accounts). But lets see...

 

Problem 3: Need more invoicers (small businesses that get paid via invoices). When customer gets an invoice, they can click a link and pay with a credit card (3.25%) or bank-to-bank ACH (50cents, yes really its 50cents only).

Measurements of success:

• Number of invoicers who sign up (growth)
• Net-Promoter Score
• Referrals

Eric's take: Value Hypothesis this is not; this is Growth Hypothesis.  He believes in the law of sustainable growth (not publicity stunts) New customers come from one of the 3 engines of growth:

• Paid (Revenue earned from past customers invested in getting new customers)
• Viral (Customers act of infection, not "word of mouth" but they cannot help but to become infected).  For each customer you sign up, how many additional customers do they get to sign up?
• Sticky/Engagement (you are addicted, you can't quit). Word of mouth works in these types of deals.

Use Google AdWords to find out the lifetime value of each customer.

Exciting: pick one engine of growth, then brainstorm on what experiments could prove that this move is worth it.

 

Problem 4: Bank Services make offerings that it sells to banks who use it with their customers. But micro-small businesses are the majority and don't want the normal offerings--too big and complex. Will they abandon Excel and paper and pay for our stripped-down offering?

Measures of success:

• Active and on-going use - will measure weekly active use.
• Small business auto-categorization works - percent new categories after 30 days of use

Make the product better and make sure its actually getting better using cohort analysis:  Did the 100 customers that came to the website after the most recent changes actually use it more (or rate it higher, etc).

Vanity metric: number of users.  But if you spend alot of time adding a feature and you just look at your total number of users, sure it went up.  But really what happened is you made a change in the code with no customer benefit.  Rip it out!

A pivot is a change in strategy without a change in vision.

You cannot "pivot the vision." That is incoherent.  Some Common Myths about The Lean Startup method:

1. Lean means cheap.  Truth: its not about cost, its about speed.
2. Its a web/internet/consumer software companies. All companies that face uncertainty
3. Lean Startups are small bootstrapped startups.  Truth: driven by a compelling vision and rigor about testing each element of this vision.

 

More favorite quotes from Eric Ries and Scott Cook:

• "In every one of your businesses, I know a scrappy little team in a garage somewhere that is gunning for you and wants you dead!"
• "'Are you better at this than you were before?' is all that matters."
• [making things more complicated with no benefit] "Thats not a pivot, thats just... DUH!"
• "Doing what you are told is a firable offense!"

Five Lessons for Creating Great Tablet Experiences (part 2)

Continued from Part 1 of my notes from a BayCHI talk given by Brennan Browne, a UX researcher at AnswerLab. Brennan presented the pros/cons of different techniques used for capturing mobile phone/tablet user research sessions.

Screen Captures (video recording straight off of the device)

Pros: best image quality, portable, cheap

Cons: doesn’t work well with all devices (earlier iPhones can’t use this without jail breaking), doesn’t capture physical interactions w/ device, passwords/sensitive info can’t be hidden

Video (filming the screen)

Tips: 

• equipment is expensive so consider demos or rentals
• define a hotzone to the user (ex: put a piece of paper down on the table and ask user to keep the device over it)
• be aware of room lighting/glare

A. Videographer

Pros: works for any mobile device, can capture physical interactions, flexible and portable

Cons: cost (need to bring an extra person to the session), screen may be difficult to see, may have to ask user to move around, lighting

B. Sled - camera structure that attaches to the device (ex: Noldus)

Pros: fixed, hi-res screen, captures physical interactions, no videographer required, very portable

Cons: won’t work with all devices, limits users ability to switch orientations or use slide out key boards, adds weight to the device, hard for participants to hide passwords or sensitive info

C. Document Camera - looks much like an old overhead projector

Pros: can capture device at any orientation, captures physical interactions, high res camera, no videographer needed, camera itself reminds users where to hold the device, can easily enter passwords/sensitive info by removing device from the recording area

Cons: price (>$7K), screen quality isn’t as good as a screen cap, not well suited for field studies

On a personal note, we’ve tried several of these methods in our iPhone usability studies and I very much prefer Screen Cap over Video. When we used a Noldus camera, we found that users were very hesitant to pick up with the device and interact as they normally would in real life. Instead they’d put the device down on the table and poke at it from afar. When we started running tests using Screen Cap (thanks to iPhone 4S/iPad 2 mirroring), we found that users felt more free to bring the device closer to their face, use gestures outside of “tap”, and rotate into landscape mode. Although we aren’t able to capture the user’s gestures on film, we take notes about interesting/surprising gestures to augment our notes.

(This post originally appeared on blog.alissadesigns.com on 03/30/12)

Five Lessons for Creating Great Tablet Experiences (part 1)

Part 1 of my notes from a BayCHI talk given by Brennan Browne, a UX researcher at AnswerLab.

Trend 1 - Trading computer time for tablet time

• Why? It’s more fun, easy, convenient.
• Computer: in the home office vs. Tablet: comes everywhere
• Tablets are portable, not necessarily mobile - possibly because need wifi (not all are 3G enabled)
• Over past 6 months, see trend of more people using tablet at work - more employers are handing them out, there are more biz-related apps available
• People are afraid of taking iPad outside of home, Starbucks, work, or other places where they feel safe (i.e. not public transit) because they fear theft
• Choice of device to use isn’t based on where user is— it’s about what user wants to do. 
• Phone: quickly checking something
• Tablet: immersive - plan to sit down with for a longer period of time
• Computer: for tasks that require more management/multitasking/typing
• People prefer typing on everything (i.e. phone, computer) except a tablet
• Did see people using bluetooth keyboards primarily if they’re trying to replace their computer with an iPad (although would still often have to turn back to a computer for other reasons)
• Whichever device is most convenient at the time will often be the one they choose to use. For example, they might pull their phone out of their pocket while on the couch, rather than getting up to grab a computer from another room.

Trend 2: The tablet and shared experiences

• Tablet is commonly shared amongst family members
• In the past 3 months more common to have multiple iPads within a house— “I got tired to sharing it so I got everyone in my house one”— much like what happened when computers were growing in popularity
• Shared nature can lead to some problems because no built in multiuser support in iPad & very limited in Android. Puts the responsibility for multi-account support on the app developer
• Facebook tries to support this (to view this, sign out of the FB iPad app and see ability to create other accounts)

Trend 3: Apps vs Web

• Many users are content to use the web on iPad - they expect to be able to access the full version of the website and to have the same level of functionality that they would have from the computer
• Example of a bad app: Target (users felt they were being forced to leave the app to view product details on the website which broke their experience - “what’s the point of even using the app?”)
• Example of a good app: Zappos (users get full functionality of the website, plus ability to interact with pictures, better shopping cart experience, etc.)
• Best Practice: give lightweight help to users during their first use experience, then make help content available (but not in their face) going forward
• Best Practice: use universal app instead of having a separate iPhone/iPad app if possible or users might not realize that you have a different version of the app in the App Store
• Best Practice: website interrupts that alert you that an app is available is fine unless it impedes the web experience (ex: people were frustrated by Yelp which asks them to download the app each time they visit the website). Using a banner or sending an email may be even more preferable.
• People generally update their apps within a month
• See lots of people syncing their iPads to computer, but it’s not as common as syncing their smartphone
• Did observe some users saving websites to their home screens, but these were generally more tech-savvy users or those who didn’t care for apps
• Saw a mix of people who did/didn’t want push notifications. Best Practice: don’t ask users whether they want to accept push notifications until they’ve spent some time within the app and have an idea of how/why notifications might be useful to them

Overall Design Recommendations

1. Design for a “small laptop”, not a “big phone”

• Create fast, intuitive, full featured experiences that are fun to use and better than the web

2. Full web

• People expect a full website when browsing on the iPad browser, so ensure your site is optimized to deliver a great experience. 
• Ex: use HTML5 to customize the keyboard when typing in a datafield

3. Content over context

• Location-specific experiences that are king on smartphones may not be as important on tablets because they aren’t necessarily being brought everywhere
• Instead, focus on rich content and superb UI (especially taking advantage of video & photo)

4. Shared device

• Consider social nature of the device when design log in components, how data is stored, and anything involving transactions/ecommerce
• Ex: Amazon app allows users to view recommendations/watch list without signing in, but user is prompted for password when making a purchase

5. Security fears

• People have no clue about security on a tablet. In all of their testing, they’ve never seen someone who’s set up a passcode on the iPad. The people who are the most tech savvy are the least afraid of security risks… but non-savvy users are more afraid about persistent log in and entering credit card info and will sometimes go back to a computer when they’re required to input credit card credentials
• Tip: reassure users that the privacy/security of your app/website on the iPad are the same as what they’ll find on the computer

In part 2 of this post, I’ll summarize Brennan’s recommendations regarding smartphone/tablet usability testing.

(This post originally appeared on blog.alissadesigns.com on 03/28/12)

 

Instagram is Growing Faster than Anyone, EVER

At SXSW Interactive 2012, I attended the last-minute session with Kevin Systrom and Mike Krieger, Founders of Instagram.

from http://instagr.am/p/IC84fJzYNZ

Background:

• Mike + Kevin + Alexia Tsotsis of TechCrunch
• The talk was not even on the schedule, they came in when Caterina Fake (of Flickr and Hunch fame) cancelled last minute.
• Announced the Android version will finally be available "soon" (to much applause) and they had a "highly polished prototype" working on their Android. So far, Instagram has been iPhone-only.
• They are excited to get to Android because they know that more users = better experience. 

Takeaways on the Instagram session:

• They are the fastest growing thing EVER, period.  Faster than Facebook, telephones, iPods, etc.  Since their launch 1.5yrs ago, they now stand at 27M users.
• Within a few hours of launching, they had 10,000 users. Clearly they were on to something.
• End of day 1, they had 25,000 users!
• Being named the iPhone "App of the Year" at the end of 2011 was a surprise (having so many rabid users obviously helped)
• Kevin was approached by Best Buy to be featured in their SuperBowl commercial.  The most expensive ad in the world they got for free! 
• Kevin appeared in the ad and had to say "I created Instagram...." He was uncomfortable about this and ran it past Mike because he really didn't want to take all the credit. "Dude, its the SuperBowl, do it." --Mike
• Kevin's original app was called Burbn and it was an HTML5 mobile web app that let you: Check in to locations, Make plans, earn points, post pictures, and much more.
• Mike was one of the first users and very passionate about it. They partnered up and became co-founders.
• Saw photos as the one area of Burbn that was widely used. 
• Spent a week prototyping a version that focused solely on photos. It was pretty awful so... 
• Went back to making Burbn, but as a native iPhone app this time.
• Finished it, but felt cluttered and overrun with features, so they never launched it.
• Cut everything in the Burbn app except for its photo, comment, and liking capabilities.What remained was Instagram.
• Launched to friends (beta) 8 weeks later, commercial shortly after that. The rest is history.

Beautiful Bar Codes!?

QR (Quick Response) Codes have become the norm for connecting the real, physical world with the virtual.  Scan in a code using your smartphone, and it takes you wherever the poster wishes.  But they are so ugly and make you feel like you are staring right into a computer's empty eyes.  So here is a collection of the most stunning QR codes I have seen.

They are courtesy of their creators, namely: Angry Birds (Rovio), C21, LA Tourism Bureau, SET/Help Japan, Louis Vuitton, Yellow Pages, and a plain old regular one so you can see how far the beautification has taken the others.

Be careful when getting creative with your QR codes--check that it scans correctly with all the major apps.  My favorite barcode reader?  Red Laser (owned by eBay) of course.  And ensure it actually puts the "quick" in Quick Response codes (optimize the website it takes you to for mobile, and minimize its download footprint).

Why Twitter is Better at Online Identity (I am talking to you Facebook and G+)

This inspiring article on Wired about Christoper Poole's stance on privacy pretty much hits the nail on the head for how I feel. Poole is the guy that started 4chan at age 15, and Canvas, both of which branded him as the godfather of anonimity.  But it could not be further from the truth--he says it's not as much about "who you share with, its about who you share as."  

Google+ could have innovated, instead they copied Facebook in their model of 'one identity' for each user.  People are more complex than that.  While Twitter gets it more than G+ and Facebook, imagine a world where you choose how you share yourself, not who you are sharing that self with. Yes, that is a direct condemnation of Google+ Circles. :)  This coming from a guy who runs 13 Twitter accounts...I speak the truth.

Siri Could Spell the End of Google's Run

I saw today (thanks Natalya) that Forbes is predicting that in 2 years time, Apple's Siri will mature to a point where almost every task will be done through it, and all searches on mobile will use it. Having worked in the VUI (Voice User Interface) industry a good 10 years ago, I couldn't agree more.  What we had back then (the systems that still run on most "phone trees") was pitiful compared to Siri.

What's that, death to traditional search?  Clearly that will put a huge damper on Google's business. They are fighting back with Android and doing OK, but when I hear that Eric Schmidt is not worried one bit about Siri, I can only see disaster for them.

Even before Siri was available on the iPhone 4S, fully integrated into the OS, I was thinking that Apple's app model was a Google-killer.  Its a bit older (early 2010), but still very much true:

"Google’s insurmountable challenge is that the habits of mobile device users are evolving and moving rapidly away from traditional search. ... The successful Apple app is essentially a tiny search engine in a box. It allows the user to efficiently manage their time by preselecting well-reviewed apps based on their interests. Google search may be able to take users to the same place that an app can, but the route will be longer and more uncertain. An iPhone loaded with two dozen apps carefully selected by the user eliminates Google as the primary middleman between the user’s search and their destination."

--from How Apple Killed the Future of Search 

Google, we loved your search, but goodbye...

Droid Bionic Brings Back the Old Cameraphone Days

Remember when putting a phone into a camera seemed stupid? Everyone called it the dumbest combo ever. And for some time, cameras in phones sucked. They sucked bad. No more. Turned out the best part of phones with cameras is that you have it with you everywhere. But what good is always having a great-photo-taking camera everywhere if you can't get capture the action fast enough?

I thought this slide was the most important of the recent iPhone 4S event--time to first shot, and shot-to-shot times really impact the usefulness and experience of your cameraphone! When Droid Bionic users want to take a picture, do they just say to themselves, "whatever, I will get the shot next time" and grab a coffee while they wait for it to start up!?

picture courtesy of gdgt.com from their live blog of the "Let's Talk iPhone" Apple event, 10/4/2011.

Kevin Kelly & What Technology Wants

I attended a talk today by Kevin Kelly, the founding editor of Wired Magazine, at the Creative Good Councils Summit in San Francisco. The guy is amazing and kk.org never fails to amaze me.