An essay on Airbnb strategy

As part of my MBA, we did a module on strategic thinking. It involved reading a book called Good Strategy Bad Strategy by Richard Rumelt

When I attended the class I hadn’t focused on Airbnb as my subject matter. As I’ve now finished my studies I decided to correct this and last week I wrote an essay about strategy and hosting.

I mixed it up with the stuff I am reading now reading which is this one called “The Hidden Persuaders”. Not quite finished this book yet as its a tough read. It was written in the 1950’s mad men type era. But is very convincing.

Here are my musings so far if you are interested…

Incidentally, I just had my preliminary grade for my MBA… DISTINCTION!

Pretty darn pleased with myself.:sunglasses:


Thanks Paul that’s an excellent read!

1 Like

@Mexican, my pleasure. Thanks for your comment.

I enjoyed your essay & while my family loves to play cards & games it never occurred to me to offer them, thanks! I do provide a nice selection of used books that they are free to take, a package of information on my area (Cody, WY & Yellowstone National Park) that are available from our local Chamber of commerce, including the bag, postcard, sticker & more. I have also framed maps for my area but they are also included in their package. I especially agree with your point about personally greeting guests, I’d say 99% of them mentioned that favorably in their review.

For “5. Sense of power” I like the door jammer thing but I just went ahead with the swing bar door lock like you see at hotels. I got (2) for $13 off ebay. I’m wondering how else I can give guests power? I’d like to give them control of the thermostat but unfortunately its central heating and cooling and there are other people in the house.

I’m thinking “6. Love objects” is important because I’ve had people ask me before if their car is safe to park in the driveway or on the street etc. I have a camera system outside and its technically possible for anyone to access from a PC or with an app on a smartphone. I set it up and tested it so that instead of a baby monitor, they can just use their smartphone or PC to check on their car.
I might try getting a lockbox or safe for the rooms too to keep other valuables protected.

It’s partially a mind game. One of the things about long lists of rules is that those are about the host’s needs not the guest’s needs. So if you are planning to test out Paul’s ideas maybe have fewer rules rather than more rules.

1 Like

@KKC “It’s a partial mind game” I was moved to lift a line from my research…

“Guests are not simply transacting tangible goods they are engaged in an emotional exchange with their hosts. (Fehr & Gächter 2000) finds that in a purely social situation contractual ambiguity reigns, and in their opinion action is driven by belief rather than contractual rules”.

That’s a bit wordy, so I’ll translating it a bit…

I believe in the research done by Fehr & Gächter. If you create a social relationship with guests then they will refer to their internal set of golden rules as to what they think is appropriate. If you create a contractual set of rules your guest considers that they are in a market driven relationship which runs the risk of people working only to those rules.

Of course, there is a risk both ways. If you rely on your guest’s internal sense of right and wrong, you may find it conflicts with yours. That said, it is my anecdotal experience that the trust you offer is reciprocated in many ways.

@Mexican, if you think of ways to elevate your guest’s power I’d love to hear them.

Fehr, E. & Gächter, S., 2000. Fairness and Retaliation: The Economics of Reciprocity. The journal of economic perspectives: a journal of the American Economic Association, 14(3), pp.159–182. Available at:


I think I understand and I’ve definitely experienced that the more rules there are, the worse the behaviors get.

I edited my rules down. They looked like this before:

  1. Remove shoes at the door.
  2. Keep the front door locked at all times.
  3. No smoking or vaping inside.
  4. Turn on the bath fan when taking a shower

Host will ask for ID.
The driveway is on CCTV.

Now it just says:

Please keep the entrance door locked at all times and remove your shoes at the door.

The driveway is on CCTV.

1 Like

We’ve not locked our doors in 30 years of living here. The only part of my property with keys is the ABB unit - go figure?


Me too! I suspect that I may alter my behaviour if I get a break in.



An insightful read (once I got past the initital academic fluff.) I believe that has been the sucess of my AIRBNB experience is the focus on the guest and a welcoming environment.

Thanks for your kind words though I appreciate it @teak1051. :grin:

I used to think that academic stuff was “fluff” too, but as I have got on a bit, and frankly as I have become an academic (of sorts), I have re-evaluated.

I now think that the way to elevate an idea from just being an opinion is to “stand on the shoulders of giants”. In short, use the work of clever people that have thought and experimented on an idea really hard and use it for a practical purpose.

Sorry… I’m off lecturing again.:roll_eyes:

Seriously thanks for your comments :heart_eyes::grinning::grinning:

1 Like

Always love your articles, Paul. Thanks :+1:

1 Like

Very nice. You know how to net things out s well. thank you for sharing. i sent to my host.

1 Like