This past summer, I started to expand my business to Toronto. Why Toronto?
Our younger daughter is attending Ryerson there. I also have a history with Toronto, having lived there for two years when I articled for my Chartered Accountant (now Chartered Public Accountant, or CPA) designation with Ernst & Young (now EY, because, you know, initials are cool). My wife attended chiropractic college there. We’d eventually like to spend more time there, especially during the winter.
Toronto, and the Greater Toronto Area that includes the neighboring cities, has 6.5 million people, or 28 times the population and business base of my current home. It’s a big city with all the advantages and disadvantages that come with it.
One challenge with big cities is big hotel costs. Our older daughter had previously recommended Airbnb, but I didn’t listen, until I heard a client talking about it. One of my clients said they always stayed at Airbnb places when travelling on business. At first, I was surprised, and mentioned concerns about security, convenience, consistency, and location choices. However, they assured me this was a wise thing to do and a cost-effective way to visit places.
I followed their advice. Now, I’ve stayed in different parts of the city and figured out where to set up an office; in Mississauga, where 60% of Canada’s Fortune 500 companies have head offices and there are over 90,000 small and medium businesses. I’m planning to set up an apartment in the Leslieville/Beaches area because it has a small town feel with great restaurants and can easily access the major traffic routes.
How Airbnb Works
If you’re familiar with how Airbnb works, feel free to skip down to the next section on Business Lessons.
Airbnb is not for everyone, but it works great for some, including me. It’s not as convenient as a hotel, so for a quick trip, or requiring a specific location, or attending an event, a hotel is the way to go. As I do in any hotel, at an Airbnb place, I still check for bed bugs before I unpack, ensure the windows and doors are secure, and make sure there are working smoke detectors.
The system works like this. People offer up space in their homes for rent through the Airbnb website. You search for a space in your location, with your parameters of what you want (private space, kitchen, parking, laundry, etc.).
I always start by searching for ‘super hosts’ as these people have received numerous high ratings and know what they are doing.
Everyone has photos of their place. If you don’t see windows in the photos, it’s probably a basement suite. Many places are a self-contained suite with a private entrance.
Once you find a place that fits your general location, dates and preferences, you apply to the host to stay there. This includes the important step of sending them a short note to convince them you’re not a crazy psycho and you’ll keep their place clean. They will respond and accept or deny your request.
You’ll get confirmation details with their exact location, a welcome message, and can engage in a conversation through emails and the Airbnb website.
Shortly before you arrive, the system starts sending you messages, and your host greets you.
When you arrive, you may be greeted personally and given a key or emailed a digital code for the door. All hosts have been highly responsive to any of my questions or requests, such as for more dish soap (few have dishwashers due to the water risk, I guess).
Once you enter, you’ll find a variety of things that make life easy when you travel. These include a stocked kitchen for basic cooking and the usual hotel supplies of towels and soap. Often, there is a welcome basket. This has ranged from a couple of water bottles to a basket with snacks and wine. One fridge even had some beer.
The main benefit is that you get more space, usually much more space, than a hotel. And it’s quieter: no elevators dinging or other hotel doors slamming. At the last place, I chatted with the neighbor and then he helped me clear heavy wet snow off my car. Only in Canada, eh!
At the end, you review each other on Airbnb’s site. Some of the review is private feedback, just for the host, and some is public, for other guests to see.
Business Lessons from Airbnb
From the Airbnb experience and business model, here are lessons for your business.
- Communicate early and consistently with all customers and prospects. Make them feel welcome and that you appreciate their business.
- Explain to your customers how you do business. They may not know, or they may have other expectations.
- Make it easy for your customers to communicate with you throughout the process.
- Proactively check in on your customers to see how they are enjoying your product or service.
- Add some little things that show personal attention and probably don’t cost a lot, to enhance your customer’s experience.
- Codify your systems and processes to ensure that you could meet the ‘super host’ criteria for your industry.
- Consider what you would change or do differently if you knew your customer was going to post a public review for all to see.
- Think about technology that can significantly impact your business in the future. How can you use technology now to strengthen your customer service and experience?
Airbnb has an interesting business model where I believe it takes 20% of the rent, the company has cash in the bank despite ongoing losses, and may be positioning itself to go public in 2020, according to this CNBC article.