How would you expand Airbnb? [Product Management Interview Question ]
 |
| Image source - https://www.bbc.com/news/technology-50315546 |
Interviewer: You are a PM at Airbnb. You are given the task to expand Airbnb. How would you go about this?
Priyanka: To get a better understanding of the problem, I would like to ask few clarifying questions.
Interviewer: Please go ahead.
Priyanka: Firstly, I would like to clarify my understanding of Airbnb. It started its services with room renting and soon adopted a marketplace model where hosts can list their properties and guests can book the properties. Airbnb earns commissions for each of the bookings made in exchange for the value provided to both hosts and guests. Airbnb operates on an asset light model and does not own any of the properties listed on their platform. Airbnb has also started virtual tourism by providing online experiences or a new way of travel where people can tour a place virtually.
Interviewer: Yes, that is well defined.
 |
| Image Source - https://www.airbnb.co.in/s/experiences/online |
Priyanka: When we think of expansion, it could either be expanding to new geographies or product expansion or creating a new business vertical. I would like to understand what the goal of expansion is.
Interviewer: The idea of expansion is to increase the revenue for our company, and we can think of expanding to new business verticals.
Priyanka: Covid-19 had taken a toll on the hospitality industry and tourism was really down. Airbnb also faced severe losses and now with tourism going back to normality, Airbnb has started recovering but having new use cases will definitely give our company room to grow further.
Interviewer: That is true.
Priyanka: Since we are targeting on increasing the market expansion for Airbnb through new business verticals let us try to understand potential use cases. As work from home had become a norm during the pandemic, a lot of companies had sold their office spaces which they had leased/rented. With employees returning to work, companies need office spaces. However, a lot of companies do not ask employees to come to work every day and are looking for more flexible options. This can be potentially powerful use case which Airbnb can explore.
Interviewer: Sounds interesting
Priyanka: I wanted to understand are we planning to design a separate app or use the existing Airbnb app? In my opinion, we should integrate new use cases in the existing app as we can leverage the existing userbase.
Interviewer: We can continue with the existing app.
Priyanka: Is there any specific geography where we are planning to expand our new business vertical?
Interviewer: We can focus on global expansion.
Priyanka: Is there any time/resource constraint that I should consider? This will help me in prioritising our features later.
Interviewer: Yes, we want to have the features rolled out by end of 2023.
Priyanka: Just to recap what we have discussed till now; we would like to increase the market penetration for Airbnb globally by introducing new business verticals. We identified it to be office space renting as it is in a related industry as that of Airbnb. We plan to integrate the use case in the existing Airbnb app by end of 2023.
Interviewer: That is well-summarised.
Priyanka: Okay, the way I would like to structure this is, we will discuss the different user segment and then focus on a specific one. We will discuss the pain points they face. Then we will find out ways in which Airbnb can address those pain points and have a better positioning. Post that, we will talk about the metrics to track whether our goal is being achieved or not. Are we aligned on this?
Interviewer: Yes
User segment:
Priyanka: Since Airbnb has a marketplace model with both hosts and guests so we should look at both the perspective:
Owners: who may have extra space available for renting or these could be companies whose office space are underutilised as they have not shifted back to full-fledged work from office model, or they work from office only on specific days. This can also be an additional source of money for them.
Office who would rent the space: These could be any small-sized companies like start-ups or freelancers who want to work along with their colleagues and have some in person interaction.
Prioritisation of User segment:
While we need both the user segment for our model to work, it makes more sense to start onboarding the owners on the platform first and thereby build a strong supply. Then we can launch marketing campaigns for our new features to attract the companies who need to rent office space.
User Journey of Owner:
Create Account -> List Property -> Find someone willing to rent/share space -> Create lease/rent agreement -> Close the deal
Pain Points of User segment:
- As an owner, I want to easily find people who are willing to rent the extra office space and showcase them the space that I have
- As an owner, I want to earn a fair price for my property
- As an owner, I find it cumbersome to manage documentation or agreement for my rented property
- As an owner, I am worried about the security of the place
Prioritisation of Pain Points:
Interviewer: Yes, we are aligned.
[Solution to pain point 1]
- Inbuilt Video calling: We can provide owners with a video calling feature through which they can display videos of the office property and give other details
- 3-D Virtual tour: As an owner, it is convenient if I can put a 3-D virtual tour of my space so that people can watch the video and get an idea of how the place looks like. People can gauge whether the space suffices their requirements or not and check out the amenities as well.
- Chat bot assistant: There can be a chatbot assistant which can answer basic questions related to the property like locality, no. of rooms, conference rooms, seating capacity, amenities etc. The owner can input all this information and rather than the owner himself answering every query the chatbot can handle them.
[Solution to pain point 2]
- Rent estimator AI tool: Airbnb already has a rich set of data on properties along with their prices. It can build a price estimator ML (Machine Learning) model which can define the rent an owner can set for their property basis parameters like amenities, floor area, locality, dimensions, etc. It can consider factors like seasonality also and suggest fluctuation in prices accordingly.
[Solution to pain point 3]
- Easy documentation: Airbnb can partner with third-party like Adobe sign or Docusign through which it can help the owners handle the lease agreement with ease. This will ensure that all the agreements are documented on time in a hassle-free manner without both parties meeting physically.The cost can be borne by the owners or renters, but it will make the process of rental agreement hassle-free for them. In the long run, Airbnb can develop an in-house tool to support easy rental agreements which can be an additional source of income for the company.
[Solution to pain point 4]
- Insurance: Owners can sign up for insurance against any damage done to the property. Airbnb can partner with insurance companies and provide insurance to owners. While this might be an existing feature for Airbnb, we will have to integrate this for the office space renting LOB also.
Metrics:
To gauge the success of our feature, we can track the following metrics:
- % increase/decrease in revenue
- # New owners onboarded on the platform
- MoM growth in properties listed on the platform
- % Owners using the rent-estimator tool
To summarise, we discussed what Airbnb is and how Airbnb can diversify itself. We narrowed down our problem statement by saying we will focus on creating a new business vertical - office rental space and established how it is a beneficial use case in the post-pandemic world. We focused on creating a strong supply on the platform and hence prioritised owners who have extra office space to rent. We discussed the user journey of the owners and identified problems faced by them. We brainstormed on potential solutions. Lastly, we identified metrics that will help us track whether we accomplish our goal or not as well as increase the adoption of our features.
Interviewer: I really like the features you defined, and it is well-summarised. Thank you. -- Technomanagers.
Subscribe to our Youtube Channel - Technomanagersagers, Product Management Interview Question
Comments
Post a Comment