![]() ![]() It’s not like they could go around San Francisco knocking on doors. ![]() The problem was, where to find people willing to let strangers stay in their places. “If you don’t have a supply of houses and apartments, people are not going to come,” says Teixeira. The chickens will run for the hills.” LESSON ONE: THINK LIKE A CUSTOMERįrom the beginning, it was clear to the founders of apartment-sharing site Airbnb that they’d need to find people willing to list their homes before finding people interesting in staying in them.Īirbnb expanded its business by finding customers who needed “If you acquire the wrong eggs and ostriches come out, then you are in trouble. “It’s not just the chicken and the egg, you also want to select the right eggs,” explains Teixeira. Spoiler alert: it’s the egg that needs incubating.Īs Teixeira reports in a new HBS case, Airbnb, Etsy, Uber: Acquiring the First Thousand Customers, all three platforms concentrated on getting the service side of the equation first, customers second. He studied three of the best-known and most successful startups-Uber, Etsy, and Airbnb-hoping to find some commonalities in how those businesses solved the dilemma. Preparing to teach a new course on e-commerce marketing next spring, Teixeira made it his goal to find an answer. You can’t have one without the other, but which one do you find first-the customer chicken or the service egg? “As a small company you cannot afford to focus on both with the same amount of effort. “It’s the classic chicken-and-egg problem,” he says. “When you have a two-sided platform, you have to acquire both the customers and the services,” says Harvard Business School’s Thales Teixeira, Lumry Family Associate Professor of Business Administration. “Poaching customers is something all competitors do in different ways” (Same idea as Airbnb, which connects people needing rooms with home-owners.) So to launch as a platform service, these companies need to find users on both the supply and demand sides. ![]() Its platform is two-sided, connecting people who need rides with people who have rides to offer. The challenge is even more difficult with startups in the sharing economy that launch as platforms connecting independent service providers with consumers. New businesses often struggle finding their first customers. ![]()
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