AirBnB vs Booking.com….your preference?

AirBNB

Having spent the last week immersed in ‘Platfirms’ (platform businesses) I now have some time to reflect as we leisurely wind our way through the French Pyrenees. In preparing for this trip I drew on my favourite accommodation platforms Airbnb and Booking.com. I’ll be up front and say I do have a preference for Airbnb. However, Booking.com tends to come into its own when looking for more affordable accommodation in the larger cities or towns. Putting this aside however, and reflecting on one of the key messages I have been making around relationship centred measures over simple activity measures, I can see a subtle but clear difference between the two platforms when it comes to relationships. Both sites are B2C businesses looking to facilitate strong relationships between their suppliers (properties) and customers (consumers) through the social media they enable. I recently published this diagram to identify potential relationship connections being facilitated by platform businesses.

Social Analytics

In this age of social, all of us are potential critics, and our comments form a major part of the buying decision for our fellow consumers. The relationship between ourselves and our fellow consumers is however only passing. We mostly care about the content. We don’t tend look to build a real relationship with those making the comments. While I don’t have any experience on the supplier side of these platforms, I suspect the property owners aren’t necessarily looking to build strong relationships with fellow property owners, other than to perhaps learn how to best represent their properties to prospective customers, by viewing competitive properties. In other words, for the most part, social media B2C platforms are really only building quite shallow relationships, centred around the media provided, with the express goal of closing transactions. Nothing wrong with that. In fact, this is exactly why the platform approach has proved so stunningly successful in this B2C marketplace.

Now let’s go back to my personal preference for AirBnB over Booking.com. I can talk about the variety of properties and situations; sometimes the attractive pricing, but I want to focus in this case on the relationship I can form with the property owners. For many of us, the biggest risk we take in booking accommodation in far flung, previously unseen places, is the unknown of things that might go wrong. That’s why we tend to look more closely at the negative comments a property might receive. What differentiates AirBnB from Booking.com in my experience is the way it encourages you to connect and converse with prospective hosts i.e. build a personal relationship. I tend to do this, if only to provide assurance that the pricing and availability is up to date. AirBnb measures host responsiveness to encourage these interactions. It also gives the host the opportunity to ‘personalise’ the ‘transaction’. And the more you converse before arriving, the more likely it is that your stay will feel more like staying with a new friend, than simply a property owner. It is these experiences I tend to remember and recommend to my friends. Of course you can use AirBnb, just like Booking.com, as a booking service; and I have done this too. Most of the times it works out fine. But certainly the times when things have not worked out so well are when we have relied solely on the ‘media messages’.

To be fair to Booking.com, it does target commercial properties, where your contact is more likely a staff member, than the owner. That said, it wouldn’t do any harm if commercial property owners encouraged their staff to converse online with prospective customers, as if they were the owners. And when this is encouraged and even facilitated by the platform, it is less likely that the supply side would feel exploited. In fact we can see now that Uber is acknowledging driver groups banding together in a union style arrangement. Perhaps the addition of relationship centred metrics may also be able to predict platform performance in the B2C world as well?

We would be interested in hearing your relationship experiences with ‘platfirms’ like Airbnb and Uber.

Hong KongOn a lighter note on this trip we had a long day stopover in Hong Kong, so we were looking for an inexpensive hotel to freshen up during the day. We did use Booking.com, which duly provided us with many options along with many comments about the compact sizes of the rooms and the mode of access, usually through a hawker’s market. All I can say is that if anyone were to come up with an innovation around ‘stand-up’ hotels, it will likely happen in Hong Kong!

 

 

 

 

The Age of the ‘Platfirm’

Platfirm? Is this a made up word? Well actually yes. It’s the term Open Knowledge have coined to describe businesses whose core business model is the platform. The ‘Platfirm Age’ is the theme of this year’s social business forum (#SBF16) held in Milan, Italy each year. Essentially a ‘platfirm’ is a firm that facilitates exchanges within a business ecosystem of suppliers and consumers. The popular examples of ebay, Airbnb, Uber and Amazon are regularly talked about in platform conversations. In opening the forum, Open Knowledge Co-founder Rosario Sica provided some compelling statistics to demonstrate that we are indeed in a new age of platform enabled business models. In Apple, Google, Amazon and Facebook we now have 4 of the top 5 companies in the world, by market capitalisation, being ‘Platfirms’. The issue of ‘Platfirm immigrants’ (as opposed to ‘platfirm natives’) was highlighted as a continuing challenge for traditional businesses wanting to get on the ‘from foot’, in either protecting or enhancing their businesses though platform thinking.

Platfirm blog

Keynote speaker Sangeet Paul Choudary was an excellent choice to lead the discussion. He and his co-author’s recent book on the ‘Platform Revolution’ provided the deepest coverage yet on just what makes platform businesses tick. Having read both this book and his first book Platform Scale I was pleased Sangeet was able to offer some new insights. One statement “What is good for the platform is bad for the ecosystem” brings to mind the power of a platform like Uber to be able to at times exploit both its suppliers (drivers) and customers with its pricing policies. One could appreciate now that powerful platforms relying purely on market forces could have the same negative impacts as a monopoly provider. On this point Sangeet was in favour of some regulation to guard against inappropriate use of market power. The other plea from Sangeet was his desire to see platform business opportunities in ‘public good’ applications, especially in developing countries. I think I would summarise Sangeet’s speech as ‘do good, not evil’, a refreshing perspective from a genuinely nice guy.

Sangeet was followed by several others developing ‘platfirms’, too much to report here (not the least because many of the speeches were in Italian, and my Italian is limited to food choices!). One interesting application worth reporting on and I think addresses Sangeet’s ‘do good, not evil’ maxim was from Michele Casucci, founder of Certilogo. Certilogo’s mission is to drive fake products out of the market. Now we have all probably bought fake Italian products in low cost market places before; well at least I have. But I was fully aware I was buying fake products at a very low price. And isn’t imitation the best form of flattery? More insidious though are the fake products sold at genuine prices. And on reflection it’s probably a good idea not to buy any fake product, as I suspect that those manufacturing even the cheap imitations are being exploited for their efforts. So I think Certilogo certainly meets the ‘do good, not evil’ maxim. How does it work? Certilogo crowdsources information from people who have purchased, or are about to purchase from expensive brands like Versace, Moschino, Paul & Shark etc. and then matches that information with supply chain data sourced from the brands that they support. In this way they can authenticate a product as genuine or fake in a matter of seconds. Like a classic platform, there is value exchanged on both sides. The brands get to find out where fake imitations of their product are being sold. The customers can find out whether they are buying, or have bought a genuine product or not. And perhaps by driving the producers of fake product out of the market, they are helping remove less scrupulous manufacturers, who are potentially exploiting workers in developing countries, to develop their goods.

The HBR Italia supplement published in support of the forum is certainly worth a read and is available here in English.