Browsed by
Month: October 2017

Airbnb: Not an overnight sensation

Airbnb: Not an overnight sensation

 

So the accepted norm for the stellar internet based brands seemed to be that it all starts with a couple of college mates who have a flash of inspiration, an idea which will engage and better the world.

They set up a website which becomes an overnight sensation, quickly leading to world domination.

Somehow reality isn’t quite like that.
the airbnb partners

Joe Gebbia and Brain Chesky fit the mould, in so far as they met in 2002 at Rhode Island School of Design.

Gebbia had form when it came to “entrepreneurship”. He had designed a cushion for back sufferers and built a website for product designers to find eco-friendly resources, which he pitched as a ‘sort of Amazon for sustainable materials’. Unfortunately neither had delivered much success and certainly not on an Amazon-ian scale!

Chesky had recently left his job as a designer on the Simon Cowell show ‘American Inventor in LA’. He said ‘the last straw came when I designed a new kind of toilet seat’. He moved to San Francisco to share a flat with Gebbia.

However it was 2007 and Gebbia and Chesky were struggling to pay their rent. They needed some cash and they needed it fast. Their need coincided with an up-coming design conference which was based in San Francisco, but rather than try and sell their design skills to the event organizers, they noticed that the city’s hotels were fully booked, and came up with a lateral idea. It was not an idea to better the world but to earn them their rent!

original logo

Could they rent out the space in their flat to people attending the conference?

They bought three airbeds, decided to sweeten the offer with the promise of breakfast and created the not very originally named ‘airbedandbreakfast.com’ website. The cost was $80 a night. Six days later they had their first customers – a 30-year-old Indian man, a 35-year-old woman from Boston, and a 45-year-old father of four from Utah sleeping on their floor.

Wondering if this could be something bigger, they got together with their old roommate and programming expert Nathan Blecharczyk, to try and build a business.

For the first for months, they worked on a roommate-matching service until they realized Roommates.com already existed, at which point they went back to working on Air Bed and Breakfast.

They launched the brand for a second time and no one noticed.

The third time, they decided to target a time and place when the local hotels should be full. It was SXSW in 2008, but they only had two customers, and one of those was Chesky. Perhaps not too surprisingly their attempts to raise capital weren’t going well either. They approached 15 angel investors and got eight rejections, and seven more who ignored them completely.
Still preserving they tried again. Barack Obama was due to speak in Denver at the Democratic National Convention, and 80,000 people were expected to be there so again, there was likely to be a shortage of hotel rooms.

Gebbia, Chesky and Blecharczyk with a new website launched two weeks before the conference. Within a week they had 800 listings – everything should have be looking good. However given their costs, it looked like even with these 800 listings they werenObama Os’t going to make any money.

Luckily a PR stunt would come to their rescue. They had bought bulk quantities of cereal and designed packaging branded as ‘Obama’s O’s’ and ‘Cap’n McCain’ cereals. They sold 800 ‘limited-edition’ boxes at $40 each and made more than $30,000.

Their activity also attracted a Venture Capitalist called Paul Graham. Graham invited them to join Y Combinator, a prestigious start-up accelerator that provides out cash and training in exchange for a small slice of the company. The company spent the first three months of 2009 at the accelerator, working on further improving their offer.

Their lack of success with other VCs continued, and looking back Fred Wilson of Union Square Ventures admitted to one of those “guitar music is on the way out” moments – “We couldn’t wrap our heads around air mattresses on the living room floors as the next hotel room and did not chase the deal. Others saw the amazing team that we saw, funded them, and the rest is history.”

One thing that did change (perhaps because of feedback like this) was that in March 2009 they dropped the Air Bed & Breakfast name and simplified it to “Airbnb” to avoid the confusing associations with air mattresses.
airbnb 2009

One month later, Airbnb picked up a $600,000 seed investment from Sequoia Capital and from there the brand really began to take off.

And the moral is that most innovations aren’t overnight sensations and take time to build. What idea of yours deserves more time and perseverance?

THE BRAND THAT WENT DOWN THE DRAIN

THE BRAND THAT WENT DOWN THE DRAIN

newcastle1

Newcastle may be not the first place you think of when you’re asked about a centre of innovation, but today’s story will be the fourth one that I have written about brands that were born in the city.

Having written about Lucozade, Greggs and Newcastle Brown Ale, this week’s brand story starts with a dentist before it literally goes down the drain.

Wilfred (sometimes spelt Wilfrid) Augustine Handley followed in his father’s footsteps and became a dentist or rather what at the time was called a ‘dental mechanic’. Father and son practised at the family home at 309 Chillingham Road for many years.

Wilfred’s big idea however started with what was a waste product, sodium hypochlorite. He bought it from the ICI chemical works at Billingham and used the compound to whiten dentures (and maybe even teeth!)

domestosjarimg_0113edresizedWilfred knew it had wider potential and started to dilute and bottle it.

In fact, bleach which is what he was working with, had been around since the eighteenth century, and in the late nineteenth century, E S Smith patented the chloralkali process of producing sodium hypochlorite, which had started to be sold as a bleach under a number of brand names but none with any great success.

Wilfred didn’t therefore actually invent bleach, but what he did do, was to get the marketing and distribution right.

First he chose a brand name. According to current owners, Unilever he chose a combination of the Latin ‘domus’ meaning house and the Greek ‘osteon’ meaning bone, suggesting ‘backbone of the home’.

The Handley family tell it a little differently: Wilfred asked his mother what his product should be called. Before answering, she asked what it was for and when Wilfred replied, ‘Domestic use‘, she came up with ‘Domestos’.

His second innovation was again not a completely original idea either and was probably inspired by the success of another local branddomestos-bike; Ringtons Tea, which had been established in Heaton in 1907. Ringtons sold door to door in the area with great success and that was what Wilfred decided to do too.

He bottled Domestos in large brown earthenware jars, which then could be refilled by door to door salesmen pushing hand carts or riding bicycle carts.

The bleach was promoted as a cleaning agent to whiten whites and to to pour down and ‘sweeten’ drains and was a real success. By 1933, goods were being shipped south to Hull by sea and, within two years, supply depots had opened in both Hull and Middlesbrough.

The brand prospered in wartime when additional uses for the brand included being a cure for sore feet and a treatment for burns. The end of the conflicts could have slowed things down as the company was unable to acquire enough delivery vehicles.

Showing more ingenuity Dosmestos overcame the problem; they bought the St Ann’s Works at Heaton Junction and set up their own coach building division. By 1952 there was national distribution with offices in London, Manchester, Cardiff, York and Glasgow and a national research laboratory.

Domestos-OG-1-25LIn 1961, Wilfred sold the brand to Lever Brothers Ltd.

Frisky and Playful

Frisky and Playful

1953-playboy-logo

Hugh Hefner died this week so I thought about a story about the Playboy brand was an appropriate way for me to commemorate the event – so here is one I wrote for my first book of brand fables – “The Prisoner and the Penguin”

Frisky and Playful 

In 1959, a reader sent a letter off to his favourite magazine but instead of writing an address he drew a picture of a rabbit wearing a bow-tie on the envelope. The letter was duly delivered to the Playboy offices.

Things had obviously come a long way in the six years since Hugh Hefner launched his new magazine.

The title for the magazine was supposed to be “Stag Party,” but an unrelated outdoor magazine, Stag, contacted Hefner and informed him that they were legally protecting their trademark and would take him to court if he were to launch his magazine under that name.

Hefner, his wife Millie and co-founder and executive vice president Eldon Sellers met to discuss the problem and to seek a new name. Among others they considered “Top Hat”, “Gentleman”, “Sir'”, “Satyr”, “Pan” and “Bachelor” before Sellers suggested “Playboy”.  Sellers’ mother had worked for a short-lived firm called Playmarilyn-monroe-1953boy Automobile Company in Chicago and remembering it Sellers thought it might be a good alternative.

The first issue of the now re-christened magazine was produced in Hefner’s Hyde Park kitchen and published in December 1953.  The first centerfold was famously Marilyn Monroe, although the famous cover photo had originally been taken for a calendar and not specifically for Playboy.

It was an immediate sensation; it sold out all of its 50,000 circulation within a matter of weeks, which despite his confidence must have delighted Hefner. He had in fact been so worried that the original issue did not carry a date, as he was unsure if or when there would be a second issue.

After this initial success the next challenge was to create a brand identity. While the most obvious solution would have been to develop a stylish image of a ‘playboy’, Hefner and his team realised that there were already two other magazines on the newsstands that used men as their icons – Esquire and The New Yorker. So rather than face another threat of a lawsuit Hefner decided something different was needed.

hugh-hefner-classic-780x439

‘I selected a rabbit as the symbol for the magazine because of the humorous sexual connotation, and because he offered an image that was frisky and playful. I put him in a tuxedo to add the idea of sophistication.

There was another editorial consideration, too. Since both ‘The New Yorker’ and ‘Esquire’ use men as their symbols, I felt the rabbit would be distinctive; and the notion of a rabbit dressed up in formal evening attire struck me as charming, amusing… and right.’

art paul -playboy-logo

The actual logo, depicting the stylized profile of a rabbit wearing a tuxedo bow tie, was created by art designer Art Paul who said some years later  “If I had any idea how important that little rabbit was going to be, I probably would have redrawn him a dozen times to make certain. I was doing him justice, and I suppose none of those versions would have turned out as well as the original. As it was, I did one drawing and that was it. I probably spent all of half an hour on it.” 

And the moral is that design should signify something you stand not just identify your name. What does your identity communicate about your brand?