Chip Conley

Chip Conley: How Do You Ride a Disruptive Wave?

Having disrupted the hospitality business twice – both in his previous incarnation as Founder & CEO of boutique hotel chain Joie de Vivre, and now as Airbnb’s Head of Global Hospitality & Strategy, it’d be fair to say Chip Conley knows a thing or two about riding disruptive waves. Add his Californian residency and new found passion for surfing to the mix, and you’d be wise to sit up and take notice of his thoughts.

“Surfing is a great metaphor for disruption, partly because it’s interesting to determine if the wave on the horizon is something you want to surf – or avoid. To be a great surfer, you have to understand waves – you have to understand what’s going on under the surface.”

Innovations usually address an underlying need that has not yet been addressed. Great innovations, however, tend to happen in businesses that have the bottom of the pyramid right but haven’t gotten around to asking what the customers really want.

“If we’ve been in an establishment for a long time, we get blinders,” Conley continued. “A great example of this is the birth of the hotel industry in America. The first interstate travellers  – most of whom had never been outside of their state – wanted a reliable, safe place to stay.”

As society changed, however, identikit destinations became boring for travellers who wanted a taste of local flavour and a more personalised experience. This shift – significantly driven by Conley’s boutique hotel venture – laid the foundations for greater change.

“Boutique hotels created a larger standard deviation of quality. Home sharing took it 10 steps further. You may have the best or worst experience of your life home sharing, but travellers today are more adventurous – they want to experience life as a local.”

Airbnb’s figures would tend to agree. “As Ghandi said: first they ignore you, then they ridicule you, then they fight you, then you win. When I first addressed the employees at Air BnB 4 years ago, I told them this is going to be the quote that defines us in the near future.

“Move on 4 years, and the 5 largest hotel chains current have about 2.3 million or 14% of the world’s hotel rooms. Our 2.2 million listings represent 0.1% of all the homes in the world. There’s still a huge opportunity for growth.”

Recognising disruption is one thing. Reacting to it is another thing altogether. Unlike the hotel industry, where 5% of guests leave feedback on average, upwards of 50% of all Airbnb guests and owners regularly leave honest, constructive feedback. This feedback loop is driving constant improvement across the entire ecosystem, while the hotel industry remains in a decade-long growth slump.

So how do you spot the right wave? “When you surf, you don’t have to reserve court time, to buy a ticket, to book a referee. You just do it. If you have a hunch that wave is a good one, ride it and see.” Good advice for future disrupters.



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