Curriculum - How would you increase bookings on Airbnb?

let's say you're a pm at airbnb how would you increase bookings [Music] hey everyone welcome back to another exponent product manager mock interview my name is kevin way and on today's show we have phil phil's going to be going through a strategy question today and before we go into that phil do you mind just telling the audience a little bit about who you are yeah well hey everyone my name is phil i'm currently a product manager at google working on android messages which is for those of you who don't have an android the pre-installed texting

app on almost every android device and i'm the pm responsible for the actual conversation experience so ultimately the team tries to answer what does it really mean for you to feel connected to the people you're talking to and what sort of experiences can we build to deliver that before that i started my career at google on the youtube ads team where i got to build youtube tv's advertising platform so um yeah that's that's me in a nutshell thanks for having me on today kevin really excited to do this with you absolutely and thanks for your

time to come on the show so like i mentioned we're doing a product strategy question for today's mock so this is a question i'd like to ask for today's mock let's say you're a pm at airbnb how would you increase bookings hmm how would i increase bookings for airbnb uh i have some thoughts uh but you know just to make sure we're kind of making the right assumptions and discussing this at the right level of altitude can i can i ask you some clarifying questions of course yeah um so i i do want to understand

i think my role in this scenario a little bit so do i own a specific part of the airbnb experience or can i assume that i'm setting a sort of holistic strategy that can impact multiple surfaces on airbnb yeah let's say that you have free reign to impact any service you want got it um and did you have a specific segment of users in mind or a market or is that also up for up for me to decide yeah that's a good clarifying question i'd say it's up to you and if you pick a specific

segment maybe you can let me know how you prioritize that yeah awesome um and then this is interesting because you mentioned like top-line bookings and so interesting if we should think about should we increase bookings by attracting new users are we trying to increase the frequency of bookings for existing users also happy to decide but want to see if you had a point of view yeah i don't have a specific point that i want to go towards so either new or existing users whichever one you think gets us the most roi okay um and then

yeah any any other constraints i should be aware of or you know free or free reign on that as well um yeah i'd love to hear like any number of ideas you have but maybe we can keep the timeline at like a two year horizon okay that sounds good um so to make sure i think i structure kind of our conversation properly um you mine give me a moment so i could kind of think through what the the right structure and framework is yeah for sure yeah so let me do i think a little bit

of sign posting on how i think i'm gonna try to work through this problem um essentially i think it's it's four steps so i think step number one let's just start by defining i think what success looks like so yes obviously you could say success is increasing bookings but there's a million possible ways we could move this metric you can you can imagine we could spam customers with notifications we could lower prices on listings in an unsustainable way but you know all these tactics are value destructive um but i do like starting with the defining

what success looks like because it forces us to identify what problem we're trying to solve for our customers and whether you know we're uniquely aligned um with airbnb's overall mission um so step two you know let's segment those users and identify their pain points and prioritize them step three i think we'd love to do some brainstorming you know what are some hypotheses we have for how we get us to this this good outcome uh and then step four is you know let's talk about what problem do we prioritize solving what's our solution and if we

have time at the end we'll talk to you about what data we look at to verify that we're doing the right things uh i'll pause there how does this how's this approach down to you um anything you'd like to add or any additional details yeah this approach sounds good let's get into it yeah all right so step number one uh which i think i have written here is defining success um so to define what a good outcome is let's think about what problem airbnb is uniquely positioned to solve for its customers in my mind i

think the unique value airbnb provides is that it's the best possible way to experience travel that's i think unique and authentic to the destination you're going to so if you think about their history a little bit started with you know crashing on someone's couch on people's homes and yes that was a cheaper alternative than staying at you know some faceless hotel chain but they did a really great job of framing that experience in a way uh where you got to like really immerse yourself in the culture and the lifestyle that community and this is a

bit of a ramble but i think i mentioned that early because i think as we start brainstorming pain points and solutions it'd be good for us to keep in mind that our original ethos and and mission statement um so let me write that down really quick just so i don't lose my train of thought um and specifically the mission is you know we want users to experience travel authentically um and so back to our good outcome uh beyond i think our good outcome beyond just like moving this bookings metric i think is that i think

what we really want to accomplish is that when whenever someone wants to travel hopefully airbnb is more frequently the service that's top of mind for them because they know that it's the best possible service to um experience this unique and authentic experience but it's kind of cool right like in a way we've sort of reframed the question um we're not just increasing bookings in absolute terms what we're really trying to do is you know people are traveling probably like three or four times a year maybe and what we really want to do is of those

three or four times let's make sure airbnb is the service that's top of mind for them because of the unique experiences we provide so i think if we had to define a northstar metric it's essentially i think increasing annual bookings per user um per year um and that's really kind of like our indicator of whether or not airbnb is sort of offering the best possible um experience um i'll pause it does that does that logic sort of track track with you yeah that makes sense if you were to kind of break that down into maybe

like a specific formula would there be something that you would be looking at like maybe optimizing for quantity of knights or something else yeah i guess i guess that's a good question about what we define as a booking right um so yeah maybe we could dig into it in my mind initially it was just bookings as like one unit irrespective of how long it was but to your point yeah there are reasons to kind of track knight stayed on airbnb so i'll rephrase actually i like that our north star should really be in a given

year how how many nights is someone staying on airbnb that's a good point appreciate you for pointing that out cool yeah um and you know i'll mention too because this aligns with kind of our north star metric um the important thing to keep in mind is that like i think travel is seasonal and has natural plateaus so hypothetically if someone is booking three or four times a year staying at airbnb like 10 to 14 times a year max it's probably not realistic for us to assume that organ makes such drastic of a change where they're

suddenly staying 30 40 100 nights a year so uh let's let's keep that in mind as well um with that i think we could talk about i think customers and their pain points that sound good to you yeah yeah sounds good yeah um might give me a minute to think about this i kind of kind of want to think through what the right segmentation is cool yeah so if it's all right with you kevin i think for the sake of time uh just to add some guardrails here i i'll focus primarily on guests for now

airbnb 2 side marketplace but um i want to focus on the guest experience if that's all right with you but obviously like whatever we do for the guest we should be mindful that like whatever recommendations we provide doesn't obviously impact the host side does that sound good to you before i talk about segmentation yeah yeah that sounds good yeah and i think there's a lot of different ways we could segment um but i think i gravitated towards sort of these two dimensions um we could talk about this dimension of business travel versus leisure travel where

leisure travel is just someone booking a trip for fun and business travel is you know you're booking a trip for work sometimes through your employer who have partnerships with hotel chains et cetera and then the second intent is someone that's a high intent traveler versus a low intent traveler and i think what i mean by high intent is that this is someone that's at this very moment um looking to actively book travel right now whereas low intent travel is someone that's used airbnb before but probably not traveling isn't super act of mine top of mind

for them they probably don't even have the airbnb app kind of downloaded on their phone at this very moment got it and just to clarify a little bit so this is high intent to travel not high intent to use airbnb when they travel yeah high intent to travel yeah i intend to travel in general um yeah and i'll note too i think we could have segmented on a lot of different dimensions we could have done solo versus group travel probably could segment it by like age who have different travel expectations like millennials versus um gen

z boomers etc i think i gravitated towards this because like i think without any data in front of me just have some intuition but i think the calculus would be a little different like you know had a data science team and things like that um so with that said i think the next thing we should talk about is probably which segment should we kind of target and prioritize and why and when i was kind of going through going through this my intuition tells me that we should rule out business travelers i think for the following

reasons i think yes they're a new kind of target market it could be really exciting but there are also the sort of travelers who i don't think value the sort of authenticity and uniqueness that airbnb provides going back to kind of our unique core value they value convenience and they're probably better served by i think hotel chains that their companies might already have existing relationships with and i think it's also it'd be a pretty risky bet strategically for airbnb to onboard you know a totally new type of supply just to cater to this new demographic

so you know i think it makes sense for us to stick with i think airbnb's original market which is leisure um but now the debate is high intent people actively looking to travel and book right now versus low intent which is you know not really thinking about travel etc yeah yeah that makes sense to kind of think more about the leisure side i can definitely imagine for business side a lot of these people are already set on hey i want to earn my status or my points through these hotel chains i want to get room

service and it's going to be really hard to change the behavior of hosts who majority of them are probably very hands-off when it comes to uh booking between chicken and checkout so yeah um yeah let's definitely focus on the leisure yeah and then now i'm debating between i think high intent versus low intent thinking about high intent a little bit let's go through their pain points um so if i'm a high intent traveler i already have a set date i like where i have a destination and right now i'm really just looking for listings and

experiences and i think they're considering things like best price location etc and i think of a lot of resolving those pain points will likely involve you know reducing price of listings improving supply improving discovery or really just like reducing any sort of friction along that user journey of finding a place to actually purchasing um which i think these are kind of things that airbnb is like already kind of actively invested in and i would say that you know for these high intent users that user journey can start on google or kayak or expedia and really

if you look at all those three things i have listed or those four things i've listed which is price um uh supply discovery and uh reducing friction on that journey the only one that i think airbnb has a unique advantage in is the kind of supply of local authentic listings now with that said as i was thinking i think the interesting opportunity for us to at least explore is the actual low intent travelers which is these are the folks who right now aren't actively planning their next trip but at some point these low intent travelers

become high intent travelers and we talked about our good outcome of making airbnb more top of mind i think the question can be framed then as what pain points can we solve for low intent travelers currently so that when it does come for them to travel airbnb is sort of the top of mind choice for them um which is sort of interesting but uh anything you'd like to add before i kind of think through my my recommendation yeah um i think this is definitely a there's merit to to breaking down the segmentation in high intent

to travel versus low intent to travel i think um one question i have is just wouldn't there have to be a lot of macro um events to for someone to convert from low intent to high intent maybe they have to earn more salary or covid has to go away is there some other way for us to target a user segment us user segment where we have more control over oh as in there are a lot of different factors that could influence whether or not someone has the intent to travel right let's say we we have

some strategy that targets all these people who have no intention to travel but we think they're gonna become people with intention to travel in the future um i feel like there's there's a lot of uh macro economic things that would have to happen in order for some of these low intense people to become high intent travelers and if these things don't happen then all of these investments would go to waste yeah i i agree with that i which is why i think i was a little reluctant to go with low intent but i actually arrived

at and maybe i'm jumping ahead a little bit in terms of solution but it's i don't think our strategy is to all of a sudden turn a low intent traveler into a high intent traveler like you said there's a lot of things that go into that it's a very gradual process but i think what was interesting for me was um right now airbnb is very much this ad hoc tool that you only go to when you want to search and when you want to kind of book travel what's kind of interesting is in terms of

like a strategy that i wanted to explore a little bit was can we sort of change the interaction model with airbnb where instead of just being an ad hoc tool it's more of a destination maybe a place you can learn more about kind of different areas maybe a place where you find travel inspiration give them a reason to come that's not just booking travel so that when it comes time to travel um airbnb's are the brand that's more top of mind um that's sort of what i'm thinking i would like to go down that route

but if you think this is totally bananas i'm happy to kind of uh step back and consider something else yeah maybe it'll be helpful for me to understand like what's an example of a low intent traveler maybe like a persona yeah um i guess it'd be someone like me where uh i i guess like i would imagine let's think of this where probably a bunch of new year's resolutions this year to travel more i know someone like me made that sort of new year's resolution but i know for someone like me um i don't really

know where to start and i don't necessarily want the kind of generic itinerary of going to like paris to seeing the eiffel tower not to disparage people who want to do that i would love to do that personally but sort of harking back to the original kind of good outcome which is why would i use airbnb it's like it's a place i could have a really unique and awesome trip that's not just your cookie cutter hotel chain okay where do i start and can i find inspiration for that that's not just googling a bunch of

million different blogs and then can i find that at the site that i'm ultimately gonna book um that was something that kind of got me excited but okay yeah yeah that makes sense so i guess like we're thinking about someone who um doesn't actively make plans maybe one or two years out for like hey like i already know this year i'm gonna go here or next year i already know i'm gonna go there um they're probably a little hands-off when it comes to or more passive when it comes to travel planning um and we we

wanna see how we can convert them into being active airbnb users so that we can improve or increase the number of nights booked right yeah and granted it sounds like a risky strategy right because essentially what what you're doing is you're essentially turning airbnb a little bit into like a content company um but you know happy to kind of talk through my logic of i think naturally like with any sort of strategy question right we would want to have an mvp have a hypothesis dip our tone it first before let's just shove 50 engineers in

here and and build it um happy to talk through how i would approach that but yeah how would you like to to guide this conversation yeah yeah i i think now that um we're on the same page about what the low intent traveler is and why we think this is a good place to make a bet i'd love to hear where you would go from here yeah and so this is one of those things where i think we should just be very crisp about what our hypothesis is and how we test it before we kind

of make any really big investments um and so i think here's sort of what i'm thinking i think the the premise of this entire strategy is predicated on a belief that if people visit airbnb more frequently just to browse or do whatever sort of activity then when it does come time for them to travel they'll book with us more often um and that's probably data airbnb has already i think that's the sort of analysis i would do first which is specifically for users who visit airbnb you know x number of times how does that correlate

with them booking with airbnb you know why weeks later and do we see a positive correlation there because i think once we have that as a foundation then the question turns more into strategy and product which is okay what can what services can we provide to bring people um to airbnb um is that that logic track for you yeah totally so i have three options i think in mind um and i'll name them now and then we'll talk about how how we could think about prioritizing them i think uh one is to kind of redesign

the listings page to kind of feature the hosts and their stories more so you know airbnb area has this feature where they designate super hosts and i'm curious if highlighting personal stories or differentiate their listings more can you know not only attract more bookings but give people a reason to come like i'm almost like read a blog and uh you know and then obviously people will come visit airbnb more top of mind when they want to travel the second one involves sort of social and user generated content i think this is where we could prompt

people after they visit to post photos of the really great trip they had um full disclosure not a big fan of this one uh i think there could be a you know one i think it's a tall ask to ask people to kind of post photos and things on another service uh besides the one they're using and i think it gets a little bit into like unhealthy fomo aspects that kind of distracts from airbnbs or original ethos um the third one i thought of was actually um making their like add to wishlist experience richer and

more personalized and more useful um you can imagine something that's sort of like a pinterest experience that's tailored towards travel destinations and activities um those are kind of like three high-level directions and i think they're pretty substantial investments but i'll talk about which one i'll i think i want to tackle and then we can talk about the mvp of that one um for which direction um and essentially i think my rough prioritization framework is essentially of the options we have what's the expected impact towards getting us to our good outcome as well as like what's

the expected cost of delivering this outcome um i think for the sake of this conversation i'm actually pretty fired up about the third option which is expanding the wishlist experience and here's my reasoning uh what's nice about that the wishlist experience is that one that experience already exists that functionality already exists and we're just extending it but two it's it's a non-dominant sort of user journey which i think gives us a lot more flexibility to experiment with different experiences without massively disrupting users and granted like i mentioned earlier building like a pinterest like experience is

a pretty heavy strategic investment you're retooling the entire wish list experience but um we should talk about i think a little more scoped down mvp of how we would build this i think um so would this be uh like how would this be different than the social user generated one because when when i'm hearing like oh it's like pinterest um does it i kind of have like the same feed or what's the vision here oh yeah i'm sorry i should have clarified um the the pinterest wouldn't be sort of like a generic it wouldn't be

user generated content it'd sort of be restructuring how um you could interact with kind of the listings page so right now it's sort of static pages that show you something but it's like changing the ui in a way where um you could show uh just make browsing i think i i think really the the strategy is just make make airbnb more indexed towards like a browsing experience rather than a high intent search experience i guess so did that make sense um i feel like if it's not clear how i'm paying the picture please please let

me know yeah so um maybe you can walk me through what this user experience would look like like if i'm a user and i come to the website what do i see yeah i think when you come to the website um instead of just offering you the ability to search um we call it the wishlist experience and so you would still have the high intent like plan your booking travel here but off to the side you have oh would you like to explore and when you hit the explorer you have like a sort of different

experience that's like i would imagine like much more immersive um you could scroll through kind of like beautiful listings and destinations it in my head it kind of looks like a uh inspo page almost um to really kind of play up the like this is you have one part of the app which is the core app which is like this is where you book and then one part of the app which is um this is where you kind of can browse and explore and find inspiration for your next trip and all the wishlist and tooling

involved with that yeah thank you for having me clarify yeah yeah makes a lot of sense there so um yeah i mean i think this sounds interesting and i'm wondering maybe in the few minutes we have remaining um do you have any sort of launch strategy that you would keep in mind when you're placing this huge bet yeah i would not just launch um a this like right away i think we'd have to scope it down a little more um i think the one i'd have in mind too is like we we have some some

uh way of highlighting that there is like a different explore experience um you know when uh oh actually no i think i think fundamentally we we want to introduce users to the fact that we are um gonna invest in an exploration experience so actually this seems counterintuitive but i think i would actually send out a newsletter to inactive users highlighting here are some of the unique experiences we have on airbnb um and that's kind of nice because i think most the engineering work would actually be sending up the logging and tweaking some of airbnb's email

outreach infrastructure we have the marketing team generate some content and i don't think the content needs to be personalized to each user necessarily either but it should highlight like here are some really cool experiences that's unique to airbnb and we could and i think our success metric is how often are people clicking on this newsletter like is this is the prospect of exploring more listings and proactive suggestion of exploring more listings um attractive and appealing um and then from there once they click on the listing we could actually monitor like how do users navigate around

airbnb after they click on it when they click on it and you show the listing do they then search for related trips and experiences i think then maybe that gives us some signal on oh maybe proactive suggestions is is a good investment um does the newsletter prompt them to kind of favorite that listing and add to their wish list then it's oh maybe we should invest a little more in the wishlist experience um so to summarize i think my recommendation would be start small with a newsletter that goes out to existing users see how engagement

with that newsletter drives engagement with airbnb see how engagement with airbnb leads to an increase in kind of night stayed per per user per year which is our north star metric and then understand how users behave after they tap this newsletter and arrive at the airbnb page and that could give a signal on where to invest more in a more exploratory browsy experience yeah it makes sense i can definitely see how this can help people inspire some of those more passive users to explore more um cool i i think this is good for our mock

interview here so i'll pause here um and i'll dive into a little bit of feedback and maybe at the end you can give the viewers some advice on how they could tackle similar product strategy questions so i really liked how you started off with defining success and you talked about not only like this user segmentation about like high intent low intent business leisure but you also called out all these other segments that you could have segmented by like such as age um so i thought that was really good to hear some of your other thinking

and why you didn't pursue some of the other paths um i i think i specifically went out of my way to try to poke holes and try to give you a lot of pushback and i believe you handled that pretty gracefully i think there were like two or three places where i really like pushed you and um it definitely shows that you really believe in what you're talking about so um always good to have that as a trait in an interview also i think it just shows in your in your answer that you know even

though you yourself you're not a big traveler you're able to take this travel question and add substantial color to it um and and kind of put your own twist on it in the sense that uh you know like even at the end like i could tell that you know this could be a nice product that people could use to kind of inspire themselves to travel so um all in all thanks for your time for answering this product strategy question and if you have any tips for the audience i think that would be awesome for us

to hear that right now yeah and i think for me one strategy questions are really hard and i've always been candid like i don't know even if that is a great strategy the one articulated but i think the interview advice that i've received in the past that's been really helpful is they're not looking for you to be quote unquote right in the 45 minutes you have they want to know like is this someone that's a principal thinker can they get feedback can i see them actually having this conversation with them as like a colleague so

i actually really appreciate your feedback kevin because it was like oh no this does change my thinking oh i didn't articulate that very well um i think the second two was like i know interviews are daunting but try to have fun with it too because you know this i meant putting yourselves in the interview shoes they have a ton of work they gotta do they have to do 45 minutes of this then they have to like write up the feedback like do as much as you can be high energy and make that 45 minutes enjoyable

for them um and you know it's surprisingly effective but um yeah i'm rambling but yeah kevin this was i had fun i hope you had fun absolutely and i think this is really valuable for the users so for the viewers who are watching at home this is definitely really good advice i think very similar to a lot of other interviews it's not about the specific answer it doesn't matter if the question is like design an alarm clock for the elderly or whatever it's not the specific answer it's more about the conversation you have with the

interviewer and how you get to your approach so yeah good luck with your upcoming pm interview and hope this mock interview was helpful thanks [Music]