Learn From These 3 Ways Airbnb Won the Trust It Needed to Succeed

Reader Resource

Position yourself for growth in 2017—join us live at the Entrepreneur 360.
Flash Sale—save up to $200 on registration. Ends Thursday. Secure Your Seat »

How important is trust for an organization? In a survey by Interaction Associates, more than 80 percent of employees said being effective in their work requires a high degree of trust in their co-workers (85 percent), boss (82 percent) and direct reports (81 percent). For any organization to grow, innovate and succeed, having trust is key.

Yet, a study by Ernst & Young (EY) found that only 49 percent of employees trust their boss and their team members. And even less trust their organization (46 percent).

Another recent study by Edelman showed that the lower you go in the hierarchy of an organization, the more trust decreases, with employees being less likely to trust managers and executives than peers.

Today, trust is eternally important.

With the increasing speed of innovation, companies need to be fast to stay on top of new trends. To create more agile organizations, we need more agile skill development and learning.

The need for a faster rate of innovation is driving managers to give their employees more autonomy over their work. This in turn is leading to a rise in remote working. However, for this more autonomous system to work, a high level of trust is an absolute must.

The difficulty is, if you only interact with your team on a working level, is it ever possible to create trust? The leaders of the new sharing economy may have the answer.

How is the sharing economy getting strangers to trust each other?

In her TED Talk, The currency of the new economy is trust, Rachel Botsman expounds on the idea that we are currently going through a collaboration revolution.

Companies like Airbnb, Uber and Bla Bla Car are at the forefront of the paradigm shift toward a sharing economy. People are trusting strangers to stay in their apartment alone for a weekend, and pick them up from the airport on time.

With such low levels of trust - even between people we see on a daily basis -- how are these companies getting people to trust strangers in their own homes?

Botsman explains that in this new economy trust is essential. The way people create trust is by sharing feedback with each other after exchanging services. In her view, all future transactions will be based on an amalgamation of the feedback we receive online from different sources, creating a virtual reputation for ourselves. However, at first sight this might be disconcerting for some.

Do we really want an online reputation following us around?

Airbnb Co-Founder Joe Gebbia explains how the company tackled the trust problem in an insightful TED Talk.

From its inception the company had to deal with what they called the stranger-danger bias. Getting people to invite strangers to lounge on their couch, and sleep in their bed when they’re not around seemed like an impossible task.

One reason for this is what psychologists call homophily or similarity bias.

People are much more ready to trust someone, who is similar to them. Without any way of connecting on a personal level, a stranger is too much of a risk. Airbnb set about to change this by designing for trust in three key ways.

Related: 'Human Resources' Just Doesn't Tell You What HR Really Does

1. Create a profile.

Airbnb found that having hosts and guests create a profile with their pictures and links to social media helped to create a more familiar picture of the other person.

Your potential host is no longer a stranger, but someone who likes to travel, like you, and enjoys the same music. However, a 19-year-old traveler and a 65-year-old retiree may not necessarily find they both have a penchant for vegan food and heavy metal music.

The next challenge was coming up with a way the young company would overcome similarity bias.

Related: 6 Ways to Lawfully Embrace Social Recruiting

2. Secure reviews.

Airbnb conducted a study with Stanford University on similarity bias.

What they found was that high reputation actually beats high similarity.

According to Airbnb, a host without reviews is four times less likely to get a booking than a host with at least one. A host with 10 reviews is 10 times more likely to book their home, thereby counteracting the potential for similarity bias.

If you think about anytime you’ve ever used Airbnb, it makes sense. You are much more likely to trust someone, who has 10 reviews than someone, who seems nice but has no reviews at all.

Reviews are therefore one of the most successful ways Airbnb creates trust between users. Like Botsman, the company calls this its reputation system. Guests and hosts both receive reviews from each other each time they use Airbnb, and this information is displayed on their user profile. However, the team also noticed a tendency for users to give overly positive reviews to avoid receiving negative reviews in return.

To encourage good quality feedback, Airbnb decided to make reviews available only after both guest and host had finished completing them. This way both parties won’t feel swayed by the feedback given by others, resulting in more objective assessments. This small change actually increased the rate and objectivity of the reviews that were given.

Related: This CEO Says the Key to Being a Good Boss Is Getting Out of the Way

3. Prompt more interaction.

Another way Airbnb encourages trust is by getting people to have more meaningful interactions with each other. The challenge was to get guests and hosts to exchange just the right amount of information during their initial contact. Share too little, and people will not gain a sense of trust; share too much, and a red light might go off.

To solve this dilemma, the Airbnb team put design thinking to use. Gebbia explained that when sending a request to a potential host, the system actually guides users to share more by using prompts, which ask you to tell the host a bit about yourself. They also used the size of the box to suggest a certain length.