Joseph Michelli: The Human Touch in Business
by Tim Healy
We all want to feel like we belong. Making customers feel like they are part of something is becoming increasingly important in nearly every industry. My guest today knows all about this importance. His newest book profiles Airbnb, a startup that has grown to a $38 billion value in just over 10 years. Its success is unparalleled, and its story offers lessons on the human touch in business that apply to any 21st Century company.
My guest today is Joseph Michelli, author of The Airbnb Way: 5 Leadership Lessons for Igniting Growth through Loyalty, Community, and Belonging. Joseph writes about how Airbnb has disrupted the hospitality industry, and how its business model has highlighted the importance of trust and human connection.
The Importance of Human Belonging
Maslow’s hierarchy of needs lists the five needs humans require to survive. Airbnb’s founders took this hierarchy of needs and used it to their advantage, thanks to a book by Chip Conley, called “Peak: How Great Companies Get Their Mojo from Maslow.”
Listen at 4:50 where Joseph discusses how a willingness to explore new concepts helped the founders of Airbnb achieve success. Through conversations with Conley, they discovered the importance of focusing on love and belonging for their customers. Making a customer feel like he or she belongs is essential. Airbnb’s motto drives this belief home: Belong Anywhere.
The Host-Guest Relationship
A unique aspect of Airbnb’s business model is that the company does not own any of the properties for rent. They can, however, control the experience that guests receive.
At 8:30, Joseph speaks on his experience working with The Ritz-Carlton. The famous hotel chain prides itself on delivering a consistent experience to every guest. Airbnb offers a unique experience for each renter.
Communication and Community
How can Airbnb ensure that hosts are better communicators? At 13:17, Joseph quotes Rollo May: “Communication leads to community — that is, to understanding, intimacy, and the mutual valuing that was previously lacking.”
On Airbnb’s platform, guests rate their hosts on communication. A low score affects the host’s search likelihood and algorithm placement. The company reaches out to hosts with “communication issues” to keep them aware of ongoing issues.
Airbnb’s Biggest Problem
With so much growth so fast, it may seen that Airbnb is free of problems. However, at 14:56, Joseph discusses the company’s biggest problem: trust. Communication between host and guest is an opportunity to start to build a road towards trust. When communication breaks down, trust is eroded.
A Sense of Belonging
Listen at 15:30, where Joseph talks about a TED Talk where founder Joe Gebbia covers the feeling of empathy that Airbnb’s founders have hoped to achieve. He met someone and ended up letting the stranger sleep on his couch, but not before double locking his doors. Trust goes both ways – and he hopes that someone in a foreign country would hope that the host would take care of him or her during an emergency.
The Best of Airbnb
The Airbnb Way covers a number of stories from users. At 17:30, Joseph discusses one of the most popular ones. A visitor to Paris during the 2015 terrorist attacks realized that everything in the city was being shut down. She wanted to cut her trip short and come back to the United States. Her hosts had a different idea. They took her to a peaceful part of the city and gave her a great experience. While this service doesn’t happen all the time, it is an example of how Airbnb pushes hosts to actually “be a host” and practice empathy in delivering service.
Why Cover Airbnb?
Joseph Michelli has written books on top businesses like Ritz-Carlton, Starbucks, and others. Why did he choose to tackle Airbnb?
Listen at 19:49 to hear how the decision was a timely one. Joseph views Airbnb as a unicorn in terms of growth and profitability. Their success model is almost exclusively reliant on using the human touch in business. While Airbnb depends on technology for service, they have almost zero control over who is providing that service. Understanding how they can influence what they can’t control is key to understanding the Airbnb effect.
Technology vs. The Human Touch in Business
With all the advances in technology, it can be easy for companies to depend on computers to run the show. At 22:10, Joseph talks about how Airbnb takes a different approach to things. By blending the human touch with technology, they create a unique experience for guests.
While focusing on the human touch in business has made it possible for companies to stand out, it also poses a number of risks. Your experience can be uplifted by a great host, but it can be shattered with a bad experience.
Stay tuned for Part 2 of my interview with Joseph Michelli, where we discuss some of his best and worst Airbnb experiences.
If you enjoyed my interview with Joseph, download more episodes of The Profit Express to inspire you on your road to success.