How to build a website like Airbnb

Airbnb's origin story is legendary, not least because of what it says about the power of great ideas and constant improvement.

In 2007, an upcoming design conference filled up hotel rooms in San Francisco. Roommates Brian Chesky and Joe Gebbia decided to earn some extra by offering to host attendees on air mattresses.

The idea led to a simple website site that brought three people to stay at Chesky and Gebbia's flat. A year later, Nathan Blecharczyk joined to start building a more feature-rich experience. The rest is history, with many entertaining stories from selling breakfast cereal to getting rejected by famous VC firms before reaching a valuation measured in billions.

It took years of learning and iterating for Airbnb to reach its current scale.

Today, launching a website like Airbnb is much easier, quicker, and more affordable than in 2007. But the core message and inspiration of the story of Airbnb remain unchanged.

The founders started with an idea. They identified an underused asset – people with extra living space – and an audience – travelers looking for an alternative to hotels. They came up with a solution that solves a big problem for both these user groups. They figured out a business model, launched a website quickly, and improved the platform and the business side continuously.

This guide aims to help you follow a similar path to Airbnb's and succeed with your online marketplace business.

Whether you're using no-code marketplace software, building on top of APIs, or coding your site from scratch, we hope this practical step-by-step approach will help you make the right choices in the early stages of your business. We'll look into how a site like Airbnb works, review its key functionality, and share the best ways to achieve a similar setup – with a limited budget.

To build a marketplace like Airbnb, follow these five steps:

1. Validate your idea as Airbnb did.
2. Choose your business model.
3. Define the key features.
4. Choose how you’ll build your website quickly and affordably.
5. Launch your MVP and plan a growth path.

In the following chapters, I'll go through each of these steps in detail and give practical advice on building your marketplace – and how much it will cost to build a rental marketplace.

Before we dive in, it helps to understand how Airbnb works. In a nutshell, Airbnb can be described as a...

• location-based
• peer-to-peer
• rental marketplace.

Location-based means that the customer needs to be at the same location as the listing to make a transaction. This affects both feature requirements and business strategy.

Peer-to-peer describes Airbnb’s primary user groups. On peer-to-peer marketplaces, private individuals can act as sellers, buyers, or both. B2C (business-to-customer) or B2B marketplaces (business-to-business) can also be successful, but they might require slightly different functionality than a peer-to-peer platform.

A rental marketplace brings together people who have idle assets with people who want to rent those assets. A rental website needs different features than product-selling marketplaces like Amazon or eBay. The rented property can be some type of space or anything from swimming pools to music studios or cameras. (For more rental marketplace inspiration, check out great Sharetribe examples in our customer gallery!)

With these building blocks in mind, let's dive into step one: validating your business idea following a path similar to Airbnb's.

Great marketplace ideas solve a real problem for both user groups: supply and demand.

Airbnb did that from day one: their first customers needed a place to stay but couldn’t find one. Their first suppliers (the founders themselves) had extra space and needed additional income.

How can you make sure you’re solving a real problem like Airbnb? By talking to your potential users.

And you can do that before spending any time or money on building your actual marketplace website. Start validating your marketplace idea by identifying who your target users are, what problem you assume they have, and how your concept offers an improvement to the status quo. Then validate all these assumptions by talking to members of your intended audience. Remember to do this for both sides: suppliers and customers.

As you research your target market, you may find another marketplace already operating in your space. Don't let that discourage you. If you can solve the problem better than any other existing solution, you have a window of opportunity. So learning how your competitors do it can offer key insight into how your marketplace can offer an improvement.

For location-based businesses, in particular, the best strategy is to find an initial focus. Focus your marketplace on one area (i.e. town or city) and one vertical (i.e. product category), and put your resources into winning them. Later, you can start scaling location by location.

In addition to solving a problem for suppliers and customers, you also need a sustainable business model. Will you be able to generate revenue to run and grow your marketplace?

That's why the next step after validating your marketplace idea is finding the right business model for your marketplace.

There are six business models you can use to generate revenue on your marketplace.

• Commission: charging a flat fee or a percentage out of each transaction.
• Membership: charging a subscription fee for joining the platform.
• Listing fee: charging a fee when a provider posts a listing.
• Lead fee: charging providers for access to customers.
• Freemium: charging for additional features, but core features are free.
• Featured listings/ads: charging providers or other businesses for visibility.
• Or combine them: Depending on your business, two or more models can work in combination.

When validating your business idea, think about the way you will monetize your platfom. Consider which business model offers you the most reliable income and allows you to scale your business. Maybe try to get a sense whether your potential users are open to your business model and planned pricing.

Commission is the most common marketplace business model. It's also the way Airbnb makes money. It charges a commission, called a service fee, from both hosts and guests. Platforms like Amazon, Etsy, Upwork, and Fiverr all use commissions as their primary revenue stream as well.

Especially in the early stages, marketplaces typically charge a commission from the supply side only. This helps keep the entry barrier low: customers don’t need to pay extra to transact on the platform, and providers only pay a fee when they make money.

Collecting a commission from customers works when the platform offers enough value to customers to justify it. This is the case for Airbnb: for example, it offers guests a review system that helps them choose the best vacation rental for them and access to multiple short-term rental properties on a single platform. Offering great value also helps in preventing platform leakage, that is, people going around your payment system to transact.

A drawback of the commission model is that it can be complex to build into your product. It usually requires a dedicated marketplace payment solution that supports splitting payments between the provider and the marketplace.

Next, we'll look more closely at payments and other features of sites like Airbnb.

The features on Airbnb are very different from those offered by traditional online stores and product-selling marketplaces. Your rental marketplace will likely need at least some of these features from the start.

These days, Airbnb has a wide variety of functionality that has been built over the past decade. It's important to remember that Airbnb did not start with all this functionality in 2008. Instead, they iterated and improved based on user feedback.

When defining the functionality your marketplace needs, focus first on the core functionality. What is absolutely vital to have on day one? And what can you build later once you've validated your marketplace idea and have the revenue or funding to finance additional development?

Here is our list of the core features of Airbnb:

When Airbnb first launched, online marketplaces were something completely new. While many things have changed since the early days of Airbnb, coding a similar location-based peer-to-peer rental marketplace can still be a complicated, time-consuming, and expensive project, depending on how you go about it.

Today’s marketplace entrepreneurs have alternatives that don't require development skills or massive budgets.

For an in-depth analysis, check out our article on the six different ways of developing a marketplace website. Here, we’ll look at the three most common methods of building a marketplace website: coding from scratch, using a no-code marketplace builder, and using an API-based headless marketplace solution.

Custom-develop your rental marketplace from scratch

Custom development gives you a lot of freedom to build and design your marketplace. But a marketplace is far more complex than your average web application. A custom development process is extremely time-consuming and heavy on upfront costs.

If you’re not a technical founder, hiring a developer to build your marketplace from scratch will require a budget in the five figures. Though development costs vary between agencies, even the most cost-efficient choice will likely set you back north of $50,000 just to launch your site. That sum won't include the cost of third-party tools, maintenance, updates, hosting, or monitoring. You will still need to pay these costs on a monthly basis.

If you’re a software development expert, the option to code from scratch is more accessible. If you can build the frontend and backend yourself and are willing to take on the maintenance work, the costs will be limited to hosting and third-party tools. You can benchmark the Airbnb technology stack or get to work using the technologies you're familiar with. You can use the programming language (Ruby, PHP, JavaScript, Python, Java, Clojure...) you know best.

If you're interested in exploring this option further, I highly recommend this article on marketplace apps by our senior full-stack developer Mikko. It's a detailed guide to building a marketplace app from scratch and helps you estimate the scope of the project, choose your technology stack and prioritize features and functionality.

However, even if there are no costs for the actual development work, your time as a marketplace founder is valuable. Custom developing a marketplace will take several months of focused work. In the early stages, you can use that time more effectively on developing a few unique key features and building your user base instead of coding the basic functionality most marketplaces already have.

Build a marketplace fast with no-code software

If you have a business idea that works very similarly to Airbnb, using a marketplace Software-as-a-service (SaaS) tool is by far the fastest way to market.

For example, Mike Williams launched a rental marketplace for music studios in one day with Sharetribe and grew it into the world’s largest before exiting.

Marketplace SaaS is also the easiest choice for non-technical founders. If your software gives you the essential marketplace website features, you can create a website similar to Airbnb in a matter of days instead of months. You won't need to worry about hosting, maintenance, backups, or updates and can launch and run a marketplace entirely without coding.

Using a SaaS marketplace tool is great if you're not a developer — and even if you are, this approach lets you validate your idea and find a product-market fit without spending months building your website.

Building your marketplace with a ready-made tool doesn't give you the same freedom as custom development. There will be some functionality unique to your marketplace idea that the no-code software does not support.

Still, a SaaS tool is great for validating your marketplace idea and building your minimum viable platform. It lets you launch your site fast and learn about your audience. A great way to fill in the blanks is by supporting the no-code software with manual operation. Later, you can move on to a more custom-built solution to grow your business and automate all tasks.

And for that next stage, an API-based marketplace software solution is a great alternative. And Sharetribe offers you an easy transition from no-code to code, as our SaaS marketplace builder can also be extended indefinitely with custom code.

Custom-develop on top marketplace APIs

Headless, API-based marketplace software aims to combine the benefits of both custom development and no-code marketplace tools. Sharetribe is a pioneer in this category, and it's specifically designed to power a rental marketplace website like Airbnb.

First, Sharetribe gives you all the essential marketplace features out of the box. You won't have to devote any time to building mandatory marketplace features that users take for granted and can launch and run a marketplace completely no-code if you wish. This cuts the time to market and costs by as much as 90% compared to coding a marketplace from scratch.

At the same time, the freedom of custom coding is preserved. Sharetribe's API-based architecture allows you to develop unique features and third-party integrations on top of your marketplace. You’re also free to design and build your unique user interface.

A third big benefit of Sharetribe is that it takes care of maintenance, security compliance, updates, and so on. Even when your marketplace grows into a global business, you won't have to dedicate development time to mandatory maintenance tasks. Instead, you can use that budget for building great, unique features and taking advantage of the regular updates Sharetribe offers.

With Sharetribe, you get the benefits of a hosted, no-code tool and the freedom and flexibility of custom coding. You can create the first version of your Airbnb-like marketplace with Sharetribe entirely without coding. After you've validated your idea and generated revenue, you can take your business to the next level by customizing your Sharetribe marketplace and self-hosting your front-end application. A great way to get started for non-technical founders is to hire one of Sharetribe's vetted Experts for custom marketplace development. You'll have a developer who knows both marketplaces and Sharetribe.

In addition to these three approaches, there are several other ways to create a website like Airbnb. For example, it's possible to use a generic website builder with plugins or combine a set of no-code tools. While none of these can quite match the speed to market of dedicated no-code marketplace software or offer the same flexibility as custom development, they may fit your specific situation. If you're looking for the right approach for you, have a look at our article on choosing the right marketplace software.

As the example of Airbnb shows, building a successful marketplace business takes constant learning and improvement. The surest way to succeed is to focus on a clearly defined target audience and fulfill their needs better than anybody else.

You’ll only know if your idea truly achieves that when you launch your site.

The first version you launch should be an MVP (Minimum Viable Platform). Minimum Viable Platform is the marketplace version of Minimum Viable Product, a classic startup term. It’s the minimal version of your platform that solves a core problem for your most important users better than any other existing solution.

Minimal shouldn’t be confused with mediocre or basic. The MVP approach encourages you to find the fastest, easiest way to deliver your very first customers a remarkable experience. Your minimum viable product should communicate your unique value proposition, let users interact, and allow you to test your business model.

Airbnb is famous for its great design. After all, both founders are designers, and the first guests were participants in a design conference.

At the core of Airbnb's design principles is trust. Many of the key features listed above, such as the review system and secure payments, are built to ensure people feel comfortable transacting with strangers online. Building trust is something you can work towards already in your MVP. After your launch, it's about constantly improving and iterating based on feedback. Airbnb's has gone through several versions, all improving upon the last. This is a great approach that allows you truly learn what your users want.

The fastest way to get the first version of your marketplace out there and start learning from your users is to create a fully functional marketplace MVP with a no-code software tool like Sharetribe. Depending on your idea, you might even get forward with a simple website, matching your customers and providers manually! Whichever solution lets you launch fast while still delivering a great customer experience, that’s what you should go for.

Airbnb-like platforms need to handle complicated functionality from filtered searching, geolocation, and online payments to communication between the users and review systems. Building such a site from scratch requires a lot of work and technical skills, and that's why outsourcing development will nearly always cost well over $50,000.

Using dedicated marketplace software can help you save both money and time. Here are two example budgets for the first year of running a no-code, Sharetribe-hosted marketplace and a self-hosted, customized Sharetribe platform.

In this example budget, we assumed you're using Sharetribe's no-code builder to validate your idea and build your MVP and want to keep costs to a minimum.

In addition to building a website, you’ll likely need to spend some money on building your brand and marketing your site. On top of the costs in the table, you may want to outsource design work, buy fonts, images, or certificates, and pay for ads or marketing solutions. However, there’s a lot you can do with affordable or free online tools.

Please note that the subscription does not include the time you spend building your platform. Using Sharetribe is completely free until you're ready to invite actual users to your platform.

At this stage, you probably know your target audience well and have already generated some revenue to fund the development of your marketplace's next version. Sharetribe is specifically designed to power websites similar to Airbnb with zero to minimal customization work.

If you don't have a developer on your team, check out the Sharetribe Expert Network. We've partnered with carefully better agencies and freelancers who are happy to help you customize your Sharetribe marketplace.

However, please note that the budget above is a rough estimate – prices for designs and development vary greatly depending on the Experts’ hourly fees and the extent of customizations you need for your idea. Still, compared to coding a marketplace from scratch, you are sure to save time and money, which you'll be able to put into another important aspect of growing a business.

The budget is for a comprehensive custom marketplace project. You could also only add one custom feature or modify your visual design only while otherwise keeping the out-of-the-box functionality. In this case, the custom development or design fees would stay much lower.

Developing with Sharetribe is free for an unlimited time. The monthly fee only applies when you launch your marketplace and want to onboard actual users.

Creating a successful marketplace business is a big challenge. Building a powerful marketplace website is an important step but not the whole story. What counts is how quickly you'll be able to learn about your users and solve their biggest problems.

The surest way to succeed is to focus on a clearly defined target audience and answer their needs better than anybody else. You'll start learning about both when you launch your site.

The faster you launch, the quicker you can start learning about your audience. The more you learn, the better you can develop your offering to serve your audience better than any other solution.

Sharetribe has been developed with this process in mind. It is designed for launching fast and jumpstarting the learning process quickly and without coding. But it supports you just as well when you want to develop your business and platform further.

But no matter which approach you choose, I hope this article helps you embrace the iterative approach. Validate your idea by first talking to potential users. Find a business model that supports you through the early stages and helps you grow. Identify your core features, choose a fast way to build them, and launch your minimum viable product.

If you're interested in reading more about the steps of building a marketplace, check out our How to start an online marketplace guide. It offers lots of expert advice for marketplace entrepreneurs that you can apply regardless of how you decide to build your website.

Best of luck with your marketplace business!

Find more inspiring examples of Sharetribe-powered marketplaces by browsing our customer gallery and founder stories!