Globe-Trotter: Going Places

Airbnb turned renting out your spare room into a stratospherically successful (and controversial) $10 billion business. Head of global operations Varsha Rao is flying high on the idea of empowering travelers and homeowners alike.

varsha rao

(Image credit: Archives)

Airbnb head of global operations Varsha Rao at the company's San Francisco office.

NO TRAVEL BUSINESS anywhere generates as much buzz as Airbnb. What began six years ago when two design grads wanted to make extra cash by renting out a room (and an air mattress—the genesis of the name) in their San Francisco apartment has exploded into a $10 billion business and a cornerstone of the sharing economy. The globe-trotting fashion crowd was going nuts Instagramming photos of Airbnb lodgings during recent fashion weeks. But the company has also garnered negative attention, to say the least—ranging from the New York attorney general's report that many Airbnb rentals in NYC are "illegal hotels" to the press about California "guests" who wouldn't leave (they finally did after the owner began eviction proceedings). The lack of taxes or regulation (for fire safety, disability compliance, etc.) is a problem for some cities. Then there are the stories of Airbnbs gone awry: Orgies! Brothels! Angry neighbors and landlords and co-op boards taking legal action! Oh, my.

Meanwhile, the company continues its seemingly inexorable worldwide growth, with more than 800,000 listings and approximately 1,000 employees. On August 16, it had its biggest night ever, with over 425,000 people staying in Airbnb locations in more than 160 countries. The woman managing this across-the-planet expansion is 44-year-old dot-com vet Varsha Rao, who came on board as head of global operations last year.

It was an innately enterprising spirit that got her here. Raised outside of Boston, Rao earned her undergraduate degree in economics and math from the University of Pennsylvania and then an MBA at Harvard. After business school, she worked as a management consultant at McKinsey & Co. "We were doing a lot of research on what was happening in the Internet space," Rao recalls. "I realized the research I was doing was more interesting than my client work. I wanted to get more involved." So she left to start, an online beauty retailer, which was sold in 2000 to a private equity firm (but is now defunct). "It was a couple of great years," she says. "That was the beginning for me. I really loved entrepreneurship, operations, and creating businesses."

Other Bay Area gigs followed, including three-plus years at Gap Inc., where Rao became vice president and general manager of "We actually doubled the business," she says with pride. "We grew it to half a billion dollars in a few years."

Rao then spent five years in Singapore to be closer to the family of her Australian-born husband, whom she met in business school. While there, Rao launched a service that "was a lot like Yelp, with consumer reviews." It still exists, under the name Later, she became the first employee in Asia of the online local marketplace LivingSocial, a Groupon challenger. "We grew so fast—over 1,000 people in five countries," she says, "and I eventually ran [LivingSocial] international."

Though she describes her extremely productive time in Asia as "a really nice family adventure," Rao, her husband, and her kids (now 11 and 8) returned to San Francisco in 2013. "We loved it there, but we definitely missed home," she says. She continued at LivingSocial, but then Airbnb came calling later that year. How could she resist? She was already a frequent user. "I loved it. It's why I wanted to work there, absolutely," she says.

That fandom certainly comes in handy. In her current role, Rao travels about 10 days every month (she credits her supportive husband, also in the high-tech world, as being key to her success). She's vetting hosts, overseeing management in 16 different cities, and handling "customer experience" issues with a team spread across San Francisco; Portland, Oregon; Dublin; and Singapore. "The majority of our users are great people," she says. "You do have some folks who are not the kind you'd want in a trusted community. So we're able to screen for that."

And when she travels, of course, she stays in Airbnbs. "It's a really great way to understand the product itself and connect with hosts, which I think is invaluable," she says. One recent standout: the woman in Beijing who introduced her to local beauty serums and creams. "They have some really awesome, innovative products in Asia that we don't have access to," she says.

As for the controversies, Rao brushes them off with a response that seems plucked from a recent ad campaign. "I think about the positive impact we're having on people who are hosting," she says. In Copenhagen, she stayed in a woman's spare room. "She wanted to change jobs, [going into] coaching and career development, and she was paying for the course through hosting on Airbnb. That is really what makes what we do so rewarding."

Rao's priorities for Airbnb are straightforward (with the emphasis on forward). "We're on this amazing trajectory," she says. But she puts a refreshingly high premium on her personal life as well: "I've got a really amazing family and kids and husband and friends. I want to stay connected and try to find a little bit of time for myself. It's just an exhilarating ride."

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Image by Damien Maloney