This EMBA Student Is Using Behavioral Science To Help Hosts Boost Their Profits On Airbnb
EMBA Electives in behavioral science at Warwick Business School turned out to be the key to Paul Ranson's Airbnb success. Now he plans to help others in the hospitality sector
Behavioral science: it’s the stuff of science, not business, right? While the theories may sound fantastical, one business school in the UK is convinced of the useful application of the subject.
In 2010, Warwick Business School (WBS) set up the Behavioral Science Group, a society intending to push the boundaries of behavioral science, especially in the ways that the theory can be applied to business. Currently, it’s one of the largest departments of its kind in Europe.
While psychology can often be found on MBA courses within courses on organizational behavior, behavioral science—a branch of psychology that specifically focuses on human behavior, and interactions between humans—is relatively new to business schools. But it has some crucial applications—behavioral science can be used to influence decision-making and judgment using ‘nudge theory’, a way of using positive reinforcement and suggestions to influence group or individual behavior.
Warwick teaches behavioral science on its Executive MBA, something that recent graduate Paul Ranson admits he was skeptical about at first. “If you examine the Paul Ranson that entered WBS in 2016, I think I would have been a bit patronizing about some of the words that are coming out of my mouth now!” he laughs.
Paul is a seasoned entrepreneur and enrolled on the EMBA after successfully selling one of his businesses. “Initially, I thought I’d do an EMBA to confirm what I’d been doing in business for the previous 30 years,” he explains. “In the end, the course has kind of changed me as a person.”
From game design to Airbnb
Paul discovered a fascination for behavioral science shortly after enrolling onto the EMBA at Warwick, a school that appealed to him since it was his “local.”
“I imagine I would have gone down a different route if I’d gone to another business school,” he admits. “But in the past, I’ve been fascinated by the way that what appears to be common sense can be contradicted, and how what people say and what people do tend to be two different things.”
Paul’s career began in video game design in the 1980s and was one of the first executives to be employed by Codemasters, now an internationally-renowned game developer.
Since then he’s been a part of a number of successful game developers but changed his business tack in 2015 by buying and renovating properties in the Warwickshire area to rent out on Airbnb, using the profits as a way of funding his Executive MBA at Warwick Business School.
It was his experience in the hospitality industry that led him to pursue behavioral science more academically.
“My initial approach to Airbnbs that I owned was that I presented them as if they were boutique hotels,” Paul explains. “But with a couple of them I do co-hosting, so I actually take my friend’s houses and, when they’re away on business or on holiday, I hire them out on the platform.”
Paul discovered, much to his surprise, that guests were more likely to leave his friend’s houses clean than his own houses—but why?
“I set to doing statistical analysis and found that effectively double the number of people left the house tidy in a residence one, with their social paraphernalia like family photos, than the ones in my specifically designed hotel experiences,” Paul adds.
“If I could make my houses look like they’d been lived in by humans, it could save both time and the energy levels.”
Paul spent a year investigating this link between ‘social’ houses and guest cleanliness for his EMBA dissertation, guided by his supervisor Dr. Chengwei Lui, a member of the Behavioral Science Group at WBS.
Ultimately, Paul is hoping his discovery could help more Airbnb renters with their own small businesses.
“I feel giddy in that I feel like I’ve discovered something!” laughs Paul. “At this point, I’m writing a book that aims to be the intersection between what I’ve been taught on the EMBA and what I’m calling my ‘wisdom’ from Airbnb.”
Paul also believes that the insights he’s gained from behavioral science on the Executive MBA at Warwick Business School could help more people, if only they knew about the subject.
“A lot of the theories, when you say them to people it’s very polar—they’ll either tell you ‘that’s obvious’ or alternatively, ‘that’s nonsense’,” Paul admits. “But behavioral scientists are arguing that as we move more into the 21st century, all businesses will have to consider the behaviors of their customers to differentiate themselves.”
“From my point of view, the EMBA has been inspirational,” he adds. “It’s brought a passion to the surface that, entering the MBA, I never thought I would have achieved.”