What is Samara? Samara Business Model Explained

Samara is a manufacturer of prefab accessory dwelling units (ADUs) that can be installed and operational in a matter of hours. It started as an R&D unit of Airbnb in 2016. And it eventually was spun off and run by Airbnb co-founder Joe Gebbia, who now runs it full-time.

Samara was founded by Airbnb co-founder Joe Gebbia together with Mike McNamara who also worked at the vacation rental company.

However, Samara itself has existed in some form since 2016 as an R&D unit of Airbnb.

Currently available to Californian residents only but with plans to expand, Samara sells two different variants of an ADU that it calls the Backyard:

  • Studio (from $289,000) – a 430 square feet unit with kitchen, bathroom, walk-in shower, built-in storage, and combination washer and dryer.
  • One bedroom (from $329,000) – a larger, 550 square feet unit with the same features plus a separate, enclosed bedroom.

Both are steel-framed, solar-powered options available in a range of colors. Customers also have the option to upgrade to double doors that open to a deck made from Western red cedar. 

How does Samara work?

Samara customers will not have to wait years for their units to arrive on site. Instead, the company boasts that, in most cases, it can offer a seven-month lead time with units built in its factory and then delivered on a flatbed truck.

Here is how this process plays out.

1 – Customization and reservation 

The customer starts by customizing the Backyard according to their tastes. 

This means choosing the layout, colors, doors, decks, windows, interior, roof, and solar system.

A deposit of $250 is also required to reserve the unit and initiate the company’s remote property analysis.


2 – Site visit

Two weeks later, Samara representatives visit the customer’s property to prepare an installation quote. The company will note any obstacles and ensure there is adequate space for the desired unit.

3 – Sign off

One week after that, the customer will receive a site plan, quote, and solar proposal to review.

4 – Permit

Provided the customer is willing to move forward, Samara will submit a formal permit application to the relevant planning authorities on their behalf.

5 – Site preparation

Around five months after submission, the company will return to the site to lay the foundation and prepare utility connections.

6 – Transportation and delivery

Once the site has been prepared, a flatbed truck transports the unit to the site two weeks later. The company then uses a crane to lift the ADU into position.

7 – Wrap up

The very next day, Samara connects the home’s utilities and performs a final interior and exterior inspection before handover. 

How long does it take to get Backyard?

According to Samara, it might take around seven months, depending, of course, on the location, with the permitting process as the most significant variable for the timing of the project.

Of course, Samara’s projects are standardized units, with usually built-in permits requirements which should speed up the process.

Is getting a Backyard faster than traditional site-built construction?

According to Samara, you can save between 4-6 months compared to traditional site-built construction.

What is the maximum size of an ADU?

That depends on the geography. For instance, in California, the largest ADU units can be 1,200 square feet.

Samara’s Value Proposition:

  • Rapid Installation: Samara’s accessory dwelling units (ADUs) can be installed and made operational in a matter of hours, providing customers with a quick and hassle-free housing solution.
  • Customization: Customers have the freedom to customize their ADUs, including choosing layouts, colors, doors, decks, windows, interior features, roof options, and solar systems, allowing them to tailor the unit to their preferences.
  • Modern Design: Samara’s ADUs feature modern and functional designs, with options for steel frames, solar power, and a range of colors to choose from.
  • Factory-Built: The units are constructed in a factory-controlled environment, ensuring quality and consistency, and are then delivered to the customer’s site, reducing on-site construction time.
  • Lead Time: Samara boasts a relatively short lead time of approximately seven months, making it faster than traditional site-built construction for ADUs.
  • Streamlined Process: The company handles the entire process, from customization and permits to site preparation and installation, simplifying the ADU acquisition process for customers.

Customer Segments:

  • Homeowners: Individuals who own residential properties and seek to add an ADU to their existing land, either for personal use or as an investment.
  • Property Investors: Real estate investors looking to expand their property portfolios with ADUs to generate rental income or increase property value.
  • Families: Families seeking to accommodate additional family members or create separate living spaces within their properties.
  • Home Builders: Construction companies and builders interested in offering prefab ADUs as a housing solution to their clients.

Distribution Strategy:

  • Customization and Reservation: Customers begin by customizing their ADUs online and placing a reservation with a deposit.
  • Site Visit: Samara representatives conduct site visits to assess the property, ensuring suitability for ADU installation.
  • Permitting: The company handles the permitting process, expediting approvals and reducing customer involvement.
  • Site Preparation: Samara prepares the site, including laying the foundation and utility connections.
  • Transportation and Delivery: Prefabricated ADUs are transported to the site on flatbed trucks and installed using cranes.
  • Final Inspection: The company performs final inspections and utility connections before handing over the ADU to the customer.

Marketing Strategy:

  • Online Presence: The company maintains an online platform where customers can explore ADU options, customize their units, and make reservations.
  • Educational Content: Samara provides educational materials and resources on ADUs, the customization process, and the benefits of prefab construction to inform and engage potential customers.
  • Local Outreach: Targeted marketing efforts focus on regions with ADU-friendly ordinances, such as California, to reach homeowners and property investors.
  • Partnerships: Collaborations with real estate professionals, builders, and property management companies help expand Samara’s reach and customer base.
  • Customer Support: Providing excellent customer support throughout the ADU acquisition process fosters trust and satisfaction among customers.

Key takeaways

  • Samara is a manufacturer of prefab accessory dwelling units (ADUs) that can be installed and operational in a matter of hours. It was founded by former Airbnb employees Joe Gebbia and Mike McNamara.
  • At present, Samara is only available in California. But as other states enact ADU-friendly ordinances, the company foresees that it will expand across the country. There are two ADU options to choose from: a smaller studio unit and a larger, one-bedroom apartment.
  • Samara offers a seven-month lead time, with units manufactured in its factory and transported to the site on a flatbed truck.
Innovation and ExperimentationSamara serves as Airbnb’s experimental and innovation hub. Its primary focus is on exploring innovative projects and new business opportunities that are not directly related to the traditional Airbnb home-sharing platform. Samara’s mission is to reimagine the future of housing and hospitality.Samara initiates a project to create unique communal living spaces in underutilized urban areas, offering guests an entirely new way to experience travel.
Social ImpactSamara often prioritizes social impact over immediate profitability. It explores projects that address critical societal challenges, such as affordable housing, urban development, and community building. These projects aim to create positive change and improve the lives of individuals and communities.Samara launches a pilot project to convert vacant buildings into affordable housing units for low-income families, focusing on addressing the housing crisis in urban areas.
Community EngagementSamara engages with local communities, experts, and stakeholders to co-create and implement its projects. It seeks input and collaboration from various groups to ensure that its initiatives align with community needs and values. This collaborative approach fosters inclusivity and sustainability.Samara partners with local community organizations to gather input and insights for a project aimed at revitalizing a neglected neighborhood and promoting economic development.
Prototyping and LearningSamara’s approach involves prototyping and learning through small-scale experiments. It starts with pilot projects to test ideas and gather data, allowing for iterative improvements and adjustments based on real-world feedback. This methodology minimizes risks and informs the development of more significant initiatives.Samara launches a pilot program to convert a few unused spaces into communal centers and learns from the experience before scaling the concept to additional locations.
Business DiversificationWhile Samara’s primary focus is on social impact and innovation, it also explores opportunities for business diversification. This may involve revenue-generating initiatives or partnerships that align with its mission and values. Samara aims to contribute to Airbnb’s overall growth and sustainability.Samara collaborates with a local non-profit organization to offer short-term rentals in unique community spaces, generating revenue that can be reinvested in social impact projects.

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Airbnb arbitrage is a business model where the renter of a house or apartment sub-lets the property to Airbnb users. This is a model where the Airbnb arbitrageur can transform a long-term rental, with the main property owner, into a short-term rental, with higher rates and margins.

Airbnb Business Model

Airbnb is a platform business model making money by charging guests a service fee between 5% and 15% of the reservation, while the commission from hosts is generally 3%. For instance, on a $100 booking per night set by a host, Airbnb might make as much as $15, split between host and guest fees. 

Is Airbnb Profitable?

In Q3 2022, Airbnb recorded its most profitable quarter ever. With revenues of $2.89 billion in Q3 2022, Airbnb posted a record of $1.21 in net income. The first nine months of 2022 posted revenues of $6.5 billion and a net income of $1.64 billion. Thus Airbnb will be profitable in 2022.

How Much Does Airbnb Take?

Airbnb’s take rates, also called fees, that the platform charges to hosts range between 15-20%. In Q3 2022, Airbnb’s take rate was around 18.5%, compared to 18.8% in 2021 on almost a hundred million nights booked over the platform. Airbnb’s gross booking value per night was $156.44 in Q3 2022, and the total gross booking value was $15.6 billion.

Airbnb Business Model Economics

In 2021, Airbnb generated enabled $46.9 Billion in Gross Booking Value, and it generated $6 Billion in service fee revenues. On 2021, there were $300.6 Million Nights and Experiences Booked, ad an average service fee of 12.78%, at an Average Value per Booking, $155.94.

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