The Diary of a CEOAirbnb CEO: “Airbnb Was Worth $100 BILLION & I Was Lonely & Deeply Sad!”
EVERY SPOKEN WORD
150 min read · 30,402 words- 0:00 – 1:30
Intro
- BCBrian Chesky
You lose 80% of your business in eight weeks, and I knew there were questions. Is this the end of Airbnb? Will Airbnb exist? Brian Chesky. Founder and CEO... Of the $100 billion company... Airbnb, one of the most successful and most disruptive companies in the world. Airbed-and-breakfast was just a way to keep paying rent before we came up with the big idea. We did not think airbed-and-breakfast would be a company where four million people a night would use. Don't focus on the mountaintop. Focus on the first step. A lot of breakthrough ideas don't seem breakthrough at the time, they seem crazy. People tend to overestimate what they can do in a year, and underestimate what they can do in 10 years. 10 years is a profoundly long period of time if you're disciplined and focused. And you can have a small idea, a small dream, and you can build something vast.
- SBSteven Bartlett
Airbnb is gonna IPO. And then disaster strikes.
- BCBrian Chesky
The Coronavirus... Emergency. Stay at home... Stay at home. You lose 80% of your business in eight weeks, and I knew there were questions. Is this the end of Airbnb? Will Airbnb exist? We had to make some incredibly difficult decisions. So I write this letter to the entire company. Here's what I said.
- SBSteven Bartlett
Is it hard for you to read that?
- BCBrian Chesky
Yeah. Yeah, no, now I get a little emotional reading that.
- SBSteven Bartlett
Why? (instrumental music plays)
- 1:30 – 7:10
👶 Early Context
- SBSteven Bartlett
Brian, I'm a firm believer that our external world can change and evolve and look different, but it tends to be the case that our internal world is much more stubborn, which is who we are at our core. And I also believe that who we are at our core is often shaped by our earliest experiences. That's been supported by a lot of the psychologists I've sat here with. To understand you, the way you think and who you are, I think it's best to first understand that early experience, and how it shaped the internal Brian that remains regardless of how everything else in your life has changed.
- BCBrian Chesky
Well, yeah, thank you for having me on. I, um, I came from a pretty normal, nondescript background. But in parallel to sports and all the regular things kids had, I had this other interest. It was the thing that most defined me, and that was that I was an artist. I would be drawing and drawing, and I have these pads of paper. And I go through hundreds and hundreds of pages, almost compulsively drawing, um, both trying to learn how to mimic an environment and reproduce it in reality, and when I was, you know, 10, I could probably draw like an adult and by the time I was in high school, I could, you know, draw like, you know, probably akin to a professional artist. I love to design worlds. I wanted to design an escape. And at the age of 17, I, I decide I'm going to design school. So I've already taken like 100 opportunities in life, and now I'm like, "Okay, I'm gonna do this. I'm not gonna be like a politician, a doctor, a lawyer, a astronaut, I'm gonna be a d- some, an artist or a designer." Halfway through freshman year, they have to, they tell you to declare a major. What kind of artist and designer? I'm like, "I'm still 17. And I gotta tell you what type of artist and designer?" This guy comes in and he pitches an department called Industrial Design. It just sounded cool, Industrial Design. And I was like, "What is industrial design?" And I remember him saying something like, "Industrial design is the design of everything from a toothbrush to a spaceship, and everything in between." To design a physical object, you have to understand three dimensions. You can't just design an object, you have to understand how to make the object. If you were a graph designer, you didn't really have to know how to make anything. I guess you had to know how to print it. But you had to know manufacturing. What kind of materials is it? Are the materials sustainable? Where do you manufacture it? Well, how much is it gonna cost? Because h- like, how much it's gonna cost, like, has implications on how you design it. Well, how much it's gonna cost depends on who is the audience. How are you gonna market it? You see, when an architect designs a building, no one, like, blames the architect if the office building doesn't get leased out.
- SBSteven Bartlett
(laughs)
- BCBrian Chesky
But in industrial design, you can't design a product, it not sell, and you say it was a good design. I would've never imagined that would have come to use to run a tech company. It turns out industrial design was one of the best educations to run a tech company, but I had no idea I was gonna do that.
- SBSteven Bartlett
I'm gonna walk back through that, 'cause there's a cup- couple of words you said across the way that really stuck out to me. The first word you said when you were talking about wanting to des- design, design your own worlds is, "I was trying to design a world that I could escape to."
- BCBrian Chesky
Yes.
- SBSteven Bartlett
The use of the word escape is quite a, intentional, but quite a, um, strong word. What were you trying to escape?
- BCBrian Chesky
Great question. I think I was a very sensitive child. I think I was a very idealistic child. And I think I was trying to escape what might, one might describe as the, eh, the numerous challenges of childhood. I think childhood is really hard for people, and I think for me especially, like, I was young, small, undersized. I had trouble fitting in at school. I remember just having a really intense environment. And I remember when I was a kid, I would watch, like, the w- uh, like, th- the ABC, where, where, like, th- they were like a Disney, you know, they had, like, this thing called The Wonderful World of Disney, and I would see these old videos of Walt Disney on television from the '80s, but it, it was from him in the '60s.And he described these like magical worlds. I was just so obsessed with designing a world that was different and better than the one I was in. I just think I had a lot of kind of anxiousness as a kid, and I never really, I didn't really feel like I was at home. You know, I felt like I was, I was searching for home. And I, I, there's this great Bob Dylan quote, he said, "It took me a long time to find my way home." And I think it did for me as well. I feel like I never found my way home until I was surrounded at school with other creatives. But other, before that, I was just, I was kind of an outsider and things were very challenging and painful.
- SBSteven Bartlett
So am I right in thinking that your desire to design a new world was also a desire to design a home where you might fit? Espe-
- BCBrian Chesky
100%.
- SBSteven Bartlett
If you, if you design the world as well, you get to control the world and you get to...
- 7:10 – 9:14
🌍 Creating A World Where I Can Fit In
- BCBrian Chesky
I, I think I wanted to design a world that I could live in, that I could fit into because I probably didn't think I fit quite into the world that I grew up in. Absolutely. That's 100% the case.
- SBSteven Bartlett
Y- you s- said in some of your interviews that you were a hyperactive child.
- BCBrian Chesky
Hyperactive, impulsive, um, s- difficulty concentrating. I was never diagnosed with ADHD. Maybe today if I was growing up somebody might have, may- may have said that, but I don't know. But I had an intense energy. I was, I was always trying to do things differently. I remember like in junior, like middle school, I would try to like redesign the school curriculum or something like, just kind of interesting, frankly kind of bizarre things. I was a bit of a performer. I wasn't into acting or anything, but I did a lot of like public speaking and I would do a lot of creative writing, but I remember I always was like, I was always different, and different wasn't good growing up. That was maybe the core thing. I think the core thing is I was different. I was different in almost every way, and different wasn't good.
- SBSteven Bartlett
I sat here with a therapist and she said to me there's two things at a very human level. She's, I mean her clients are royalty and CEOs at the top of the world and athletes and gold medalists. She says, "All my clients come to me with two, one of two things, and it's usually both. Either they don't believe they're enough or they feel like they're different." And those two things really haunt people in a world... Uh, you know, we, we're tribal animals, as you know from... I've watched Airbnb's IPO video and this idea of connection-
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
... really coming through strongly. We wanna belong. We wanna be in our tribes, and feeling like you're different, I- I was thinking about this through the lens of a tribe, means that I don't belong in the tribe. Feeling like I'm not enough means I'm not valuable to the tribe.
- BCBrian Chesky
100%.
- SBSteven Bartlett
And those, and that's wh-
- BCBrian Chesky
And I would think tho- both of those identified. I felt like my entire life many people have like turned
- 9:14 – 15:52
💼 Dealing With My Addiction To Work
- BCBrian Chesky
to addiction, and if I turned to one was work. And luckily my addiction was very productive, and so no one ever called it that. Like no one says that somebody's working all day and night, especially if they're doing something creative, if you're an successful entrepreneur. And it was mostly, I mostly was, made me happy. But the challenge is that if you are doing something hoping to become something, hoping you become something and then therefore you're gonna feel a certain way 'cause people are gonna treat you a certain way, it turned out that what I wanted was love and what I was actually retracting was adulation. And so the problem is we try to seek conditional love. We do something great, we get noticed, and then people show us love and admiration, but it's probably not love or admiration, it's probably adulation. And adulation I think is like a cup with a hole at the bottom, and the problem is you fill up the cup, but then something leaks out the bottom, and so it kinda comes down and down and down. You have to keep filling it and keep filling it and keep filling it. And the problem is that, like anything, you can't just do a n- keep doing the same acts. You must do even bigger acts. You have to go bigger to get the feeling you had before. I think this is incredibly typical of people, like I know tech entrepreneurs where a lot of them were, had challenged the authority, didn't fit in, wanted to be loved, and were really good at something. And it's not to take away any of that, but just to know where it comes from. H- now that I know what it, where it comes from, I've been able to have a much healthier relationship with it. I still love what I do, but I now, it's really interesting, my motivations have gone more internal, more intrinsic. Instead of wanting to be super successful, to feel a certain way, part of me says, "Well I've, I've not felt that way. I probably never will." And I, you know, if I... No amount of additional status or money or anything's gonna make me feel g- better because this amount hasn't actually changed how I feel. It turns out that like when you're, when you go on a rocket ship, you initially, the success and the status and everything makes you initially probably happier because it's new. There's a novelty, and it's distracting. And at some point you adapt to it, and the moment of adaptation is the moment you probably go back to reverting to the way you felt before all of it. You're not worse, but you're presumably not better. Life is so much more than just climbing a ladder and getting to the top and realizing you're not much higher than you ever were before. That the world is, you- you had everything inside of yourself mostly to be happy before the journey started, and probably what you needed most is purpose, you have that, health, and relationships. And I think that, you know, a lot of people take the last one for granted, those relationships. And that's, that's kind of, that's kind of probably been my journey.
- SBSteven Bartlett
The cost of your addiction to work-In hindsight, you can maybe point at the cost and say, "This was something I sacrificed at the expense of happiness because of that addiction to my work." What are those things?
- BCBrian Chesky
Let me first say that, like, it- it was mostly worth it.
- SBSteven Bartlett
Yeah.
- BCBrian Chesky
And, uh, so I wanna be clear about that, that I wouldn't have done it dramatically different. I am... Let me just say, I am... It- it's, like, the- the journey of Airbnb, of being able to build Airbnb has been unbelievable. It's been the great joy of my lifetime, and if people could experience what I had experienced, I would say to them it would be the most unbelievable ride of a lifetime, and I wouldn't wanna change a ton because it's been amazing. But if they're about... somebody's listening, and they're about to go on this journey, I would forewarn them about some things that no one told me, and no- and no one told me when I started this journey is two things. The first thing is how lonely it would be, and it doesn't have to be, but it's almost like by default. You see, when I started Airbnb, I started with my friends, two of my friends. Then we hired people, and those people, they were our employees, but they were also kind of our friends. And this notion that I was the boss and there was a power imbalance, well we're all, like, broke working out of a three bedroom apartment, so what does it mean that I'm CEO? Like, that's kind of just a title. And so I felt really connected. We weren't a family, but we were more like a family than a business, if- if it was one or the other. And then as we got successful, then it became more of a corporation. There was a chain of command. There were more boundaries, you know, like, you- you started hiring people that had families, and people with families don't hang out with you on nights and weekends. And then, like, you know- you know, it just, like, it becomes more formal, and that's the moment that your employees become your employees and less your friends, and that gets more and more isolating. And then people start looking at you a little bit differently and it- it feels really good, but you can just find yourself working more and more to live up to the responsibility, and you feel like you're never working enough, and you're working 60 hours a week, then 80 hours a week and 100 hours a week, and you just almost feel guilty any second you're alive, um, you're not working. And I... Again, I'm s- huge proponent in pouring your life into something, but I think that what I thought was every incremental hour would make me more productive, but what turns out that, like, we need to step away from work. We need to be happy. We need to have some healthy relationships to probably make good decisions. I don't... Lonely lead- leaders are probably not the best leaders, and when you're lonely, you're probably less empathetic. Your sense of vigilance is up. Um, you don't necessarily see problems really clearly. You don't have people to bounce ideas off of. When there's a challenge, it could feel like you're alone. You don't have as much resiliency. And so I remember going from being incredibly happy to feeling incredibly isolated not having been prepared. Now, I was prepared for all the business challenges. People told me what it's like to scale a team, hire executives, but we weren't really well prepared for the psychological and emotional journey that we would go on. That turned out to be some incredibly intense journey. So that was the first thing. The first thing that I didn't know, no one forewarned me about, and that I've now learned is about the lonely journey it can be. And I would just tell people it doesn't have to be lonely. S- keep in touch with your friends. Meet other entrepreneurs. Like, you've got to almost fight. The world, as you go on this journey, is going to isolate you into a bubble that's gonna completely detach you from reality, and if you're not careful, you can lose the sense of yourself, and you have to fight every single day like a person in a ocean without a l-
- 15:52 – 17:30
🚪 Being Lonely As An Entrepreneur
- BCBrian Chesky
without a- a life jacket, just staying above water, and that staying above water is fighting the temptations of isolation so that you can remain connected. And if you're connected, you're gonna be okay. But it's not gonna just happen. Most people don't... Like, you don't have to think about breathing. You just breathe. You have to think about staying connected. The other thing is you can't try to be successful to think it's gonna solve something inside of you. Being successful, other than maybe a sense of purpose, it turns out having a purpose and serving others and being focused on something, that's generally good for you. Beyond that, no amount of status and power is gonna fill something inside of you. Whatever is inside of you that you're missing, you need to probably fill, you know, through introspection. Like, we might call it solitude, connection to self. Or maybe, you know, like, m- many of us growing up were kind of lonely and so we wanted to be loved, so we decided to pursue these things so that people would be connected to us, but then by working, we're just lonelier, more and more isolated. In fact, maybe the thing we had to do the entire time was reach out and bring people in. Maybe that was the thing we were missing, and that was probably what happened with me.
- SBSteven Bartlett
If I could speak in... If you could talk into Brian's ear in October 2007 when you were 26 y- years old and you arrived in San Francisco, and you could say, "Brian, listen. Here are some practical things I'm gonna do. Here's how I'm gonna change your schedule for the next 10, 15 years. I'm gonna add one extra hour of something to your schedule every
- 17:30 – 21:05
🤝 Rediscovering & Building Back Up Connections
- SBSteven Bartlett
week." What would that one hour be?
- BCBrian Chesky
It's completely obvious to me that I would make time for the people I love.
- SBSteven Bartlett
Who- who is that?
- BCBrian Chesky
I would start with my family, especially my sister. I'm now really close to her, but there were a bunch of the Airbnb journey we would go weeks without talking for no other reason... I was just busy. And, like, well, like... And- and- and there's this paradox that when you go on this crazy journey like I do, a lot of people don't reach out to you 'cause they're afraid to reach out to you 'cause they think they're bothering you, but you're so busy that you're dealing with inbound from the business that if no one... Like, you're just reacting all the time. So if your friends don't re- reach out to you, you're not gonna reach out to them 'cause you're just reacting to everything. And they're like, "Well, they're so busy. If they wanna talk to me, they'd reach out to me."
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
You see how you end up in this, like, drift and drift and drift? I would have stayed connected to my high school friends. I would have ke- I- I have high school friends I now do an annual trip with, some of them I didn't talk to for almost 20 years. I graduate. I didn't keep in touch with them. It's one of the great regrets I have. I had college friends that I lived with after RISD, but every year as I went on my Airbnb journey, we talked less and less and less and I drifted more and more away. And I could go down the list. I actually, I had this thing. I've said, I talked about it once before, but I wa- it was 2001, '21. It was, like, May or June, and I, I had s- developed a, at this point, long relationship with President Obama. He had left office and he became a bit of a mentor to me, and he mentored me on, like, leadership and business. And at one point he took a personal interest in me. And I remember I was single, got out of a relationship, and I kinda felt lonely, and I remember telling him, "I think I need to be in another relationship." And he said, "I don't think you yet need to be in a relationship. I think what you need are friends." And I thought to myself, "But I have friends. What do you mean?" But then I, then he explained that, like, he had these, like, 15 people in his life, many of them before, you know, mostly before he was president, and he, like, they were totally connected. And I realized I had all these people in my life, but if I called them, first they go, "What's going on?" Like, "What's new with you?" And I had to get 'em all up to speed in my life. And if you have someone in your life where if you were to call them or text them you have to get 'em up to speed, then you're not connected. People you're connected to are already up to speed. And I actually think that most of us, being alone or being lonely is an illusion. Or maybe the illusion is that, like, people don't love us and the fact is we have all these people but we're not reaching out to them, and they're also not reaching out to us. And everyone's waiting for someone else to take some initiative. And it seems crazy 'cause we're just a text message away from our entire life, and yet what do we do? We open the phone, and instead of texting people or FaceTiming them or, like, seeing them, we, what do we do? Open social media? So opening social media is like going to a dinner party except you don't go inside, you're looking in the window, and you know, like, and like, it's great if it's a way station to meet people, but if you're look, just looking in the window and that's your social life, then that's, you're gonna feel really sad. So knock on the door and walk in and start talking to people, start hanging out. So this is, tha- that would be the thing I would do.
- 21:05 – 23:48
🤝 The Power Of Connections With others
- BCBrian Chesky
I wouldn't have been totally isolated. I would've rem- con- stayed connected to my family, my close friends, and really... And the only other thing I'd say is I- I'm now friends with a bunch of other entrepreneurs, including, you said you had Daniel Ek on the show.
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
And I would call him a friend and I spend time with him and others. So, in other words, I would have old fr- I would keep my old friends and I would be friends with people in my situation.
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
So if Daniel Ek doesn't know the Brian before Airbnb, so maybe he doesn't know the real me, tha- tha- that me, but he does know a different real me that my childhood friends can't know, 'cause my high school and college friends can't possibly know what it's like for me to go through what I'm going through. And I can tell it to them and they can have compassion, but they can't possibly know what I'm talking about, but Daniel can. And Daniel can know what's look li- it's like when an executive leaves you where everyone's kinda, the walls are caving in and you feel like you're not scaling and you're, like, drowning in this stu- y- you know, there's all these things that I can describe. We have a shared experience. So I think those two groups are really important, your roots and your friends from the past, and your friends from your present day shared experiences. And there was a period of time where I didn't have either of those, really.
- SBSteven Bartlett
As you were saying that, it reminded me of a phrase I heard many years ago in a book I read that said, "The things that are easy to do are also easy not to do."
- BCBrian Chesky
Oh, yeah. Yeah.
- SBSteven Bartlett
So what's the point of sending it? But also, it reminded me of why I have that sand timer on the wa- on the, uh, shelf over there, because funny enou- I think I've lived so much of my life believing that I could do life later.
- BCBrian Chesky
Oh, yeah.
- SBSteven Bartlett
Like, I could pick up the relationship with my family later. And then that's, it's almost like we're living through the frame of i- that we're gonna live forever. Like, when you look at our decision making you think, "Fuck, you're giving, like, three decades of your prime years to building this thing."
- BCBrian Chesky
Yes.
- SBSteven Bartlett
And, like, and we, uh, we're assuming that we can pick up the rest later-
- BCBrian Chesky
Right.
- SBSteven Bartlett
...and it'll all be there. And that's what I learned. I tried to pick it up later and there was nothing there. (laughs)
- BCBrian Chesky
I think that metaphor of the hourglass with the sand-
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
... slowly dripping every day of your life is a window, and every day that window gets a little narrower and a little narrower and a little narrower. And I-
- SBSteven Bartlett
Should I say the difference though just with the sand timer?
- BCBrian Chesky
Tell me.
- SBSteven Bartlett
Is you know it's dripping but you can't see how much you have left.
- BCBrian Chesky
Oh, that's a really good point.
- SBSteven Bartlett
So it's, it's... And that's why y- you should almost cover it up because we can s- you know, with the sand timer we can see how much sand we have left, but in life I could, I could live for another six minutes, and so could you, or it could be six months or 60 years and-
- BCBrian Chesky
Yes. That's a
- 23:48 – 28:41
⏳ Embracing Life's Finite Nature
- BCBrian Chesky
profound thought. And you're right. We don't really live our lives imagining if we had a limited time left how would we live. I like to th- I- I- I... An exercise I've done is imagining, you know, at a young age if I had ten years left, 'cause if I had one year left I might-
- SBSteven Bartlett
(laughs)
- BCBrian Chesky
... be so dramatically different that I might not do something sustainable. I might, like, not work and just only spend time and that's not sustainable. But I think we always go about life thinking we have many decades, and I think that creates a sense of procrastination.And if you say to yourself, "You have this decade. What would you wanna do?" It gives you enough urgency, but also long enough to have routine, to build towards something. And I think that, like, the, one of the most important things people can do, I- I, two thoughts come to my mind. The first thought is that you've probably heard the saying you can, "People tend to overestimate what they can do in a year and underestimate what they can do in 10 years." That 10 years is a profoundly long period of time in some ways if you're disciplined and focused. And you can have a small idea, a small dream, a small goal, and you can build something vast. I mean, I've only done Airbnb for 15 years, so you think about what 10 years is. I, you wouldn't have hired me as your intern 15 years ago. The other thing about 10 years, though, is think about the amazing life experiences you could have with other people. And I think life is about experiences, but the best experiences are the ones you share with other people. Like on Airbnb, 80% of our trips are with other travelers. Like, 80% of people travel with other people. And I think, as I think about my memories growing up, and I rode the school bus, like, 180 days a year, or more than 10 years, that's thousands of days, and all those memories blend together. I don't really remember those. But I remember basically every vacation I've ever took, taken. I remember the first time I went to this city, the first time I went to that city. And they're burned in my mind. And I think that when I look back on my life, I'm gonna remember all the experiences I went, all the places I saw, the friendships and the ex- and, and the people I loved and who loved me, and what I poured my heart and soul into. And I think that, like, that is a important way that I've thought about my life. And I made time for some of it, but I think the pressure of being successful made me so focused on trying to climb a mountain that maybe I didn't focus enough on who I was climbing with and who was along the way with me.
- SBSteven Bartlett
Bronnie Ware interviewed palliative patients on their last days on Earth, so she interviewed people on their death bed and asked them what their biggest regret was. Hypothetically, if you had six minutes left and I was interviewing you to find out what your biggest regret might be, now, if you had six minutes left, what might you say to me?
- BCBrian Chesky
I think my biggest regret would be the time I didn't spend with people I love, maybe making sure those people knew how I felt about them. And then I'm 42. I've created many great things, and one thing I haven't created that I've always wanted was probably a family. I just couldn't even explain exactly rationally why, but just, you know, like, we all, I think humans have an, many, many people have an urge to, to create a family, maybe to feel like they've created something and they can leave something behind. I've le- I will have left a company behind, but maybe I could leave more than that behind. So those would be the things that I would regret. But, importantly, I'd also like to say, I feel like in other ways I've lived multiple lifetimes, and I would be filled with so much love and gratitude for what I've been able to experience because I never thought in my lifetime I would be able to experience what I've experienced right now up to this point. The amount of people I get to meet, the amount of work I get to do. I get to work, come to work every day to obsess with some of the most creative people in the world. And you know, most people, they don't get to be surrounded with the people they choose. When you're a CEO, you get to pick the people you're surrounded with. There's something really special. And I've gotten to select some of the most creative, kind, compassionate, intensely driven people in the world m- making some things that I'm so proud of that have affect millions of people's lives. So, but I tend to think we regret the things we didn't do, not the things we did do. And I think we tend to regret, you know, the people we didn't spend time with, the people we loved that we didn't tell, or the people we, you know, could've met and didn't.
- 28:41 – 32:40
🚀 Start Small, Dream Big: Scaling Strategies Of Airbnb
- SBSteven Bartlett
I think this is fascinating. I looked at the back end of our YouTube channel, and it says that since this channel started, 69.9% of you that watch it frequently haven't yet hit the subscribe button. So, I have a favor to ask you. If you've ever watched this channel and enjoyed the content, if you're enjoying this episode right now, please can I ask a small favor? Please hit the subscribe button. Helps this channel more than I can explain, and I promise if you do that, to return the favor, we will make this show better and better and better and better and better. That's a promise I'm willing to make to you if you hit the subscribe button. Do we have a deal? There's sacrifice involved in everyone's journey, especially when it's a great journey, and you were talking about being, I think, 25 years old when Walt Disney inspired you.
- BCBrian Chesky
Yeah. (laughs) Neil Gabler. I've read this book twice. Yes, I've read this book twice. This book... Okay, so this book had a big effect on me, and there's two chapters that really affected me. So this is the Neil Gabler book. It's The Definitive Biography, and it's pretty extensive. It's like over 600 pages. You can see it.
- SBSteven Bartlett
It's the Walt, Walt Disney's bio- biography.
- BCBrian Chesky
Yes, the biography about the man Walt Disney. And there's two entrepreneurs that I've always looked up to more than any others, and those are Walt Disney and Steve Jobs, partly because they built companies that have lived beyond them, but more importantly, they were creative people that were basically running tech companies. I mean, Apple was clearly a tech company. Disney was, at the time, very much a, a, like, a technological marvel. The first chapter that really affected me was this chapter, I think it's Go-Getter. It describes the period of time where he moves from Kansas City to Los Angeles. And he's early 20s.He moves to Los Angeles. He convinces his brother, Roy Disney, Ro- uh, Roy Disney, who I think has like, uh, I can't remember what ailment he has, but he has, like, this horrible ailment and they don't think he's even gonna live. And Walt says, "Come to California. It's gonna be good for you." And Roy, they were like br- they were literally brothers, and I always thought of Joe, my co-founder, as like brothers, if we were like, like, non-blood-related brothers. But, you know, when you're a co-founder, you're almost like brothers. And him going to LA in the 20, I think it was the 20s, was like me going to San Francisco in 2007. The gears of the world felt like they were turning there-
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
... in some really important way. So this book I read right before I started Airbnb. I'm living in Los Angeles, I read this biography and I thought to myself, "I don't have to work for someone like Walt Disney. I can try to become something like that. Even if I don't get to that level of scale of success, that's okay. I can do something much smaller, but I can do something like this." And then there was another chapter, um, f- four years into Airbnb, called Folly. Folly. Folly is the title of the chapter about Snow White and they called it Folly 'cause they named it Disney's Folly and the reason they named it Disney's Folly is because he bet the entire company on this feature length animated film and everyone thought that it was just terrible, the company's gonna go outta business. And I thought... I was reading that chapter and that's when a light bulb went off. I s- he basically invented the storyboard for that movie because the movie was so long, right, no one had done a feature length animated film that he had to storyboard out the scenes. And I remember thinking to myself once I read that chapter, I said, "What if we created a storyboard of the perfect vacation on Airbnb from the time you book to the time you check in? And what if we literally designed the end-to-end journey?" You might call this service design. And this became a guiding light to how we design our service. We didn't just design the screen, the apps, the emails, we designed the experience, the end-to-end experience. Kinda like when I was in industrial design school and we were, like, designing a ventilator or some
- 32:40 – 42:45
🎨 The Power Of Creativity In Business
- BCBrian Chesky
product and you're trying to put yourself in the shoes of the user.
- SBSteven Bartlett
Mm.
- BCBrian Chesky
So this book became very influential for me. And maybe the final thing I'll just say is, like, somebody once said, "Numbers are the language of business." And I remember thinking to myself, "No, language is the language of business. Numbers are just the only way we have to measure them." But that... You ever notice there's 500 companies in the Fortune 500? How many of them are creative people? I don't know how many, but, like, I, I might be one of the only ones that went to design school. They have boards of directors. Let's say there's 12 p- or 10 people per board, so that's like 5,000 board members. How many of them are creative people or designers or people from the humanities? Not many. How many CEOs have creative people reporting to them? Not many. And so we have this world now where we, many people are dissatisfied with the way the world is. We are often given two bad options. We tend to be fighting, zero sum, when we could imagine something better, but we don't have a lot of people in positions of power that can take creative leaps of the imagination and really understand how to design something better that we're in right now. And I think creativity is kind of being systematically squashed from maybe corporate America. You know, Pablo Picasso said, "It took me four years to learn to paint like Raphael, but a lifetime to learn to paint like a child." I think that childhood curiosity is something that creative people are able to typically, I think, hold, hold onto and, and I think that's being a little bit lost. And what I loved about Walt Disney, and I also liked about Steve Jobs, was the sense they were truly creative people that had truly creative companies. They empower them and they had an intuition. They didn't just paint the company by numbers. And that's the kinda company I've always tried to do. I've had this dream of creating one of the most creative places on Earth, like Disney or Apple. We may not get there, but at least we'll have the ideal.
- SBSteven Bartlett
I wanna talk about that moment where creativity won out over what a CFO or the numbers might say.
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
But taking a step back to that wh- something else you said there, which is, um, you kind of alluded to this idea of creating for, creating for yourself being the path forward to creating for others, and I saw that... That's actually one of the big things as an entrepreneur I've taken away from the Airbnb story, that you don't have to sit there and think about what a million people want in a product. You just have to solve a problem for, like, you and your best friend.
- BCBrian Chesky
Yes.
- SBSteven Bartlett
And you can build an amazing business-
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
... out of that. And that's really, like, the genesis of Airbnb if you go right back to-
- BCBrian Chesky
Yes.
- SBSteven Bartlett
... even the name.
- BCBrian Chesky
And that's almost every company in the world, by the way. Almost-
- SBSteven Bartlett
Really?
- BCBrian Chesky
... every company in the world. Maybe enterprise companies are not that. People have this thi- people forget. Take any giant company in the world, nothing large started large. They always started small. It started with a few people, one or a few people, and many times they were making something that looked like a toy. It looked like a hobby. I remember one of my first investors said, "Brian, don't s- worry about people stealing your idea because if it's any good everyone will dismiss it."
- SBSteven Bartlett
Everyone will dismiss it?
- BCBrian Chesky
Everyone will dismiss it. It turns out that a lot of breakthrough ideas don't seem breakthrough at the time. They seem crazy or they seem unserious or they seem like hobbies. They seem something small. Airbnb, we did not design a way for millions of people to stay in homes. Airbnb started one weekend. It was October 2007. A design conference was coming to San Francisco. All the hotels were sold out. And we had this idea. We said, "Well, what if we just turned our house into a bed and breakfast for the design conference? We can make enough rent."
- SBSteven Bartlett
I think I actually have that email.
- BCBrian Chesky
Oh, yeah. You have the email that Joe sent me. Yeah. Yeah, you have the email that Joe sent, sent me. And-
- SBSteven Bartlett
So that's 2007?
- BCBrian Chesky
"I thought of a way to make a few bucks turning our place into a, a designer's bed and breakfast, offering young designers who come into town a place to crash during the four-day weekend." This is September 22nd, 2007. We thought we were just creating a way-... to create a bed and breakfast for the conference. Unfortunately, we didn't have any beds, but Joe had airbeds. We pulled the airbeds out of the closet and we called it airbedandbreakfast.com. Now, I can assure you, we did not think Airbed and Breakfast would be a company where 3, 4 million people a night would use to sleep in. We did not think I'd be doing podcasts and I'd be a giant public company. We thought it was gonna be a way for three people, one weekend to stay in our apartment, sleep on some airbeds, pay us money, we'd have a cool weekend adventure, and we'd go about our lives. And the funny thing is, we thought it would pay the rent while Joe, Nate, and I, or Joe and I at the time, thought of the big idea.
- SBSteven Bartlett
(laughs)
- BCBrian Chesky
We kept talking about the big idea, and Airbed and Breakfast was just a way to keep solving our own problem, paying our rent before we came up with the big idea. But when I joined Y Combinator, it's a very well-known startup incubator of sorts, the founder, Paul Graham, used to have a saying, and it's the most important advice I ever got, and it's what you were saying, and it's counterintuitive. He said, "It's better to have 100 people love you than a million people that just sort of like you." If you have 100 people that love your service, they, when they love something, they'll tell everyone they know. I remember talking to somebody, she loved Airbnb. I'm like, "How many people did you, you've told Airbnb?" She goes, "I probably told 10 or 20." And her friend standing next to her goes, "No, she's told like 1 or 200 people."
- SBSteven Bartlett
(laughs)
- BCBrian Chesky
And I started realizing, people who love something become your marketing department, and they'll tell other people, and if they tell other people, that grows by what we call word of mouth. So how do you get somebody to love something? I don't know how you get a million people to like something at the same time when you're starting from nothing, but I do know how you could get one or two people to like something. You can meet with them. You can understand what their needs are. And you could design something so perfectly spoke just for them, and you could literally think of them as recruiting one person at a time. If you have a business idea, you don't need to get to a million. You, y- before you get to a million, you need to get to 100,000. Before you get to 100,000, you get to 10,000. And before 10,000, you get to 1,000, and before 10,000, you get to 100. So all you have to do... And all roads lead to 100. Don't focus on the mountaintop, focus on the first step. Don't focus on a million, focus just on 100. And as you do that, you make the problem small and manageable, 'cause a million has to build systems and just, you start developing complexities you can't deal with. So all you gotta do is get to 100. Once you get to 100, now you get to 1,000. And what you do when you get to 1,000 is you just keep going in orders of magnitude, and the job changes.
- SBSteven Bartlett
Mm-hmm.
- BCBrian Chesky
But people get paralyzed 'cause they think they have to make something big. And they're like, "Well, Apple wasn't like this," or, "Google wasn't like this." Well, actually, Apple started by selling bla- these blue boxes in the back of, like, a trunk of a car. Google was this, like, research project they were gonna sell for, like, low millions of dollars, and they didn't really know what they had. These things all start as unprestigious toys that seem hacked together, and they're only made for you and your friends. That's almost always how it starts.
- SBSteven Bartlett
And that question about creativity beating rationality from, like, a corporate Ameris- America standpoint, the Airbnb story, story is riddled with moments where you chose creativity and customer experience over scalability and profits. But that wins out over a long period of time in this story.
- BCBrian Chesky
It always does, doesn't it? I think it's in our soul to be creative. I think most entrepreneurs are creative. It's funny, almost every business is conceived intuitively. Maybe sometimes people have a business plan and they have some, like, statistical insights and data, but most people when they start a company, they have no data. Like, they have no customers, and if you have no customers, you probably have no data. And so everything is started with intuition, with insights and understanding. And then the problem is, as you get more successful, you get more data.
- SBSteven Bartlett
(laughs)
- 42:45 – 42:59
📊 Balancing Data & Creativity
- BCBrian Chesky
It doesn't mean they're unimportant, but if you only optimize for them, then you're gonna be imperiled, and it's a pretty...... damn good guarantee that you're gonna be irrelevant in the future. So, I feel like there needs to be more heart in business, more creativity in business.
- 42:59 – 45:33
🌍 Designing a Better Tomorrow
- BCBrian Chesky
And not for the sake of the creative people, for the sake of the businesses, for the sake of the world we live in. Don't we want to live in a world that's more interesting and more exciting? Well, we need to bring the creativity that artists and scientists come together to bring, and it's that marriage of artists and scientists and operators all coming together that I think can design a significantly better world than we alone we have in now. We have all of the technology we need to design a s- a better world. We, believe it or not, have all the money we need. We can say we need more money, but actually we could be more efficient and more productive with the resources we have. This is gonna require creativity, though.
- SBSteven Bartlett
We've got an exciting new sponsor on this podcast, and I couldn't be more excited to announce that we're now working with Shopify. And if there's one tool that I use pretty much every single day in my businesses, that is certainly Shopify. I'm sure you've all heard about Shopify. But for some reason if you haven't, then Shopify is the commerce platform that is revolutionizing millions of businesses worldwide. Whether you're starting a side hustle, a new project with a friend, or a global business, Shopify has you covered. You guys may know that we recently sold a product on this platform called The Diary of a CEO Conversation Cards, which featured questions from the guests in these episodes. And from start to finish, from launching that product, we used Shopify, a total game-changer. Makes life incredibly, incredibly smooth when it relates to business, and a tool that my team have absolutely loved using, which is not always the case with technology. We couldn't have launched those conversation cards without it. And if you guys haven't tried Shopify out for yourself then I highly suggest you do. Head to shopify.com/bartlett to take your business to the next level today, and let me know how you get on. That's shopify.com/bartlett. Let me know how you get on. As you may know, this podcast is sponsored by Huel. If you're living under a rock, you might have missed that. I discovered Huel's RTD about four years ago. Huel's RTD is basically a meal in a bottle. It is nutritionally complete. It contains 26 of your essential vitamins and minerals. It's got your protein in there, 20 grams of protein. It's got slow release energy in there in the form of those slow release carbs. It's just nutritionally complete. Not only have I got a good relationship with it in terms of health, but it saves my life in terms of those busy days where there's a higher probability of me reaching for something I might regret. If you haven't tried Huel's RTD, you've probably seen it in a couple of supermarkets but you can order it online, and the link is in the description below. Let me know which flavor is your favorite, and also tell me if it ends up adding value to your life in the form of making you nutritionally complete on those difficult days. At the very beginning, I saw this email, which I think is really important because maybe it's the most important thing, because there are gonna be
- 45:33 – 50:13
📉 Pushing Past Multiple Rejections When Building Airbnb
- SBSteven Bartlett
people, uh, starting companies now that are getting a lot of emails like that.
- BCBrian Chesky
(laughs) . This is from August 1st, 2008. We were... By the way, so let me give the context of this email. So Jo- Joe, Nate, and I were trying to raise money. For everyone trying to raise money, I want you to know that Airbnb was trying to raise $150,000 at a $1.5 million, I think, post-money valuation.
- SBSteven Bartlett
I'll give you that right now (laughs) .
- BCBrian Chesky
Exactly. And, and here's one of many rejection letters. "Hi, Brian. Apologies for the delayed response. We've had a chance to discuss internally and unfortunately don't think that it's right for, fill-in-the-blank investment firm, from an investment perspective. The potential market opportunity did not seem large enough for a required model."
- SBSteven Bartlett
(laughs) .
- BCBrian Chesky
Now, I want you to just put it in this perspective. Airbnb handles nearly as much money as the entire GDP of the country of Croatia today. One in about every $1,500 spent in the world, about $1 spent on Airbnb. That's a pretty large market. And our business is pretty much the same idea as the idea that we proposed to that person who said our market opportunity wasn't large enough. So there's probably a myriad of lessons in that a- aren't there? And I think that it's a reminder that the world doesn't just change, or at least it doesn't just transform towards our dreams, ideals, and ambitions, that requires certain types of people. We might call them entrepreneurs, inventors, all sorts of people in different domains that believe the world could be a little different than the one that they live in. They have the audacity to believe that they can do it, and they have the ability to convince other people to go on that journey with them. But along that journey, everything's gonna be different. You're gonna get lost, you're gonna be cold, you're gonna, you're gonna have, like, obstacles. Things are gonna attack you. You're gonna fall down pits. And the question is when people are cold and they're shivering and they're not sure what to do and you're running out of resources and rations, can you find your way up that mountain? Do you know why you're going? Can you invent all these different apparatus, like there is a stream you can't figure out, you can build a bridge to cross the stream with the limited resources you have. Can you recruit people along the way? And can you beat the drum? And when people are tired and they say, "I wanna sleep," you say, "Yes, we're gonna rest, but we gotta go just 500 more steps. I know it's, it's right over the e- edge. I think we can do a little bit better." And can you push people outside their comfort zone? Not enough to hate you, but enough to feel like, like a trainer, you're like, "Three more reps," and you don't wanna do it, and then that very moment, they're not your friend, but at the end of the workout you're like, "Thank you for pushing me that hard." This is that kind of person. And can you take divergent ideas that no one's ever seen before and just continue to reformulate them? Could you store these ideas in your head, 1,000 competing ideas, and just reformulate them in your mind? It turns out this stuff is difficult, but you can work your way up there. Most people watching this have the skillset to be an entrepreneur. Not everyone has the skillset or the desire to run a giant company. I don't think everyone needs to do that. But a lot of people have the skillset to do something, to start something. This is what you need to get up the mountain. And the problem is, imagine we got up the mountain-... and then somebody was dropped from a helicopter, having never walked up the mountain, and you tell them, "Okay, now you lead this group up the next mountain." Can you imagine how hard it'd be for that person to drop from the sky? Or maybe they joined a third of the way up the mountain but they weren't there at the very beginning. You see, a founder brings three things that a professional manager doesn't have. The first thing a founder has is they're the biological parent. So you can love something, but when you're the biological parent of something, like it came from you, it is you. There is a deep passion and love. The second thing a founder has is they have the permission, right? Like I can't tell another child what to do, but if they were my child I probably could. I have the permission, and so you have a permission. I could rename the s- n- I could rebrand the company, and a professional manager would probably come and say, "I can't do that." But I know how we named it. I know how we branded it. So you know what you can change. And the third thing that a founder brings is you built it, so you know how to rebuild it. You know the freezing temperature of a company. You know at what temperature it melts. You know like what this looked like before it was tooled, where it came from, the alloys, where they, where
- 50:13 – 56:27
💼 The Benefits Of A Founder Led Company
- BCBrian Chesky
they were sourced from. You're not just managing it, you're building it. And the problem is, professional managers typically don't have any of those three, at least not in the abundance of founders. But the problem with founders, there's two problems. The first is most of them cannot scale to run a giant company. And even if they do, the last problem is they don't live forever. And companies, great companies usually wanna live longer than humans do. And so therefore you end up with the inevitable challenge that Disney and Steve Jobs had, which is succession planning. Actually both of them died prematurely and didn't, maybe Steve prepared more than, than Walt did. And that's the last step of the journey. But I think there's something really special about founders and founder-led companies, and I think that if you want the world to change we need more entrepreneurs, we need more founders. If you wanna empower more women, you should make more women entrepreneurs. If you wanna lift up more economies around the world, you should lift up entrepreneurs in those economies. It's one of the greatest ways to create wealth, to change the world, and to just change the trajectory of society.
- SBSteven Bartlett
So powerful, Brian. It made me think about what Steve Jobs did leave behind, and that's maybe where the word culture comes in. Because I would've bet against Apple surviving and flourishing in the wake of Steve Jobs' passing because Steve was so, so special, but he clearly left a, a set of enduring principles behind. Culture. You know, I spoke to Daniel Ek, as you said, he's a friend of yours. Um, he said to me, "20 years old, didn't care about culture. 30 years old, didn't know what it was. At 40 years old, I think company culture and team culture is the most important thing." When you think about culture, how important is that? What is it? How does one go about creating it?
- BCBrian Chesky
It's funny you ask this question because last week I sent a c- email to the entire company, to all 6,000 people, and my email was about culture and why it's important and what it is.
- SBSteven Bartlett
Please.
- BCBrian Chesky
Can I read you a co- portion of it?
- SBSteven Bartlett
What a privilege.
- BCBrian Chesky
So the context of the email is I hired a, a head of people and culture, like a different name for HR. "Jony and I have always believed that you must design the culture you want. Otherwise, it'll be designed for you, and you might not like what emerges. The people and the culture they create are at the heart of Airbnb. Simply put, culture is what creates the foundation for all future innovation. In the long run, the culture is the most important thing you will ever design because it's the engine that designs everything else. All good designs start with a vision, and I want working at Airbnb to feel like working at the world's largest startup. I believe we can grow into one of the largest companies in the world without feeling large, a company that's still like, run like a startup, with the best people in every discipline collaborating at high speeds with intense focus, all while maintaining minimal bureaucracy and communication layers. And to make this happen, we're gonna reimagine the HR function, because too many companies have lost sight of which HR was originally designed to do, reducing it to merely an administrative function. Yet at its core, HR is about people and culture, and it's one of the most strategic functions within a company. That's why we don't call it HR, because it should be about bringing out the very best in people. Most of all, I want us to feel like we're building one of the most creative places on Earth, a company that brings together some of the best people of our generation to dream up new products and services that capture the world's imagination, a place where years from now people would say, 'If I was alive during that time, that's where I would have wanted to work.'" I literally wrote that email last week, about culture.
- SBSteven Bartlett
It's, it's so incredible. It's so incredible because yeah the, the greatest leaders that I've met all arrive at the same conclusion about culture. Ha- even if it takes them 10 years or 20 years or whatever, they arrive there. Um, the question though, because so many CEOs could send that email-
- BCBrian Chesky
Yes.
- SBSteven Bartlett
... right? Everyone could just, you know, they just heard Brian say it so they copy and paste and send it to their team. The question is cr- how do you actually create that?
- BCBrian Chesky
It's so great. So big, huge insight here. Okay? I used to think you talk about the culture, and you talk about how important it is, and then you write out a list of, "Well, what is your culture?" "Well, our culture are a bunch of principles or values we live by." So, "Well, what, what makes us most unique? Let's do a session. Let's write out a list of our values."Now let's tell everyone the values. Let's print them on the walls, let's have people repeat them, let's keep telling people culture is important." And that stuff can help a little bit, but it's not how you build culture. So let me give you a few thoughts. Your culture is the shared way you do things, and often they're based on lessons you've learned, and the lessons you tend to remember the most are the ones that are seared in you. They come from trials and tribulations, from your most difficult times. It's the way you rise to the occasion in the face of adversity. Your culture is the behaviors of the leaders that get mimicked all the way down every single person. Your culture is every time you choose to hire someone, every time you choose to fire someone, every time you choose to promote somebody. It's the way everyone does everything, and the way a leader designs a culture is not by writing out a list of values. It's by basically leading by example every single day and taking a survey of every single thing happening and constantly shaping it, pruning it, like a gardener sh- you know? And you, you, you don't just allow the culture to happen. You design the culture. You have an idea of what you wanna do, and you're
- 56:27 – 1:04:03
🌱 The Importance Of Culture & How To Bring The Best Out Of People
- BCBrian Chesky
just constantly getting this group together. You know, you might have a culture of excellence and a culture of excellence means I review all the work and I say, "Not good enough, not good enough, not good enough." And eventually, I could not join the meeting, but people know what I'd say. They'd say, "It's not good enough. This is our standard." And the moment I cannot be in the room and the same action happens as if I was in the room, that's the moment it goes from management to culture. So it's like a golf swing. To teach a golf swing, you gotta, like, probably ... I don't play golf, yet the instructor has to watch the person. And at some point, the person learns how to swing a golf swing without the instructor there. That's the difference between management and culture, and culture is something that people learn to develop these shared instincts, and it's so important because it is, it's your ultimate intellectual property, not your technology, not your recipes, not your exclusive contract vendor relationships. The way you know how to do something, i- that is the most important thing a company has because all a company is, is a bunch of people, a bunch of money, and a direction that those people are using those resources that go towards people, resources, strategy. And the culture is a thing that bonds those things together.
- SBSteven Bartlett
You're the smartest person I'm gonna get to throw this idea of culture at, so I wanted to throw it at you 'cause I've just ... Again, a week ago, I started thinking about it when I was asked the question on stage. People, because of, in a post-pandemic world and now trying to figure out if they're remote or in office or whatever else, trying to figure out their company culture, and I came to the conclusion that you shouldn't, um, you shouldn't try and create your company culture. It is already there if you look closely and try and figure it out. And here's what I kind of concluded, that if tr- someone's trying to figure out what their company culture is, think about the problem you're trying to solve in the world. Then from there, reverse engineer the behaviors you need to solve the problem. Then from there, reverse engineers the philosophies and values you need to create those behaviors. Then from there, implement the fucking things.
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
Hire the people ... So i- through the lens of this podcast, how do we become the best in the world at what we do? Best podcast in the world. The behavior we need, because we're dealing with algorithms that changed all the time, is this experimental mindset. We need to constantly be leaning in every time something changes. That's the behavior we want. So one of our values is what we call 1%, which means that we obsess over the smallest details. And then how do we implement that into the business? Well, we have a hea- head of experimentation in this podcast full-time. We have a full-time data scientist. If y- you said about the vibe in the room, and I s- said the sen- the, the AI thing glued under the table recording the conversation with the track pad, so that's like our company culture. It was the behaviors we needed, the philosophies that created, and then the systems, processes, and people we then hired through to make sure that we achieved that. Does that roughly ... You're the first person I've ever said that to. That roughly make sense? And please interrogate it for flaws 'cause I need to improve my thinking.
- BCBrian Chesky
I think it's essentially correct, and I think the one thing I would add is when we say behaviors, because I agree with the word behaviors, but I wanna, like, round out behaviors 'cause, for just a second. I used to think behaviors as the things in addition, we used to say the what and the how. This is something I always got wrong. There's what you did and how you did it, and people tend to think of the what as competency, how well you did your job, and culture is how, how you went about doing it. And, like, so were you a jerk? Were you nice? Did you make people around you better? And I don't think that's accurate. That's what I used to think, there's the what and the how. It turns out the how you do something creates the what. In other words, you can't break the core values and succeed at making something but, like, trample on people along the way. Your values, your culture is how you do something. So for example, let me take our example. Like, one of our va- one of our ... we don't, we don't even really have codified core values. We have old codified core values, but, like, our culture is at its strongest when it's just, like, one shared consciousness. So the best cultures is one shared consciousness where everything in your head, everything you care about is permeated throughout the people and they can finish your sentences, and people would do in a room without you what they would do if you were there. And that's when you create this collective consciousness. So my thing is the culture starts with the intersection of what your vision is and what your personal values are and how you wanna lead. And to use this, I just wanna give one very concrete example of where I left this out. I'm a perfectionist.I am-- the people, who I-- who work for me will watch, they'll actually laugh 'cause that's kind of, like, a cr- classic understatement. I want every part of the product to be perfect. I want our product to be perfectly designed. I want it to look like one person designed it. Completely cohesive. I obsess over simplicity. I wanna make sure that it's about reducing something to its essence. I want there to be this sense of heart and imagination. And the problem was, the way we were running the company, I was running it the way I thought everyone else wanted to work, and they wanted to work in autonomous separate groups and divisions. They wanted to do lots of experimentation. And for me, I like to be creative and experimental, but I did not wanna do micro-experimental optimizations for software, because what that meant... Let me use an analogy. Let's say we're making a car. One team is experimenting on the tires, and then another team's experimenting on the wheels. But it turns out those two things don't fit together. And if they fit together, they invent this new wheel, now it's gotta fit on a bigger car body. So now they gotta go to the car body team and change the shape of the car. But that makes the car, I don't know, maybe heavier. They need a different battery. So now they go to the battery team. The battery team says, "Well, we need to manufacture a new battery." But now they need to actually capitalize that, so they go to the finance team. And the finance team goes, "Well, we have to go to IR," investor relations, "to say, we need to explain we need more money." It's just a metaphor. The metaphor is that you're all on one team, rowing together, and I realized that we needed to be totally integrated. So I did some things that no one else did. I said, "There's no more divisions. We're gonna be run like a startup. We have a design department, a marketing department, uh, engineering department, a sales..." And this is how every little company is run. And almost no large companies in the entire world are run this way. People say you can't run a f- a- a- a giant company like a startup. But I- I wanted to do that, and I know Steve Jobs had done it that way, and it's like, "I'm gonna try to do the same thing." The next thing is, people tend to do measurement when you get really big, and you do small, tactical micro-optimizations. But then you tend to bias towards performance marketing, towards AdWords, towards small optimizations, and you don't take big creative leaps. Because big creative leaps require the entire company to organize, work together. You don't obsess over things you can't measure, and you... It's hard to measure quality. If this pixel's off, if that doesn't feel quite right, if this thing's complicated, it may be hard to measure, so maybe that doesn't matter. I said, "No, that matters. That's our culture." And somebody once said, "But we can't measure the impact." I said, "That's exactly why it's our values. Because our culture and our values are we do something when nobody notices and we can't even measure it, and we don't even know if it works. The reason we do it is 'cause that's what we believe." It's like, you know, like, this table, we want it to be a certain sheen. But I can't prove to you that more people wanna sit in this room, but I want it that way. It matters to me.
- 1:04:03 – 1:06:36
🎭 How To Be A Great Leader
- BCBrian Chesky
I always joke to people, "The most important customer is yourself." You have to love it, because real artists wanna sign their name to work. And you have to be willing to sign your name in the bottom right corner of that thing to make it perfect. So this is just a metaphor. So it starts at you, your values, and then the last thing is your behaviors. Those are, those behaviors aren't just how you act and behave. It's your capabilities. It's how you make something. And maybe, like, your values are, "We're constantly trying new things." And that has to be rigorously detailed and documented, and I think you wanna show by example. And I tend to skip level. Work with a team, and m- and watch them and keep meeting them. I meet every team in the company that works on projects that I e- I see. I meet them either every week, every two weeks, or every four weeks, and I have 'em show work. It's like a, it's like watching a golf swing. I'm the chief editor or the orchestra conductor. I don't push decision-making down. I pull it in. By pushing making decision down, I'm pushing the company to be fragmented. By pulling decision-making in, it's like a solar system. The planets are coming closer to sun, and then at some point we're all one collective consciousness. We're totally integrated. We can row in the same direction, and we all have the same values. Every single thing you care about in your head as a leader, your culture is as strong as everyone else caring as much as you do about every one of those things. They may never be a carbon copy. Individuality is good. But the further away from you, usually it's like carbon copy of a carbon copy of a carbon copy. And so I think your job as a leader is to flatten the organization to make people feel as close as possible to you. By feeling close to you, they're gonna be close to the values, because you as a leader, you are the values.
- SBSteven Bartlett
And then disaster strikes.
- BCBrian Chesky
And then disaster strikes. (laughs)
- SBSteven Bartlett
(laughs)
- BCBrian Chesky
And then, you know what? When disaster strikes, whatever you do in your darkest hour, that becomes your culture. Because your culture, people think, is the perks, the yoga, the free food. No. Culture is, like, when everyone said, you know, you were gonna fail. In your darkest hour when you didn't know how to get out of the situation, when y- you know, you were in this incredibly difficult position. Maybe you're in a def- difficult negotiation. Maybe you're about to run out of money. Maybe you're in this horrible situation with a competitor. Whatever you do-
- SBSteven Bartlett
A pandemic.
- BCBrian Chesky
... in that difficult... Or the pan-
- 1:06:36 – 1:20:26
💪 Airbnb's Darkest Moment
- BCBrian Chesky
or in our case, the pandemic. And you're about to go public, and you're working on one of the biggest IPOs ever at that point, and then suddenly you lose 80% of your business in eight weeks.
- SBSteven Bartlett
That's what you lost?
- BCBrian Chesky
80% of our business. And we had a business larger... We were handl-... Our, our gross sales were probably higher than Starbucks. I think at that time it was $35 billion. I think Starbucks is, like, 25, 30 billion. So this is gross sales through the platform, gross revenue, gross, gross booking value. When a company that big loses 80% of its business in eight weeks, it's like an 18-wheeler going 80 miles an hour and slamming on the brakes.... nothing really good comes out of that situation, at least not initially.
- SBSteven Bartlett
Was that your darkest hour?
- BCBrian Chesky
100%. It was so dark, at least professionally, I mean, my darkest personal hour I- I'll talk about in a second, but my darkest professional moment was, I remember there were news articles, "Is this the end of Airbnb? Will Airbnb exist?" And this is eight weeks after we were preparing for one of the highest IPOs ever. How could we go from this noun verb used all over the world to suddenly people were worrying c- will we even survive? And I knew there were probably some questions. Not only could we survive, but could I, could I, could I, Brian, lead us through this? I think no one doubted I knew how to build this. I did. I mean, that happened. But was I enough of an adult and a grownup and a leader to be able to manage through a crisis? And that crisis occurred on March 15th. That's when the world shut down, the Ides of March, and I remember holding an emergency board meeting, and I remember there was a quote by Andy Grove, he's one of the, uh, founders of Intel, I believe. And he said, "Bad companies are destroyed by a crisis. Good companies survive a crisis. But great companies are defined by a crisis." And I told our board that we're gonna be that third category. See, everyone was like, "Oh my God, why us?" And I was like, "No, no. Watch us." And I told myself at that moment, "This is our defining moment." I had no evidence that this was our defining moment, but I said, "This is our defining moment." And I said, "What's about to ensue over the next six months will be the best six months in the company's history. We are gonna redefine every part of our company." So I learned a lesson in the crisis. You make principle decisions, not business decisions. A business decision is you make a decision predicting the best possible outcome. A principle decision is irrespective of the outcome, maybe you have no idea how the outcome's gonna play out. How do you wanna be remembered? What's important to you? I wrote a bunch of principles. Some were pretty simple, like act decisive and fast. Everyone... By the way, data oriented people really struggle in crisis-
- SBSteven Bartlett
Mmm.
- BCBrian Chesky
... because the data's changed and they don't know what to do, and they are, are uncomfortable making intuitive decisions. You better do that in a crisis. The second is, as I said, act with all stakeholders in mind. A lot of people suddenly they don't think about everyone, and they get really cold and heartless. I mean, that's a temptation, and you should not do that in a crisis. Always imagine how do I want to be remembered in history? Maybe history won't remember you. Maybe we're not important enough to be remembered, but pretend like we are. Do... If we had to be remembered, how do we wanna be remembered? Act decisive with all stakeholders in mind, preserve cash, win for the next travel season. People said, "Travel may never come back. It may not come back forever." I said, "It will come back, and we're gonna win." And I think the final thing is to remember that a crisis is a terrible opportunity to waste. If you tell yourself, "This is my defining moment," then that creates an optimistic mindset. And that optimism is what everyone looks to because in a crisis, the hardest thing to... You know what the hardest thing to manage in a crisis is? This is what I learned.
- SBSteven Bartlett
What?
- BCBrian Chesky
It's your own psychology. It's not the p- employees, it's not f- the financials, it's your own psychology. Because if you think you're screwed, people see it in your eyes and they say, "Well, you have the most information, so we must be screwed." But if you're optimistic and that optimism is rooted in reality, some basic facts that people still want us to exist and here's why, then that optimism is gonna be the conditions for creativity. And you damn well need creativity in a crisis, 'cause in a crisis you often have, like, two bad options, and you sometimes want that third path. And that's what creativity is. Oftentimes in life, creativity is that third path, that third road that doesn't exist that you pave with all the components that weren't ahead of you. So that's what we did. We rallied the company together. We got in a foxhole basically, and we rebuilt the company from the ground up. We had to make some incredibly difficult decisions. We had to reduce the size of our company by 20, uh, 25%.
- SBSteven Bartlett
History will always remember how you did that.
- BCBrian Chesky
I hope so, and I hope they remember-
- SBSteven Bartlett
Because-
- BCBrian Chesky
... it well.
- SBSteven Bartlett
... I remember it. I read it one hour ago before you came here. I read every article about it, and you were held-
- BCBrian Chesky
Can I read the ending of it?
- SBSteven Bartlett
Yeah, yeah. Yeah.
- BCBrian Chesky
So I wrote this long letter when I, uh, when I never thought I would, and I just wanna read the ending of it 'cause I wanna, I wanna, um, I wanna... I'm gonna read just the close, the last three paragraphs. So I write this letter informing the company of a layoff. This is, you know, obviously very difficult, and actually in a pandemic it's pretty traumatizing because it's uncertain, you're isolated, you're by yourself maybe, and you don't know if you're laid off in a pandemic, who's hiring 'cause the economy slowed down and we were in a recession. So I go through this email, I write out all the benefits. I'm not gonna read the whole thing.
- SBSteven Bartlett
I wanna just fill the gap for you, though, because-
- BCBrian Chesky
Okay.
- SBSteven Bartlett
... the benefits you gave, I read it upstairs, the benefits you gave people were unlike any other company did. The way you looked after their mental health, the way you, um, offered to maintain their healthcare. In the US people lose their healthcare if they lose their job.
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
I looked at it and thought, "Fucking hell." Like-
- BCBrian Chesky
We created an alumni directory-
- SBSteven Bartlett
Yeah.
- BCBrian Chesky
... where if you were laid off, you could opt into a public directory. We'd publish your information and we'd point recruiters to your information, and we ended up getting, like...... mil- hundreds of thousands of peop- recruiters and people ended up visiting those profiles, and a lot of those people got rehired. I was even calling CEOs. And I, I remember this is how I wanna be remembered. I only remember that when I'm in peril, we're in our darkest hour, I'm not just worrying about how we will survive. I'm trying to call CEOs of other companies to see if they can hire our people. But I wanna, I wanna read you what... Oh, sorry.
- SBSteven Bartlett
Y- you made a long-term decision in that moment.
- BCBrian Chesky
Yeah.
- SBSteven Bartlett
It's so clear.
- BCBrian Chesky
Well, I asked how do I wanna be remembered?
- SBSteven Bartlett
CFOs wouldn't have made, like ... Not saying CFOs in general, but finance-focused data people-
Episode duration: 1:37:10
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