Brian Chesky on Launching Airbnb and the Challenges of Scale | Blitzscaling 18

This is session 18 of technology enabled Blitzscaling, a Stanford University class taught by Reid Hoffman, John Lilly, Allen Blue and Chris Yeh. This class features Reid Hoffman interviewing Brian Chesky, the co founder and CEO of Airbnb. This podcast has been produced by Greylock Partners. For more podcasts, class notes, slides and videos, please visit greylock.com It's a great.

Honor for us to have Brian Chesky here. Brian's obviously CEO and co founder of what I think is actually the most interesting of the up and coming unicorns on all kinds of levels. Not just the way the world should be, but also various things that I learned from Brian. I learn about design, I learn about kind of what are the right ways to be an entrepreneur in this set. So it's great honor for us to have him here. Thank you for coming. Thank you, thank you. Let's start with it may be known, but it's worth starting with the story of Airbnb. How did you get the idea? What were the early days like?

Right, right. Well, thanks everyone for listening. Sorry, my thing's coming out. So Airbnb, many people would say that, or a number of people said it's the worst idea that ever worked. Or. Or at least I can say a lot of everyone at the time seemed to say it was the worst idea ever and it worked. So maybe that's the nice connection. It's the worst idea that ever worked. Airbnb. I'll just do a really quick kind of background before Airbnb. So I'm different than most technology founders. And so far that I actually went to art school. So I was an artist by training. I went to the Rhode Island School of Design, and if you guys know that school. And I studied industrial design and industrial design. I know they teach that here in Stanford. It's kind of like product design. Everything from a toothbrush to a spaceship, they used to say, and everything in between. Bless you. And growing up, I never really thought about being an entrepreneur. I didn't even know that existed. I don't even know if I ever heard the word entrepreneur. That would have been an almost absurd thing to say in upstate New York, where I grew up to use that word. In fact, in hindsight, the only entrepreneur I knew was Bob from Bob's Pizza. And I didn't really want to have a pizza shop, so I don't think it would have occurred to me to start a company. My parents are both social workers. My mom used to have a joke. She said, I chose a job for the love and I made no money. She choose a job for the money. And I said, well, I'm going to art school. And she said, oh my God, you chose the only path in life that's going to pay less than a social worker because you're going to be an artist and get paid nothing. And so she said, if you do that, make sure you don't move back home, live in my basement, make sure that you get a job one day and that if you get that job, then make sure that job has health insurance. This is like a grand ambition for my parents. So it wasn't about starting any kind of big company or scaling up a company. And so I wasn't going to be able to call my parents. Oh my God, what do I do? I have 100 employees. How do I scale? That wasn't going to happen in my family. I ended up going to RISD and the school had a profound impact on me, probably much like here in Stanford. Because growing up you're taught to look straight ahead. Like growing up, you don't get rewarded for being disruptive. You just go to the principal's office. And I was there quite often. And so guy to risd and teachers were like, you're a designer, you can redesign everything around you. You, you can. Basically they're saying is you can change the world. That's not something that most parents tell their kids. You can change the world, they tell you to behave. And so I ended up. One other thing happened at risd. I met my co founder, one of my co founders at RISD named Joe Gebbia. And one day Joe says, brian, I think one day we're starting a company together. Well, I'm living in la, working as an industrial designer and I remember my life. And you may be confronting these decisions where everything in front of me in my life looks like everything behind me. In other words, the road is like a disappearing road into the horizon. And it kind of terrified me because it was that job with health insurance. And at risd I was told, no, I can do anything, I can change the world. And you're not doing that. And so I had this impulsive moment where I go into work and my roommate or my friend Joe at RISD was trying to like convince me to leave my company and go to San Francisco. And we were going to start a company. We had no idea what this company was going to be. We just thought, we'll think of the big idea. And so one day I go to work, I quit my job and living in a house with a bunch of Friends that moved across the country with me and I said, okay, guys, I'm gonna leave. And they thought I had like an early life crisis. They thought, like, they need to have an intervention. I'm like, no, no, I'm fine. And I took some old foam mattress, I rolled it up in the backseat of an old Honda Civic with $1,000 at the bank. I drive up to San Francisco. This is October 2007. I get to San Francisco and Joe tells me the rent is $1,150. I didn't have enough money for rent. That weekend, this international design conference was coming to San Francisco. And we went to this conference website and we noticed on the conference website they had like a hotels tab. We clicked on the hotels tab. And in the hotels tab there are always hotels. And next to every hotel said, sold out, sold out, sold out. And at that point we just had this idea. We said, well, designers need a place to stay. We literally have no money. In fact, I don't know how I'm going to make rent. So we thought, what if we just created a bed and breakfast for the design conference? Naturally, that's maybe not what most of you would think to do, but that's what we thought to do, you know, go to risd. You're like, I got to create a solution. So we thought, let's create a designer bed and breakfast for the conference. Unfortunately, I didn't have any beds. Joe had, he just moved up there. It would be like a floor and breakfast. That's like not the best thing. And so Joe had three airbeds. He had gone camping and he had kept some airbeds. And we pulled the airbeds out of the closet, we inflated the, the air beds and we called it the Airbed and Breakfast. And that's where the name comes from. Airbedandbreakfast.com so a lot of people hear the name. They think it's like, you know, like air is like the platform and BB is the house. No, no, it's just air beds. That's all this was. This was just air beds. And so we ended up posting three people from around the world. A 35 year old woman from Boston, a 45 year old father of five from Utah, and a 30 year old from India. And now I got to tell you, the reason we started doing this is because we thought it was funny. Cool. We make money because we had to make rent. There's something that happens though, when somebody lives with you. It's kind of like the arc of a friendship gets contracted From a year to a day. In other words, if you were to meet somebody maybe here at Stanford or in the real world and you get to know them, how much time does it take to like invite them over to your house and have dinner with them? It might take like months, even a year. Like, you don't just get to know people. And what it did, we realize, is it contracted this year long friendship into a couple days. And so these people came as strangers. They literally left us friends. We ended up keeping in touch with them. In fact, one of the guests ended up inviting me to his wedding. The other guest, this woman, moves from Boston to San Francisco. And I think we're realizing there's a bigger idea here. I asked Joe, I said, who's the best engineer? You know, Because Joe and I were designers. Joe could do front end engineering, but we were both designers and product. Product people. And Joe said, well, my old roommate Nate is Nate Joe met on Craigslist. He went to Harvard. He's a computer scientist. And so the three of us got together and we basically had this core idea. We said, what if you could book someone's home the way you could book a hotel anywhere in the world? And that's basically how it started. The one caveat I'll make to the story is after that very first weekend, there wasn't this flash that, oh, my God, this is going to be huge. We actually didn't do anything for four months. In fact, the thing we don't usually talk about is after that we started exploring creating a roommate matching website because we thought no one would ever do this airbed and breakfast thing. But people need roommates. We thought Craigslist meets Facebook, like roommates with profiles. Until one day we typed roommates.com in and realized somebody had built that site. And this was like three weeks or four weeks later. And I said, why the hell did anyone type that site in the first day? Because I just wasted four weeks. So we didn't know what to do. We went home for Christmas and people are like, what are you working on? And I didn't want to tell everyone in my family I was unemployed. So I said, I'm an entrepreneur. Of course. My mom said, you're actually unemployed. I said, no, I'm actually an entrepreneur. And that's also when I learned when you're starting out, the difference between unemployed and being an entrepreneur is in your head. It's usually a mindset. And I was, in my head, an entrepreneur. And they said, well, what are you entrepreneuring? And I'm like, because it wasn't really a common word there. And I said, well, I got this thing, Arab Edden breakfast. They're like, arab Edd and what? And we just started getting used to pitching it. We're like, maybe we should actually do this. And it was still not obvious. The original idea was air beds for conferences. So we ended up launching at south by Southwest in 2008. And the whole idea was, if you're going to a conference, you don't have a lot of money. You could sleep in someone's home on their airbed. And we ended up the second version of the website we built. And we had two customers and I was one of them. So that's kind of how it started. It was. Frankly, it wasn't the Facebook story. Two weeks. It was a longer road.

By the way, I had known the roommates thing until just now.

Yeah, we don't usually talk about it.

Yeah. My first startup myself was called SocialNet and it was a social platform for a variety of matching services, included a roommate service.

Nice.

And that was in 97.

We both were kind of circling.

Exactly. I didn't actually realize that we had dating, professional networking activities, and roommates. Those are the four things.

It's amazing.

It's hilarious.

Yeah. The idea was that like airpan and breakfast was not the big idea. We thought there was a big idea and we didn't think it was that. We thought it would pay the rent. So we had enough time to think of the big idea and we thought the big idea was some social networking something. And of course it turned out that the crazy little idea that we thought no one else would do became the big idea. And I think there were a couple lessons there. Number one, all these really good ideas or big ideas often sound like stupid ideas. Somebody once told me in the early days, don't worry about anyone stealing your idea. If it's any good, everyone will dismiss it. And that was exactly the truth. And the second thing was that a lot of these ideas are you solving your own problem. And they're not like some life changing problem. It's in a nuisance. And that was clearly the case for us.

So tell us a little bit about the early days. You really had to hustle to keep it going.

Oh, man. So we're one of the companies that launched a bunch of times. I actually learned something because we kept doing launches to get a lot of press. If you launch and no one notices, you can actually just keep launching. And so we just kept launching like we've launched and like People would keep writing about it as if we launched. We're like, we'll just keep launching until we get customers. And we'd change things and change the name and we'd launch again. And so the first so called launch was that first weekend, but that was just three people. The second launch was Airbeds and conference in the United States. And we had two customers. I was one of them. And so we decided we'll launch at least one more time. When I used it in south by Southwest at the time, there was no payments and you had to stay in an air bed. And a bunch of people was telling me a bunch of things. They said, why do I have to. I want to go to London, but there's no conference. We're like, why does this have to be for conferences? At the time, that wasn't even obvious. Why would anyone stay anyone's home if there wasn't a conference? It would be too weird. And then we thought, wait, why does it have to be on airbeds? At the time, actually, we had a rule. You had to have an airbed, so you had to inflate an airbed and put it on your mattress. And everyone's like, why am I putting airbeds on my mattress? It's so uncomfortable. And I wake up on one side of the bed. I woke up and the other, it's like rolled around me and it's hot. We're like, okay, fine, you don't need to have an air mattress. You may have a real bed. And the final thing was payments. I don't. We may very well be the first website on the Internet where you could actually book with somebody else and pay them directly. In other words, there was eBay. And eBay used PayPal. But you didn't feel before PayPal, there was checks. There was. Yeah, yeah, checks, exactly. And there wasn't a lot of legacy there, you know, because we looked at, there was eBay and Etsy, and they were both before us. And Etsy used PayPal, and both of them, you would book and they would send you on a PayPal gateway. And we wanted to feel like booking a hotel. Never leave airbnb. We would hold, collect, remit the money. And so whereas they were like paying direct and they would take a cut and there was two different payments. And that was kind of a crazy idea. It almost scared us. It seemed insane that, like, you would actually be able to pay somebody else and be able to book something with them and you would get a reputation system. We decided, let's just do it. And at the time we're like, this is a little too crazy. It's a little too scary. I don't know if we're allowed to do this. I'm not sure if it will work. We decided to do it anyway. And so then in the summer of 2008, we ended up basically designing the final version of the product. So we designed this product where you could book someone's home anywhere in the world. We had a rule three clicks to book it button, because there were so many clicks and so many different ways to get a home that it was just too hard. And I remember hearing the story of when Steve Jobs developed the ipod. No matter where he was in his ipod, he wanted to make sure he was always three clicks from a song. We said we should always be three clicks from a being able to have a paid booking. And so we created this, basically a homepage with a search bar, listings the home. And that's exactly the product as you see it today, with reviews, payment system and customer service. And we basically ended up landing on that. But that was the third version of the product. We kept basically redoing the product. At this point, I get introduced to a whole bunch of investors, probably 15 angel investors. We were raising 100 to $150,000 at a $1.5 million valuation. We were 1 million. And eventually somebody convinced us we'd get 1/2 million valuation, an extra $50,000. So we were trying to sell 10% of the company for about $150,000. And of the 15 people we got introduced to, I think about, you know, we got interest over email. I think about six, seven or eight of them didn't even reply to the email. So we never heard from them again. About seven or eight replied. Of those, half of them said, this doesn't fit my investment thesis. Which is weird because their investment thesis was like, consumer Internet companies. We were consumer Internet. So I that we fit their thesis, but we didn't. Or they said the market wasn't big enough. One person said, I'm just not excited about travel as a category. So we're like, okay. And then we ended up meeting a few more investors and they all passed on us. The low point was we ended up launching in August 2008. We meet with the angel Mike Maples, and we decided. I was so cocky, I said, I'm not even bringing a deck. I'm just going to show them the live website we launched that day on TechCrunch. We have 10,000 people visit our website. I go There without a deck. I have a website. I typed in the website. It doesn't work. So I basically sat in front of him for like an hour and I didn't know what to say. I'm trying to explain to him this concept and he's like, I have no idea what you're talking about. So meaningless to say.

Never told me that.

Yeah, yeah, it was pretty embarrassing. And always have a deck, like as a backup if your website goes down, or at least don't let your website go down if you're meeting an investor and it's like the last money you have. So you know those, like, you know those binders that kids used to put baseball cards in those sleeves? We put credit cards in them. We probably. I probably went 30,000 in credit card debt. Like I would get credit cards like a typical $5,000 max. And I would just keep getting credit cards. The company stopped giving me credit cards and Joe did the same thing. And you know, we went tens of thousands of hours in credit card debt. We ended up launching for the Democratic National Convention though, and we were able to. So 2008, what was like the number. We had this basic idea, we need to get people to talk about us. And we had this thing called the chicken and egg problem. How do you get guests come without homes? Well, you can't get homes if there's no guests. And how do you get them at the same time? And how do you do that on a travel website where you can't just focus on one city because people go to other cities. So you have to focus on cities all over the world at the same time. And basically the thing we thought is we need to get a ton of press. So it's like the spontaneous combustion at the same time. We thought maybe events, higher profile versions of the founding event. And she thought, what's a high profile event? We thought the Democratic National Convention, Barack Obama was coming to Denver, there were 80,000 people coming. Or there was an 80,000 seat football stadium and they had 27,000 hotel rooms. We thought, wow, there's an opportunity here. Plus it's very grassroots. And we contacted New York Times, CNN and they thought like, what are you talking about? This is crazy. No one's ever going to stay with other people. So we ended up just like reaching out to local newspapers. They ignored us. And we had this idea, why don't we just start by getting anyone to write about us? We felt like if some people write about us, other people would refer to them. So we literally started with bloggers. I Wouldn't be surprised if some middle school student wrote about us for the school paper. But if we literally got bloggers to write about us, then people would Google dnc, they would see us come up because all these bloggers wrote about us. Then the local newspapers would write about us. And eventually we worked our way up until cnn, New York Times got it. It started getting traction, but we were still in debt. We got like 80 bookings or maybe less for the Democratic National Convention. We got one or two bookings for Republican National Convention that did not work out too well. And then the following weekend we got like no bookings. And we realized if only there were political conventions every week, we'd have a business. But we have nothing. So this is now almost a year into the business. We're tens of thousands of dollars in credit card debt. Every investor said no to us. We've launched three times, we've gotten national press, and we have like almost no customers every single day. We're. And now one of my co founders decides he's moving to Boston, he's getting engaged, and his fiance is maybe not interested in living in the West Coast. And it was unclear if we were going to stay together as a founding team. And everyone hits rock bottom. For me, this is rock bottom. We're totally in debt. We don't know what to do. We're desperate. Late at night, it's midnight one in the morning. And Joe and I think maybe we're airbed and breakfast, the air beds aren't working out. Maybe we could sell breakfast. I mean, everyone needs to eat. So we thought let's just get in the breakfast business. So we ended up making. We weren't going to make eggs, so we decided let's make cereal. So we started making breakfast cereal and we made presidential themed breakfast cereal. We made Barack Obama themed cereal. We called it Obama O's, the breakfast of change. And we created John McCain themed cereal. We called it Cat McCain's a Maverick in every bite. And we literally handcrafted our own cereal boxes. And we basically used it to gin up press and also, frankly, desperation. And I hadn't been eating at this point, so I was probably also starting to get slightly delirious. And we called General Mills, they were like, what are you talking about? You seriously think we're gonna make unlicensed presidential themed cereal? We're like, okay, I guess you won't. And so then we called these medium sized cereal companies. They're like, great, just send us a non refundable check for like $200,000. And we're like, okay, that's not gonna work. So we found this guy in Berkeley. He was a alumni of RISD. He says, I can't print you 100,000 boxes of cereal, but here's what I'll do. I'll print you 1,000 boxes of cereal for free. Just give me a royalty. We're like, thank you. One day, Joe comes back with 1000 pieces of giant cardboard. I'm like, what the hell is that? He's like, these are cereal boxes. They were just pieces of cardboard we had to fold and glue into boxes. No one told me that. So to fund the company, we basically folded like giant origami a thousand boxes of quacko box cereal, had to pack cereal in them, and we sold them for $40 a box. We thought, who was gonna pay $40 a box? But they were limited edition. So we hand numbered every one. We called it limited edition. We ended up selling like $30,000 of cereal. And that's actually how we funded the company. And now we have a core value. It's called be a serial entrepreneur with cereal to see. I know it's a bad joke, but. And that's basically how we started. And this is the last part of the story. The last part of the story is it was November 2008. We got back to almost broke. It's more than a year in. We've launched three times. We've been on the national press. We have only a couple customers a day. Everyone says this is crazy. I told one mentor of mine about this business. He said, brian, I hope that's not the only idea you're working on. You know, my mom said, like, if you need money, you don't need to have strangers stay in your home. Let me send you money. So people are very worried, and you start wondering about the decisions you've made in life to get here. So I could tell you I didn't feel, like, successful or smart or talented at this moment. I felt like the world was against me. I would go to sleep with my heart pounding every night. I'd wake up, like, wide awake, like, what am I going to do? How am I going to get through the day? We have no money. And a bunch of people recommended we go into Y Combinator. And we were kind of like, well, we've already launched. We're like, way beyond that. Like, you're dying. And we're like, okay, I guess we're not beyond anything if we're dying. And so we meet with Paul Graham, Y Combinator, and he Thought the idea was absolutely terrible. In fact, he said, people are actually doing this? And I said, yeah. And the second question was, what's wrong with them? And I said, oh, shit. So this is. I thought this was a really bad interview, but by the end of the interview, Joe hands him a box of Obama O's. And Paul Graham thought we just bought this stupid box of cereal. And he's like, no, this is how we funded the company. And Paul Graham said, if you can convince people to pay $40 for $4 box of cereal, maybe you can get strangers to stay in other strangers homes. And he also liked us because he said we were cockroaches. And he said, it's an investment. Nuclear winter and the only people that will survive are cockroaches. And you're a cockroach. And so I'm like, thank you. It was actually the nicest thing for like six months. That was the only compliment I got, was I was a cockroach. And I remember calling my mom like, mom, I'm a cockroach. I got in. So that's how we got into Y Combinator, and that kind of was a turning point for us.

And so. But Y Combinator itself didn't make the numbers change. What was the thing that you did or the couple of things that you did that changed the inflection?

There were two. Is this the one? Yeah, there were two things. The first thing was what Y comer did was it basically created a structure for us to work on it full time and live together. So in other words, we were all kind of working on it, but it was like everyone had other things going on in their life. And I think the enemy of a startup is everyone else's life. It's true. Like, you have life and you have vacations and you have conferences and you go away and you do other stuff. And it's like that is the enemy of a startup. You know, Paul Graham used to say, startups don't die, they just fade away. And so we basically decided for three months, Nate would move from Boston to San Francisco, and we'd wake up at eight o', clock, we'd go to bed at midnight seven days a week, and we work from eight to midnight every single day. And seven days a week we get a full night's sleep, but that was it. And we would. And that dedication for three to four months created this real serious rhythm where we weren't doing other things. We were totally focused. That was the first thing. The second thing was Paul Graham. I think the second Thing was, Paul Graham gave us a series of advice that probably changed our business forever. Probably the most important single piece of advice I got, which is probably advice that is probably the most important advice I can give you. Or one of the most important advice is he basically drew out this chart and he basically said, it's better to have 100 people that love you, 100 customers that love you, than a million customers that just sort of like you. In other words, if you have 100 people that absolutely love your product, they'll tell 100 people, and then they'll tell 100 people, or even 10 people, and this thing will grow. We call it growing virally. In fact, almost all movements in history have grown this way as well. There's, like, deeply passionate followers, and they grow it, and they're customer advocates. And the problem is, in Silicon Valley, the general wisdom is, I need to build some app, this thing, and these have this viral coefficient. I need to get millions of people to use it, and they gotta like it enough to share it. And that's totally the wrong way to think about it, especially if you're in a service business like ours. So Paul Graham said, all you have to do is get 100 people like you. Don't worry about millions of people. That was totally freeing, because until then, I'm like, how the hell am I gonna get a million people to do this if I can't even get my mom or my sister to do it? But I can find 100 people. And so we literally decided, do things that don't scale. All you need to do is get 100 people to love you. Do things that don't scale. It turns out 100 people that love you is really hard because it's easy. 100 people like you. 100 people to love you means you need to meet them, you need to understand their problem. And so we literally would fly during Y Commandeer from Mountain View. We commuted from Mountain View to New York. We would go. Joe and I would go to New York and we'd go door to door because New York was where most of our community was. We'd meet with every one of our hosts and we'd live with them. We literally would live with them. We'd write the first reviews for the places. And in fact, I would go there and I'd be like, wow, the photos are terrible. This is actually a really nice house. And the host was like, well, I can't figure out how to get photos onto my computer. This is before, really the iPhone and high quality camera. This is like, people had to plug a camera into their laptop. And she thought, what if you just clicked a button and a photographer next day would magically show up and photograph your home? And they thought that'd be amazing. And so I went home with Joe and we borrowed a camera from one of our friends in Brooklyn who was a photographer. And we knocked on the door and they're like, hello, yes, I'm here. The photographer. And they're like, wow, this is a small company. The founder's also photographing my home. I used to also carry a bank ledger in my backpack. And if you need to get paid, I'd just like Rick about the check, and I'd knock on your door and hand you a check. So that was also a reminder of how small we were. But the point was that doing things that don't scale, if you just think about building something that even just one person loves, it's super easy to create something a single person loves, especially if it's a service. And then you go person by person. Once you have 100 people, then you just focus on figuring out how to scale that. And it's a totally different instructional problem to scale something 100 people love, then figure out what that is. And that was a turning point for us. And so by April 2009, we had hundreds of people that loved us. People started booking, and it became clear there was a real business here. And Paul Graham said, you have to be ramen profitable by demo day. Demo day is the end of y. Com era when everyone presents to investors. Well, he said beginning of 2009, it wasn't clear to be any investors. Sequoia Capital had put out this slide deck rip Good times. That was like the worst possible thing for me to see at the time. Like, what do you mean, good times? This last year's been the worst year of my life. What do you mean the good times are over? What's the next year gonna be like? Because it wasn't good the year before. I'm like, oh, my God, I don't know what this means. What it meant was Paul Graham said there may be no. He actually told us this. He said there may be no investors at demo day. Can you imagine that? A Y combinator? There may be zero investors at demo day. And so if you want to defer a batch because there may be no investors, you can. And we decided, well, we can't defer. We're going to die. And so St. Paul Graham said, well, there might not be investors. So if you're profitable, you never need to get funding. And so we decided, let's be Ramen profitable. Ramen profitable means you're profitable if you just live on Ramen. And I'm like, well, that's more than I'm living on now, so that's totally fine. And so by April, we were Ramen profitable and Sequoia Capital invested $600,000. And at the time, that was like a pretty big deal to get Sequoia Capital to invest. They hadn't invested. Many invested in LinkedIn, but they invested in Google, PayPal. So we're like, oh my God. Like, it was a huge legitimization event for us. And I think at that point the rest was kind of, I don't wanna say history. Cause we're talking about what happened next, but that was the moment at least the product market fit happened. And then it went from building a product to kind of building a company.

And how did you start getting to, like, you had this initial community in New York. You actually got to know your customers very well. So you understood photography was key for unlocking the marketplace. You understood getting the host connected in really well was unlocking the marketplace. How did you start then moving to many cities?

So the really unexpectedly great thing about our business was it was this word network effect, I think, gets kind of bastardized. And it's unclear if it means anything anymore because everyone says they're a network effect, but we truly were a network. And I'll tell you how it happened. So we launched in New York, or we didn't even launch. I mean, we launched anywhere that you could access the Internet, basically. And there was Google Maps, but New York was the big city we launched in. The thing is that we were a travel product in New York, which meant unlike other companies where the supply and demand, like Uber, the drivers and riders in New York, on Airbnb, the hosts were in New York, but the travelers came from all over the world. So people all over the world would hear about and discover homes in New York. They would travel to New York and they'd also travel to San Francisco, and then they'd go back to their city and they'd spread the idea. The other thing is they would go from a guest to a host. And so the network naturally grew. But we also targeted events. So, you know, we targeted the Democratic national convention. We built D.C. through the inauguration in 2009. We focused on music festivals and concerts. So the World cup, the Olympics, these are early, not the most recent one, but the one before. So events in PR were probably the main Ways that we bootstrapped. And then we built this one click post to Craigslist tool that Craigslist allowed us to do until they shut it off like a couple years into it. But we allowed host to basically we built a tool where they could with a single click of a button click and distribute their post to Craigslist to get more distribution. And so the listings would get relisted onto Craigslist and they would feed back. We started doing a little bit of Google advertising, but the main way it grew was through word of mouth and pr. And pr. We used to promote the events. We didn't have any partnerships. We tried to partner with event companies. We tried to partner with like partnerships in your early stage company I found never work because there's so much red tape and paper that by the time you ever get done you're like dead. And so. But PR is super. Like if you've got an idea that's noteworthy, people will talk about it. And almost the more absurd the idea in some ways the better because it's worth writing about. Like it was absurd. People were doing this so they couldn't stop writing about it. And so that was actually a good thing, being kind of a provocative idea. It was good to get the word out. And then we thought if we just get enough people to use it, they'll tell everyone else about it. And so this idea primarily grew through word of mouth. And then we would go to cities and then we would educate the hosts, we'd do these meetups. So we'd go to a city and we call it turning on a market. We would do a meetup, we'd meet the 10 or 20 hosts, we'd educate them. But the other thing is that in San Francisco or here at Stanford, it's not novel for you to meet somebody who started a website that's like not a big deal. And you just had like 15 people come talk to you. You go to like Boston, you go to like Austin, Texas, you go to San Diego. Most people don't go through their day to day meeting a person who built the product they've used. It's very novel. And if they like the product, they want to go meet that person. And so you're in town. So we literally went city by city. We went to Paris, we went to London, we'd meet the host, we'd educate them. And then one thing we didn't realize is they would get so excited they met and they thought they were reasonably nice people, that they would tell their friends about it and Their friends would start doing it and they'd get more engaged. We notice after you meet us, you would get more engaged. Then we'd also photograph your home, give you tips. And so these markets started turning on and then we kept getting pressed. We kept having some funny Obama OS type stunt to get people to keep talking about it. And we just religiously focused on making sure customers really loved us. And we felt like if you loved us, you would tell more of your friends and eventually it would grow.

Okay, so let's. I think that's the great warm up story now. Getting the scale.

My God, I'm just warming up. Holy shit. Exactly. What's next?

Oh, it's the canonical ideal one. So let's first start with a couple of things that you guys do very uniquely from all the other consumer Internet. So for example, because you and Joe are designers, you have an attention design, it's much more intense.

Even my socks, if you notice.

Yes, yes, exactly. But you have this concept of seven star design.

Yep, yep. So yeah. So the concept goes as follows. On the Internet, especially most marketplace businesses, the kind of paradigm is five stars, right? So a YouTube video, Airbnb or Uber or whatever, it's five stars. And the problem with five stars is five stars. Like the only reason you would leave less than five stars is because it was horrible. So if you rate an Uber ride like four stars, your life might have been in danger. Right. And so in other words, the bar to do five stars is really low. On Airbnb, the bar people actually do leave four and three star reviews. But our goal wasn't to get to a five star because a five star might have been nice enough for other people to book it. But we wanted to build a product where you loved it so much, you would tell everyone about it. It would have a meaningful impact on your life. And we believe that travel has the impact to transform your life. Like, I've taken trips and I've met people where it has an impact on your life and we wanted to have that. And so we thought, what if you booked an Airbnb and we sold you a product and you didn't leave five stars, but you emailed the company asking for a six star because the product was so good, you had to almost go above and beyond. And so we imagined, when we design products, we imagine, okay, this is what customers expect. They expect to have a five star experience. And then we basically ask the intellectual question, so let's take airport pickup, for example. What's a five star check in experience on Airbnb the five star check in experience is they give you the address, you get to the house, you knock on the door and they're there and they open the door and they let you in the house and that's five star. And anything worse than that, you start to leave four stars, as you call them, they're like five minutes away. You'll probably leave a four star. And one star is obviously like they never showed up. So the bar is kind of low. Like you knock on the door and they open the door. That's a really low bar. So we ask, well, what's a six star? Well, a six star is they probably pick you up at the airport. So you don't knock on their door, they actually pick you up at the airport. So what's a seven star review? You can actually play. It's kind of fun. Well, seven stars, they don't pick at the airport, they send a limousine and you open the limousine door and they know that you like, I don't know, Pringles. Sorry, that was a weird example. This is like improv. So we're growing with it. So there's Pringles there and there's like coconut water. And they know you are into surfing and there's some surfing magazine, even though you're in San Francisco, you're not gonna surf. That's fine. And that's a seven star. So what's an eight star pickup? Well, an eight star check in is, there's a, like, you know, you get to the airport and they're like, we're coming. And they're like, where are you? And all of a sudden you see like a giant elephant, an elephant is walking by the gate, the terminal, and there's a parade in your honor. You get on top of the elephant and you are paraded away. And you said, well, what's a nine star check in? If that's an eight star check in, how do we get to nine stars? A nine star check in is you get off the plane and you don't even. The moment you step off the plane, there are 5,000 screaming 13 year old women and boys and they're holding signs. I call it the Beatles check in. It's The Beatles in 1964 coming to America and they're just cheering for you, screaming for you, and you basically they follow you and they do a press conference in the front yard of your Airbnb. And so then what's a 10 star check in? Well, I can go to 30, but I won't because it'll be A long day. And the 10 star is you get to the airport and there's a little card and it's got your name on it and you're like, great, there's my ride. But you realize the person dressed in the limo suit is Elon Musk and he just takes you to space. So I've exaggerated to make a point. Usually we don't go all the way to 10, but the whole point is that if what you need to do is just find 100 people to love you, then it's very easy to take for granted. The five star is what people expect. But to build something people love, you almost need to do something more than they expect. And so every moment is an opportunity to do something slightly more than people expect. And we play this out, you go to like all the way to 10. Okay, now we're not going to do all that. But maybe suddenly six stars doesn't seem so bad. Now we should have a service, airport pickup or something like that. And so we do this about almost every frame of the experience. And this also can apply to almost anything. Office design or how you hire people. We storyboard end to end the interviewing experience.

I think one other thing in your seven star design principle that you haven't yet captured which is really important is it's not just the webpage, it's not just the mobile app.

Yes. Yeah. I think one time I told somebody about our product. In fact, there's this person who works for executive at Disney. I'm like, yeah, we have a product team. And he thought, a product. He said product. Do you mean like the house? And at Airbnb, we've historically called the product like the website and the applications, the technology. And I'm like, oh, that's kind of weird. See, Facebook marks. Zuckerberg calls the product the website or the app. But technically speaking, the product is whatever the customer's buying. The customers are not buying our website and they're not buying our application. That's just a storefront of communication. What they're buying is a house. And frankly, what they're buying, more than a house, is the host experience of hospitality, this idea of belonging. And so we realized very early on that we are an online to offline business. In fact, in China, they call it O2O online to offline. But we kind of started, I don't know if you could. I think the sharing economy. We're kind of like a next wave of the Internet. So there was a wave of the Internet things online, Amazon Books online. There was another Wave of Internet connecting together, LinkedIn, Facebook. But then there's another wave of the Internet, the Internet going back into the real world. And Airbnb was one of those examples. And so we started storyboarding the experience and realizing it's really about every moment of the experience. And we have to be responsible not just for the online part of the product, but the offline part of the product. And so that's what we did.

So as a bridge to getting to how you also design culture, I think it's worth sharing with people how you also apply design to the office as part of embodying culture.

Yeah. So I think that there's, I think, I feel like there's all these things. Let me back up and say, before I say that, let me say this. I consider myself a designer by trade, but I think a designer, you know, Steve Jobs used to say, designer design isn't how something looks, it's how something works. And I think when you realize design's how something works, you imagine almost everything needs thought and design. That you don't just design a website or an application, you design everything. You design a company and you design your organization, you design your buildings, everything. And so we started thinking once you realize everything can be designed, then you don't have to pull everything out of a box and plug it in. In other words, your company doesn't need to look like every other company. Everything can be reinvented. Now, not everything should be reinvented. You shouldn't reinvent management and HR systems. But there are some basic things that might be core to you should reinvent. And for us, we decided the space we work in should be reinvented. First of all, our core competency was showing cool space around the world. We better have a cool space. And I also realized early on that a really cool, interesting space would be a huge differentiator to hire people and that you would spend more time in your office than you will in your home. And so it was deeply important that people were comfortable and happy. That was the kind of hypothesis and I think it's pretty much a no brainer. But I think that it's a moment that people completely take for granted. It's totally a afterthought. And I said, that's great that it's an afterthought for everyone else. It's going to be a competitive advantage for us. And one of the things we decided was how can we reinvent the office? And there were like a hundred ideas, but I'll just give you one of them in One of the offices we had, you walk in a lobby and there were photos of our homes around the world. And so you go to this lobby and I remember people were like, just walking around the lobby looking at all these homes, like, oh, these are awesome. And I thought, I couldn't figure it out, but I thought, there's gotta be a better way than just showing photos of our homes. And I couldn't figure it out. One day I'm walking home, I'm walking from my house to. I'm walking down the street and I pass a furniture store. And it's late at night and the furniture store is like lit up. They light it up at night and it's like, there's like a floor to ceiling window and I just look in and it's a showroom. They basically recreated these rooms. And it was hilarious. I thought it'd be really funny just to have a meeting in that, like in a showroom. And in fact, the next day I took somebody to a meeting in the showroom and we were hanging out in a dining room of like a furniture store. But you feel like you're in a living room. And it was actually kind of fun. It was kind of absurd. You're like having a meeting in ikea. But it was actually kind of fun. And sudden we realized, what if all of our meeting rooms were actually modeled piece by piece after apartments on our website? And we ended up doing that. And so I remember one time we emailed somebody, we said, hey, can I. Do you mind if we recreate your home in our office? And they're like, what? And I'm like, yeah, all I need is an inventory of everything in your home. And so some people did it. And we literally recreated the rooms. You go there. Our meeting rooms are literally homes. You walk into, like showrooms of our homes. It's a subtle little reinvention. It doesn't cost a lot of money. Because people's homes, the furniture they put in, is actually cheaper than most office furniture. It's really creative. And we have tens of thousands of people a year who fly or come to our office to tour our office now. And it's because. And our office has become a huge competitive advantage in hiring and people like to stay over. But that's just like a tiny example where almost everything is a creative opportunity.

And that was actually one of the ones that I was like, oh, my God, this is a great idea. Because part of what you're trying to do and when you create a culture is you're trying to create A norm of what are we all focused on? What are we doing? And tactile visual.

Yes, here it is.

Yes, is awesome.

It's so critical that there's no dissonance between what's inside the building and what's outside the building. And I remember I've been to some companies before. Like one time I went to this travel company, travel Magazine, and I imagined their office being this awesome place. And I don't know what I imagined, but I got there, it was gray, it was drop ceilings, cubicles, and you could have put any logo in the front and it could have been literally any company. And I thought people need to be in the mindset of your product, and so you have to put your product in the building. People need to be immersed in the world because they're working in that world. And so when they work for you, there's kind of like they're working in the center of the universe. The center of the universe of your business needs to be the most potent. And the problem is in most companies, it's the least potent. It's like just gray with drop ceilings and cubicles. And so we thought that was a huge opportunity to reinvent. And we've now had a lot of like, CEOs and other people come to our office to get inspiration. Even as of last night, I was showing somebody around.

Well, it certainly had that effect for me too. Actually, before we get to design and culture, that actually also brings up one other point that I think is useful. You spent, I think it was nearly a year living in Airbnb.

Yes.

Why don't you say a little bit about why you did that and what you learned from it?

I did it out of kind of necessity. But so here's the thing. When we started Airbnb, we started in our three bedroom apartment and we started working on the apartment. And unlike most companies, most companies, when they start hiring, they find an office space. And we decided we were going to work out of our apartment indefinitely. In fact, originally we were inspired by Craigslist. Who works in a house? We thought maybe we can put 100 people in a house. We didn't do that, thankfully, but we started working and we hired people so quickly we couldn't find an office in time. At one point we had, I think 15 or 17 people working out of a three bedroom apartment. We literally had meetings in the bathroom and on like the stairwell. It was kind of odd. You know, you should, by the way, never interview someone in the bathroom. It's apparently like a huge violation. So. But at some point, like, we had no space. We turned our bedrooms into meeting rooms. And I said, I'm just going to give my bedroom over to the company. You guys can turn it into a meeting room and I'll find a place to stay. And my first instinct was, well, where do I go? Like, we never built that roommate site. So I'll go to roommates.com, i'll go to Craigslist. And. And then I know, for some reason I thought, wait a second, why the hell will I go on Craigslist? We have, like, thousands of homes here in San Francisco. Maybe I can rent one for the month or a couple months. Then I thought, wait a second, why don't I just actually be kind of fun if I stayed in them for a few nights each and I actually could test them and I could travel that, leaving my city. And so I ended up doing this, I thought, for a few weeks, turned into a few months, turned into almost a year. I think it was like 10 or 11 months where I would stay in a different home every, like, three to five nights. People are like, where are you from? I'm like, three blocks away. And they're like, wait a second, what's going on right now? But it was this huge message of the company. And the message of the company was, this is not a job. This is not even a career. This is a calling. This is a passion. And I think a strong culture is when people believe and feel in what you're doing, and they're not. You know, there's this old parable about two men. They're laying bricks. A guy comes up to one man, he goes, what are you building? He goes, I'm building a wall. He asks the other person, what are you building? He goes, I'm building a cathedral. I think Simon Sinek wrote about it, but it's the idea that you're not building financial systems, you're not building a website, you're not designing. You're not designing different screens and mockups. You're building this mission. You're creating this kind of world. And that's only possible if you're constantly using the product. And even if you're a travel company, you can be living and breathing the product. And I always felt like every one of us has to be a product person. You can't be a business person. You're a product person first and foremost. And product needs a rule, and the product is the thing you're selling. And so we need to be deeply passionate, all of us, about everything that we're doing with the product. And it really told people in the company, you should use the product when you travel, you should use the product when you're home, you should be hosting, and you should become an expert in every part of your product. And the number of people I see that work at some big companies where they are so disconnected from the end customer, those are the companies that get disrupted.

Okay, so last piece on the kind of. There's a lot of things that are unique about Airbnb, but the last thing from the point of view of the class before we get to the scaling part of it. Designing culture.

Yeah.

So part of the reason why we started with the role modeling you as CEO, what you did as the office, those were two of the elements. But what are the other things? Because the design of the culture is one of the things that I see you put more energy into it than any other young entrepreneur.

Yeah, I culture, first of all, like culture I define as like a shared way of doing things. And so that's it. And I think there's no, I don't think there's necessarily good and bad cultures. I mean, you could argue that our cultures are bad. That's usually subjective. I think there's weak cultures and strong cultures. And what I consider a bad culture, some might consider a good culture. Just that's the way they do things. And I wanted to have a strong culture, a culture where everyone was on a mission, it was shared and people were deeply passionate and there was a set way that certain things were done and there were like a series of beliefs that we all had and there were a few governing ideas. And so I decided we wanted to have strong culture. We ended up touring Zappos. Alfred Lin's on our board. He ran Zappos with Tony Hsieh. And we did a lot of research. And one thing I learned is a strong culture is a place where the founders, it's a founder led culture, and it's where the founders really impose this kind of strong kind of way of doing things that people buy into and they're deeply passionate about being there. And again, it's not a job. We cultures, it's lame to hang out with your co workers. Strong cultures, it's totally natural. So the first thing I realized is the most important cultural event is every time you hire somebody. When you're starting a company, the most important culture you make are the people you surround yourself with. The second most important is deciding when people aren't fits, removing them. And there's a hundred other cultures But I think hiring is the most important thing to culture because you're bringing people in, and so the culture becomes the people around you. And so the main thing is the hiring. I decided to interview every single person, which is not crazy when you're five employees, but I think I hired. Interviewed the first few hundred employees. I don't know what the number, but I remember people were begging me to stop interviewing employees. And about a year after that point, they started begging. I actually did stop interviewing every employee, but I literally would interview every employee. And today, when you interview Airbnb, you have to go through functional or technical interviews. So if you're an engineer, you go through engineering interviews or functional interviews, but you also have to go through culture interviews. And everyone goes through two. We have two people, because sometimes you make the wrong decision. So we have two people, and the people are basically testing for six core values. I'll give you one example. One of our core values is to be a host. So they're passionate about the notion of giving and hospitality. And you can kind of tell by their life and their background if they are or not passionate about it. It's deeply hard to not be a host in your DNA and want to work at Airbnb and be successful. It kind of is a weird thing. So you get to learn these things. So these are just some of the things. We created a Core Values Council. It almost sounds like an absurd thing to say at most companies. I don't know anyone else that really does that kind of stuff. Core Values council, it's about 12 people that are experts in the values and the culture, and they're kind of this kind of advisor group to everyone in the company. So people aren't sure if this is the way to do something or not, or I don't know if this is something that feels onboard brand or not. You can kind of book office hours with these people, and they can give you some feedback. And so this is kind of some of the stuff we do. We try not to be overly dogmatic about culture. I think it can go too far where there's a set way of doing things you can never reinvent. So things have to be timeless and more fundamental. Not like this is how we make presentations. That's not culture. Culture, like beliefs that should never change under any technological conditions.

And how do you. I mean, obviously you got a huge drive to that by personally getting it and then evolving it into a practice that includes a cultural interview. What are the kinds of things that, as you begin to hit the scale, because that's the precise thing that one of the things that is.

So you have to basically be relentlessly doing cultural things every week. And so I do as many cultural things I used to do, but now they're no longer person to person. The main leverage points I have now, culture is having people do things on my behalf. You would call it leverage. They're doing it for you. So in the early days I did all the interviews. Then I trained people, I pan picked people and I said, you should do the interviews and here's who you interview for. So I spent days with them, showing them how to interview. So then they started interviewing. Then we had all these people. So I had to create an inner circle that trained those people. I used to meet every single employee and give them a personal orientation. Then I started doing weekly orientations to groups of people. And now we recorded it all because we hired people all the world. And so we've institutionalized this whole onboarding week with all and we curate all the videos and stories. I do the Sunday night email series. I think you've seen some of the emails. Every Sunday night I write an email to the company that's not really a tactical email, but like a more kind of above the trees, kind of fairly thought provoking kind of cultural email. Because I find that if on your first day you say something to somebody, they kind of remember, but then like 100 people said 100 things after that. So you have to continue to repeat things. So I think culture is about repetition. It's about repeating over and over and over again the things that really matter at a company. And then it's about trying to design as many things, like the space. When you check in, there's a key card. And when you check your key card above it says champion the mission. It's one of the values which is like. And it reminds you every day to do that. So there's a lot of subtle things that we do. And I think it's like that touch point, like what is every moment that can be designed to reinforce how you want like people to value things. And it all can be designed. I think culture. Some people I've heard. When I wrote this blog post, it was based on what Peter Thiel said called don't up the culture. Because I asked Peter Thiel's advice and he said, don't up the culture. And I'm like, oh, has that happened? But the way you don't fuck up a culture is by focusing on it and designing it. I've heard people giving it a Counterpoint, there's devil's advocate, which is to say cultures are organic. They shouldn't be designed. And when they're designed, they're, like, fake and sloppy. And I actually don't believe that because most people who've created cultures organically wake up with a culture they don't usually love. Now, it doesn't mean you control everything they do. The whole point of culture is you control only a few things. Like, everyone here is a host, and I'm not gonna tell you how to act, but I am gonna tell you everyone here has to be hospitable and that I'm gonna impose on everyone. If you don't like it, go somewhere else. So you pick just a few things. You can't pick everything, because then you're like Big Brother. Yep.

No. Well, culture is the norms that define what is the team that we're playing on and what is the winning condition.

Yes.

And how do we hold each other accountable? Not through a hierarchy, but through a community.

Yes, that's right.

Through each other.

Yeah. And they work really well through, like, peer accountability.

Yeah. That's why it's key. And as I was mentioning before the class, Reed Hastings also in into this a couple weeks ago. So let's go to the challenges of scale. So now a substantial time in the wilderness. Inventing Obama O's and cereal, moving on to the breakfast part of it. And then financing. Beginning to get customers love you beginning to get a network effect by which guests would come and then Kobe host and then be spreading the world. And so now you've begun to hit your product market fit, and you've begun to scale it. What were the things that started changing for you that you had to now learn now that you were scaling?

Oh, the first one was a long list. Yeah. First one was hiring, and I think hiring and then management of the people that you hired that still, like, still starting in, like, mid-2008 until today, that probably became and is sustained to be the most important thing. And when you're just starting, other than picking the right co founders, which is also kind of like the most important thing, it seems to be important. So before product market, other than your co founders, I find the people around you weren't the most important because you and your co founders presumably can do most of the work, and it's just really on you to figure out almost everything. And so I found before product market fit, I did everything, and I literally did everything but code. I did everything. And then post product market fit, you do very little except Manage, create a vision and hire people. And so suddenly you shift and you go from building the product to building the company. Builds the product. Well, the company is mostly the people. And so I had to figure out how to find great people, attract them, recruit them. And then the craziest thing is once you hire these people, like what do I do now? I gotta manage them. How do you manage somebody? Like what does that even mean? I'd never been managed or managed somebody in my life. I mean I worked at a company before but in hindsight I don't think I was managed very closely. It was a small firm, but I kind of did my thing. So I didn't. And I managed. I was like a camp counselor at a hockey camp. That wasn't really management. They were like 12 year olds and I tell them how to skate. That wasn't really management. So I'm like, oh God, I don't really know what management is. And you're managing people older than you and that's also kind of weird. Like oh my God. And so at first it's a really odd experience. And so you kind of learn partially through trial and error by like making tons of mistakes. Like, like a classic management mistake is like people complain so you immediately appease them. So you basically reward people to complain. And the people who don't complain like get disenfranchised but they're not extroverted, say, just leave the company. Like there's just these little things that are kind of in hindsight intuitive, but they seem counterintuitive. And so I had to learn. I think learning to hire and manage was one really big thing. I think learning how to move towards from an intuition to data informed. Because I think when you're starting and building a product, I think data is not the most important thing. I know people do a lot of AB test to try to figure out a product. I really feel like pre product market fit data is not the most important thing. It wasn't for us. I mean we were really going off of person to person interactions and then you have to work on moving towards data information. So obviously AB testing and cohorting and all these things that were foreign to me saying data kind of building people thinking more long term. When you're a startup before product market fit, thinking long term seems preposterous because there may not be a long term. It's kind of like if you're dying, you're not thinking about what you want to do. When you grow up you're going to think about how Do I not die and how do I plug this wound? So you kind of move out of this terminal, you start thinking more terminal. I think those are probably some of the big things. But there were other things like actually having a plan, a roadmap, a strategy. You don't have plans in a startup, you don't have strategies, you don't have roadmaps. Roadmaps the next two weeks and suddenly I've got three engineers, they got to know what to do for the next three months. And so you start creating roadmaps, you start having a wish list. How am I going to get the word out, how am I going to expand? So things like that.

Well, the overall thesis in blitzscaling, as you know, because you're one of the people living it and doing it is what got you here is not what will get you there. And you're changing like you used to be, entirely very short term focused. Where the results this week, today, this month matter versus what's my year plan? What am I actually in fact trying to make happen one, two years from today? Which changes the question of am I doing it myself or am I essentially first hiring people, then hiring managers, then hiring executives and keeping a culture. The game changes as you're going and so what got you here does not get you there.

That's one of the weird things. It's kind of like there's this perception that when you start a company, you grow a company. See everyone, when they ask me at Urban V, they always ask me the founding days. It's as if like you have this idea, it takes off, then you just got to find a way to manage it. And the truth is that so glosses over all the other stages. Like you have like five stages. Stages two, three, four and five are as complicated or more complicated as stage one. I mean, I think stage one is actually fairly straightforward. Like solve your own problem, do something that don't scale, find 100 people that love it and have some really great co founders that you trust. Make sure you are full stack designers and engineers in your founding team ideally. And I mean there's just some basic principles. I don't think it's that complicated. And even if it is, it's well written about. But the thing after that, there's like not a lot of books about and everyone gives you the wrong advice and you gotta figure it out and you're kinda on your own. And the risk is if I ask a CEO how to manage and they work at a huge company, they're gonna tell me the wrong things. Just like you talk about, like, you're like skating, but it's not ice, it's water. It's like the ice skates don't work yet. So one of the one, we invited a CEO over and he gave me this piece of advice I'll never forget. He said, every six months you keep your job, it's a promotion. I almost think in hindsight, it's better to say every six months is a totally different job. So it's not like this metaphor of you're an athlete and you're like. I don't know, you're like a tennis player and you play small tournaments and you work your way up, you start playing tennis, then you're like a bowler, then you're like a football player, and then you're playing hockey. The job changes so much, you're almost playing a different sport at every job. And this is why it's fairly. I don't know if it's rare, but it's hard to start a company, to be the right person to start a company and be the right person to manage it when it's a thousand people, because it means you have to be different types of people and it's totally different. Like, at a large company, you have to be extremely strong at usually to be fairly strong in public speaking or writing, because that becomes your primary management tool. Like, how do I speak to the company? I either write them an email or I say something in a video or in front of a bunch of people. In the early stage, you're around a kitchen table and it's four people, so your interactions are different. So just there's all these subtle things that, like, the skill sets start changing. The most important thing, I think, is being adaptable, because no one's an expert at everything, but you gotta be very adaptable. And I've seen people who've been able to scale and people who haven't been able to scale. And I think there's two things that I've identified at being able to scale. One is just general intelligence and talent. Like, if you are like over your head when you start, it's hard to ever not be over your head. But the other thing is people who are kind of curious and adaptable. I found that, like Pablo Picasso had a saying. He said, it took me four years to learn to paint like Raphael, but it turned me a lifetime to learn to paint like a child. We have to kind of be kids at heart in startups. I find, in the sense that you're curious, you're open mind, you're welcoming, you're adventurous, you're not a know it all, know it alls will never scale in startup. So if somebody's a know it all, they know everything, so they'll never know more. So you're not going to scale. That's kind of the way I think about it. So these are the things and I've had to be that and I've sought out your advice. And if you're not a know it all, you are shameless about getting feedback. And so I've had to surround myself with people much smarter than me, much more experienced than me, including Reed and many other people who've gone through what I haven't gone through yet. But you're right, it's not even like you're slaying a different dragon, it's like a different sport.

Term that I use for it is infinite learners. And you're actually one of the people I use as an example because literally, the very first time you and I did a press event, it was the first time that I had done a press event with an entrepreneur in my portfolio, where the very first question you asked me when we got off the stage was, what should I have done better? It was literally we walked out and it was like, what should I done better? I'm like, you're the first time I've done this with somebody and it's the first time. That's been the very first question. Anyway, Infinite Learner, I think, is actually key for managing the scale and the blitz Scale International. One of the things as you begin to scale, it changes competition. Right, so you got Windu in the early days. How did that kind of change your notion of how you were playing when you began to see people being in the go from, oh, that's crazy to, oh, that's essential. And we're all now trying to compete.

There's like a bunch of stages of startup. The first stage is, I think, survival, meaning, like, you're not meant to survive. So you start this company, you have this idea, and everyone's telling you you're crazy. You can't get any money, you can't raise any money, you're co founders, you don't even know if everyone's gonna keep working on it. And so I call that, like, survival and not dying is working on it. The next day, it's like no one actually kills you. You just fade away. You stop working on it. The second stage is probably firefighting. And so then you are firefighting, oh, my God, we're growing. I need to hire these people. I don't know what to do. Then once you get through the survival and some of the initial firefighting, you've gained the luxury of having all these other people now decide to copy you and try to destroy you. So now it's existential threats, true existential threats. And we had two. One was government relations and the other was competitors. And I'll talk about competitors. So we got to the point where we started getting successful only to have all these people basically copy us one day. It was early 2011, so about two years in from 2009 of it working. So 2009, 2010, it kind of was working 2011. So we had two year kind of honeymoon, or I don't know if I call it honeymoon, but like. And then suddenly, by the way, in 2010, somebody, this guy, Howard Hartenbaum, he's an investor at August Capital, he told me, he says, whatever you do, all you gotta make sure is these two brothers don't copy your website. And I said, what two brothers? He goes, they're called the Sandwer brothers and they're notorious. And usually when they copy a website, they scale it and they kill you. But he's like, don't worry though, because you're fine, because they haven't copied your website. And they probably. If they haven't by now, they won't. I'm like, thank God we're free. All of a sudden we notice people, like, we notice a lot of suspicious activity and people spamming our users and we're like, something's up. We didn't know what's up. Turns out we find out the Sandler brothers have the Ryan Airbnb. Now, I'll tell you how scary this was. In 2011, the hottest startup in the world was Groupon. They went from $0 to, I think like a billion dollars in revenue in like a year or two. At the time, that was completely unheard of, actually still kind of unheard of. And Groupon grew that fast. Not because the U.S. business, but because the European business, which was called citadeal, that was actually the Oliver Sandler clone that Groupon had to buy. So basically, these two brothers not only, I was told, would kill anyone that they cloned. They're like the attack of the clones. But they also had built what was at least being positioned at the time the fastest growing, most successful startup of all time. That was how Groupon was positioned. That was not somebody that we were interested in fighting. Right? Suddenly you're like this giant dragon appears you're like, this is not possible to beat him. Now, at this point, we'd raised $7 million, in fact, from you.

That's where I entered the picture.

So Reed had given us $7 million. And then suddenly in 2010, I think in April 2010, by January or February or March, some point, 2011, they raised $90 million, and we had 40 employees. And it took us two and a half years to find these 40 people. And in 30 days, they hired 400 people, and they opened 20 offices. And I had no idea how you even open a second office. Like, we have one office. How do I get a second office? Do I fly there? Do I get an apartment? And they had $90 million. And I was like, this is horrible. And they basically said, we're gonna do in Europe what you do in the United States. Now, the problem with that is most companies, if they lose Europe, they're just a smaller company in Airbnb. If you lose Europe, there is no Airbnb. A travel website where you can't travel to Europe is like a phone without email or phone without signal. It doesn't. There's no reason for it to exist. So this became a bet. The company fight. And we didn't know what to do. We had a proposition to buy the company. It would have been very expensive, but more importantly, it would have been huge cost, culturally. And I didn't know what to do. I remember I called up Mark Zuckerberg because they cloned Facebook, this studio set. So I called up Andrew Mason. Andrew Mason told me, yeah, they're probably gonna kill you. He had told me this story that Oliver Samwer was so good at copying companies that it was too easy for him. He needed to turn it into a challenge. So he decided to hire developers from North Korea and just. Cause I don't know. And Andrew described it as. Cause it was like he just wanted to make it more challenging to copy. His company was too easy. I don't really believe that story. But it was just. In other words, there's all this mythology. Mark Zuckerberg told me, don't let them sell. Whoever has the best product wins. And he ended up being right. Paul Graham gave me even better advice, though. He said, you're missionaries. They're mercenaries. And oftentimes, missionaries often win. So he said, you should basically just pretend they had this baby, but they don't want to raise the baby. And so I thought, well, we're founders. We want to grow this company. So I'm like a parent, and I want this child to grow into this wonderful company. And so I said, well, I didn't say this to Oliver Sandler, but my view was my biggest punishment, my biggest revenge on you is I'm gonna make you run this company long term. So you had the baby. Now you gotta raise the child, and you're stuck with it for 18 years. Cause I knew he wanted to sell the company. I'm like, no, no, you're running this company. And I knew he maybe could move faster than me for a year, but he wasn't gonna keep doing it. And so that was our strategy, and we built a company long term. And the ultimate way we won is we had a better community. He couldn't understand community. And I think we had a better product, but it was a do or die time, and we ended up flying to Europe. We hired a bunch of country managers, we flew them all to San Francisco, and we basically trained them for a month or two. We said, now go to your country. Hire your team. Here's how you open a market. Here's how you open cities. And we opened, I think, like, eight or 10 offices in, like, three months. It was actually totally insane. We hired hundreds of people, and the whole speed of the company picked up at that point, and a couple years later, obviously, like, it was game over.

But, yeah, it was one of the principal triggers for Airbnb going to blitzscale in the organization.

Yeah. Because we were not. We were. I think that was a. The first moment was Y Combinator, where, like, we had this hustle of if we weren't successful by any Y Combinator, we're probably going to stop. So we hustled and then we started moving, but we weren't moving as fast. Then 2011, boom. Samwer, I mean, the gift he gave us was a scale fast, and he took a cubby that was kind of successful, and he kind of compressed our time to becoming an international network effect within a year. And by the end of 2011, it was clear it was going to grow really fast.

So two last questions before we go to a few questions in the audience. The first one is the other one that triggered, obviously, was government regulatory. And you and I both speak about this a lot, so you can find it in detail in YouTube and Google and news things, because, roughly speaking, this is the way the world should be. People should have this kind of social belonging. People should be able to. They can already rent the room to students. They should be able to rent a bed. People should be able to connect with them. And obviously, we should make sure that this is the social space, the neighborhood. That's all done the right way, but give a little bit of character as kind of like, here's a. As we win the scale, here's how a unique challenge hits us.

Oh, yeah. So the problem with all these challenges is they always like, hit you in the. It's like you're walking down the street, someone just punches you in the side of your face and you never saw them coming. And that's kind of what it felt like with every one of these challenges. So Sam were like, hit us in the side of the face and same thing happened. Government relations. We had a number of big problems. The first problem I Remember having was June 2010, when we got word that New York City was going to pass a law. They hadn't heard about Airbnb, but they were trying to go after this landlord that wasn't even on Airbnb that was converting apartments into like hotels without getting licenses. And we thought, oh, this is a problem because this might affect our users. Of course it did. They said, oh, the city won't enforce against you. It's just an enforcement based policy. Don't worry about it. And we're like, okay, we won't worry about it. So then a couple years later, we get an email or a call, actually a physical letter from the New York State Attorney General saying, well, actually there is this law and you are violating it or your users are violating it. And so we want the data of your users to enforce against thousands of people because we don't know if we're paying taxes. And more importantly, we think they're breaking short term rental laws. And so suddenly we're confronted with these huge, potentially ominous challenges. And Attorney Generals are very scary people. They actually have quite a jurisdiction and they have reputations of putting people in jail, especially New York State Attorney Generals. His predecessor was Eliot Spitzer, and he was quite scary as Attorney General. So you're just kind of suddenly I remember us having conversations like, how do you know how to do fight an Attorney General or not? And how do you do that? And I could tell you the details of how that fight happened, but I think it's more the principles that matter. I mean, the details were he wanted specific personal information on tens of thousands of users, many of whom weren't violating any rules. We thought anonymized data is one thing, but we're not just handing over so you can just discover rules people might be breaking. That's a phishing expedition. And we viewed that if we challenged them in court, we'd win. We challenged them in court. We did win. We eventually compromised on a narrow set of user data, which is not any different than a subpoena, which all companies basically comply with. But that was overly broad. It was like a fishing expedition. And so we didn't want to do that. But the bigger thing is, how do you learn how to deal with government relations? It was a huge challenge. We had a lot of trial and error. My first instinct was to fight, to be like this. Fight for the people, mobilize people. In 2010, we wanted to do that. We staged a rally, a political rally. After I learned how to build a website, I had to learn how to stage political rallies. So we go to, like, New York City, go to City hall, and we'd give people signs and they'd help. And then we realized that's not really the right approach for us. We're a company where people are living together, and we're trying to teach people that people are fundamentally good and they're living together. A company where people live together is not a good company that has a brand of fighting. Because, I mean, the big fear is people are going to fight in their homes, this and that. We need to be partners of cities, and we want cities to know they love us. And so we decided, you know, we're gonna kill them with kindness. In other words, we're gonna show them that we wanna be partners. And I also learned another lesson from government relations, which is I always had this instinct that if people don't like you, you should never talk to them. And somebody told me this saying. They said, it's hard to hate somebody up close. And so I kind of created this counterintuitive thing, which is that I will only I'll meet everyone that hates me. And the goal isn't to make them hate me, not hate me at the end, but you'll hate me less after you get to know me. And I think you'll understand me. And that was totally counterintuitive because I used to have this fear that if I didn't think I could convince them, I thought it would be a bad meeting. I didn't want to have bad meetings, and I wanted to avoid conflict. And so we basically had this view that we're going to meet everyone, and the more you hit us, the more we might be even inclined to talk to you, because we think there's misunderstanding and it's not to get you to like us, but so that you will understand us and at least you will be informed. And so we decided to go on a listening tour. At one point in New York City, I ended deciding, I'll meet everyone that hates me or a lot of them. I ended up meeting, like 40 different people, tons of horrible meetings. But months later, there was a lot less, like, kind of vitriol against Airbnb. I mean, people suddenly had an understanding, and so that really helped a lot. Now we have to meet with, like, senators, all sorts of politicians. We were on the ballot in San Francisco. How do you fight a ballot initiative? There's like, it's just so crazy because. Because we're a business in the real world. The scope of things I've had to learn how to do are astounding. We've had over the summer, almost a million people living in a home every night. How do you keep a million people safe every night that are staying in strangers homes, often from different countries, where sometimes the countries never even live together, like these different cultures. So the bigger lesson is, you know, you had a saying, starting a company is like jumping off a cliff and sending an airplane on the way down. And I guess my point is that never stops. It certainly happened for me, starting the company, but then it was always the next thing, and now I have new things, so it never stops. And so I think the biggest thing I've had to learn how to do is learn. And learning means going to the source, and I don't know.

So, last question on the kind of things that surprise you as you grow these globally relevant companies, because you just came back from it. Paris.

Yeah. Oh, God. So everyone's obviously quite aware of the horrible things that happened in Paris last week. Terrorists killed, I think, 129 people from ISIS. Well, what you may or may not know is that I was in Paris with a huge part of the company while the attacks were happening. So last week we had our annual convention. We have or conference. We have this thing called the Airbnb open, and it's an annual. It's a third year in a row we've done it. And hosts from around the world fly in. Last year was here up in San Francisco. This year we had it in Paris. And it's, you know, it's like our version of what Salesforce might call Dreamforce or whatever. And hosts come together and we really kind of update them, and the new products, new values, everything. And we had 645 employees fly to Paris to be a part of this, and about 5,000 hosts. And I was there in Paris with all of them. And by the way, my parents were there, my Sister, My girlfriend came with me. So, like, kind of everyone, my life was there. And I'm in Paris. It's two days into the conference. I finished. I did two keynotes the first day and second day. So I take a deep breath. I'm like, I'm done. Thank God. I'm gonna relax. I had this dinner, a celebratory dinner for. We called it the 10th street dinner. Basically, we had an office on this 10th Street. And it was basically everyone. There's the first 40 employees in the company, they're still there. So we called it the early employee dinner. And we brought them together to celebrate and recognize them for being at the company for almost five years. And we're having this wonderful dinner. Joe gives a toast. Thank you all. Da, da, da. It's amazing. Dinner. All of a sudden, our phone starts buzzing. I see Twitter. I'm like, attack in Paris. And it was at a restaurant and there was a shooting. We're like, oh, that's really horrible. That's terrible. But not unlike. You'd read, like something horrible happened in your city. You're like, okay, that's really sad. And so then we put our phone away. About 30 minutes later, my phone starts buzzing again. There is a massacre in a theater. A hundred people. Well, actually, we didn't know it was a massacre at the time. 100 people taking hostage in a theater, another location. Then my phone buzzes again. There's a suicide bombing outside of a stadium. Oh, my God. Suddenly my phone buzzes again. At this point, what had happened was we had 645 employees that were going to dinners and events throughout the city of Paris in 5,000 hosts from 110 countries that were throughout the city. And at this moment, there were seven coordinated attacks happening within a one hour period in random event places all over the city, particularly in the areas that all of our employees were at and all of our hosts were at. And the thing that was so scary was the places they picked were gatherings of many people in many countries where all of our. That's who our people were. And they also picked random places to create the psychology. These attacks could happen anywhere. So this point, fear struck over the dinner. We realized we're under attack. There could be another five or ten attacks, and it could be anywhere. I got, you know, I started finding out there were employees that were. Some of our employees were at a restaurant that were next to the Backland Theater where the massacre was, where 89 people died. And one of. One of my employees, somebody I'm very close to, was sitting in the restaurant looking out the window when they saw all these people running by them for their life and they're screaming. I mean, the look of when somebody's running for their life and they just witnessed a series of murders, I can only imagine that feels like. And so people. And then suddenly people were in restaurants. They shut the lights, they closed the metal gates, they're hiding under tables. We had a whole team at the stadium, and the stadium, they had like a stampede and people were running out of the stadium. So this was not something I've ever had to deal with. So what do you do? So I'm at this party, we have a head of security who's in a different building. He creates a remote command center. I literally create a command center in a walk in shower. Because we're in a two bedroom apartment, 50 people. I had nowhere else to go. I mean, there was this giant shower and it was actually frankly, good acoustics because it was just stone. So if you were just sitting there and I couldn't hear anywhere else, I close the door. We create this command center with our phones and we pull up our laptops. We still have signal. We were told we might lose Internet at any moment. And we basically go through. The first step is account for everybody. So we create a list of all the 645 employees. We start calling and emailing. We go down the list and we have this remote command center accounting for everyone. Then we got to figure out what's the next thing we do. We need to work with the local government because some people are going to be sleeping outside and we can provide housing. So we work with the local city in the federal government of France and try to provide housing. And we get our hosts, 300 of them, to open their homes. Very spontaneous for anyone that needs housing. And then we got to figure out what are we going to do about this conference. We had to cancel the next morning and account for people and deal with their families and everyone's reaching out. So it was something that. It was one of those most insane ordeals. We had to fly all the people back, make sure we provide the employee support for them. And I've never had in my life to deal with anything quite like this. We were in the center of this huge crisis. And as remarkable as it was for that time, it's not remarkable in the arc of a startup. In other words, that was very specific, but that physical event is kind of a metaphor of so many things you do. And this was just physical safety. I've never had to deal with something quite life and death like this before. But so much of that remind, when I was going through that last week, I'm like, oh, my God, this reminds me of the first four years Airbnb. And I don't mean. I just mean the way my body felt. Constantly pounding, not knowing how I get through the day, constantly firefighting. Oh, I'm selling you and starting a company, by the way, for the right people. It's a rush, but it is this constant thing. And the other thing that, that last thing I'll say is it was at that moment that reminded me the responsibility I have. Because, you know, I'm conscious of the responsibility I have. We have a couple thousand employees, we have tens of millions of community members, but at that moment, you are so much more conscious. Your responsibility is truly real. And people's lives, I mean, in some cases, they maybe do depend on you, or at least their livelihood depends on you. And that was a huge and humbling realization that I had.

So can we go a little long?

Yeah.

Okay, so, because I know we're at time, but we're going to go a little long, I want to make sure that was a really important story to get to for all kinds of obvious reasons. But I want to get to a few questions as well. Start here.

Could you talk more about learning how to learn? Like, was it reading books?

Was it self reflection?

Yeah.

So, yeah, it's talk more about learning how to learn.

Yeah. I'm certainly not an expert on how to learn. I think people here at Stanford are going to teach you a lot more about how to learn. But I'll give you just one tip. I think there's a lot of tips I'll give you. Maybe one. If I told you I want you to learn about a topic and you got a week to do it. So let's say I want you to learn about the basics of UI design and you had a week, what would you do? And I want you to really learn it. I want you to learn everything that's important. I want you to become like an expert, or at least a temporary expert, such that you could know the basics and know the most important things. You would probably read like a ton of books, talk to a ton of people and interview people and go through this fairly exhaustive process to learn about UI design. And so what if I told you, well, in that week, I also actually want you to learn about the basics of front end development. I want you to learn about the basis of accounting so you can have balanced books and I want you to also understand how to incorporate a company. Now, how do you do that? Because you start adding the hours. You don't have hours. So what you learn is you can't learn everything about a topic. So you have to be very good at short circuiting to learn from the definitive source about the topic. And the skill becomes. You hope that you go to the right source, because if you go to the wrong source, you learn the wrong things. But you also find that if you read the right source, you don't have to read any of their sources. And like, you know about management. Somebody gave me the book High Output Management, and it turns out I never had to read 10 management books. I had to read that one book.

That was Keith.

It was Keith Rabaugh. That's right. And it's about Andy Grove, founder of Intel. And like, if you read that book on management, you kind of know about management. And you know, Paul Graham probably was a version of that for Y Combinator. And so what I've had to learn how to do is seek out the experts and like, it's kind of the equivalent of like reading writings of intelligent people. Rather, if you want to learn about the news, read about somebody who's deeply informed and watching like a political talk show for four hours because you're going to leave kind of confused and if you won't have any deeper context. So I found that going to the source and Reed was a source for me. I wanted to learn about trust and safety. I went to George Tenet, the director of CIA, and that was fairly like former director, sorry. And that was kind of over the top, but it was helpful. And the cool thing is the more successful you get, the more you have access to them. But even before you get really successful, you can certainly read about the best. And I also learned from biographies, but I think going to the source, there's a lot of other tips, but that's just one tip I would give. And then you gotta be shameless, because I found that, you know, most people will help you if you ask a question. And the biggest reason people don't help is because people don't get asked. And you know, we're here to share information and knowledge. You gotta be willing to have the courage to ask people and seek out knowledge. And I was shameless at asking you questions, like over and over again to a point where it's probably annoying, but I didn't care. I was so shameless. I didn't care if I annoyed you because I'm like, I need to Learn this. Yeah, exactly. Can you talk about the prehistory you have with your founders and how you sort of, like, selected them and knew that they were the right fit for you? Yeah, I kind of got really lucky if I, like, wrote a book about how to start a company. I think the one part I wouldn't be helpful is how to pick co founders, because I got really lucky. That part kind of fell in my lap. I went to RISD with Joe, and I was friends with him for seven years. It's now 15, but I was friends with him seven years before I started the company with him. And he was kind of like a best friend of mine or one of my best friends. And then my other co founder, Nate, he kind of. I didn't know him, and so that was a little more of like a happenstance. So it was kind of luck. And I had an intuition. He was a great engineer, but it was like. And I could tell by the things he built, he was pretty extraordinary. But there was an element of luck involved with Nate. So I'm not the best. I did not go through the struggle of having to find co founders. So I can't tell you a long journey about how you do it. I can say a few things, though. The first thing I would say is you should a few things about co founders. Number one, I think the mentality should be your co founders should be better than you. If they're not better than this, you should at least feel like they're equal. And I see a lot of people who find co founders who they kind of consciously know aren't their equals. And they're not really co founders. They become proxy early employees that can't scale. And when they can't scale, they get super disenfranchised and they're not useful and they're not able to contribute. And I think sometimes people do it because they're lazy or at insecurity. They don't want to equal the company because it may be like a power struggle. I think you should try to find people you admire that are better than you, that challenge you. The mentality is if they're better than you, then you will rise to the occasion, become better because you're around them. And the other thing is, you have to have people that you deeply trust and like, you're gonna be around these people for 12 hours a day, 14 hours a day, 16 hours a day. If you're kind of annoyed by them after four hours, you're gonna be annoyed by them after month seven, 24, seven. You're gonna really, like, not be able to stand them. So you need people that you like, that you trust and that you admire. And ideally, you have a long history with them. I had long history with one of the two, but I think Nate, who I didn't have a long history of, proves you don't have to have been friends with them for seven years for it to work. And I generally find complementary skills rather than overlapping skills works. Now, Joe and I appear to be the same people on paper at least. Our found our origins, but we ended up having, frankly, very different personalities and skills. As it turned out, Innate is totally our opposite in many ways, the woman. So I was wondering at the beginning, you were a designer. How do you. You make a switch to the entrepreneur? Like, what's your mentality change? Also about. Like, you mentioned about the tough time. Like, how do you convince yourself? And like, this is a good idea to keep working on it. When do you, like, keep going? When do you stop? Should you repeat the.

Should I. Yeah, summarize it.

Okay, so how did I switch from becoming a designer to entrepreneur? And then during tough times, why did I keep going? Right. So switching from designer to entrepreneur, it's really like, how do you switch from anything to becoming an entrepreneur? I was always kind of. In hindsight, it turns out I always was an entrepreneur. I just never knew it existed. Meaning I was always, like, creating things and starting things. Although they weren't always businesses. They were usually like projects or films of my friends or things. Growing up, I created clubs. And so I think the best way to become an entrepreneur is just to become an entrepreneur. Like, I don't know else to say it. In other words, just start and just creating things. Create things of people. The best preparation for creating a company is to create a company. If you can't create a company, create a club, or create a product or create something. And I found that throughout my history, all the things I created, whether it was my club hockey team at college or this thing I designed or a project with my friends for fun, and usually it was outside of school, and it was always slightly mischievous, just slightly kind of fun or a prank or something, I think that's the best thing. So I think other than the fact that it is good to learn in these classes, the thing that's even more useful than being here right now is to leave this thing and to start something immediately and not learn how to start it. Just start it, because you will trust yourself and you'll learn. So that was what I did at RISD though the school teaches you to start things because you constantly have. They give you some impossible challenge, like, okay, go figure it out, go. And I think just having that being almost. It's almost like becoming impulsive, but to kind of learn to be impulsive in some ways, because just to start and plunge in is kind of an impulsive thing. I think the second question is, why do we keep going during the tough times? Which is another way of saying, why did you have conviction and resilience? Right. Because you need to have resilience and conviction to keep going. The thing about startups, of course, I keep quoting things that Steve Jobs said because he's one of the people I've learned a lot from, from afar, of course. So. Yep. So there's a lesson. Study people you admire. But he said, you have to be passionate about things you do because there are going to be days where it's so hard it's easy to stop believing in it. So if you don't have this reservoir of deep passion for what you're doing, you'll like, kind of lose faith and stop believing in it when it gets really hard. And I had this deep conviction it would work. And many people say, well, why did you have this conviction? Why did you believe Arab Ben Breakfast would work? And it was that very first weekend we hosted three people, and I saw how my life changed and I saw how other people's lives changed. They literally changed people. One person moved, the other person decided to go on a different path because of the designers he met. And I thought with Joe, if people could experience what I'd experienced that first weekend, this would be an idea that spread around the world. And I really believe that. Now, I couldn't get people to actually give it a shot, but I believe that was a marketing challenge and that we would get them to try it because we discovered something. And one of the things Paul Graham says is, what insight do you have that no one else has? In other words, what is it something that you've discovered? Often a discovery doesn't happen in a laboratory. A discovery is something that you hacked to solve a problem for yourself and you accidentally discovered. It's really cool. And if only other people knew about it. And my unique insight discovery was staying with other people in their homes was deeply rewarding and saved money. It would be awesome and other people want to do it. And it was clearly non intuitive, non obvious, which is a good thing because when you tell people like, that will never work. So that means people won't copy you for a Couple years here. Yeah.

Just to follow up on that, you talked about the deep conviction. How do you. You said that you were distracted by the roommate thing you were working on after you started. So how did you get back to the.

Really good question? Really good question. So repeat the question. Oh, sorry. So you say conviction is important, but you started Airbnb breakfast, then you did a roommate thing, and then you went back. What was that journey like? You know, it's kind of funny. I think conviction happens over time, and it happens through, like, repetition of talking about it and thinking about it and working it out with people. So kind of here's how it happened. We started this website, and I had some conviction that this would work. The weekend we started, I had conviction it would work around the country. Air beds for conferences. I was always, like, a generation ahead. I was never three generations ahead. I didn't think, like, years out, but I always thought, like, the next year out. And I could always see the next step. I couldn't see three steps forward. And so I believed in the next step. So that first weekend, I believed this would work around the country. But Joe and I convinced ourselves out of the idea because we were so enamored by the story of Facebook and all these other companies. We thought, they're huge. I can see the next step, but I can't see people all over the world doing this. I can't see becoming a company where millions of people would use, and I want to have a company millions of people use, and millions of people need roommates, but millions of people, when they travel, don't stay in homes. And so that was kind of where I went to. So it wasn't as much I lost conviction, as much as I had the wrong mental model to decide what to pursue. But I deeply believed in this idea. We did the roommate site, and it was like, okay, someone's done it, and I don't know if I'm passionate about it. And I went home for Christmas, and I found myself talking about it. And the funny thing is, the more I talked about it, the more excited I got and the more I talked about it. I'm a fairly extroverted person. So extroverted people, like, they kind of figure things out by talking it out. And I talk about it, and as I talk the idea out, I keep adding things, even though I hadn't built it yet. I was like, as if I had. And then we could do this and that, and you'd brainstorm, and the conviction happens through repetition and investigating, going deeper and exploring and Think about it. And it just kind of built from there. And then it came through more and more physical experiences of doing it, staying. And the more you have real experiences, the more you build that reservoir of conviction. And the one thing people want to talk about, leadership is leaders are people other people follow. They're not necessarily people, they're bosses. A leader is somebody other people follow. And a key core reason why somebody follows you is conviction. In other words, a leader has to have conviction. And if I'm like, I think the way you get home is that way. Maybe if I say the way we go home is that way, I know it's that way. People will probably go that way. Because you are so certain now you can't, you gotta try not to be wrong. But conviction is incredibly important for leadership. And for me, building the reservoir of conviction was through real life experiences and talking it through and getting to know the problem.

The other nuance, by the way, on a lot of these companies is they make markets. So it wasn't like, well, how many people were staying in homes before? Far fewer. How many people were taking black car services before? Far fewer. How many people like just other things. And part of that making of markets.

Is part of what you have to.

Have the conviction for.

Yeah, just one nuance of that, which is that was what happened. We fell into the venture capital trap, or the like so called like trap of, well, is it the dumb venture capitalist? The dumb cemetery, Sorry, he's a venture capitalist, sorry, the dumb VC trap. They call it the idiot vc, which is there's no market for this. And you're right, as Reese says, almost all great companies created the market. And so a lot of people say, like, they invest in markets. And I think you should invest first and foremost in product. And founders, you can invest in markets. And if you think as long as our markets, travel or accommodations. But our market was not, in fact, Sequoia, who's notorious for investing, or not notorious, but famous for investing in markets, they really struggled sizing our market, but they actually took their credit, discovered this was a big market. And as long as they looked at the right things and they thought, well, there's half a trillion dollars a year spent on accommodations every year short term, $2 trillion a year spent on travel and $40 billion spent on vacation rentals. So we do think based on, we like these founders and we like the product, we think there will be a market. And so you have to be able to foreshadow emerging markets rather than existing markets.

Last question in the back what's difficult.

For you right now? What's difficult for you right now? Christ.

The problem is. That's a very long answer, answering that question. That would be the.

Yeah, yeah. Answering that question is extremely difficult right now. You may have stumped me in the last question. So let's see. Okay, I'll tell you one thing. So this is, I think this is like in your book, you talk about it as like transitioning from like city to nation or village to city, which is one of the things you have to do. So I've gone through all different phases. We're at the phase now where the company is working, the core business is working well. The product we had, the idea we had, is now scaling. It's working well. We've hired an executive team. I have full executive team. They're managing it. I could presumably go away for a month or two months and the company would basically run fine. Basically. Right? I mean, there's things that would start to degrade, but the core product will be fine. The company more so than the product needs day to day management, but the company, the product's fine. So there's a couple things. The first, probably the two biggest things I'm focusing on, the first one is scaling the culture for the new size. A lot of the cultural norms and kind of things we institutionalized was for a company that was like 500 people, we're now over 2,000 people. And I want to make sure that this still feels like a fast growing startup. It's still product oriented, it's still everyone's mission driven. So that means a lot of the methods and behaviors in the day to day has to change. The other thing, though, probably even bigger, is most companies that are really, really big have more than one product. Apple has the Mac, but they have the iPhone, the ipod, the iPad, the watch. And very few companies have a single product. I mean, you guys have multiple sources of revenue, right? You don't have one source of revenue. Almost no company in the world has a single product. I mean, Google is maybe a notable exception as having many products, but kind of one product that generates most of the revenue. And so that's the challenge for me now is the core products continue to grow, but there's opportunities to start other products. And part of me is like, well, I know how to start a product. I started one. But how do you start a product or a new business inside of an existing business that's successful? I thought it was just like the first time. It turns out starting a new business inside of an existing successful business is so different than starting a business because you have all these things that are helpful. Like you can pull people internally, you have unlimited funding, but you have all these things that you never thought. Like, sometimes people inside the company inadvertently don't try to stop it, and they don't do it on purpose, but you try to pull the best people on the team, like, no, we can't have it, or why are we focusing here? We need to fix this. So that's a huge thing that I'm focusing on right now is trying to create a new business inside of the company. And you're basically, you're shifting from a single product company to a dual product company. That's a pretty big shift. And so that's something that I'm thinking a lot about now. And I think all enduring companies have to do that. Because if you're a technology company, you can't presume your original invention, your original product is the thing that you're selling many, many years from now.

So let's thank Brian for that.