Reid Hoffman | Airbnb Reflections

Hi, I'm Chris Yeh, the co author of Blitzscaling, and I'm here once again with my co author and old friend, Reid Hoffman, co founder of LinkedIn and investor at Greylock Partners. Reid, you've made a number of legendary investments, including, of course, Facebook. But your investment in Airbnb must rank high on that proverbial list. One of the amazing facts that most people don't know about is that Airbnb was actually your first investment as a venture capitalist rather than as an angel investor after you joined Greylock. So, given Airbnb's ipo, I thought it'd be fun to take a look back at your history with the company and maybe extract some helpful lessons for the listeners. So let's start at the very beginning. The first time that the Airbnb founders tried to approach you, you didn't actually take the meeting. What happened and what can founders and investors learn from that experience?

So, of course we're going to start with something that's vaguely embarrassing and where I have to be a little circumscript in how I'm discussing this, but the very first time that someone started talking to me about Airbnb, they misdescribed it. And, you know, I kind of tended to think that this person didn't actually have a very good instinct for how to invest in consumer Internet. And so a good person so, you know, perfectly happy to have drinks at the bar and kind of catch up on life and everything else. But I was like, oh, I got this really exciting investment and I think it's really, really, really interesting and I'm looking to make an investment in it myself. And you know, da, da. And I was like, oh, what's that? And I was like, well, it's Airbnb. And I was like, oh, you know, okay, what's that? It's like, well, it's renting couches. You know, everyone has couches and now every space opens up because you can rent a couch was essentially how I was pitched on it. And I went, oh, oh, well, that sounds really interesting. You should go do that, is what I said. But it was really like, okay, if it's essentially a couch thing, don't talk to me about it. And the reason was it isn't that having couches in your portfolio of the set of things you might have is available in your marketplace isn't a good thing. But, like, couches have all of the downsides and none of the upsides of creating a travel space marketplace. The downsides naturally include you've got this, okay. I've got connectivity with kind of a stranger. And by the way, there's upside to that too. But you have the downside as well. You've got the, the fact, you got the uncertain about the environment that you're going into. You. You got all of these different issues. And what's more, you even have more than when it's a room or when you're renting the apartment, because a room, you have your own room, you have your own bed, et cetera. You can kind of, you know, it's like your own space, you know, versus the couches are generally speaking out in some other kind of space. It's always the low end. Also, in couches, it's got to be the absolute cheapest thing. Like maybe similar to, like the next cheapest is, you know, you can have a sleeping bag in my yard, right? Even suburbs or there's yards. And then you have all of those challenges and none of the potential upsides. Like none of the, oh, well, actually, I'd much rather rent your apartment on the Seine than even that really gorgeous hotel, you know, for the Four Seasons or. Because that the location and apartment, you look out the window and it's on the set. And even if it's a, you know, not kind of as well appointed as the Four Seasons, oh, my God, it's an apartment on the Seine.

And.

And that was part of the upside of Airbnb, but that was none of that was explained to me. And so, so this guy, you know, kind of says this stuff to me and I, I kind of go, okay, well, good luck. And. And then when the various kind of angel investors and other people tried to reach out to me about Airbnb, I was like, oh, I know about it already. Right? As advertised, this is the extended read as a fool, you know, story. And so I've. I've heard it already. No, no, no, no, no, no. Not a good fit for me, you know, Da, da. Then finally, one of the angel investors, who was very smart, who I respect a lot, reached out to me and said, hey, you should really look at these. These are really good guys. I think this is an interesting space. And I said, well, look, here's the way the space was pitched to me. And then was like, well, that's dumb. I was like, yeah, okay, I thought so too. I was like, yeah, it's about so much more than that. Then I scratched a little because I was like, all right, well, that's changing my view of the market. And so I scratched around a Little and called a little bit about getting references on Brian and Joe and Nate. And I got these really strong references. And I said, okay, that's very interesting. And so I said, okay, put us in touch. They came by on a Sunday to Greylock. And I said, okay, look, this is super interesting. Come in on Monday, you know, we'll present to the partnership. And literally, actually I told them two minutes into the pitch, like, look, I'm going to make you an offer to invest. Let's make the rest of the session a working session. And so that flipped it. But it took the understanding that it was a game worth winning. Like part of the whole entrepreneurship thing is, okay, if you win that game, very rarely is it a game that's completely useless. But there's the, oh, that's kind of like, you know, it's kind of like the junior league and then there is the, you know, the varsity league, and then there's the big leagues. And generally speaking, as investors and entrepreneurs, you really want to be doing things that are the, that if you succeed in this, it transforms the world, it transforms the industries. It's the big league game. And that was the thing that was so clear two minutes into talking to the Airbnb founders.

Now, I do know that you were very self deprecating about this. I want to point out that even if you might have made a mistake by trusting someone else's opinion, that you did correct it very quickly. And the thing that really stands out for me is it was really about the advantages and disadvantages of network intelligence. The initial contact from your network was from somebody who maybe you didn't have a great signal from, but the information they gave you was such that you were like, well, I don't think this is interesting. And that caused you, if there was any mistake, to ignore some of the later signals until you got a strong enough one from somebody who you really respected to go ahead and dive in. So I hear your network intelligence at work in that story.

Yeah, but one of the things that I always try to do is update my knowledge, update my playbook, update my way of acting. And because if you can't say, what did you learn? Then you didn't learn anything. You're not updating your capabilities, your decisioning, et cetera. And so I looked at this and went, okay, I made a set of mistakes here. What are the ways that I update now? My, my knowledge set in investing. So one is if I get something referred to me from a source that I don't trust very well, I don't necessarily add negative information. I may not do anything, I may not do positive. But I don't go because Source X, which doesn't understand this investing game very well, describes in a certain way, doesn't mean that they're describing it accurately. So it goes into the bucket of don't know. Like, don't know about that. The second was that to also kind of do a little bit of the say, okay, well, that would be a little foolish to only be couches. So if you thought that these were strong, smart folks, what would that likely be? Like, what would it be? Because if you said, look, well, it's likely to be all space, you know, everything from a couch to a castle, right? You go, oh, well, that could be much more interesting. So do that a little bit and then update a little bit based on the number of different times you're pinged by different people. Because even though it took eventually, you know, someone who I could have given money to invest, for me, that's the ultimate judge of what do you think their investing acumen is that I went, okay, I should have even earlier gone, wait, this is interesting. I should pay attention. I should learn from this.

Now, those are definitely some good lessons, but there's one additional lesson that I'm sure that every entrepreneur that's listening right now wants me to ask, which is, what on earth can you say to Reid Hoffman in two minutes that gets him to say, I want to invest in the company? So what happened in those first two minutes that got Brian and Joe and Nathan to say, wow, these are guys I want to back?

Well, it helped that I had already done the referencing on the three of them, which I normally try to do before I meet with entrepreneurs at all, because then I can be moving faster. I can be deciding whether or not I kind of be leaning in. Probably the hardest part for me in VC is if I start down a path and then I back out because of referencing on the entrepreneur versus, well, the market's not exactly right fit for me. Or you've got these really extravagant terms from this other investing source. And I don't think that's the actual fair price between the two of us, but maybe the price that you want to go with. And it's always what's best for the entrepreneur, best for the company first. And so maybe that's the right thing. Those are all easy. The harder one is the referencing says that you actually, in fact, don't have a particularly high sense of integrity. You don't act as partners with the people you're interacting with, you're willing to cut corners that cause risks to society or customers in ways that are unacceptable or those kinds of things. And so I try to get that referencing as much as possible, including the would these be really interesting people to be going on this journey with done early. So that was one thing that I'd already done. And, and so I knew the referencing information on that anyway. And then once you have that, it is very possible within certain spaces, especially where I have expertise, some of them I don't have expertise. And you could have the two minute pitch and then it would work on someone who has the expertise, but I would have to generate it. So I wouldn't be there. But like there's probably no one in the world who's more expert at networks and marketplaces than me. There's other people who are experts as expert in different ways, but probably no one who's more. And so I know the area very well. And so when they kind of very quickly went through what the dynamics of how the marketplace is being set up, what the cohorts of it were in terms of the hosts or the sellers were also buyers and travelers were focused on communities around them, had the zones that they were operating in in terms of what they had learned from the earliest, you know, like what was going on in Paris and what was going on in Barcelona, what was going on in New York and so forth and what the dynamics were. And then some of how they understood the growth of the marketplace, the growth of the communities and the growth of the network, all of which was kind of in a quick precis of here's what the business is. It was like, look, I know we're going to go into a lot of detail and I know you're going to have much more good detailed analysis about, you know, the kinds of things that marketplace experts know, which is, well, how do you understand what a repeat buying pattern looks like? And how do you understand how hosts or sellers spread to other host or sellers? And what does that look like? And that's different for different marketplaces. But you know that. But I know that we're already going to go into it. From your earlier description, right? Like from the early description, it already showed me that you are on top of it because they had already really built. The marketplace was small, but it was en route right to a building. And that was the thing that was the, okay, let's do this. This can be epic. It has been epic. But back then it was this could be epic.

And when I hear you talk about the founders like that. What I hear is, first of all, you had done this referencing in advance. You knew they had integrity, you knew they had strong capabilities with good partners. But then what they revealed in that first two minutes was A, that they had really been learners and had really extracted learning from their prior experience and B, they had a very sophisticated, comprehensive model in their minds of how this worked and they were able to convey it to you. This is what you always say, it's really important to be an explicit learner, somebody who can actually convey it to others. And they were able to do that for you.

Yep, exactly.

So looking back at that first meeting now from the perspective decade later, how did things go? Because you obviously had an investment thesis, incredible conviction. You brought them to the partner meeting the very next day. That's incredible conviction. How did events turn out and how did that relate to your original investment thesis?

So first, one of the things that's very interesting, that's about venture partners in the room. And one of the things I love about Greylock is it's very clear headed. And so, for example, Greylock has, you know, if it's 55 years of investing history, it looks back and it realizes that many of its best investments are from mixed votes from some partners going, this is absolutely critical, important, and other partners going, I think this is a real serious mistake. That's not the serious mistake, isn't they? Oh my God, this is a disaster. But it's kind of the, this is an investing mistake. This is going to be a drag on the portfolio. This is going to be, you know, waste of time, you know, etc, etc. Not, this is going to cause problems in society. And so, you know, I brought the investment in and, and this investment had that exact characteristic. Like the specific entertaining thing is that a central reason for why I joined Greylock was David Z, who was my most helpful board member at LinkedIn. And David, you know, who is my primary recruit into Greylock, looks at me and says, look, every venture capitalist has to have a deal that they can fail on. Airbnb can be yours, right? And that was like, well, okay, boy, here's an experienced vc. My very first deal on the door. Oops, right? But I had enough conviction. And it was like, look, I think I'm right. I, I think David's wrong. And then other partners, James Slavitt and other partners were like, nope, I think this is actually a pretty interesting investment. I think you should do it. So we had that kind of mixed thing and I, so I got the, the license To. To go and put a term sheet down. And so we negotiated and we got to a nice set of terms. And, you know, one of the things just to tie up that particular part of it, one of the things that was interesting is it took years for Airbnb's metrics to really start accelerating for a long time. Like, when you look at the graph, it's kind of like almost like a classic exponential curve, which is a slight linear slope up, which hits a knee and then goes to a very strong, you know, slope up. And. Well, before that was the case, David came to me and said, you were absolutely right and I was wrong. What did you see about Airbnb that I didn't see? Because one of the things I love about, you know, David, I love about Greylock as a culture is it's living in truth. And so, you know, he was very blunt with me, that he thought it was kind of a mistake, but he was also always constantly thinking about it, thinking about how to help, thinking about the decisioning, you know, how we looked at it. And he came back and said, okay, you know, the numbers are the same. But he's like, no, you were right, I was wrong. What did you see? And I said, well, all of the things that you pointed out, which are it's tiny numbers, it's unknown if Flywheel will go. There's going to be some opposition by local political interests like hotels, some neighborhood groups, you know, possibly, obviously through that politics, there's going to be a possibility of bad actions happening that's going to lead to something that, you know, could be quelling to the growth of the market. All of that's accurate, right? The thing is, each of those is just a different risk factor. And I didn't judge the risk factor to be as high as you judge them, because if you judge them to be nearly certain, that'd be an issue. But I viewed them to be real. But then I went to, okay, if this actually, in fact works, then it's going to be huge. And it's going to have, you know, Chris, you and I talked about Blitzscaling. And part of the reason Airbnb opens up Blitzscaling, you know, is the book is this is going to be something that has network effects. It's going to be not just industry transforming, but world transforming, and is going to be a new kind, a different kind of company, a different kind of product and service, a different kind of platform for launching other kinds of things. And. And that's all there. And so that's the reason why you take the shot. It's the reason why I got into tech investing, is to do this kind of tech investment.

And one of the great things about this story is I think it really reflects well on both you and David ultimately. And David, of course, is a fantastic guy, as you said, where you had the conviction, despite this very strong signal from one of the people you trusted most in the world, but you had the conviction to say, no, I think you're wrong in this, we should still move forward. And David had the humility and ability to really learn, as you say, live in the truth and ultimately learn from the experience and not just say, well, I was wrong and you were right, but also, what did you see that I didn't, so that I can see it next time. And I feel like it's such a very great and illustrative story.

Yeah, it's pure David. And it's also the kinds of things that are part of the culture of Greylock that I like so much.

How have you seen the product evolve over the time that you've been involved with Airbnb? What are some of the things that really stood out for you?

There's kind of two levels to this. One level is that the same kind of the peer to peer network that creates the kind of host communities and the hosts and the properties then also becomes a platform in which Airbnb can launch kind of belonging and community like products. So one of the products that I thought was the most delightful out of the many that they've done is Magical Trips, which is currently on hiatus because of Pandemic, but is the give people the ability to offer experiences, not just a place to stay, but experiences. A violin lesson, a cooking lesson, a midnight bike tour, a, you know, any of these things that could be done in the same kind of come belong as part of our local culture, our local community, and be part of that, as part of what is available within the Airbnb. You know, there's kind of this magical experience as part of the upside of going and, you know, renting an apartment or a room and getting connected to locals, not just through the commercial industry of a hotel, but through a, you know, what's kind of the local community, the cafe on the corner, et cetera. And so that was one zone of the product. The other one was how the part of how I describe the Airbnb founders is one of the things that is general characteristic for a lot of founders is they're infinite learners. They learn and adjust very quickly. When they encounter challenges, they move very Aggressively to solve the challenge and do so with a learning mindset and with a very high integrity. So, you know, one of the things, like, you know, one of the earlier defining moments was they had had some criminal who'd stolen a credit card, who then used the stolen credit card to rent an Airbnb and then totally trashed the apartment. It was like, well, this could be one of the things that David Z. Was worrying about. But they said, okay, we gotta move immediately to people understanding that we will back and be trust and safety. We'll have guarantees, guarantees to the sellers, guarantees for the, the buyers. We will underwrite that to, you know, because we have the best, you know, multi transaction, the repeat intelligence on both sides of that and that we will establish all those products and those product norms in a small number of weeks. I believe it was six weeks as the entire company sprinted on it. And they said, everybody has to be doing something towards this because this is really fundamental to how everyone trusts and stays in a aspirational mindset. This is how we belong. This is how we're better as part of being part of Airbnb. And so that was another thing that was part of the Airbnb journey.

Yeah. And I think that, you know, among other things, you can find stuff where they talk. For example, I believe Joe Gabbia has a. An entire TED Talk about how they designed for trust. They really did focus on trust. And again, as you mentioned, they undertook the necessary actions to maintain that trust, to live up to it. Now, that was just one of many things that have happened since your investment. What are some of the things that surprise you? Because I know you always reflect back on things you've done. You come up with new insights. What are some of the key lessons that you learned from Brian, the rest of the team there that maybe you adopted yourself or shared with other people?

Well, one of the central ones, which we covered in the very first episode of Masters of Scale, which was Brian Chesky. And that's one of the reasons I wanted Brian to lead it off and called him and I said, hey, I think we're going to end up doing this really interesting podcast and I think you should be the first guest. Part of it was Brian and Joe and Nate, all are very deep believers. And in fact, from RISD with Brian and Joe in the design mindset, in designer and design, the design mindset is to some degree like an engineering mindset, which is a how do you frame and understand a problem and how do you design solutions? And so design mindset can be taken to many things, not just to the crafting of a product. And that's valuable. And I knew that anyway. And so when they were talking about design as being fundamental in the very early days, I was kind of thinking, oh, yeah, it was designed of the experience of the product on the website, the product on the mobile phone. But a really central thing that they really added in to thinking about was, and look, there's a natural reason why entrepreneurs like myself and many others tend to think, you know, design of those things, because those are the experiences that we most easily can control. We can most easily control the. What is it like when you log into LinkedIn or, you know, or any of the other things? And what is the experience of using those, you know, search in each of these different products? And so what it made me realize was to say, well, even though you have in some ways more limited control of the other elements of the experience of the product, which in marketplaces and networks is reaching out, is, you know, what is your first experience with an Airbnb? You know, what does that look like? But one of the things they realized is they said, look, we can actually provide guidebooks, not just like scoring systems, not just like, hey, you know, how good was that? And have a reputation system, but we can provide coaching and guidance about the knowledge of what makes the experience most magical. Like, we can actually help craft broadly the design of experience. So, for example, a very simple one from the Airbnb is what happens when a person first walks into any new place? What's the very first thing they do? Well, for a large percentage of people, it's that you look out the window, right? So if you say, well, actually, in fact, if you want to have a people to feel like they're in a good, clean place, make sure the windows are clean, right? You're going to look through the window, and if it's kind of a dirty, grungy window, go, oh, I'm in a dirty place. Right? You may not be able to control fully what the window, like the window looks out on, what the window looks out on, and you may not be able to do very much about that, but you might be able to make it nicer in certain ways. And that would increment the, oh, this is a nice place as a way of doing it. And so they approached the entire experience with a design mindset, not just the product that they themselves are doing, the marketplace, the software, etc. And that was also part of the reason why, like, when they started doing another, you know, story that we captured was, you know, when they started doing photography, they realized that in order for a person to know which place they wanted to go, you want to have very good photography. They said, look, we have to provide photography as a service as much as we can, but let's start it ourselves to understand what it is. And that is part of what led to the theory in the Masters of Scale first episode, which is first be handcrafted to learn what to do in a scale. Because obviously having Brian and Nate go and photograph every place on Airbnb is the exact antithesis, the exact opposite of what can be possibly scaled. But they kind of got a sense of how it work, what it would look like. They also got a lot of other intel from hosts about what worked and what didn't work and that kind of thing. And then they could build that all into, okay, which of these things could be built into scalable solutions. And those were the kinds of things that got added to my corpus for how to think about all consumer Internet startups, all startups in general, the entrepreneurial journey.

Well, as a proud alumnus of Stanford's product design department and someone who spent way too much time with foam core, hot melt glue and other things like that, I'm glad to hear that the design orientation has been so successful for Airbnb. But that is something that you brought to your toolkit to work with startups. What about your investing practice? You often say that success imprints more strongly than failure. What has the success of Airbnb imprinted on you when it comes to your investing process?

Usually the success imprints more strongly than failure I use as a negative example. And so hopefully I keep the new mind about openness to other patterns and not realizing that here I've got a hammer and so everything looks like a nail. But generally speaking, what it means for the way that I invest is that I like to invest. When I go, okay, here is a specific set of risks that if they succeed, you have something that's huge. If you succeed in your theory of the game here, then it's essentially, I call it an uncapped return. No returns are uncapped, no sizes are uncapped. But it means that it's so, so, so massive in its impact in the industry and its ability to have tons of customers, to have global impact, that essentially the sky is the limit. And so an Airbnb, as per the early discussion of the investment thesis discussed with David Z, I had that. And that's fundamentally the investments that I do. There's a lot of times where you get pitched on a really interesting e commerce investment that very clearly could get a 5x or a 10x. And it's very predictable, it's very reliable. You have super high quality, talented entrepreneurs. And by the way, I have great partners who do those deals. Those don't tend to be mine. Mine tend to be the. Well, it could be zero, right? Because oh, doesn't work, doesn't come together. Or it could be huge. And that pattern, which is my instinctive pattern anyway, got very much, you know, like, okay, this is the way I'm going to be doing investing. Because the experiences and the journey with Airbnb has been so amazing.

Well, it certainly sounds like that is a pattern that has been successful to date. So I think that the imprinting in this case was a positive. So the other thing about Airbnb, and again, so many amazing things have happened with it, but one of the things that happened this year is the business really went through a remarkable set of circumstances. The COVID 19 pandemic decimated the travel industry and it really affected Airbnb's business. Yet since then, it's rebounded amazingly well. So what do you think Brian and the leadership team did there to achieve such a great outcome in such trying.

Times, by the way? No one, like there isn't a previous playbook. There isn't a, you know, like, oh, this is what expertise would do. It's part of the reason why having infinite learners with high integrity first principles thinking is kind of so key because they looked at this and went, okay, obviously the most central thing that the economics that the pandemic asteroid hit was the entire travel industry. And Airbnb is this travel property. And so, you know, obviously the business went off a cliff and they said, okay, what do we need to do? So the first thing is they said, all right, well, we are a peer to peer, like a membership, a belonging. So we have to try to as best we can. And you know, while Airbnb is a company with a bunch of cash that's raised, you know, from investors on the, on the balance sheet, the best we can, we have limited cash. We have to try to make sure that we help our hosts and our travelers get through this in a not too difficult way. Because of course, part of what happens is, well, I'm the host, I'm renting this space. If I don't rent it to you and no one else is going to now rent it, I'm deprecating the economic value. That's a huge hit for me. So I will tend to say I should. You know, it's too bad. The traveler is the person who must suffer, not me, for the thing. But the Traveler is like, look, the pandemic hit, I paid for this with my credit card, which includes act of God things. I'm not going. This, this isn't my choice. This is the pandemic issue. And so I shouldn't have to take the economic hit. And Airbnb, the first thing they did is they said, okay, let's step in and let's try to soften this as much as possible. Give full and majority refunds to a lot of folks in the Travelers case. Then while we're doing that, in a number of the different host case, to give them between a full or a partial payment for that space to say, hey, and this is all coming out of Airbnb's coffers. So, you know, first act of leadership is to say, look, we know that our company is in trouble and economically here too, but really the long term company is the host and Travelers, and so we will actually, in fact take some of the serious economic hit to try to mitigate the pain and the suffering and the uncertainty here. So they first thing was taking that economic hit as kind of natural leaders. Then they had to look at this and say, okay, well, because part of this we had to rationalize our burns. They had to do a layoff, which is obviously a super painful thing for a company that was just anticipating a public offering. And we had to navigate that. And so then they did that. And then the next thing is say, I'll say, well, all right, so how do we adapt? What are the signals, how do we pivot and what are the things that we can do? Now, one of the things they realize is one of their key assets is they have a whole bunch of essentially a network of mini entrepreneurs of entrepreneurs who are doing, who are hosts or experiences. And they say, okay, well, let's go to that network and let's help them adapt. And so, well, international travels goes way off the books, but people still want to do this. So domestic travel, 200 to 600 miles. And what are the things that need to happen in order to be, for people to feel safe? Because by the way, there's arguments why you'd want to stay in an Airbnb, in a set of Airbnbs versus a hotel during a pandemic, because you're like, well, you're not in proximity space with other people as long as it's cleaned kind of the right way and you have kind of understanding of that and the way that you do the kind of key handoff and all the rest, you could do all that in a way that actually, in fact, has for people who still need. Who. So there's need to travel and there's want to travel, and you can do that in a much more safe way. So let's lean into the network adaptation and make this a more desirable way of solving either necessary travel or vacation travel, given the network. And that won't work for all hosts, but work for a number of them as a way of doing that and make that happen. And then once you get that network adaptation going, return it. Oh, and then the other network adaptation, for example, was, well, we're doing these magical trips, which is like, get together as a group in a city. Now let's turn it to online experiences. Like, say, okay, well, now we'll do online experiences as a way of doing it, and we'll change to that as a way of doing it. And so those were all of the kinds of things that is part of what makes Airbnb, you know, kind of a magical company. It has a great culture, great employees, and is part of the reason why I've been so delighted to be along the journey.

And it really sounds like one of the key elements of their response at a higher level is being network aware, having the bigger picture in mind. Because it's very easy when tough times come for companies to really focus inwards and just say, well, you know, we're going to focus on our definition of the company, which is our employees and our customers. But in this case, there was a recognition on the part of Brian and the rest of the team that what really matters is the overall network, which includes our employees, but also includes our hosts, also includes our guests. And the most important thing is to preserve the health of the network, even if it means taking some of that precious money that's in the company and using it to shore up the network. It ultimately is the right thing to do. Because we're a network. We're not just a company.

Exactly. Well, actually, by the way, they say we're community, but community is a former network.

Absolutely. Now, the other element of the community, and this is something that we touched upon in our previous book, the alliance, which of course, we wrote with our good friend Ben Kaznoca, is that there is a community between an organization and its former employees, as well as its current employees. And one of the things that I really admired about Airbnb during this difficult time was how they really honored Their alliance with their employees, even while they're going through this wrenching, difficult 25% layoff. So can you talk about some of the things that Airbnb did and. And how did you feel about that? How did that make you feel as someone who'd been involved with the company?

Well, you know, Airbnb is one of those 10 out of 10 entrepreneurial journeys. So, again, not a surprise. I thought they handle themselves with high integrity. You know, first principles, compassionate management, all the things that kind of really matter to great cultures. And so they said, look, we, you know, have to do, like. And obviously super painful for the company, for the employees are laid off, some of the employees who are staying because you went from everything is going in the right direction or on track to an IPO to an asteroid hit us. And now we have to part ways with some of the amazing people. And so they did, just to really quickly run through it. I mean, first they said, okay, look, everyone who's here, let's make sure that they have an ability to participate in some of their stock. So we'll change the vesting to make that happen, to make sure that everyone did that. We'll make sure that they have a good severance package. We'll pay for 12 months of Cobra because we recognize the uncertainty of coming after that. But also, even these other kind of human things, which is, you know, classic layoff thing, is to, like, you know, rip off the Band Aid. So it's like, do it on Friday, and everyone just kind of disappears. And then the new group is like, no, we're going to do this on Monday so that people have a chance to talk to each other. And then we actually, as a company, are going to invest in. Because, you know, we hired all these amazing people. It's because they're amazing. We're going to invest in helping them find their next gig because, like, we know that they're amazing. And that's kind of obviously classic to the alliance, because the alliance is to say, look, you're not just amazing because you're working here, you're amazing because you're the kind of person that you have worked here, that we knowledge of you could work here. And that. That's part of what we did. And that leadership, obviously, as usual, came from a set of things that Brian did very well as a CEO, but obviously the whole company kind of coming behind it and as part of a culture that everyone at Airbnb should be proud of, what they've helped build.

Built. Yes. And as we often say, when we talk about the alliance. The most important way people judge your company is by the employees that you have. The second most important is by the employees whom you used to have, the employees who have left. And in this case, while, of course, is a tremendous sadness that so many people were not able to be part of the entire journey, those are people who are carrying away with them a real sense of what it was like to work as a part of the company and are still members of the company's alumni network. Part of the broader network that goes beyond just those who are currently employed.

Exactly.

So in looking back over this Airbnb journey, which, again, remarkably enough, was your very first venture capital investment, it really feels like not only is it something that represents many of the themes of your career in terms of the emphasis on networks and being able to think about where the upside, where the possibilities are, but it also feels like it has been one of those key experiences that has actually shaped the way you think about the world. Are there any final lessons or thoughts you want to share with people before we go?

I think one of the things that is often said in Silicon Valley, and not as appreciated as much as it could be, is that many of the best Silicon Valley companies are missionary companies, not mercenary companies. And, of course, everyone tends to want to tell the mercenary story. It's a little bit more risque. You can kind of count them a little bit more as villains. They're just in it for the money, and they're trying to do that. And actually, in fact, many of the journeys that are amazing journeys are journeys that actually, in fact, have a very different deep mission, where that deep mission is improving a human ecosystem. And sometimes, by the way, it's. It can be, you say, well, you're. You're missionary because you're trying to build an amazing piece of technology, like an iPhone. You go, okay, that's not like feeding starving children and so forth, you know. So some of the missions are, you know, kind of an interesting one. Not as direct to the heroic, you know, Nobel Peace Prize, other kinds of things that kind of lead to, you know, like. Like emissions that are, like the pure, deep humanity missions. But there, even those cases are we're adding something to the human ecosystem for this. And what I would say is, you know, part of the delight and joy that I get as an entrepreneur, the delight and joy that I get as an investor are those journeys where that mission really is a humanity mission. And the majority of my investments fit that characteristic. You know, like, for example, in autonomous vehicles with Aurora and Neuro and Nauto, you know, like, Nauto is human safe driving. You know, even as you get to autonomous vehicles, which will be a long time where there'll be autonomous vehicles and human drivers, the human safe driving all on Naoto will be, you know, be super important. But, like, all of them have that kind of characteristics. And those missions, sure, people are trying to. It's a capitalist system, and they're trying to build a really huge business that is very deeply valuable in equity. And that's part of what allows these things to get to scale, because it allows it to compound to get more equity and hire more people and build out a product for the whole world. And that's part of what makes the system work. But it is, in fact, at root, a mission. And the Airbnb mission of getting a sense of human connection, of social connection, of belonging, and is deep in the genetics. And so I'll leave with this last little tiny anecdote that I thought was, like, just so awesome because I thought Airbnb did this better than any other company I know, including LinkedIn and PayPal and other ones that I've been directly participant in, is they really wanted to bring this mission home. And so what they did is they made all of their conference rooms modeled off of some of their most delightful properties that Airbnb hosts around the world were doing. So that when you're in a conference room and you're meeting, you're meeting in a conference room that reminds you of the kinds of places of experiences at its aspirational height that your travelers are going to, that your hosts are operating, and what that means for being multicultural, what that means for being inclusive, what that means for having amazing experiences. And that fundamentally, Airbnb always makes the decision on that side of it. It always makes good business decisions, too. But it always says, this mission is why we have a right to be transforming the world. And I think that's the kind of thing that we should all. We should all seek as entrepreneurs and investors. And there's much, much more of it within Silicon Valley than the current tech lash, you know, really gives any credit to.

Well, I think that that is a fantastic summary of the reason why entrepreneurship is so important. And I hope that we'll be able to see Airbnb continuing to carry out its mission for many decades to come, this time as a publicly traded company. Thank you again so much, Reid. That concludes this episode of Gray Matter. You can subscribe to gray matter on soundcloud.com greylock partners. You can also find new episodes and blog posts on greylock.com youm can follow Greylock on Twitter reylockvc. I'm Chris Yeh and on behalf of Reid Hoffman, thank you for listening.