April 12, 2023 • 47 mins
Since Brian Chesky and his then-roommate rented out three air mattresses in their apartment in 2007, he’s been on a wild ride building Airbnb. What are the biggest challenges of building an $80-billon dollar business and disrupting the hospitality industry in the process? How do you convince people to open up their homes to strangers? What happens when the pandemic stops your breakneck growth - on a dime? Learn all of this, and more, in this engaging conversation between two passionate entrepreneurs.
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Speaker 1 (00:00):
The heart and soul of the company isn't about houses,
It's about people. I always want to be a tech
company that had like heart at the center of the
company and creativity, not bits and bites. During your travels,
I'm sure many of you listeners have booked an Airbnb,
one of those residential properties made available for short term rental.
(00:23):
Officially launched in March of two thousand and eight, Airbnb
has become a major player in the hospitality business around
the world. Brian Chesky is the co founder and CEO
of the wildly popular and successful San Francisco based company.
Although under his picture in his high school yearbook, Brian
(00:43):
wrote the caption I'm sure I'll amount to nothing. Brian
sure has. In two and fifteen he was named one
of Times one hundred most Influential People Alive, and today
his publicly traded company is worth close to how much
Brian I guess eighty billion dollars and continues to grow
(01:08):
and at the ripe old age of forty one, I
hope that you are taking advantage of your vast success
and enjoying your life. Yes, thank you very much. So.
He's joining me today from my farm in Bedford New York.
He just flew in from Boston and we want to
talk about his road to success with Airbnb. The business
(01:30):
of being in business is Brian Chesky, thanks very much
for joining me today. Brian, Well, thank you Martha for
having me. I've looked forward to meeting you for a
long time. You went to Rhode Island School of Design.
Many At one time when I started my company, about
ten years into the development of Martha Stewart Living, I
was the largest employer of Rhode Island School of Design graduates.
(01:52):
I remember that when I was at Risdie. Yeah, that
was a big theater program. Yeah, it was. It was
so great. We and we still have many of the
graduates working for us. Kevin Sharkey, Hodzan a house there,
a lot of a lot of my employees went to
Rhode Island. Why why Risdy Well, Um, it was just
it was just and I don't want to say factory,
but it was the It was a fabulous school for
(02:14):
the developing of the crafty, the artistic, the photo graphic on.
So many different fields are studied at Rhode Island School
of Design, and the school attracts the most talented of
people interested in all of that yeah, and so we
found lots and lots and lots of great employees and
(02:35):
I'm in touch with lots of them. And oh yeah,
and uh and you did you what did you study there? Yeah?
So I, um, well, I'll just go back. My I'm
from by the way. Um being on your Being on
your podcast today is definitely a highlight for me, and
highlight even maybe more for my mom because I have
a lot of memories growing up of you being on
television and like all your magazines in our house and
(02:56):
and then yeah, so I got to Risdy. I'm from
upstate New York. Just a little bit of background my
social workers growing up. I remember my mom like, tell
me one time I was like in high school. I
think it was like thirteen four maybe I was fourteen
years old, and she said she told me something I
was stay in the backyard of her house. She said,
I chose a job for the love as a social worker,
and I ended up making no money. So you should
(03:16):
choose a job that pays you a lot of money.
And one day I tell my mom, I said, I've
realized what I'm want to do in my life. I
want to be an artist. And she's, oh, my God,
you managed to pick the only field that will pay
less than a social worker. Like, You're gonna literally get
paid nothing and live in my basement. I said, no, Mom,
I'm gonna like get a job. And she goes, if
you get a job, has to be a real job.
And I go, what's a real job. She goes, A
real job's a job with health insurance. So anyways, I'm
(03:39):
in high school and I discover, like you know that,
like I just have this passion for art and design,
and so I go to Risdie and I get to
Risdy and by the time I get to campus, I
kind of I'm really like an fine artist at the point,
I'm like an a drawer, a painter, and I come
to inclusion, I'm almost like born a hundred years too
late for what I want to do because the oldestration
(04:00):
I'm doing is starting to be replaced by photography. And
freshman year, you have to pick this major. And so
I'm like seventeen years old. Maybe I just turned eighteen.
I already decided I was going to be an artist
or designer. Now you got to pick what type of
thing I'm going to do the rest of my life.
I don't even know and every you know, as you know,
there were eighteen majors. Every department head at pitches to
(04:20):
like go into the department. You know, there's architect surecraftic design,
there's furniture, there's jewelry, there's you know, you can kind
of textile, textile, ceramics. And then there was this field
called industrial design. And before risde I never heard of it.
And I remember the department heads something said something like
industrial design is the design of everything from a toothbrush
(04:41):
to a spaceship and kind of everything in between. And
when I heard that, I realized, that is exactly what
I want to do. You know, you can zoe like,
you can do like you can work for you Martha
Stewart living, you can do medical design, you can toy design,
you can do fashion, you can do like equipment you
computer design, computer. I mean like the design like everything
Apple design was industrial design, and it was really the
(05:05):
intersection of technology and like kind of crafts and materials manufacturing.
It's one of the few design fields where you're responsible
for whether the thing you make sells. If you're an architect,
it's really not your problem with the building's not least
if you're a designer, Your practicesn't sell, it's a real problem.
What was your big project over So I did a
couple of things, probably two. One. I spent a semester
(05:27):
at MIT, so they had this product development program MIT Sloan,
and you basically had got assigned like an everyday household
item and you had to reinvent it. You're on a
team with electrical and mechanical engineers from MIT, and of
course you're the designer. And we came up with this
like thing for Starbucks. It was never a manufacturer, was
like a sugar dispenser, but it was really cool and
(05:49):
it was a teaspoon sugar comes out. Yeah, it was
probably half a teaspoon, so you could get a little
bit more precision. And it was just like I thought,
really nice, beautiful, like kind of elegant solution. But it
was the first time I had worked really closely with
like mechanical engineers and you know, and they were electrical engineers,
but we didn't we did not make our product like
electric electricity based, and so that was cool. And then
(06:12):
my senior year, I was very interested in like health
and this is like you know, obviously way before the iPhone,
and I had this idea of, like, we know all
this information about our stocks, we know all these information
about our personal finances, we know this information about like
the sports teams. Why don't we know the information about
the most important thing we have, which is our own bodies.
(06:33):
And so I try to design this like health and
fitness program where it could basically track your like biometrics,
and it could basically be like a virtual personal trainer.
And there's a lot of apps now in the app
store that kind of do this stuff. But this was
two thousand and four, way before any of this technology revolution.
So I graduate Risdy, I'm like, I don't know what
I'm gonna do in my life. I want to go
(06:54):
to California. I couldn't tell you different between LA and SF.
Never been either place. I vaguely knew there might have
been a different but California represented a frontier. It represented
a place where like kind of I guess dreams come
true and you could like make anything in your life.
And I always thought, look, California, it's not what you've done,
but what you will do. And I'm like, well, I
haven't done anything. And I go to LA and I
(07:14):
get a job as an industrial designer. It's this little firm,
and you know, because we're a small firm, it turned
out to be a blessing in disguise because we had
we worked with clients with small budgets. So basically we
worked with startups we weren't. We weren't working with like
we weren't like Ideo, working with like Procter and Gamble,
which would have been prestigious but would not have prepared
me for entrepreneur show. I remember one time I got
(07:36):
assigned a project to be on a reality TV show.
Was the craziest thing. Like Simon Cowell had just done
American Idol. He did a spinoff called American Inventor, which
is basically a precursor to Shark Tank. And my boss
one day comes in to me in my office. He said,
you're going to be on a reality TV show and
I'm like I am. He goes, yes, you are, because
ABC has like hired us, and you're going to be
(07:58):
assigned a contestant and you have to design this product
for this contestant. And so they were competing with the apprentices.
Yeah yeah, oh yeah, yes exactly. So I got assigned
a magician who had an idea for a better toilet seat,
and so that's that's like what I'm like. I'm like,
I remember, I'm like twenty four now, maybe twenty five
years old. I'm designing this toilet seat for a magician
(08:20):
on reality television. It was just a toilet seat that
was meant to be more hygienic by like when you
flush it, it seals everything, so everything's more sanitary. It's
probably maybe it's a good idea, um, but I just
kind of thought like, wow, like I gotta this is
this is you gotta start somewhere. But I remember at
this point my life was like I'm in a car
(08:41):
and the road in front of me looks exactly the
road behind me, and I'm like, this is not my life.
I've got to make a change. So I'm in La.
The tech revolution is basically happening. Facebook is taking off.
YouTube was just sold to Google, and I kind of
felt like the gears of the world are turning. In
San Francisco, my friend from Risdy named Joe was living
in San Francisco and he's been telling me for like
(09:03):
a year or now, like come to San Francisco where
it's happening. It's where it's happening. So finally I'm like
all right, by the way, Like I was, I was
making forty thousand dollars a year entry level designer. I
had no savings. I think I had like a thousand
dollars of the bank. So one day, this is now
October two thousand and seven, I packed everything in a
back of old Honda Civic and I drive up to
(09:24):
San Francisco. I even had like rolled up like a
foam mattress into my backseat with duct tape. I get
to San Francisco and my now roommate, Joe Gebbia, who's
not my co founder, tells me that our rent is
check is due and the rent check is one one
hundred and fifty dollars, so I don't have enough money
to pay rent. Well, it turns out that weekend and
(09:44):
international Design conference was coming to San Francisco and all
the hotels were sold out, and we had this idea.
We said, well, what if we just turned our house
into a bed and breakfast for the design conference. Unfortunately
I didn't have any beds, just literally moved up there,
but Joe had three airbeds in his closet, so we
pulled the airbeds out of the closet. We inflated them
(10:05):
and we called the Airbed and Breakfast dot com and
that's where the name comes from. And if you told
me back then, I'd be telling the story like a
thousand times. I'd be like, you're crazy. But we ended
up hosting three people that weekend, a thirty five year
old woman from Boston, a forty five father or five
from Utah, and the third year old from India, and
something Martha kind of crazy happened. The expected thing that
(10:26):
happen is we were able to pay a rent. But
the unexpected thing to happen is when three people live
you for a week, it's not unusual for you to
become friends with them. And I wasn't expecting to make friends,
but you took like a two year relationship and we
compressed it. And the thing about hosting, and I had like,
I had no idea what you were saying in the house.
Also I was there with him and basically I didn't
(10:47):
just like, like, we made them breakfast. It was not
a fancy breakfast. It was like pop tarts and like
orange juice, and we gave them like a map to
the city. But we actually like took them around the city.
They got to feel like there were a local designer
San Francisco. So unlike staying at a hotel, this was
kind of like staying with a friend from out of town.
And we basically took them around the city, hung out
with them. And by the way, the thing I realized
(11:09):
is I had fun too. And there's something about hosting,
and I didn't know anything about this, that when you're hosting,
it's like this really sacred relationship you have where a traveler,
where a guest is like, you know, they're kind of
they're they're vulnerable, they're putting themselves into your trust and
you feel that and you also feel like your life
(11:31):
is on display and you want to like show your
best foot forward. You're like, this is my life, this
is my house. And so there's this really like deep
bond when you're hosting somebody that I took for granted
and that was the genesis of airbnb. So whould you
do for sheets and towels? It was. It was rough.
We weren't the best. I mean, I'm gonna be honest.
We were good hosts in so far that it was fun.
(11:53):
You were hanging out, but but we were broke twenty
four year old. So yeah, we like we had a
bunch of we had sheets laid out on an airbed,
we had a stack of towels because I wanted to
feel like I was like a real hospitality company. But
we were also renting air beds on a floor, so
it was a nice stucta position. I remember one point,
I see a forty five year old father five. He's
like a Mormon from Utah, and he's sleeping on an
(12:14):
air bed in our living room and it was just
like a funny image. You know, it's like, wow, this
is funny. But they had a good experience. A well,
that's the important thing. So did you know then that
that was going to evolve into Airbnb. I remember Martha
saying this is going to be huge. One day, a
thousand people are going to do this, And that was
(12:35):
my idea of huge. So no, I mean I thought
we were always one or two steps ahead, but not
like a thousand steps ahead. And how could you ever
have imagined that inflating three air mattresses one weekend to
make rent would lead to what it is today. It's
now been used a billion a half times is a
billion a half. We have the equivalent of the population
(12:58):
of Los Angeles living together every single night. Never in
human history has nearly every country in the world lived
together like today. And obviously the lot happened between then
and now. How is that a lot lot more than
staying in hotels or how what's the equivalent. I don't
know what the total inventory of a Hilton or Marriott is.
Maybe they can house like a million people a night,
so and we can house you know, up to four
(13:20):
million people a night or million a night on a
big night wide worldwide. Where aren't you in the world,
That's a great question. It's easier to say where we aren't.
We're not in North Korea. They have no internet. We're
not in Iran for regulations. We're not in I don't
think we're in Crimea. We pulled out of Russian Belarus
and we're not in I don't think we're in South Sudan.
(13:41):
We were and still are one of the most global
companies in the world. We're one of the biggest businesses
in Cuba. We're one of the biggest American businesses in Brazil.
We have a robust business in Japan, Korea. You know,
kind of nearly My Ecuadorian driver has four Airbnb's in
his hometown in Ecuador. They run it via the internet
(14:02):
and they live here. They run it there and they
go back down every so often to check on everything
and make sure it's all up to part. But it's
so interesting to see young entrepreneurs developing inside your company.
You know, it's kind of crazy, Marth that we have
nearly four and a half million host that are hosting.
(14:22):
Last year, our host earn more than sixty billion dollars. Wow.
In the majority of them, we're women, which is also
pretty cool. So it's a nice way to make a
second income. It's a nice way to a first income.
Some people do a first income. And the cool thing
is like if you start hosting, like people are shocked
to how well it works. The average person who gets
a booking book gets a book and within three days
(14:43):
of listing, And I think it gives people a lot
of pride. I mean, there's something about, like, in this
world where we're spending more and more time online, it
feels like the more time we spend online, the internet
had this promise to bring us all together and build community.
But there's something about like face to face connection that
I I think airbomy brings. It gets us offline from
the Internet. It's a very like old fashioned idea with
(15:05):
new technology. It kind of brings out the best in
everyone because I think to be a host, you know
better than anyone, is to care for someone else, to
anticipate their needs, to put your life on display, and
to be able to democratize that idea to get millions
of people, you know, for every like eleven dollars spent
in the world, I think the last I saw about
(15:26):
a dollar spent on Airbnb. So it's a very ubiquitous
idea now. But people thought this idea was crazy. I remember,
I remember when it first came out. I thought, I
wonder would I ever do that? I've never I have
never actually rented any of my properties. Yeah, and I
just I guess I just think, uh, you know, first
(15:46):
of all, I don't have much time to do that, yes,
but oh should I really do that? But every one
of my family members is stayed in an Airbi ever
stayed in one yet though no I have not. My
daughter is avid airbnber and they're they're going back on Airbnb.
There you go. Yeah, it's really well. I think that
like you are the quintessential host. Yeah, and and there's
(16:10):
something actually it is funny, like I I started hosting
recently and again because that was the first host in Airbnb,
and it hadn't occurred to me at a like host
for the last few years. But I started hosting again
last year. I decided, I'm gonna put my home on
Airbnb for fun. Now, where's your home? My home is
in San Francisco, so I live right near Dolores Park
in San Francisco, lovely, and I was gonna, like, you know,
(16:32):
how do you charge a night at your home? I
charged zero dollars a night. I couldn't figure out what
to charge, and I thought, well, I'm not doing this
for money, so how do you get it? How do
you get your home? It's more like it's more like
you have to be online at the right time and
then it's available. But he pops up and then you
book it. I've had three guests stay with me and
and um, so you know, I would think every pretty
(16:53):
eligible girl in America would be putting in for that.
I'm still waiting for those guests, but but I had
it was mostly guys. It's been guys. Book Ban is
not married, girls, and he is forty one years old,
and he is a multi billionaire. And actually he's really
cute and he is beautiful teeth and a nice smile.
Oh girls, oh my god. Well let me tell you
(17:16):
about Mike. You never got to airbnb your house again?
I know, now I gotta now embarrass um. No, but
when I when people stay with me, Um, the theme
is beyond the airbed because I basically it's a theme
of the original Airbnb. So you come into my house
and I decorated my guest room with old photos when
I started the company, you know, like I basically give
him on a tour at the original Airbnb. We make
(17:38):
dinner together the first night. I think it's really cool
to like sharon meal together and cook. But I can't
actually cook. So um, but I make cookies. I make
this special chocook cookies. I call him Chesky's chips. They've
been a family recipe for um. You know, send me
the recipe I would, Oh, I got off Google. It's
a great recipe. So um, I should have made you
some cookies. But that's a high standard. And so and
(18:00):
then the next day I take them on a tour
of the office. When you step into someone's home or
their office, you kind of step into their mind, into
like a thousands of decisions that they made, and like,
I could talk to you for hours, but I don't
quite understand you to the extent that I step into
your space because I see your books, your designed decisions,
like everything, and it's really cool. Oh this is our studio.
(18:21):
You're sitting in my TV studio. Okay, well I like it,
which is used for some of our cooking SHOWSS and
some of our gardening shows. But it is it is
interesting that you actually let the guests stay in your
own home. It's not like you've gone away for the weekend. Now.
People thought it was kind of crazy. Good to my mom,
She's like, what you're gonna like? I feel like she
(18:42):
was trying to stage an intervention quietly with my team,
like are you serious you're gonna have strangers in your house?
But it actually, I know it sounds crazy, but the
whole point of airbnb is it's not crazy because they're
not strangers. But are most people renting out extra rooms
or are they renting out an additional room in an
addition on their house. What's the most used scenario. Is
(19:03):
it like the apartment over the garage. What is the
most used scenario is somebody renting the house they're living
and when they're not there, or a second home that
they live in some of the time. Okay, so that's
the most common use. Yes, Now we started as a
raid to rent a room in your house while you're there.
That's kind of the original Airbnb idea. And now you've
(19:24):
got more enterprising people that are managing multiple properties like
this gentleman equator. Right, Yeah, if you own three or
four properties and you can make more money renting them
day to day than to by the month or a year.
And the basic idea of airbnb is you get to
like travel and live like a local. So when you've
(19:50):
got this this, this light bulb went off. Yeah, and
you were having these people sleeping on air mattresses. How
long from that moment to raising the first funds for
actually starting up your company? And along the way, of course,
you said your partner that traveled with you to San
Francisco as your first founding partner. Yeah, do you have
other two founders? So it was the other one. So
(20:12):
Joe is my first one. And then only a few
months later. We didn't really do much for the first
few months, and then Joe and I are realizing we're
ordinary guys. So I bet you there's a lot of
other ordinary people like us. They want to make some
extra money. Me cool people. So I asked Joe, I said,
who's the best engineer you know, software engineer, because we're
both designers from Risty, And he said, well, my old
roommate in Serviancisco, Nate Is, And Nate joined us, and
(20:34):
the three of us got together and we said, what
if we can build a website where you can book
someone's home the way you can book a hotel anywhere
in the world. And I remember telling somebody about this idea.
The first person I told this idea idea, he said Brian.
I said, yes, He goes, I hope that's not the
only idea you're working on. And I go why, He goes,
this is crazy. Strangers are never going to stay with
other strangers. And I remember saying, they're not going to
(20:56):
be strangers, right. The whole point is you're going to
be able to virtually meet them because we're going to
design a system of trust where both sides have profiles,
both sides will review each other. We're gonna verify people's
in't at any we're gonna have twenty four seven support,
and we have all these different safety protocols. And that's
really the secret sauce of Arabia. And you thought about
that from the very beginning, because this was the objection.
(21:18):
And I think the idea is like, it's actually not
that crazy once you get used to it. Like an
hour ago, we didn't know each other, and now we do,
and you can get to know somebody pretty quickly, and
you can bring a lot of signals online about people
and really bring them to life. And I think that's
one of my missions is to make sure that like,
like there aren't strange in the world, just people you
(21:38):
haven't met yet. And I think that you know, we're
more alike than we are different. If we can use
hosting to remind people that, I think the world will
be a lot smarter place. So you developed the concept,
you hit one engineer and two designers. So now it's
March two thousand and eight. We found the company basically,
and we launch for south By Southwest in two thousand
(22:01):
and eight, and we get two bookings, and I was
one of the two bookings. So at this point we're like,
all right, this is not really taking off. It's still
not working. So we try one more time using a
mat if we remember summer two thousand and eight, what's
happening presidential election? Barack Obama, John McCain, There's a Democratic
National Convention coming up, and I remember there was like
(22:22):
a CNN article it was like DNC housing crisis because
they were gonna see Obama was in the keynote in
the football stadium in Vasco Field, and everyone's like where
all these people gonna stay? And we're like arabd and breakfast.
So we launched for the Democratic National Convention with an
advertising campaign. I had like fifty dollars to my name,
So no, there was no advertising campaign. Well how did
you launch? How did you so? For the internet? Yeah? Yeah,
(22:44):
yeah basically, so you like we'll call like producers at CNN.
They're like, who are you? We're not talking to you.
So eventually we started with like local bloggers, like at
some point it's probably like like like emailing in college
kids that had like little blogs and they would start
talking about it, and then Denver Rocky Mountain News and
then Denver Post would start talking about it. And then
the local TV news stations. I remember there's a TV station.
(23:07):
They did a story about a person trying to make
money on the DNC and I had said, I have
one hundred stories like that, so I call the producers.
We were just relentless, We were shameless. And then if finally,
you know, when Denver you have like CNN, New York
Times and all these outposts, all these people stationed and
they they started talking about the company, and so finally
(23:27):
we were launched. We got the word out. We were
in all this press, and we provided housing for like
eighty people during a Democratic National convention. And Mark, at
this point I thought we were like massive, We're huge,
We've made it. But the Beatles attached V eighty bookings.
I have no sense of scale. Then the next weekend
we have like no bookings, and I realized, if only
there were political interventions every week, we'd have a business.
(23:50):
So we tried to raise money for investors. We were
trying to raise one hundred and fifty thousand dollars at
a one play five million dollars valuation. If you had
given us a hundred thousand dollars back then, predolution, you
would have today eight billion dollars. Maybe post delution, you
stole a few billion and nobody wanted that deal. I
remember somebody saying, I like everything, but you and your
(24:12):
idea meaning the idea. Strangers aren't going to study together.
And here's the other thing. They said, designers don't start
tech companies. Did you go to people like Kleiner Perkins? Oh? Yeah,
and they said no. Actually, I don't know if we
went to Planet Perkins. The early days, we went to
like all sorts of angel investors, and most of them
said no, and so we're totally broke. I remember this point,
like you know those binders that like those plastics leaves
(24:34):
of kids used to put baseball cards growing up, we
put credit cards on them. As we fund the company.
We were just like taking out credit cards. They would
give us five thousand dollars limits and we'd take out
another card, and we were fund in the company that way.
So now we're like thirty forty k credit card debt.
I don't recommend doing this. And we were called the
Airbend and Breakfast. The airbeds weren't selling, so we said,
well what about breakfast, And so we ended up with
(24:56):
this kind of hairbrained idea which turned out to be
kind of funny, where we made collectible breakfast cereal Barack Obama,
John McCain theme cereal. We called it Obama os the
Breakfast of Change, the little cheerios and Captain McCain's were
Captain Crash and Crunches. Yeah, a Maverick and everybody. And
we've been ended up like making like thirty thousand dollars
I think selling colletable breakfast cereal. At this point though,
(25:18):
we're still like not no traction. We've been doing for
a year. No one thinks this is a good idea.
So we enter this program called Why Combinator. You might
have heard Why Comminator like a basically a seed incubation fund.
And that's when everything took off. And the reason why
was because now it's late two thousand and eight, early
two nine, there's a recession. People are losing their homes.
(25:39):
And then suddenly I remember Paul Graham used to say,
make something people want, and we said, well, what if
we make some many people really need, like desperately need.
And that's two keywords, want and need. That's we tried
to do it, wants and needs. And I think that like,
it's a very important lesson because so many entrepreneurs that
are ambitious make things that people don't really want or
don't really need. And I think a great way to
(26:00):
make some people need is to make something that you
need for yourself in your life. So then it took off.
During y Combinator, we focused on New York City. I
mean I was crazy. I would fly to New York
every single week, but my co founder, Joe, and because
that's New York City, was the only place we had
any business. And we literally go knocking on doors, like
getting people to sign up, or we literally like meet
(26:21):
users that would host on Airbnb. And I remember I
would knock on the door and I'd say hey, like
I'm the founder of the company, and they're like, oh
my god, you must be a really small company if
you're like knocking on my door. I mean literally the
way you would get paid back then, as I would
carry a bank ledger or my backpack and I would
just hand checks to people. There was like there was
just like a complete free frill. All the bookings were
done by you and you then reimburse the owner. Yeah,
(26:44):
so the whole thing, I mean, we did have all
the bookings done through the platform, but a lot of
people you could elect to get paid by PayPal or
by having your money paid through a bank account. We
eventually did online ACH, but for like a month or
two I just literally was mailing checks to people before
we automated ACH. And you know, eventually it got much
more automated. So you've gone through multiple hurdles. What was
(27:08):
the What was the biggest hurdle? I mean good or bad?
I mean there's in the whole history of the company. Yeah,
I would say I would say there's three. The first
hurdle was just getting this idea going. People thought this
thing was crazy, and it took about a year pushing
it up a hill, and in hinds of the years,
not a long time, but it felt like an eternity
because we didn't know this would ever work, and eventually
(27:29):
like it just started working. The second hurdle was twenty eleven,
we become a billion dollar company. Now we felt like
we've made it, and all of a sudden, a woman's
house is trashed on Airbnb, and everyone was like waiting
for the moment that someone's house is trashed to be
able to say, like, I told you this was a
bad idea, and that was the first moment of a
(27:50):
crisis and confidence. What was the trashing I don't remember.
It was in twenty eleven. A woman in San Francisco
named EJ had our apartment trashed, and we had no
protections back then for people like it was a kind
of a leap of faith. So out of this dark
hour lossing trust and confidence in the company, we had
this idea, what if we had an Airbnb guarantee against
(28:11):
property damage? And I was going to guarantee everyone's home
against five thousand dollars of property damage. And the last
second before I'm about to announce it, an investor, mind
Mark and Reason, came to my office is like midnight
and he's like, adds a zero to the end. He
goes make a fifty thousand, and I'm like, well, you're
the one that gave me any money, so if you
think we should do this, we'll do this. That is
(28:31):
today a three million dollar guarantee against theft and property damage.
And that really was one of the things that actually
catapulled us to restore a trust. But I think the
hardest thing I've ever done in my life was probably
managing the crisis of the pandemic. I mean that was
totally crazy. People stopped traveling. I mean, think about this, Martha.
(28:51):
So I remember it's late two nineteen and like many
of us, we go away for the holidays thinking our
life is like going in one direction, and I have
no idea that my life is about to change. It's
early twenty twenty. We're preparing to go public. Airbnb is
one of the companies the two thousand tents, like it
(29:11):
was like a hot company, and the IPO was going
to be this culmination of this obviously momentum in this success.
So we're working on our IPO. Then all of a sudden,
we start seeing our bookings precipitously fall in China. This
is late January early February twenty twenty, because obviously it
starts in China, and we're one of the only American
(29:31):
businesses in China, like there are very few internet companies.
We were there, I was there with my family great
on January twenty twenty, Are you seriously yes? And we
got out. I mean, I probably buy the skin of
our teeth, you know, can you imagine? And when we
came home then you know, the s hit the fan,
but I can see that your business was so I
(29:52):
remember remember saying this like kind of naive combat time Martha.
I said, Wow, if this thing spreads outside of China,
it's gonna be really bad. I had no idea what
was about to happen. We lost eighty percent of our
business in eight weeks. And we were doing probably like
thirty five billion dollars a year and book end at
that point, that's like the gross sales more than Starbucks does.
And so when you're a business like ours and you're
(30:14):
doing sales like that and you drop, it's like you're
an eighteen wheeler and you slam in the brakes and
you were filing for an IPO with it was at
that time we were preparing to file for an IPO,
we had written the s one. All of a sudden,
we went from preparing to file an IPO to have
the biggest IPO of twenty twenty two within eight weeks,
Journalists writing is this the end of Airbnb? Will Airbnb exist?
(30:36):
The bankers saying, I don't think you have to worry
about your IPO for a couple of years, and so
we went into crisis. Moke, I have a board member
named Ken Chenal. He was c of American Expressed during
nine to eleven and two thousand and eight, and he
calls me up and he says, this is your defining
moment as a CEO, and like rang in my head
like a bell, and we all came into action. A
(30:58):
bunch of us kind of basically got into a duxhall
And this was like a door die situation for us, right,
It was like so crazy, and we basically had to
rebuild a company from the ground up. And along the
way we tried to take care of every stakeholder guest.
We issued more than one billion dollars or refunds for
people who felt unsafe traveling. Host had a major economic
shore falls. We took two hundred fifty million dollars out
(31:19):
of our bank account and sent it to Host, even
though like that money was kind of precarious at the time.
People needed housing on the front lines. I said, even
if we're the companies on the brink, we're still going
to help others. So we provided housing for frontline workers
like nurses, firefighters. We had to do a layoff, one
of the big first tech layoffs of the pandemic, but
we tried to do with compassion, and I was employee.
(31:42):
Did you have at that time we had seven thousand,
We went down to five thousand, so you know, we
laid off like two thousand, Yeah, two thousand, probably twenty
five percent places or so. So it was obviously, you know,
obviously that is a Lafts. The hardest thing is CEO
usually ever has to do. And I always warned about
how difficult was, but I wasn't prepared all. And you know,
when you lose that much of your business, it's like
(32:03):
your house is on fire and you're like going into
a burning house and somebody tells you can only keep
half your things. What are you going to take? And
then suddenly everything becomes really clear to you. And I
realized that not everything we did was as important as
everything else, and that we had to get back to
the roots of Airbnb, back to connection, back to everyday
(32:24):
people bringing them together. And so we hunkered down, remade
the company from the ground up, and something remarkable happens.
People start traveling again. They're not crossing borders, they're not
going to cities, but they're like sequest in their homes
and they're like getting store crazy. So they start booking
airbnbs like the town over or like within a tank
(32:45):
of gas away. And then suddenly yeah, and then our
business comes back, but a different kind of business. People
are now staying airbbies, not just for a night, but
for a week or for a month. They're living in
Airbnb's and they're living with other people. And so our
business comes back, but without a lot of the cost base.
And then so then we prepared to go public, like
(33:07):
all these bankers said, we weren't. We never have to
go public, but we have. Now we have to like
redo the everything because like the s one we had
written was like for a company didn't exist anymore. It
was now a different business. So we do an IPO
on Zoom and it becomes one of the biggest IPOs ever.
We prepared. At the depth of the crisis, we were
probably a value to eighteen billion dollars. We go public
(33:29):
at forty seven billion, and the day it closes was
one hundred billion dollars company. And Mike, it's like my
whole life like now flashes before my eyes again. That
was the craziest year in my life. And it was
a very different company than what you had envisioned in
the first place. It was a very different company, you know,
weirdly and now and now what is it? How close
to your original vision is that company? Now? It's kind
(33:51):
of going back full circle. I mean, to be honest,
like everyone, by start is the way to meet people.
It wasn't a way just to stay in a house.
There's a way to meet people that's like a social club.
It was like a social club. It was like it
was like a social network in the physical world, even
though that was a total loaded worm, but it was
like way to bring people together. It was the idea
that what if you could walk in someone else's shoes?
And then it grew and it grew to the point
(34:13):
where people started getting more investment properties, and then you
wouldn't meet the host and there was a keypad, and
there's a real merit to a service like that. But
the heart and soul of the company isn't about houses.
It's about people. It's about connection. I always wanted to
be a tech company that had like heart at the
center of the company and creativity. I mean, a designer
from Risdy starting a tech company, how could a company
(34:35):
not be about people in connection, not bits and bites.
And so that's what it is now where we have
like new products we're launching and it's all about bringing
people together. Like what, well, it's launching in a month.
You're going to great news on your podcast. Let's just
say that the original idea of Airbnb. We're going back
to the original idea of Airbnb of bringing people back together,
(34:57):
people staying with each other's homes. And that's a really
big focus of ours. It's not a dating appe no, no, no, no.
Although I am very interested in new ways to like
bring people together. I don't think dating is the right
thing for a BMB. But any idea is to help
connect people and bring them together, is I think something
we're gonna need in this new world. I can see
I'm good at advertising. Um, you want to go to
(35:21):
an odd place, and how many who wants to go to? Yeah?
This place? And you put that, yeah, and you put
that out there. Who wants to go to let's just
say Tasmania Yeah, And and so you could also become
a giant travel company totally. Yeah. I mean you could
be better than better than the kind of travel companies
(35:44):
that exist now, which are tours or something with unrelated people.
They could be all related. Yes, you could basically fine
people to travel with because there are people you don't know,
or it could be a reason to reconvene with people
that you know but you live in different cities from
all brainstorm with you. I love to love doing that.
Oh yeah, And then I mean think about it like today,
(36:04):
how do people meet one another? It's getting more and
more difficult. And the Internet was supposed to be this
way to meet people, but what is really like Your
Instagram followers aren't coming to your funeral. No one changed
someone else's mind on a YouTube comment section. Social network
is now social media and we're not really connecting. People
were performing in front of other people. And so I
think that there's a real need for a way for
(36:25):
people to still connect, to still meet. Where one of
the largest providers of housing in the world, It's been
used a billion a half times. But yeah, where I'm
really interested in is things that bring it back to
the magic of hosting, creativity and bringing people together. I
also want to show people that a creative person can
run a Fortune five hundred company. I mean, think about
how many Fortune five hundred companies are run by CFOs
(36:47):
or coos or engineers or super analytical people how many
creative people are designers run fort enphundred companies? How many
creative people are on the board of fort environment company?
How many creative people report to the CEO of a
creative company by an extraor neighbor. Who's your next? Oh? Yeah,
so there you go. Okay, I wish I'm surrounded. I
wish there were more of them. Yeah, there are a lot.
There's you, there's Ralph, but there should be more. How
(37:08):
many are in tech? Not many, not in the big companies.
And I kind of remember I remember when as there
is d there was obsession about how did you get
designers in the boardroom? And I always remembered, well, why
can't designers run the boardroom? We're really like design Obviously,
it's not just how something looks, it's how it works.
But you're not just a designer, and you have to
face that fact. Now you are also a very important
(37:30):
tech guy. He's built a company around technology with a
base basis of a of a creative idea. But but
Steve Jobs did the same thing, you know, really deep
Jobs I think probably thought of himself in a larger
way as a design or he just how he did
he did? He said design is the fundamental soul of
a man made creation that reveals itself through subsequent layers.
(37:50):
Johnny I've now works with us and like and he's
taught me a lot about design. And I thought I
knew about design that I started working with Johnny. And
it's like, design isn't just how it looks, that's how
it fundamentally works. And I thought, what if it Like, Yes,
I'm a business person, I'm a technologist in some kind
of way, I still approach every problem like a designer.
It's certainly paid off. Yes, So Airbnb offers lots of
(38:23):
things that hotels. Ju notch Right just lists five things.
Number One, Airbnbs are in basically every neighborhood in the world,
So hotels and hotel district, you go to Airbnb, it's
in a neighborhood. Number Two, it's usually that more affordable
than a hotel because you're sharing space and people that
need of a profit. Three, you're getting a local and
authentic experience. Four, you can potentially have a connection with
(38:46):
people in Five. When you're a real home, the home
is usually equipped so you can cook. There's like things
in the kitchen. There might be a backyard or a barbecue,
there might be a pool, and you're not the question
as hotel. So these are five examples of things you
get not a hotel. Now, hotels are great if you're
like staying for a night, you're in for a midnight,
you leave at at am. But basically, Martha, I think
the longer you're away from home, the more you want
(39:08):
to be at home. And a lot of our business
half of it's more than a week. That's a great
use case. If you're going there for a few nights,
averybody's still great. What's the cheapest Airbnb? I mean, we
have airbnbs that are like ten bucks a night around
the world, and then we have verbs that are like
fifty thousand dollars, Like what I mean. We have an
entire collection of castle so you do is it all
(39:29):
stationary real estate? We have boats. We do have a
collection of boats, so anyone can list anything on Airbnb.
But we have a lot of remote screening to make
sure like they people have like an authenticated address, um,
you know, and the whole the whole thing works on
a reputation system. So that's the real key. When somebody
stays in Airbnb, they leave the guest review and then
(39:51):
they leave a host review, and the host leaves the
guest review. Seventy percent of the time people review each other,
and that's really the major currency. We also verify every
guest in every host, so we have one hundred million
authenticated verifications, and we do a lot of remote screening
as well to detect for prior parties to really make
people feel safe. How did the hotel industry react to
(40:11):
Airbnb and how are they reacting now. I think they
ignored it, then they didn't like it, then they probably
try to stop it, And I think now they've come
to conclusion that we can co exist together, and actually
maybe they've also come to the realization that they have
record revenue and record profits even as we grow, and
that we can both live together. That a hotel is
great if you need to go for a night or
(40:32):
two you're in and out, or if you're like staying
in a conference, and if you want to have a
local experience, really authentic experience, and live in a home,
then Airbnb is great. And these are kind of, frankly
slightly different use cases. Oh, it's the least time you
stayed in a hotel. I actually stayed in a hotel
very recently for an investor conference, and we own a
hotel app called hotel Tonight. So I'm a primarily airbnb person,
(40:56):
a home person, but hotels are great for some use cases.
If I get in at midnight, I leave at eight am,
I think a hotel is probably better. I don't want
to wake up the host at midnight and let them
like host me and then I'm out in the morning.
And which country is your biggest market? United States? Probably
followed by like France and then UK. Well on average,
(41:17):
you said it, but I just want to reiterate. How
many guests do you host a night? Up to four
million a night, depends on the night and not crazy,
that's like, that's basically the size of LA But so
imagine we built a community basically the size of a
living together every night, but from nearly every country in
the world. People from the Middle East are staying at
homes and people in Texas, you know, these cultures that
(41:39):
have not really lived together in this way before. It's
really interesting to hear your enthusiasm, of which only seems
to grow and not wane with this amazing company, and
your opportunities are vast. Is there one one area that
you want to go into that you just haven't broached yet.
We did launch a product called Airbnb Experiences, where you
can basically not just staying at home, but have an
(42:01):
experience with somebody, so you can do like you can
do like a cooking class. I'll give an example. There
was a grandmother in Tuscany and she put a cooking
class in Airbnb, Pasta with Grandma. She Now, she became
so popular that all the other all these other grandmothers
in Tuscany started putting their own pasta class up. And
basically the way it works, you book a class, you
go to her house, she teaches you pasta with other guests,
(42:24):
you make the pasta, you eat it, and you tell
stories about growing up. It's so popular that grandma's around
the world are now doing Pasta with Grandma, dumplings for Grandma,
and they're making a hundreds of thousand dollars a year.
So I think there's a major opportunity with experiences, and
then beyond that, I think there's just so many other
ways to bring people together. I've had ideas for Airbnb.
(42:44):
You know, many of my family members use airbnda. My
Nie Sophie is on her way to India, and she's
debating whether she use Airbnb in India, which is newish
in India. But she's thinking maybe she's gonna stay with
friends first where they'll feed her. Yeah. Yeah, and feeding
is one of the things that she's always brought up
to me. You know, you get into a city she was.
(43:05):
She got into the outskirts of Berlin and she had
nothing to eat, and it was late at night and
she had nothing to eat. Yeah, but we have a solution.
We have Martha and Marley Spoon, which happens to be
a German company. Do you have you thought about putting
food in the refrigerator pre ordered by the guests. I
think it's that's a great idea, you know. I think
it's food is a key part of hospitality and being
(43:26):
a good host. You would know that as well as anyone. Yeah,
And we have these meal kids which you just can
order and for two or four people or six people
if you want. I just thought it would be a
good idea for airbing. I like that a lot. Yeah.
And also, Martha, I'm going to continue to host people
my home. You have an open invitation. If you're Evan
San Francisco, you hosted me in your home. I got
(43:47):
host you in my home outside of Airbnb. You've done
work with the Obama Foundation, yes, so tell me a
little bit about that. Well. President Obama crazy enough became
a bit of a mentor to me. I met him
the last year of his press him and see and
then when he left office, we kept in touch and
we had like a standing phone call where he kind
of really took an interest in helping me, like, and
(44:08):
you know, it was a very important time in my life,
and I wanted to help him and help his foundation.
And I was thinking about philanthropy, like I wasn't prepared
to have a lot of money. And the one day
I wake up and you know, before you know, it
was like the flash of that you have billions of dollars.
I joined the Giving Pledge to commit to giving the
majority of my wealth away before I die or upon
my death. And I hadn't really done anything yet. I
(44:30):
hadn't really thought about it. And I had a brainstorm
with President Obama and I said, the first thing I
want to do is I want to help high school kids.
And I want to do some kind of scholarship too.
I want to help kids that don't have any other
means to get help, you know, if you're going to
tack of this venture capitalist And I was brainstorm of him,
and President Obama told me a story about you know,
(44:51):
he wanted to go into public service when he was
in college, but he felt like he almost couldn't afford
to because college is expensive and public services and teach
you a lot. And I thought to myself, can you
imagine a present bomb it didn't go into public service,
didn't become a community organize, you probably would have been
president if you went to corporate law. And so I thought,
we thought we had this idea, would if we create
a scholarship for college students that want to have a
(45:12):
career in public service, there's no venture capitalists for them.
And then I had the other idea. I said, well,
I don't know a lot of education, but I know
quite a lot about travel. So we're gonna have a
travel component because I want people to go to polk
service to also take the best ideas around the world
and bring it back to the United States or for
wherever they're going to do service. And so now there's
they not only do we pay for the last dollar education,
(45:36):
So like you know, fifty thousand dollars or so. We
also pay for ten years of travel so they can
travel the world. And you know, I think the basic
idea in marth I have is the world is getting
more and more divided, but it's hard to hate someone
else when you meet them up close. It seems like
the people's strongest opinions of other people than ones without passports.
And I think that it's real risk that we get really,
(45:58):
really insular. And so you could basically have a generation
of bridge builders. The world will be a lot more healthy.
But you can't build a bridge unless you've ever been
on the other side of the river. So you're funding
education for these people, yep. So one hundred scholarships a
year will probably eventually scaled the two hundred. I took
one hundred million dollars put it into this scholarship fund
that the Obama Foundation of Ministers. Oh, great congratulation, Thank you,
(46:22):
very important. Education is all important in my mind, Yes, totally. Well,
we could talk and talk and talk into you are
you are fantastic, But I just wanted to say it's
been a pleasure to meet you, Thank you very much,
and to learn more about Airbnb. Keep up with Brian
and his travels with his adorable dog, Sophie Yes, a
Golden Retriever Yes, And you can follow him on Instagram.
(46:44):
His handle is at b cheskycche sky and of course,
to learn more about Airbnb, visit airbnb dot com or
download the Airbnb app. Thank you Brian, Thank you Martha
for having a pleasure. Thank you for hosting. Now I'm
so reved up. I'm gonna look. I think I'm first
gonna look for not a castle. I don't want to castle.
(47:06):
I think maybe a boat. We have a thousands of those. Okay.
Both are fun. Love to host. You will help
The heart and soul of the company isn't about houses,
It's about people. I always want to be a tech
company that had like heart at the center of the
company and creativity, not bits and bites. During your travels,
I'm sure many of you listeners have booked an Airbnb,
one of those residential properties made available for short term rental.
(00:23):
Officially launched in March of two thousand and eight, Airbnb
has become a major player in the hospitality business around
the world. Brian Chesky is the co founder and CEO
of the wildly popular and successful San Francisco based company.
Although under his picture in his high school yearbook, Brian
(00:43):
wrote the caption I'm sure I'll amount to nothing. Brian
sure has. In two and fifteen he was named one
of Times one hundred most Influential People Alive, and today
his publicly traded company is worth close to how much
Brian I guess eighty billion dollars and continues to grow
(01:08):
and at the ripe old age of forty one, I
hope that you are taking advantage of your vast success
and enjoying your life. Yes, thank you very much. So.
He's joining me today from my farm in Bedford New York.
He just flew in from Boston and we want to
talk about his road to success with Airbnb. The business
(01:30):
of being in business is Brian Chesky, thanks very much
for joining me today. Brian, Well, thank you Martha for
having me. I've looked forward to meeting you for a
long time. You went to Rhode Island School of Design.
Many At one time when I started my company, about
ten years into the development of Martha Stewart Living, I
was the largest employer of Rhode Island School of Design graduates.
(01:52):
I remember that when I was at Risdie. Yeah, that
was a big theater program. Yeah, it was. It was
so great. We and we still have many of the
graduates working for us. Kevin Sharkey, Hodzan a house there,
a lot of a lot of my employees went to
Rhode Island. Why why Risdy Well, Um, it was just
it was just and I don't want to say factory,
but it was the It was a fabulous school for
(02:14):
the developing of the crafty, the artistic, the photo graphic on.
So many different fields are studied at Rhode Island School
of Design, and the school attracts the most talented of
people interested in all of that yeah, and so we
found lots and lots and lots of great employees and
(02:35):
I'm in touch with lots of them. And oh yeah,
and uh and you did you what did you study there? Yeah?
So I, um, well, I'll just go back. My I'm
from by the way. Um being on your Being on
your podcast today is definitely a highlight for me, and
highlight even maybe more for my mom because I have
a lot of memories growing up of you being on
television and like all your magazines in our house and
(02:56):
and then yeah, so I got to Risdy. I'm from
upstate New York. Just a little bit of background my
social workers growing up. I remember my mom like, tell
me one time I was like in high school. I
think it was like thirteen four maybe I was fourteen
years old, and she said she told me something I
was stay in the backyard of her house. She said,
I chose a job for the love as a social worker,
and I ended up making no money. So you should
(03:16):
choose a job that pays you a lot of money.
And one day I tell my mom, I said, I've
realized what I'm want to do in my life. I
want to be an artist. And she's, oh, my God,
you managed to pick the only field that will pay
less than a social worker. Like, You're gonna literally get
paid nothing and live in my basement. I said, no, Mom,
I'm gonna like get a job. And she goes, if
you get a job, has to be a real job.
And I go, what's a real job. She goes, A
real job's a job with health insurance. So anyways, I'm
(03:39):
in high school and I discover, like you know that,
like I just have this passion for art and design,
and so I go to Risdie and I get to
Risdy and by the time I get to campus, I
kind of I'm really like an fine artist at the point,
I'm like an a drawer, a painter, and I come
to inclusion, I'm almost like born a hundred years too
late for what I want to do because the oldestration
(04:00):
I'm doing is starting to be replaced by photography. And
freshman year, you have to pick this major. And so
I'm like seventeen years old. Maybe I just turned eighteen.
I already decided I was going to be an artist
or designer. Now you got to pick what type of
thing I'm going to do the rest of my life.
I don't even know and every you know, as you know,
there were eighteen majors. Every department head at pitches to
(04:20):
like go into the department. You know, there's architect surecraftic design,
there's furniture, there's jewelry, there's you know, you can kind
of textile, textile, ceramics. And then there was this field
called industrial design. And before risde I never heard of it.
And I remember the department heads something said something like
industrial design is the design of everything from a toothbrush
(04:41):
to a spaceship and kind of everything in between. And
when I heard that, I realized, that is exactly what
I want to do. You know, you can zoe like,
you can do like you can work for you Martha
Stewart living, you can do medical design, you can toy design,
you can do fashion, you can do like equipment you
computer design, computer. I mean like the design like everything
Apple design was industrial design, and it was really the
(05:05):
intersection of technology and like kind of crafts and materials manufacturing.
It's one of the few design fields where you're responsible
for whether the thing you make sells. If you're an architect,
it's really not your problem with the building's not least
if you're a designer, Your practicesn't sell, it's a real problem.
What was your big project over So I did a
couple of things, probably two. One. I spent a semester
(05:27):
at MIT, so they had this product development program MIT Sloan,
and you basically had got assigned like an everyday household
item and you had to reinvent it. You're on a
team with electrical and mechanical engineers from MIT, and of
course you're the designer. And we came up with this
like thing for Starbucks. It was never a manufacturer, was
like a sugar dispenser, but it was really cool and
(05:49):
it was a teaspoon sugar comes out. Yeah, it was
probably half a teaspoon, so you could get a little
bit more precision. And it was just like I thought,
really nice, beautiful, like kind of elegant solution. But it
was the first time I had worked really closely with
like mechanical engineers and you know, and they were electrical engineers,
but we didn't we did not make our product like
electric electricity based, and so that was cool. And then
(06:12):
my senior year, I was very interested in like health
and this is like you know, obviously way before the iPhone,
and I had this idea of, like, we know all
this information about our stocks, we know all these information
about our personal finances, we know this information about like
the sports teams. Why don't we know the information about
the most important thing we have, which is our own bodies.
(06:33):
And so I try to design this like health and
fitness program where it could basically track your like biometrics,
and it could basically be like a virtual personal trainer.
And there's a lot of apps now in the app
store that kind of do this stuff. But this was
two thousand and four, way before any of this technology revolution.
So I graduate Risdy, I'm like, I don't know what
I'm gonna do in my life. I want to go
(06:54):
to California. I couldn't tell you different between LA and SF.
Never been either place. I vaguely knew there might have
been a different but California represented a frontier. It represented
a place where like kind of I guess dreams come
true and you could like make anything in your life.
And I always thought, look, California, it's not what you've done,
but what you will do. And I'm like, well, I
haven't done anything. And I go to LA and I
(07:14):
get a job as an industrial designer. It's this little firm,
and you know, because we're a small firm, it turned
out to be a blessing in disguise because we had
we worked with clients with small budgets. So basically we
worked with startups we weren't. We weren't working with like
we weren't like Ideo, working with like Procter and Gamble,
which would have been prestigious but would not have prepared
me for entrepreneur show. I remember one time I got
(07:36):
assigned a project to be on a reality TV show.
Was the craziest thing. Like Simon Cowell had just done
American Idol. He did a spinoff called American Inventor, which
is basically a precursor to Shark Tank. And my boss
one day comes in to me in my office. He said,
you're going to be on a reality TV show and
I'm like I am. He goes, yes, you are, because
ABC has like hired us, and you're going to be
(07:58):
assigned a contestant and you have to design this product
for this contestant. And so they were competing with the apprentices.
Yeah yeah, oh yeah, yes exactly. So I got assigned
a magician who had an idea for a better toilet seat,
and so that's that's like what I'm like. I'm like,
I remember, I'm like twenty four now, maybe twenty five
years old. I'm designing this toilet seat for a magician
(08:20):
on reality television. It was just a toilet seat that
was meant to be more hygienic by like when you
flush it, it seals everything, so everything's more sanitary. It's
probably maybe it's a good idea, um, but I just
kind of thought like, wow, like I gotta this is
this is you gotta start somewhere. But I remember at
this point my life was like I'm in a car
(08:41):
and the road in front of me looks exactly the
road behind me, and I'm like, this is not my life.
I've got to make a change. So I'm in La.
The tech revolution is basically happening. Facebook is taking off.
YouTube was just sold to Google, and I kind of
felt like the gears of the world are turning. In
San Francisco, my friend from Risdy named Joe was living
in San Francisco and he's been telling me for like
(09:03):
a year or now, like come to San Francisco where
it's happening. It's where it's happening. So finally I'm like
all right, by the way, Like I was, I was
making forty thousand dollars a year entry level designer. I
had no savings. I think I had like a thousand
dollars of the bank. So one day, this is now
October two thousand and seven, I packed everything in a
back of old Honda Civic and I drive up to
(09:24):
San Francisco. I even had like rolled up like a
foam mattress into my backseat with duct tape. I get
to San Francisco and my now roommate, Joe Gebbia, who's
not my co founder, tells me that our rent is
check is due and the rent check is one one
hundred and fifty dollars, so I don't have enough money
to pay rent. Well, it turns out that weekend and
(09:44):
international Design conference was coming to San Francisco and all
the hotels were sold out, and we had this idea.
We said, well, what if we just turned our house
into a bed and breakfast for the design conference. Unfortunately
I didn't have any beds, just literally moved up there,
but Joe had three airbeds in his closet, so we
pulled the airbeds out of the closet. We inflated them
(10:05):
and we called the Airbed and Breakfast dot com and
that's where the name comes from. And if you told
me back then, I'd be telling the story like a
thousand times. I'd be like, you're crazy. But we ended
up hosting three people that weekend, a thirty five year
old woman from Boston, a forty five father or five
from Utah, and the third year old from India, and
something Martha kind of crazy happened. The expected thing that
(10:26):
happen is we were able to pay a rent. But
the unexpected thing to happen is when three people live
you for a week, it's not unusual for you to
become friends with them. And I wasn't expecting to make friends,
but you took like a two year relationship and we
compressed it. And the thing about hosting, and I had like,
I had no idea what you were saying in the house.
Also I was there with him and basically I didn't
(10:47):
just like, like, we made them breakfast. It was not
a fancy breakfast. It was like pop tarts and like
orange juice, and we gave them like a map to
the city. But we actually like took them around the city.
They got to feel like there were a local designer
San Francisco. So unlike staying at a hotel, this was
kind of like staying with a friend from out of town.
And we basically took them around the city, hung out
with them. And by the way, the thing I realized
(11:09):
is I had fun too. And there's something about hosting,
and I didn't know anything about this, that when you're hosting,
it's like this really sacred relationship you have where a traveler,
where a guest is like, you know, they're kind of
they're they're vulnerable, they're putting themselves into your trust and
you feel that and you also feel like your life
(11:31):
is on display and you want to like show your
best foot forward. You're like, this is my life, this
is my house. And so there's this really like deep
bond when you're hosting somebody that I took for granted
and that was the genesis of airbnb. So whould you
do for sheets and towels? It was. It was rough.
We weren't the best. I mean, I'm gonna be honest.
We were good hosts in so far that it was fun.
(11:53):
You were hanging out, but but we were broke twenty
four year old. So yeah, we like we had a
bunch of we had sheets laid out on an airbed,
we had a stack of towels because I wanted to
feel like I was like a real hospitality company. But
we were also renting air beds on a floor, so
it was a nice stucta position. I remember one point,
I see a forty five year old father five. He's
like a Mormon from Utah, and he's sleeping on an
(12:14):
air bed in our living room and it was just
like a funny image. You know, it's like, wow, this
is funny. But they had a good experience. A well,
that's the important thing. So did you know then that
that was going to evolve into Airbnb. I remember Martha
saying this is going to be huge. One day, a
thousand people are going to do this, And that was
(12:35):
my idea of huge. So no, I mean I thought
we were always one or two steps ahead, but not
like a thousand steps ahead. And how could you ever
have imagined that inflating three air mattresses one weekend to
make rent would lead to what it is today. It's
now been used a billion a half times is a
billion a half. We have the equivalent of the population
(12:58):
of Los Angeles living together every single night. Never in
human history has nearly every country in the world lived
together like today. And obviously the lot happened between then
and now. How is that a lot lot more than
staying in hotels or how what's the equivalent. I don't
know what the total inventory of a Hilton or Marriott is.
Maybe they can house like a million people a night,
so and we can house you know, up to four
(13:20):
million people a night or million a night on a
big night wide worldwide. Where aren't you in the world,
That's a great question. It's easier to say where we aren't.
We're not in North Korea. They have no internet. We're
not in Iran for regulations. We're not in I don't
think we're in Crimea. We pulled out of Russian Belarus
and we're not in I don't think we're in South Sudan.
(13:41):
We were and still are one of the most global
companies in the world. We're one of the biggest businesses
in Cuba. We're one of the biggest American businesses in Brazil.
We have a robust business in Japan, Korea. You know,
kind of nearly My Ecuadorian driver has four Airbnb's in
his hometown in Ecuador. They run it via the internet
(14:02):
and they live here. They run it there and they
go back down every so often to check on everything
and make sure it's all up to part. But it's
so interesting to see young entrepreneurs developing inside your company.
You know, it's kind of crazy, Marth that we have
nearly four and a half million host that are hosting.
(14:22):
Last year, our host earn more than sixty billion dollars. Wow.
In the majority of them, we're women, which is also
pretty cool. So it's a nice way to make a
second income. It's a nice way to a first income.
Some people do a first income. And the cool thing
is like if you start hosting, like people are shocked
to how well it works. The average person who gets
a booking book gets a book and within three days
(14:43):
of listing, And I think it gives people a lot
of pride. I mean, there's something about, like, in this
world where we're spending more and more time online, it
feels like the more time we spend online, the internet
had this promise to bring us all together and build community.
But there's something about like face to face connection that
I I think airbomy brings. It gets us offline from
the Internet. It's a very like old fashioned idea with
(15:05):
new technology. It kind of brings out the best in
everyone because I think to be a host, you know
better than anyone, is to care for someone else, to
anticipate their needs, to put your life on display, and
to be able to democratize that idea to get millions
of people, you know, for every like eleven dollars spent
in the world, I think the last I saw about
(15:26):
a dollar spent on Airbnb. So it's a very ubiquitous
idea now. But people thought this idea was crazy. I remember,
I remember when it first came out. I thought, I
wonder would I ever do that? I've never I have
never actually rented any of my properties. Yeah, and I
just I guess I just think, uh, you know, first
(15:46):
of all, I don't have much time to do that, yes,
but oh should I really do that? But every one
of my family members is stayed in an Airbi ever
stayed in one yet though no I have not. My
daughter is avid airbnber and they're they're going back on Airbnb.
There you go. Yeah, it's really well. I think that
like you are the quintessential host. Yeah, and and there's
(16:10):
something actually it is funny, like I I started hosting
recently and again because that was the first host in Airbnb,
and it hadn't occurred to me at a like host
for the last few years. But I started hosting again
last year. I decided, I'm gonna put my home on
Airbnb for fun. Now, where's your home? My home is
in San Francisco, so I live right near Dolores Park
in San Francisco, lovely, and I was gonna, like, you know,
(16:32):
how do you charge a night at your home? I
charged zero dollars a night. I couldn't figure out what
to charge, and I thought, well, I'm not doing this
for money, so how do you get it? How do
you get your home? It's more like it's more like
you have to be online at the right time and
then it's available. But he pops up and then you
book it. I've had three guests stay with me and
and um, so you know, I would think every pretty
(16:53):
eligible girl in America would be putting in for that.
I'm still waiting for those guests, but but I had
it was mostly guys. It's been guys. Book Ban is
not married, girls, and he is forty one years old,
and he is a multi billionaire. And actually he's really
cute and he is beautiful teeth and a nice smile.
Oh girls, oh my god. Well let me tell you
(17:16):
about Mike. You never got to airbnb your house again?
I know, now I gotta now embarrass um. No, but
when I when people stay with me, Um, the theme
is beyond the airbed because I basically it's a theme
of the original Airbnb. So you come into my house
and I decorated my guest room with old photos when
I started the company, you know, like I basically give
him on a tour at the original Airbnb. We make
(17:38):
dinner together the first night. I think it's really cool
to like sharon meal together and cook. But I can't
actually cook. So um, but I make cookies. I make
this special chocook cookies. I call him Chesky's chips. They've
been a family recipe for um. You know, send me
the recipe I would, Oh, I got off Google. It's
a great recipe. So um, I should have made you
some cookies. But that's a high standard. And so and
(18:00):
then the next day I take them on a tour
of the office. When you step into someone's home or
their office, you kind of step into their mind, into
like a thousands of decisions that they made, and like,
I could talk to you for hours, but I don't
quite understand you to the extent that I step into
your space because I see your books, your designed decisions,
like everything, and it's really cool. Oh this is our studio.
(18:21):
You're sitting in my TV studio. Okay, well I like it,
which is used for some of our cooking SHOWSS and
some of our gardening shows. But it is it is
interesting that you actually let the guests stay in your
own home. It's not like you've gone away for the weekend. Now.
People thought it was kind of crazy. Good to my mom,
She's like, what you're gonna like? I feel like she
(18:42):
was trying to stage an intervention quietly with my team,
like are you serious you're gonna have strangers in your house?
But it actually, I know it sounds crazy, but the
whole point of airbnb is it's not crazy because they're
not strangers. But are most people renting out extra rooms
or are they renting out an additional room in an
addition on their house. What's the most used scenario. Is
(19:03):
it like the apartment over the garage. What is the
most used scenario is somebody renting the house they're living
and when they're not there, or a second home that
they live in some of the time. Okay, so that's
the most common use. Yes, Now we started as a
raid to rent a room in your house while you're there.
That's kind of the original Airbnb idea. And now you've
(19:24):
got more enterprising people that are managing multiple properties like
this gentleman equator. Right, Yeah, if you own three or
four properties and you can make more money renting them
day to day than to by the month or a year.
And the basic idea of airbnb is you get to
like travel and live like a local. So when you've
(19:50):
got this this, this light bulb went off. Yeah, and
you were having these people sleeping on air mattresses. How
long from that moment to raising the first funds for
actually starting up your company? And along the way, of course,
you said your partner that traveled with you to San
Francisco as your first founding partner. Yeah, do you have
other two founders? So it was the other one. So
(20:12):
Joe is my first one. And then only a few
months later. We didn't really do much for the first
few months, and then Joe and I are realizing we're
ordinary guys. So I bet you there's a lot of
other ordinary people like us. They want to make some
extra money. Me cool people. So I asked Joe, I said,
who's the best engineer you know, software engineer, because we're
both designers from Risty, And he said, well, my old
roommate in Serviancisco, Nate Is, And Nate joined us, and
(20:34):
the three of us got together and we said, what
if we can build a website where you can book
someone's home the way you can book a hotel anywhere
in the world. And I remember telling somebody about this idea.
The first person I told this idea idea, he said Brian.
I said, yes, He goes, I hope that's not the
only idea you're working on. And I go why, He goes,
this is crazy. Strangers are never going to stay with
other strangers. And I remember saying, they're not going to
(20:56):
be strangers, right. The whole point is you're going to
be able to virtually meet them because we're going to
design a system of trust where both sides have profiles,
both sides will review each other. We're gonna verify people's
in't at any we're gonna have twenty four seven support,
and we have all these different safety protocols. And that's
really the secret sauce of Arabia. And you thought about
that from the very beginning, because this was the objection.
(21:18):
And I think the idea is like, it's actually not
that crazy once you get used to it. Like an
hour ago, we didn't know each other, and now we do,
and you can get to know somebody pretty quickly, and
you can bring a lot of signals online about people
and really bring them to life. And I think that's
one of my missions is to make sure that like,
like there aren't strange in the world, just people you
(21:38):
haven't met yet. And I think that you know, we're
more alike than we are different. If we can use
hosting to remind people that, I think the world will
be a lot smarter place. So you developed the concept,
you hit one engineer and two designers. So now it's
March two thousand and eight. We found the company basically,
and we launch for south By Southwest in two thousand
(22:01):
and eight, and we get two bookings, and I was
one of the two bookings. So at this point we're like,
all right, this is not really taking off. It's still
not working. So we try one more time using a
mat if we remember summer two thousand and eight, what's
happening presidential election? Barack Obama, John McCain, There's a Democratic
National Convention coming up, and I remember there was like
(22:22):
a CNN article it was like DNC housing crisis because
they were gonna see Obama was in the keynote in
the football stadium in Vasco Field, and everyone's like where
all these people gonna stay? And we're like arabd and breakfast.
So we launched for the Democratic National Convention with an
advertising campaign. I had like fifty dollars to my name,
So no, there was no advertising campaign. Well how did
you launch? How did you so? For the internet? Yeah? Yeah,
(22:44):
yeah basically, so you like we'll call like producers at CNN.
They're like, who are you? We're not talking to you.
So eventually we started with like local bloggers, like at
some point it's probably like like like emailing in college
kids that had like little blogs and they would start
talking about it, and then Denver Rocky Mountain News and
then Denver Post would start talking about it. And then
the local TV news stations. I remember there's a TV station.
(23:07):
They did a story about a person trying to make
money on the DNC and I had said, I have
one hundred stories like that, so I call the producers.
We were just relentless, We were shameless. And then if finally,
you know, when Denver you have like CNN, New York
Times and all these outposts, all these people stationed and
they they started talking about the company, and so finally
(23:27):
we were launched. We got the word out. We were
in all this press, and we provided housing for like
eighty people during a Democratic National convention. And Mark, at
this point I thought we were like massive, We're huge,
We've made it. But the Beatles attached V eighty bookings.
I have no sense of scale. Then the next weekend
we have like no bookings, and I realized, if only
there were political interventions every week, we'd have a business.
(23:50):
So we tried to raise money for investors. We were
trying to raise one hundred and fifty thousand dollars at
a one play five million dollars valuation. If you had
given us a hundred thousand dollars back then, predolution, you
would have today eight billion dollars. Maybe post delution, you
stole a few billion and nobody wanted that deal. I
remember somebody saying, I like everything, but you and your
(24:12):
idea meaning the idea. Strangers aren't going to study together.
And here's the other thing. They said, designers don't start
tech companies. Did you go to people like Kleiner Perkins? Oh? Yeah,
and they said no. Actually, I don't know if we
went to Planet Perkins. The early days, we went to
like all sorts of angel investors, and most of them
said no, and so we're totally broke. I remember this point,
like you know those binders that like those plastics leaves
(24:34):
of kids used to put baseball cards growing up, we
put credit cards on them. As we fund the company.
We were just like taking out credit cards. They would
give us five thousand dollars limits and we'd take out
another card, and we were fund in the company that way.
So now we're like thirty forty k credit card debt.
I don't recommend doing this. And we were called the
Airbend and Breakfast. The airbeds weren't selling, so we said,
well what about breakfast, And so we ended up with
(24:56):
this kind of hairbrained idea which turned out to be
kind of funny, where we made collectible breakfast cereal Barack Obama,
John McCain theme cereal. We called it Obama os the
Breakfast of Change, the little cheerios and Captain McCain's were
Captain Crash and Crunches. Yeah, a Maverick and everybody. And
we've been ended up like making like thirty thousand dollars
I think selling colletable breakfast cereal. At this point though,
(25:18):
we're still like not no traction. We've been doing for
a year. No one thinks this is a good idea.
So we enter this program called Why Combinator. You might
have heard Why Comminator like a basically a seed incubation fund.
And that's when everything took off. And the reason why
was because now it's late two thousand and eight, early
two nine, there's a recession. People are losing their homes.
(25:39):
And then suddenly I remember Paul Graham used to say,
make something people want, and we said, well, what if
we make some many people really need, like desperately need.
And that's two keywords, want and need. That's we tried
to do it, wants and needs. And I think that like,
it's a very important lesson because so many entrepreneurs that
are ambitious make things that people don't really want or
don't really need. And I think a great way to
(26:00):
make some people need is to make something that you
need for yourself in your life. So then it took off.
During y Combinator, we focused on New York City. I
mean I was crazy. I would fly to New York
every single week, but my co founder, Joe, and because
that's New York City, was the only place we had
any business. And we literally go knocking on doors, like
getting people to sign up, or we literally like meet
(26:21):
users that would host on Airbnb. And I remember I
would knock on the door and I'd say hey, like
I'm the founder of the company, and they're like, oh
my god, you must be a really small company if
you're like knocking on my door. I mean literally the
way you would get paid back then, as I would
carry a bank ledger or my backpack and I would
just hand checks to people. There was like there was
just like a complete free frill. All the bookings were
done by you and you then reimburse the owner. Yeah,
(26:44):
so the whole thing, I mean, we did have all
the bookings done through the platform, but a lot of
people you could elect to get paid by PayPal or
by having your money paid through a bank account. We
eventually did online ACH, but for like a month or
two I just literally was mailing checks to people before
we automated ACH. And you know, eventually it got much
more automated. So you've gone through multiple hurdles. What was
(27:08):
the What was the biggest hurdle? I mean good or bad?
I mean there's in the whole history of the company. Yeah,
I would say I would say there's three. The first
hurdle was just getting this idea going. People thought this
thing was crazy, and it took about a year pushing
it up a hill, and in hinds of the years,
not a long time, but it felt like an eternity
because we didn't know this would ever work, and eventually
(27:29):
like it just started working. The second hurdle was twenty eleven,
we become a billion dollar company. Now we felt like
we've made it, and all of a sudden, a woman's
house is trashed on Airbnb, and everyone was like waiting
for the moment that someone's house is trashed to be
able to say, like, I told you this was a
bad idea, and that was the first moment of a
(27:50):
crisis and confidence. What was the trashing I don't remember.
It was in twenty eleven. A woman in San Francisco
named EJ had our apartment trashed, and we had no
protections back then for people like it was a kind
of a leap of faith. So out of this dark
hour lossing trust and confidence in the company, we had
this idea, what if we had an Airbnb guarantee against
(28:11):
property damage? And I was going to guarantee everyone's home
against five thousand dollars of property damage. And the last
second before I'm about to announce it, an investor, mind
Mark and Reason, came to my office is like midnight
and he's like, adds a zero to the end. He
goes make a fifty thousand, and I'm like, well, you're
the one that gave me any money, so if you
think we should do this, we'll do this. That is
(28:31):
today a three million dollar guarantee against theft and property damage.
And that really was one of the things that actually
catapulled us to restore a trust. But I think the
hardest thing I've ever done in my life was probably
managing the crisis of the pandemic. I mean that was
totally crazy. People stopped traveling. I mean, think about this, Martha.
(28:51):
So I remember it's late two nineteen and like many
of us, we go away for the holidays thinking our
life is like going in one direction, and I have
no idea that my life is about to change. It's
early twenty twenty. We're preparing to go public. Airbnb is
one of the companies the two thousand tents, like it
(29:11):
was like a hot company, and the IPO was going
to be this culmination of this obviously momentum in this success.
So we're working on our IPO. Then all of a sudden,
we start seeing our bookings precipitously fall in China. This
is late January early February twenty twenty, because obviously it
starts in China, and we're one of the only American
(29:31):
businesses in China, like there are very few internet companies.
We were there, I was there with my family great
on January twenty twenty, Are you seriously yes? And we
got out. I mean, I probably buy the skin of
our teeth, you know, can you imagine? And when we
came home then you know, the s hit the fan,
but I can see that your business was so I
(29:52):
remember remember saying this like kind of naive combat time Martha.
I said, Wow, if this thing spreads outside of China,
it's gonna be really bad. I had no idea what
was about to happen. We lost eighty percent of our
business in eight weeks. And we were doing probably like
thirty five billion dollars a year and book end at
that point, that's like the gross sales more than Starbucks does.
And so when you're a business like ours and you're
(30:14):
doing sales like that and you drop, it's like you're
an eighteen wheeler and you slam in the brakes and
you were filing for an IPO with it was at
that time we were preparing to file for an IPO,
we had written the s one. All of a sudden,
we went from preparing to file an IPO to have
the biggest IPO of twenty twenty two within eight weeks,
Journalists writing is this the end of Airbnb? Will Airbnb exist?
(30:36):
The bankers saying, I don't think you have to worry
about your IPO for a couple of years, and so
we went into crisis. Moke, I have a board member
named Ken Chenal. He was c of American Expressed during
nine to eleven and two thousand and eight, and he
calls me up and he says, this is your defining
moment as a CEO, and like rang in my head
like a bell, and we all came into action. A
(30:58):
bunch of us kind of basically got into a duxhall
And this was like a door die situation for us, right,
It was like so crazy, and we basically had to
rebuild a company from the ground up. And along the
way we tried to take care of every stakeholder guest.
We issued more than one billion dollars or refunds for
people who felt unsafe traveling. Host had a major economic
shore falls. We took two hundred fifty million dollars out
(31:19):
of our bank account and sent it to Host, even
though like that money was kind of precarious at the time.
People needed housing on the front lines. I said, even
if we're the companies on the brink, we're still going
to help others. So we provided housing for frontline workers
like nurses, firefighters. We had to do a layoff, one
of the big first tech layoffs of the pandemic, but
we tried to do with compassion, and I was employee.
(31:42):
Did you have at that time we had seven thousand,
We went down to five thousand, so you know, we
laid off like two thousand, Yeah, two thousand, probably twenty
five percent places or so. So it was obviously, you know,
obviously that is a Lafts. The hardest thing is CEO
usually ever has to do. And I always warned about
how difficult was, but I wasn't prepared all. And you know,
when you lose that much of your business, it's like
(32:03):
your house is on fire and you're like going into
a burning house and somebody tells you can only keep
half your things. What are you going to take? And
then suddenly everything becomes really clear to you. And I
realized that not everything we did was as important as
everything else, and that we had to get back to
the roots of Airbnb, back to connection, back to everyday
(32:24):
people bringing them together. And so we hunkered down, remade
the company from the ground up, and something remarkable happens.
People start traveling again. They're not crossing borders, they're not
going to cities, but they're like sequest in their homes
and they're like getting store crazy. So they start booking
airbnbs like the town over or like within a tank
(32:45):
of gas away. And then suddenly yeah, and then our
business comes back, but a different kind of business. People
are now staying airbbies, not just for a night, but
for a week or for a month. They're living in
Airbnb's and they're living with other people. And so our
business comes back, but without a lot of the cost base.
And then so then we prepared to go public, like
(33:07):
all these bankers said, we weren't. We never have to
go public, but we have. Now we have to like
redo the everything because like the s one we had
written was like for a company didn't exist anymore. It
was now a different business. So we do an IPO
on Zoom and it becomes one of the biggest IPOs ever.
We prepared. At the depth of the crisis, we were
probably a value to eighteen billion dollars. We go public
(33:29):
at forty seven billion, and the day it closes was
one hundred billion dollars company. And Mike, it's like my
whole life like now flashes before my eyes again. That
was the craziest year in my life. And it was
a very different company than what you had envisioned in
the first place. It was a very different company, you know,
weirdly and now and now what is it? How close
to your original vision is that company? Now? It's kind
(33:51):
of going back full circle. I mean, to be honest,
like everyone, by start is the way to meet people.
It wasn't a way just to stay in a house.
There's a way to meet people that's like a social club.
It was like a social club. It was like it
was like a social network in the physical world, even
though that was a total loaded worm, but it was
like way to bring people together. It was the idea
that what if you could walk in someone else's shoes?
And then it grew and it grew to the point
(34:13):
where people started getting more investment properties, and then you
wouldn't meet the host and there was a keypad, and
there's a real merit to a service like that. But
the heart and soul of the company isn't about houses.
It's about people. It's about connection. I always wanted to
be a tech company that had like heart at the
center of the company and creativity. I mean, a designer
from Risdy starting a tech company, how could a company
(34:35):
not be about people in connection, not bits and bites.
And so that's what it is now where we have
like new products we're launching and it's all about bringing
people together. Like what, well, it's launching in a month.
You're going to great news on your podcast. Let's just
say that the original idea of Airbnb. We're going back
to the original idea of Airbnb of bringing people back together,
(34:57):
people staying with each other's homes. And that's a really
big focus of ours. It's not a dating appe no, no, no, no.
Although I am very interested in new ways to like
bring people together. I don't think dating is the right
thing for a BMB. But any idea is to help
connect people and bring them together, is I think something
we're gonna need in this new world. I can see
I'm good at advertising. Um, you want to go to
(35:21):
an odd place, and how many who wants to go to? Yeah?
This place? And you put that, yeah, and you put
that out there. Who wants to go to let's just
say Tasmania Yeah, And and so you could also become
a giant travel company totally. Yeah. I mean you could
be better than better than the kind of travel companies
(35:44):
that exist now, which are tours or something with unrelated people.
They could be all related. Yes, you could basically fine
people to travel with because there are people you don't know,
or it could be a reason to reconvene with people
that you know but you live in different cities from
all brainstorm with you. I love to love doing that.
Oh yeah, And then I mean think about it like today,
(36:04):
how do people meet one another? It's getting more and
more difficult. And the Internet was supposed to be this
way to meet people, but what is really like Your
Instagram followers aren't coming to your funeral. No one changed
someone else's mind on a YouTube comment section. Social network
is now social media and we're not really connecting. People
were performing in front of other people. And so I
think that there's a real need for a way for
(36:25):
people to still connect, to still meet. Where one of
the largest providers of housing in the world, It's been
used a billion a half times. But yeah, where I'm
really interested in is things that bring it back to
the magic of hosting, creativity and bringing people together. I
also want to show people that a creative person can
run a Fortune five hundred company. I mean, think about
how many Fortune five hundred companies are run by CFOs
(36:47):
or coos or engineers or super analytical people how many
creative people are designers run fort enphundred companies? How many
creative people are on the board of fort environment company?
How many creative people report to the CEO of a
creative company by an extraor neighbor. Who's your next? Oh? Yeah,
so there you go. Okay, I wish I'm surrounded. I
wish there were more of them. Yeah, there are a lot.
There's you, there's Ralph, but there should be more. How
(37:08):
many are in tech? Not many, not in the big companies.
And I kind of remember I remember when as there
is d there was obsession about how did you get
designers in the boardroom? And I always remembered, well, why
can't designers run the boardroom? We're really like design Obviously,
it's not just how something looks, it's how it works.
But you're not just a designer, and you have to
face that fact. Now you are also a very important
(37:30):
tech guy. He's built a company around technology with a
base basis of a of a creative idea. But but
Steve Jobs did the same thing, you know, really deep
Jobs I think probably thought of himself in a larger
way as a design or he just how he did
he did? He said design is the fundamental soul of
a man made creation that reveals itself through subsequent layers.
(37:50):
Johnny I've now works with us and like and he's
taught me a lot about design. And I thought I
knew about design that I started working with Johnny. And
it's like, design isn't just how it looks, that's how
it fundamentally works. And I thought, what if it Like, Yes,
I'm a business person, I'm a technologist in some kind
of way, I still approach every problem like a designer.
It's certainly paid off. Yes, So Airbnb offers lots of
(38:23):
things that hotels. Ju notch Right just lists five things.
Number One, Airbnbs are in basically every neighborhood in the world,
So hotels and hotel district, you go to Airbnb, it's
in a neighborhood. Number Two, it's usually that more affordable
than a hotel because you're sharing space and people that
need of a profit. Three, you're getting a local and
authentic experience. Four, you can potentially have a connection with
(38:46):
people in Five. When you're a real home, the home
is usually equipped so you can cook. There's like things
in the kitchen. There might be a backyard or a barbecue,
there might be a pool, and you're not the question
as hotel. So these are five examples of things you
get not a hotel. Now, hotels are great if you're
like staying for a night, you're in for a midnight,
you leave at at am. But basically, Martha, I think
the longer you're away from home, the more you want
(39:08):
to be at home. And a lot of our business
half of it's more than a week. That's a great
use case. If you're going there for a few nights,
averybody's still great. What's the cheapest Airbnb? I mean, we
have airbnbs that are like ten bucks a night around
the world, and then we have verbs that are like
fifty thousand dollars, Like what I mean. We have an
entire collection of castle so you do is it all
(39:29):
stationary real estate? We have boats. We do have a
collection of boats, so anyone can list anything on Airbnb.
But we have a lot of remote screening to make
sure like they people have like an authenticated address, um,
you know, and the whole the whole thing works on
a reputation system. So that's the real key. When somebody
stays in Airbnb, they leave the guest review and then
(39:51):
they leave a host review, and the host leaves the
guest review. Seventy percent of the time people review each other,
and that's really the major currency. We also verify every
guest in every host, so we have one hundred million
authenticated verifications, and we do a lot of remote screening
as well to detect for prior parties to really make
people feel safe. How did the hotel industry react to
(40:11):
Airbnb and how are they reacting now. I think they
ignored it, then they didn't like it, then they probably
try to stop it, And I think now they've come
to conclusion that we can co exist together, and actually
maybe they've also come to the realization that they have
record revenue and record profits even as we grow, and
that we can both live together. That a hotel is
great if you need to go for a night or
(40:32):
two you're in and out, or if you're like staying
in a conference, and if you want to have a
local experience, really authentic experience, and live in a home,
then Airbnb is great. And these are kind of, frankly
slightly different use cases. Oh, it's the least time you
stayed in a hotel. I actually stayed in a hotel
very recently for an investor conference, and we own a
hotel app called hotel Tonight. So I'm a primarily airbnb person,
(40:56):
a home person, but hotels are great for some use cases.
If I get in at midnight, I leave at eight am,
I think a hotel is probably better. I don't want
to wake up the host at midnight and let them
like host me and then I'm out in the morning.
And which country is your biggest market? United States? Probably
followed by like France and then UK. Well on average,
(41:17):
you said it, but I just want to reiterate. How
many guests do you host a night? Up to four
million a night, depends on the night and not crazy,
that's like, that's basically the size of LA But so
imagine we built a community basically the size of a
living together every night, but from nearly every country in
the world. People from the Middle East are staying at
homes and people in Texas, you know, these cultures that
(41:39):
have not really lived together in this way before. It's
really interesting to hear your enthusiasm, of which only seems
to grow and not wane with this amazing company, and
your opportunities are vast. Is there one one area that
you want to go into that you just haven't broached yet.
We did launch a product called Airbnb Experiences, where you
can basically not just staying at home, but have an
(42:01):
experience with somebody, so you can do like you can
do like a cooking class. I'll give an example. There
was a grandmother in Tuscany and she put a cooking
class in Airbnb, Pasta with Grandma. She Now, she became
so popular that all the other all these other grandmothers
in Tuscany started putting their own pasta class up. And
basically the way it works, you book a class, you
go to her house, she teaches you pasta with other guests,
(42:24):
you make the pasta, you eat it, and you tell
stories about growing up. It's so popular that grandma's around
the world are now doing Pasta with Grandma, dumplings for Grandma,
and they're making a hundreds of thousand dollars a year.
So I think there's a major opportunity with experiences, and
then beyond that, I think there's just so many other
ways to bring people together. I've had ideas for Airbnb.
(42:44):
You know, many of my family members use airbnda. My
Nie Sophie is on her way to India, and she's
debating whether she use Airbnb in India, which is newish
in India. But she's thinking maybe she's gonna stay with
friends first where they'll feed her. Yeah. Yeah, and feeding
is one of the things that she's always brought up
to me. You know, you get into a city she was.
(43:05):
She got into the outskirts of Berlin and she had
nothing to eat, and it was late at night and
she had nothing to eat. Yeah, but we have a solution.
We have Martha and Marley Spoon, which happens to be
a German company. Do you have you thought about putting
food in the refrigerator pre ordered by the guests. I
think it's that's a great idea, you know. I think
it's food is a key part of hospitality and being
(43:26):
a good host. You would know that as well as anyone. Yeah,
And we have these meal kids which you just can
order and for two or four people or six people
if you want. I just thought it would be a
good idea for airbing. I like that a lot. Yeah.
And also, Martha, I'm going to continue to host people
my home. You have an open invitation. If you're Evan
San Francisco, you hosted me in your home. I got
(43:47):
host you in my home outside of Airbnb. You've done
work with the Obama Foundation, yes, so tell me a
little bit about that. Well. President Obama crazy enough became
a bit of a mentor to me. I met him
the last year of his press him and see and
then when he left office, we kept in touch and
we had like a standing phone call where he kind
of really took an interest in helping me, like, and
(44:08):
you know, it was a very important time in my life,
and I wanted to help him and help his foundation.
And I was thinking about philanthropy, like I wasn't prepared
to have a lot of money. And the one day
I wake up and you know, before you know, it
was like the flash of that you have billions of dollars.
I joined the Giving Pledge to commit to giving the
majority of my wealth away before I die or upon
my death. And I hadn't really done anything yet. I
(44:30):
hadn't really thought about it. And I had a brainstorm
with President Obama and I said, the first thing I
want to do is I want to help high school kids.
And I want to do some kind of scholarship too.
I want to help kids that don't have any other
means to get help, you know, if you're going to
tack of this venture capitalist And I was brainstorm of him,
and President Obama told me a story about you know,
(44:51):
he wanted to go into public service when he was
in college, but he felt like he almost couldn't afford
to because college is expensive and public services and teach
you a lot. And I thought to myself, can you
imagine a present bomb it didn't go into public service,
didn't become a community organize, you probably would have been
president if you went to corporate law. And so I thought,
we thought we had this idea, would if we create
a scholarship for college students that want to have a
(45:12):
career in public service, there's no venture capitalists for them.
And then I had the other idea. I said, well,
I don't know a lot of education, but I know
quite a lot about travel. So we're gonna have a
travel component because I want people to go to polk
service to also take the best ideas around the world
and bring it back to the United States or for
wherever they're going to do service. And so now there's
they not only do we pay for the last dollar education,
(45:36):
So like you know, fifty thousand dollars or so. We
also pay for ten years of travel so they can
travel the world. And you know, I think the basic
idea in marth I have is the world is getting
more and more divided, but it's hard to hate someone
else when you meet them up close. It seems like
the people's strongest opinions of other people than ones without passports.
And I think that it's real risk that we get really,
(45:58):
really insular. And so you could basically have a generation
of bridge builders. The world will be a lot more healthy.
But you can't build a bridge unless you've ever been
on the other side of the river. So you're funding
education for these people, yep. So one hundred scholarships a
year will probably eventually scaled the two hundred. I took
one hundred million dollars put it into this scholarship fund
that the Obama Foundation of Ministers. Oh, great congratulation, Thank you,
(46:22):
very important. Education is all important in my mind, Yes, totally. Well,
we could talk and talk and talk into you are
you are fantastic, But I just wanted to say it's
been a pleasure to meet you, Thank you very much,
and to learn more about Airbnb. Keep up with Brian
and his travels with his adorable dog, Sophie Yes, a
Golden Retriever Yes, And you can follow him on Instagram.
(46:44):
His handle is at b cheskycche sky and of course,
to learn more about Airbnb, visit airbnb dot com or
download the Airbnb app. Thank you Brian, Thank you Martha
for having a pleasure. Thank you for hosting. Now I'm
so reved up. I'm gonna look. I think I'm first
gonna look for not a castle. I don't want to castle.
(47:06):
I think maybe a boat. We have a thousands of those. Okay.
Both are fun. Love to host. You will help
Host
Martha Stewart
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