Airbnb CEO Brian Chesky Thinks He Can Make Cities More Affordable

Then why am I here?

Good. Good. You got to start somewhere.

Well, thank you for having me here today.

Almost every single trip I stay in Airbnb. I started staying a little bit in hotels because we offer hotels and Airbnb. But I'll be going to Amsterdam. I'm staying in an Airbnb, like a house on the canal. And, you know, I've booked hundreds of Airbnbs. So just about every Airbnb, every place I go, I try to stay in a home.

Well, I always think a great philosophy is to make something for yourself that you want. And essentially that's what I did. That's what I did when I started Airbnb with my friends. And you know, I think dogfooding the product essentially is something that's really, really important. We call it like being in the laboratory versus being in the field.

Yeah. You really want to be in the field. You want to be, you know, in market testing the product, using the product. If I was in retail, I'd probably be visiting the stores often. I think it's very easy and very comfortable for a leader to be sitting back in their office just looking at the data. And I think the data only tells you so much. Data is often lagging indicators. And you often get the wrong lessons from data. And so you want to get firsthand experience. And that firsthand experience sometimes helps you make sense of data, but also tells you stuff that data can't really capture.

100%. It's very, very different to stay in a home that someone lives in versus a home that's a second home versus a home that is a dedicated rental managed by someone who connects via API. Generally, I prefer homes that people live in. At the same time, not everyone does. Some people don't like to see people's personal things around. Some people really want a slightly more hotel-like experience that's a little sparse or a little more standardized. And I think it's just good to remember there's about 10 million homes. And so I think people's association with Airbnb is based on the homes they search for. And so if you tend to book last minute in urban areas, you're going to have a certain type of aesthetic. If you book long lead time in Europe, you're going to have a very, very different understanding. And so I think that like really understanding how different the experience of Airbnb can be. You know, you think about it like hotels are pretty much homogeneous. They're pretty much the same. Hotels don't vary that much between hotels kind of price point and then within the hotel the rooms are almost identical except for maybe the size of the room. Airbnbs are so disparate and so to understand the vastness in how unique everything is, you often need firsthand information. And so often times like just understanding even the trade-off between a home that's very easy to get into. A lot of people say I want to check in and I'm not bothered versus some people say I want a cultural experience. I want the host to show me around. These are really, really nuanced things you have to experience. So, for me, being able to stay in these different homes, it really helps me understand the type of different properties. The other thing I've learned is how different it is by market.

Now, if I'm going to go to Amsterdam, that's really different than going to Los Angeles versus going to say Boston or going to Austin. It's really, really different based on the market, based on the use case, and based on what the kind of guest is looking for. These things are really, really hard when you're an online travel company because we're not really asking people like what they're looking for. You know, on an online site like Airbnb, one of the challenges we have is we want to know as much as possible about you to make you happy. At the same time, people's attention spans are not really high. They're shopping quickly. Every question you ask is friction. So, it's difficult to ask a lot of questions.

I book under my own name? I don't say I'm the CEO of Airbnb, but it's certainly not hidden. And if you read the reviews, they're going to figure it out pretty quickly. And I think 80% of people figure it out. You know, I always say like, should I go under a pseudonym? I want to not tell people I'm the founder of Airbnb and almost like ask for a special experience. I want to try to get a realistic experience. At the same time, I like one of our core things is we want real people to book their real homes under the real identity. And so if I'm going to force real identity to other people, I have to live by that myself.

I think I'm getting close to the same experience, maybe a slightly more positive than typical experience, but I can tell sometimes people have no idea who I am. And I always assume I'm getting the best case scenario.

Being a founder is such a different type of experience and I could never figure out how to describe it. I literally went on like a circuit after the pandemic trying to explain how I run the company.

Yes. And Paul Graham wrote an essay and he called it founder mode. I didn't come up with that term. He did. I basically spoke in front of like 200 entrepreneurs. I described how as a founder you run a company different than a professional manager. And Paul Graham kind of realized in that moment that there were two different ways to run a company. The way a founder would and the way a professional manager would. And it's very, very different. Now I'm making some generalizations. So the people that build companies that tend to be more in the details, more decisive, bigger authority to make decisions. They tend to take bigger, bolder risks partly because they have the moral authority too. Like for example, I could, I wouldn't, but I could change the name of the company because I came up with the name of the company. Somebody who is a professional manager, I don't think they would ever dare change the name of the company. They would feel like it's not theirs to change. And that's the thing, it's ours to change. You know, we're not like a foster parent. We are the parent. Somebody once said, 'Being a founder is the upper bound of how much anyone will care. No one will ever care about the company more than you.' And so that passion is definitely higher. I also just think, you know, every single job in the company that someone does, I did before them and I did a much better job.

For the most part minus the specialization like accounting. I wasn't an accountant, but there was a day where we had to figure out like how to count our money and we were like, we got to go on QuickBooks. How does QuickBooks work? And we started doing it and at some point we got over our head and we found a consulting CFO. And so every single job in the company, the generalized version of that job I did before I delegated that job. I also as a founder it's almost like I know the chemistry of the company. I know the melting point of the company. I know the freezing point of the company. I kind of know how much you can bend a company before something breaks and therefore how hard you can push people, how many changes you can make.

Well, there's always like for every like light there's a shadow and I think that founders are the ones that I think probably make the biggest impact on business. And then of course they are also some of the times the ones that have the fewest checks and balances. And so I think that the best case scenario in society is when a founder is able to scale and able to be successful. The primary weakness of me as a founder running a company was people had to pay for my immaturity in my 30s and my lack of experience and they had to pay for my learning curve. But I said it was a good long-term bet because eventually I will become as mature as a professional manager. But a professional manager can never gain what I had. They can never do that unless they go through the process I went through. But as far as whether or not founders are being responsible in society, I think that's like a whole another topic. And ultimately, you know, I think of us as founders as leading by example. I'm not perfect. I try to lead with a reasonable amount of humility, but enough confidence to make big changes.

Because I thought about hiring wrong, you know, and I'll tell you a kind of quick story. When I was starting Airbnb, somebody, actually the person was Sam Altman who became a friend of mine. He said, 'Hiring should be 50% of your job.' I'm not even sure it was his 50% of his job. And I said, 'Yeah, I should do that.' It never was 50% of my job. It wasn't even 10% of my job. And so, I never really spent enough time hiring and I never really made it a high enough priority. And what I've learned the hard way 19 years later is that it's all about the people. And it's kind of a cliche. You probably heard that over and over again. I don't think hardly anyone in business believes it's all about the people. Here's my evidence. If they all thought it was all about the people, then wouldn't the HR function be the most important function in a company? And you think in most companies it's not?

And if it's so important, why is it an administrative function? I probably spend three hours a day recruiting. I used to think it was my job to hire my management team and it was their job to hire their team. And if they can't hire their team, they're ineffective. What I do is I treat myself as the co-hiring manager for all my direct reports. We both have to agree to the person because when my exec retires, naturally, they'll be looking at their person under them as their successor. If it's their person, not your person, they may not be philosophically aligned with me.

If that creates tension, then I'm going to tell them like, 'Leave the company.' If somebody needs quote authority to operate in a huge amount of space separate from me, then I tell them this is not the right company for you. I don't want to think of this as me in your business meddling. I want to think of it as if our relationship's good, we make each other better. Also, I really always want to teach people to reach for the stars as far as hiring. We, it's almost like we're trying to marry up constantly. And the basic philosophy is we're not trying to hire for the company of today. We're trying to hire for the company of tomorrow. We want you to come here to build the company of tomorrow. Well, people can only evaluate us based on who we are today. So, somebody has to be there to sell the dream of who we're going to be tomorrow. And I think that person's the founder.

Ah, you have to ask him that. During the pre-launch of ChatGPT, he told me that's what he did. I think I learned the hard way that I didn't spend enough time in hiring and so I now think it's the number one priority inside of the company for me. There's another thing I remember once seeing an interview by Steve Jobs and he said great people don't need to be managed. Of course they do, but what he meant is great people don't need to be managed as much as people that aren't as great. And so if you spend more time hiring presumably you would spend less time having to manage. So you're going to spend time on people either way either on the front end or the back end. So what I think you should do if you're a CEO or a founder is constantly be meeting talent even before you need it. And also just wait until you find the right person even if it's a little bit painful because ultimately short-term pain is long-term gain.

So a couple things about Steve. First of all I think of Steve as a designer that ran a technology company. And so therefore like...

I think of myself as a designer that runs a technology company. I'm not as good as Steve Jobs, so I don't want anyone thinking I compare myself to him, but I like a kid looking up to LeBron James saying I want to be like, you know, that's a good mentor, a role model to me. That's what I think. So I studied him quite a lot because I almost felt like me coming to Silicon Valley was a bit of a glitch. A designer running a tech company. I couldn't code. People called me quote non-technical. And so it seemed kind of like...

Um, a little bit. A little bit. And this goes to like a long history. I went to Rhode Island School of Design. I was an industrial designer. And when I was at RISD in the early 2000s, there was a whole thing, how do we get design in the boardroom? Designers, similar to people in HR, aren't typically empowered in companies. For example, most Fortune 500 companies, including the CEOs you're interviewing, I'm curious how many of them have a designer report to them. A lot of companies that should have a designer report to CEO, don't. Look at the board of the Fortune 500. How many creative people are on the board? Not a lot. But we're living in an age where creativity is going to really matter, especially in the age of AI. And so I thought why can't a designer instead of have a seat at the table, why can't they run the boardroom? And so that was kind of my thinking for like why to start a company. Anyways, I had the good fortune meeting Ed Catmull. Ed Catmull has the distinction of having worked with Steve Jobs longer than anyone else in their career continuously from 1985 to Steve's death in 2011. I asked Ed Catmull a question. I said, 'What was most misunderstood about Steve Jobs?' He said what was most misunderstood about him was that he went through the hero's journey and that the book that Walter Isaacson wrote was primarily a composite of the Steve before he got fired from Apple. At least the impression people got and that he went through the wilderness of 11, 12 years at NeXT was commercially a failure, 12 years later sold for $200 million by today's standards not a success but in those wilderness years really learned how to become a great CEO. Came back 90 days from bankruptcy to Apple in 1997 and somehow led the greatest turnaround in the history of capitalism. And how did he do it? It's a mystery that no one had an answer until you realize what he did at NeXT. And what he did, I think he learned how to be a good CEO. So the key lessons he had were he held people to extremely high standards. He spent a lot of time recruiting. He was in the details. You know, people called him a control freak. He probably was a control freak.

I think some people do. I think some people do. But I asked Jony Ive once. I said, 'Do you feel like Steve was a micromanager? Was he a control freak?' And Jony said, 'No.'

He might be. And so if Jony was a control freak, Steve Jobs couldn't have controlled him.

And I think a last resort is a micromanagement where you're like telling people what to do. If I'm telling somebody what to do, they're probably not successful. So, the best thing is we're partnering. I'm asking you questions. What if we did this? What if we did that? Now, I'm not doing that with my chief accounting officer. I'm not doing that with my like a tax attorney. I'm doing that in areas where I think it can add value like product, marketing, operations, things like that.

Well, I think they use email and that's maybe...

Not very often.

I don't know if I write an email a week. I respond to email. I respond to emails every day because people email me, but I'm trying to think of the last time I like drafted an email. I don't know if I...

I just find it like inferior to almost every other form of communication. So, email is subject based. Text message is person-based. I think text message is much faster. It's contextual. You feel like a deeper connection to the person. Doesn't have a subject line. When you get a text message, it doesn't feel like work to respond. When you get an email, it feels...

Yeah. And I...

Yeah. Because I think that everyone has a right to run their company how they want. And for me, the blending between work and life is like is more probably blended than the average person. I do think there's boundaries. You know, I try not to text people when I think they're with their family unless there's a crisis. But I do think that text is a lot more responsive than mail. Like the notifications pop up right on your phone. If I have a problem, my general philosophy try to call someone, text them, meet them in person. I think the best forms of communication are in person number one. Okay. Zoom number two, text number three, probably email number four. And I say text, WhatsApp, these are all like Slack are all versions of like kind of like messaging.

I've evolved my thinking a little bit.

My view was like every company and almost in the world we were like mostly entirely in person and we weren't even familiar with the product Zoom before the pandemic and we were using like WebEx and Skype and the technology really wasn't there. So it was always considered a second-class experience. Then the pandemic occurred and we were all on Zoom and Airbnb had a unique experience because we lost 80% of our business in eight weeks and so we not only turned the company around on Zoom, we actually went public on Zoom and the company was more successful on Zoom than the real world. Additionally, I started noticing that we were benefiting from this movement of people working remotely. And I thought we had to put our money where our mouth is. We had to support this idea that you can live and work anywhere. And I thought that was really, really great. What it did is allowed a lot more flexibility. I don't think 100% of employees should be in an office 5 days a week. And I think the fact that you have an office inside of your laptop is a great thing that offers flexibility. And so I had this view that you'll be able to live and work anywhere, be mostly remote and we could get together whenever we needed to. It turns out over the course of a few years and in hindsight it's kind of obvious to imagine that came at a cost of essentially the culture remains strong for a while but it's hard for new people to get to know other people. If everything's on Zoom everything has to be scheduled and sometimes things can just be like quick conversations. It's difficult to have development. Some types of creative work you want people standing around seeing pointing at different things. You want to build trust. You want people to understand who they're working with. So we have our version of hybrid. Most people when they say hybrid they mean like three, four days a week. Our hybrid is more like a week or two a month and you know it depends on the job. And we found this is working pretty well and we're experimenting with having more and more people come and work in San Francisco. I think the general trend line is going back to more and more in-person connection but never losing the sense of flexibility. You know there's a couple things. Number one, if you impose everyone to be in San Francisco or wherever your office is, you have to make a very simple business calculation. Is the productivity and connection gain of requiring everyone be in office better than the candidates you lose because you require people to live between 30 and 60 mile radius of the office? And you have to make that decision. Here's another thought I have. This might be contrarian, but I have a view that like if your office policy is easy to explain, it might be wrong because it might be one-size-fits-all. Everyone comes to work four days a week. That's easy to understand.

Not really doing them.

Not recurring.

I think it's not only unnecessary, it's probably inferior. And if you go through the list of great CEOs, almost none of them that I'm aware of do recurring one-on-ones. And I'm kind of curious that the people you interview, they might do it, but most of the people I admire don't do it.