The Evolution of Airbnb: A Conversation with Brian Chesky

Hi Brian.

[Brian] You want me to sit?

Yeah, you can sit down.

While we're doing this,

I'm gonna tell you just a little bit about Brian and Airbnb.

I won't be long, but I will just say Airbnb,

4 million hosts,

1.5 billion guests

across more than 220 countries.

Pretty incredible.

Transformed the entire travel industry, no big deal.

Very happy to have you here

for our last conversation of the day

before we have some drinks.

And let me start by backing up,

which is something I maybe tend to do in interviews.

I apologize, I'm a linear thinker,

but I've been thinking a lot lately,

for reasons that are probably obvious,

about time in four year increments.

And if you think back four years, 2020,

the world in the midst of a devastating pandemic

and an event that for your company was,

I mean, I will,

the word that comes to mind for me is existential, right?

Catastrophic.

I think you laid off at the time

something like 25% of your staff.

And yet here we are today talking about,

or we are going to be talking about,

the evolution of Airbnb, what's next?

So I'm curious, from your point of view,

I will not make you relive that whole experience,

but from 2020 to now,

when you think about everything that has changed

for your company,

what stands out?

What are sort of like the big milestones

or the big moments in Airbnb's,

like recent history

from that really sort of like existential moment

four years ago,

So it was January, 2020,

we were working on our IPO

and it was gonna be one of the big IPOs since like Uber.

And I remember I was in a meeting

and it was late January and we saw our business in China,

we had a business in China,

and it fell off a cliff.

It dropped like 80%.

And I said, what, what is this?

What happened?

And they said,

Oh, there's this thing called the coronavirus.

And I had never heard of it and probably none of you had

because it hadn't made the front page of the newspaper yet.

And I remember saying something kind of innocently like,

wow, if if this thing spread beyond China,

it would be really bad.

[Interviewer] We would be real screwed. Yeah.

And within eight weeks we lost 80% of our business.

[Interviewer] That's so crazy.

And to lose 80% of our business,

and we were doing about $35 billion a year,

so that was more than the sales of Starbucks,

and when you're doing that much business

and you lose almost all of it,

it's like you're in a 18 wheeler,

you're going 80 miles an hour

and then you slam on the brakes.

There is no easy nonviolent way that,

like everything just is smooth.

And there were actually articles,

like Is this the end of Airbnb?

Will Airbnb exist?

And I think we were one of the,

like the tips of the spear of this kind of crisis.

And you know,

there's nothing,

like I've thankfully I've never had

like a near death experience

and I don't think we ever had

a near death business experience,

but we didn't know it at the time.

And there's something about your business flashing

before your eyes that makes,

gives you a clarity that you don't have in any other time.

And at that moment,

like I think that became the defining moment of the company.

The first thing we had to do is,

we had to like cut the company almost in half by size.

We did a layoff of about 25% employees,

but we also had a lot of contingent workers, contractors.

So we really lost about a third of the company.

We had to then go,

I had to go through like a thousand different projects

in the company line by line,

cutting as many things as possible.

And so it's like your house is on fire,

you go in a house and you can only take out

like a handful of things outta the house.

That is really, really clarifying.

And I suddenly just changed how I operated,

because I think I had been operating

like in a totally different way.

See I was told that like the way you should run a company

is you should hire great people

and you should just trust them

and get outta their way to do their job.

And that sounds nice on the surface.

I don't think Jensen, who was just before me, does that.

He has 40 direct reports, I believe.

And what I had done,

was I thought like,

founders are in the details

and you are involved in all decisions

and over time you step out.

And that was the biggest mistake I ever did.

And many of the founders

and many of the leaders I've met,

the biggest mistake they make

is they step outta the details.

Because what I've learned

is that great leadership is presence, not absence.

And that people can be empowered

with you being very involved,

'cause you can actually put your entire weight behind them.

And so I got really, really hands-on.

We made the company much smaller.

We felt like we wanted to be

not the Navy but the Navy Seals.

We went back to a functional organization,

we moved to like these release cycles

where we started doing software updates,

kind of like an operating system.

We almost started developing software like hardware

because I felt like we were a free for all organization,

we were like divided into all these different divisions,

going in a thousand different directions,

and you open the app every year and you're like,

why does the app look no different the year before?

So we really simplified, we got back to the basics,

got back to like,

and the first thing we did is I said,

alright, we're gonna expand beyond a core business,

which I know you'll ask about,

but we have to have permission

to expand beyond the core business.

So before we do new stuff,

we're gonna figure out all the things people don't like

about Airbnb and we're gonna start

to address them one by one.

So people said prices are too high.

So we started working on,

like working on making Airbnb more affordable.

People started saying like,

well the quality is not really good.

So we started working on a lot of quality issues.

People said the app was too difficult to use,

it'd become pretty much a Frankenstein of an app

because you had all these different teams

pushing code every hour, every day.

There was no cohesive vision.

So we started focusing on that

and over the last three years,

we do these releases twice a year,

one in May, one in November,

the entire company rose in one direction.

We have this two year roadmap.

So we look out two years,

almost no other software company does that,

and we've made over 535 features in upgrades and fixes,

the service is by no means perfect,

but the results are today the company is stronger than ever

and a company that people thought was going outta business

does more money as a free cash flow,

as a percent of revenue,

than almost any company in Silicon Valley.

And I think this really just comes back to this,

you know, quote that Andy Grove, you know,

he was CEO of Intel, he said,

A bad company's destroyed by a crisis.

Good companies survive a crisis,

but great companies are defined by a crisis.

And I always wanted the pandemic to be our defining moment,

and I think it probably was.

[Interviewer] Fantastic.

So you're now in this position

where you've effectively sort of rebuilt

and reoriented Airbnb and you're right,

I am gonna ask you about moving beyond the core business.

You've launched some really interesting features

relatively recently, right?

Like the icons program is one,

where you can stay in all sorts of wild

and crazy different places.

You recently launched a co-host program

and I noticed I'm taking my daughter

on a trip in the spring,

I can't tell you where because she doesn't know yet,

but when I booked the trip on Airbnb,

all of these different experiences came up,

which is the experiences program,

like make cheese with this person, go drink wine,

which she's young,

we're not gonna go drink wine with anyone,

but it genuinely did to me as a user feel like,

oh there's like something different is happening here

and now I'm on stage with Brian Chesky

and I can ask him what it is and where it's going.

Where is this all taking us in terms of Airbnb,

the core business,

how we think about it now, you go,

you book a room or you book a place to stay on vacation

or a business trip,

where are we headed?

So when we started Airbnb

and it originally took off,

I thought we would like expand beyond housing.

I thought we could take the Airbnb model, you know,

people were saying like the Airbnb for this,

the Airbnb for that.

There was an entire ecosystem of startups

started around this kind of idea.

And I thought that we were gonna do that.

And we tried to do it in the early, the 2000 teens,

like 2014, 15, 16.

And it was a little premature.

We were still in hypergrowth, we weren't really ready.

And then of course the pandemic occurred

and then we decided to get back to our foundation.

So I've looked at a couple companies for inspiration,

maybe one company that is a decent

reference point is Amazon.

And we're a pretty different culture than Amazon, you know,

we're probably closer in our product development philosophy

to Apple than Amazon,

but the business that Amazon had in the late nineties,

it was a bookseller

and the only thing you could buy on Amazon was books.

Now books are not nearly as big a market

as vacation rentals.

You were approaching a hundred billion dollars a year.

But because books isn't a very big market,

they had to go into other adjacencies very, very quickly.

And so baked in the early days of Amazon

was what do they do after books?

They did DVDs and they needed CDs

when people used to buy those.

And then they moved on and on and on

and eventually they sold everything.

And I don't know

if we will sell everything on Airbnb,

but I think one day you'll be able

to Airbnb a lot more than just an Airbnb,

and you know, we're gonna, you know,

we don't really disclose ahead of time what we're gonna do,

but the one thing I've already said

is we are gonna reimagine experiences.

I think it's an underrated product.

People generally like it,

but it never really like caught on.

And I think that we can totally reimagine that product

and I'm just like so excited

because I very rarely,

like maybe here's a way of saying it,

like there are so many founders

that like they have this idea like,

and if you're lucky, if you're lucky,

you have an idea and it just takes off.

And I was 26, my parents are social workers,

I didn't think I would have an app that ever took off.

And my life completely changed.

Everything about my life changed

because of this rocket ship I went on,

and I went on this rocket ship

and there's been a couple other dozen people,

if you've like how many people like me are there

that like go on this rocket ship, a few dozen,

And you get to know them, they're at the same conferences,

and you talk to them

and then we all go through this like trough of despair.

Most of us do.

It's almost like corporate adolescence.

And it was probably almost as awkward as my real adolescence

and only a few people,

Jensen before us, the greats,

they get to the other side

and they get an opportunity to have a second act.

They get an opportunity to reinvent themselves.

And that's what I hope next year is the beginning of Airbnb.

I hope it is.

I hope people say that that was one

of the biggest reinventions of a company in recent memory.

Reinvention is a big word to use. I'm bookmarking that.

[Brian] Reinvention. That's an aspiration.

I'm gonna be checking in on this.

[Brian] That's an aspiration.

Fantastic.

I saw you speaking earlier this year,

it was an off the record session

so I can't share what you said,

but you talked about sort of your theory

of the case around the value of physical experiences

and the value of physical community.

Particularly in an environment where, you know,

we're spending a lot of time

talking about digital experiences, we're talking about AI,

we're talking about the intridification of the internet,

which Jay Graber talked a little bit about earlier.

Can you talk us through a little bit of sort of that,

I mean obviously your company is very well positioned

to capitalize on the resurgence

of physical experience,

but just give me your,

like your thesis on that topic, briefly.

Let me, yeah.

So very briefly, up until two years ago,

very few people were talking about AI

and then of course Chat GPT launched

and then the generative AI revolution basically started.

And while it's been so exciting, I bet you very few of you,

your daily life has any differences because of AI.

Here's a test, take your phone out,

look at all the apps in your home screen

and ask what of them have changed two years later

because of generative AI.

Like truly changed.

I doubt there are, other than using an AI native app,

I bet you none of the apps you use,

including Airbnb are fundamentally

completely different in a world of AI.

And then ask yourself,

what did you do today that was different because of AI,

zero I saw in the audience.

What did you,

what have you done today or yesterday

that changed fundamentally because of AI?

Maybe some things,

but I think it leads to this bigger topic.

I remember when the internet came out like,

and I mean I was born in 1981,

so my memories of the internet were like 1993,

it was before search engines,

and before search engines, some of you might remember,

do you know how you found a website,

there was a phone book

and there was this like actual phone book

with these like websites

and you would say, oh if I wanna learn about this,

you go to the phone book and you type in the browser.

And the reason I say that is I feel like we are in

the like phone book stage of AI.

We are still that early

and I think it is starting to begin

to change our digital world,

but it has not yet changed the most important part

of our lives,

which is the physical world.

And that's maybe one of the reasons

why your life hasn't completely changed by AI

is even when it does change on the phone,

our physical reality is still exactly the same

as it was before.

And then the question is,

well when does the physical world start to change?

Or when does the physical world

start to be enabled in a completely different way

because of AI?

Airbnb's kind of unique because like, you know,

there's this word that Silicon Valley uses, product,

you know, you have product managers,

and product managers are basically software managers,

product means software,

what's our product?

It's not our app, it's the home, it's the experience,

it's the wine tasting,

it's all these things we're gonna be launching.

So I am so excited about what we can do

and I think that like AI

and all these different revolutions that are gonna,

I mean certainly AI I think is gonna enable a lot more.

And I think if you think about AI, like maybe in a stack,

you have what Jensen's doing,

which is the GPUs on top of, that's the second layer,

which is the LLMs.

There's been a lot of innovation,

but the world will change at the layer above that.

And the layer above, that's the applications.

And so when the apps in your phone are totally different,

we have reached the application layer

and when we reach the application layer,

the world will completely change.

But it's kind of like AI is,

the infrastructure is like the highways.

We need to still build the cars.

And 10 years ago everyone thought

we'd all be in self-driving cars right now.

And there are a bunch on my street.

But there aren't a lot on a lot of streets.

And so I think the point is,

we overestimate how much technology can change

in the short term,

but we probably underestimate

how much it will change in the long term.

And it is gonna take some time I think

to permeate the physical world.

But once it does,

I think it's gonna change everything

and it's not gonna be limited to asking the agent something

and getting an answer.

[Interviewer] Interesting.

[audience applauding]

I mean, yeah, I like this vision.

No it's really, it's interesting.

I mean, is there other technological progress?

I think one of the recurring jokes of this day

is that every session,

the person in my chair asks the person in your chair

about AI, right?

There's a lot of-

[Brian] It was like 1995 you'd say the word internet.

[Interviewer] Right?

Yes or as Stephen Levy pointed out earlier,

five years ago it was the metaverse, right?

Is there other technological progress,

whether it affects your company

or whether it's just something you are seeing

as a leader in the tech industry

that you think is really salient,

that you think is important,

that you think maybe has implications for Airbnb

that we are not talking about

because we are spending so much time talking about AI?

Or is AI really deservedly sucking up

this much oxygen?

[Brian] I mean maybe the way to think,

I mean there are so many different technologies

that will probably impact the world.

Maybe the way to think about it is that AI will be enabler,

you know,

I think that like one part of AI

that I think will be massive

is when AI can do software development.

Because I think like right now,

like there are only so many people

that can like hire software engineers.

Like a small ski company can't have a like a,

can't have an app,

because they can't hire engineers.

But when software development

becomes much more like prompting,

then software can be completely ubiquitous.

And as software's completely ubiquitous,

then suddenly the physical world can start to change,

'cause everything could have software in it.

And so that's just like a very small example.

So I think that AI is an accelerant.

I don't know,

I think a lot of times when we say AI

and we say like AI is gonna change the world,

I wonder if we're using AI,

we're really saying is technology,

I wonder if we're just saying that technological progress

is going to speed up

and that the next 20 years are gonna feel like the last 50.

And that probably is true,

and it probably is in large part for AI,

but AI is built on a lot of other technologies.

And so if AI is built on other technologies,

then wouldn't other new technologies emerge

that are built on AI that will also accelerate technology?

And so I just think that there's gonna be a huge amount

of technological progress.

And I'm not like a,

I'm a designer at heart, not a technologist,

so I'm not probably the best person to ask

what the specific technologies are.

But I think when we say AI,

I think sometimes or AGI,

think we kind of mean technological progress.

[Interviewer] Yeah, yeah.

[Brian] Make sense?

I think AGI is at the center of it,

but it's gonna probably lead to the,

there's gonna be a lot of other developments.

Like AI is only possible with like,

processing power increasing and like, you know,

like AI is gonna lead to discovery

of a lot of new areas

and a lot of new fields that are gonna be self-reinforcing.

Yeah, no, it makes sense.

We have a few minutes left.

I wanted to make sure to spend a little bit

of time on your leadership style.

I was telling you backstage

that of all of sort of the tech CEOs,

the leaders in this industry,

I see Brian Chesky's name associated the most

with leadership advice tidbits of, you know,

you no longer believe in one-on-one meetings,

it's founder mode, baby.

Like, it's just,

it's all this sort of noise about how you run your company

and how you sort of have evolved as a leader,

your sort of theory of leadership.

Which brings me to the question,

not so much about leadership advice,

I kind of wanna know what a day in the life

of Brian Chesky is like,

like a work day.

You know, when you think about founder mode,

sweating the small stuff, being in the details,

not sort of trusting,

not sort of delegating and operating

in sort of manager mode.

What does that look like every day?

I ask as a manager and someone who really-

That's great question by the way,

like I love this,

this term founder mode has become pretty ubiquitous,

and yet most like I know, Paul Graham-

It's not, you didn't say it.

[Brian] It wasn't, Paul Graham said it,

and he never actually explained what it was.

And one time when it like first went viral,

somebody said,

I'm going founder mode on this burrito.

And yeah that was-

[Interviewer] It's so good.

That was the moment I realized

we probably should clarify what this means.

Otherwise, like I don't,

'cause otherwise I feel bad for the burrito.

Yeah, it is a little bit threatening.

I think it means a lot of things,

but just to be very simple, like at its crux,

I think it means to be in the details.

I think it means that great leadership is presence,

not absence.

And I think a lot of us are taught to delegate,

because the opposite of delegation

is this horrible ill

that you can commit to on your employs,

which is micromanagement.

And no one wants to be a micromanager.

No one good wants to work for a micromanager.

And I think it's way more nuanced than that.

I remember there was an executive

that once asked me,

Is this your decision or is this my decision?

And I kind of exaggerated when I said this,

but I kind of said like,

it should never be either.

In other words, everything is a dialogue.

It's a partnership.

It's not about me telling you what to do

and it's not about you doing your own thing,

it's about being involved.

And the way I basically spend my time

is I basically review the work.

I basically say like,

I don't like managers,

and I put managers in quotes,

meaning people who manage the people absent the work.

Like if you're not managing the work,

what are you doing all day?

Are you like doing one-on-ones?

Are you acting like their therapist?

Are you dealing with bureaucracy all day?

And so I think the best way

to manage people is through the work.

And that's actually how they learn.

They learn by doing, by watching,

and you mentor them through the work.

So what I do all day is I basically review work.

So like every day is a little bit different,

but I might wake up

and like every Sunday night

I have a head of program management at Airbnb,

program management, unlike most companies,

is a tier one function.

And they basically,

we have 75 to 80 projects that I'm monitoring

and I review every project

and the company that's customer facing.

And I review everything every week, every two weeks,

every four weeks, every eight weeks,

there's like a cadence

and I'll probably do like 30 hours of reviews

and maybe that's like approximately half of my schedule.

I don't know exactly how many hours I work,

Maybe some weeks I work more than that, but,

and so I'll basically be in reviews.

And so the reason I don't do one-on-one meetings,

I mean if somebody needs to talk to me,

I'll talk to them and I do a lot of calls.

I'll call somebody and I'll ask 'em a question.

What I don't do is recurring scheduled one-on-ones

where the employee owns the agenda.

And I find, I know Jensen said he doesn't do that either.

And what I do is I basically run the company in groups,

group meetings where I'm reviewing work

and I have the boss, like the person doing the work,

their boss, their boss and their boss.

So no one can ever have to go,

no one ever has to go up the chain to get to me.

You could get to me in front of everyone

and I'll ask everyone's opinion

and then I might disagree with them,

but I'll like ask them to talk me out of it,

change my mind.

And that's probably the main thing I do.

In other words, a simple way I run a company,

is we have a release, a big product release,

we set a big goal

and then we review the work every few weeks

towards that goal.

And we're either on track or we're either off track.

And if I'm not doing that,

I'm probably trying to find great people

to work on the next thing.

And by hiring them, developing talent or promoting them.

Who do you lean on as a leader? Who do you learn from?

Who do you look up to?

I mean, it changes,

because when I was starting out I like,

I think my investors,

which were my board members,

taught me a lot.

I had Reid Hoffman and Mark Andreessen on the board

and you know,

and then eventually Alfred Lynn

and I had all these different people join the board

and your investors are kind of like your mentors.

Then I started learning from the executives I hired,

I hired these executives and I learned from them.

Then I started learning,

I became like shameless about seeking out other CEOs.

So like I went to this conference called Sun Valley,

all the like big shots of Silicon Valley were there,

so I would,

I like remember one time like there's this duck pond outside

of Sun Valley and I like,

it's like a pond with all these ducks,

and I was chasing Jeff, not chasing,

but like trying to practically chase Jeff Bezos down

to get advice from him in the duck pond.

No it's a good visual, let's go with that.

And so I would, people like that,

and now I, you know,

last night I had a dinner with like 20 other founders

of companies like Airbnb size

or maybe a little smaller,

some were a little bigger,

and I do a lot of like,

we do a lot of comparing notes now

and we were talking about like how we run our companies

and I do look at like historical references.

I think Walt Disney and Steve Jobs I like in particular

because they were creative people

running technology companies.

I think of myself like that.

So those are kind of who I learn and lean on.

[Interviewer] That's interesting,

interesting to hear about how it has evolved over the years.

And speaking of time,

we are coming to the end of ours,

and as you are the last speaker of the day,

we've asked a couple folks this throughout the day,

but parting words from Brian Chesky,

what I wanna know

and what I think you could leave everyone here with is,

that little bit of optimism I promised all of you

at the beginning of the day,

Brian, what gives you hope?

What makes you feel optimistic?

What can these fine people

take away from you today?

Oh, that's a great question.

Maybe I can put it in the context

of like what's happening in the world today.

[Interviewer] Yeah.

I don't know if people today in this world

are super optimistic

or that's, first of all,

there seems to be a lot of despair.

There seems to be a lot of pessimism.

There seems to be a lot of division.

I mean, I remember when I came to Silicon Valley

there was another election going on, 2008.

Senator Barack Obama against Senator McCain.

And in hindsight they both looked a lot more purple

than the kind of red and blue divide of today.

I mean, to give you an example,

like we sold collectible cereal boxes

and we had like this Barack Obama themed cereal

with this John McCain theme cereal,

you know the outrage there would've been

if we had like Trump and Harris cereal,

like both sides would've been completely,

how dare you make cereal by the other candidate.

That is how divided we are.

And I'm like pretty concerned about that.

But I wanna bring it just back to Airbnb,

'cause that's like kind of my only point of reference.

When I started Airbnb with my two friends,

I remember telling one of the first people

I told about the idea

and he looked at me with a straight face,

Brian, I said, Yes?

He goes,

I hope that's not the only idea you're working on.

And the reason he said that,

and it was, you know,

like a completely reasonable rational thought

is he said strangers will never trust one another.

They'll never be able to do this.

And I've learned since that day,

more than 2 billion people have stayed in the Airbnb

and 220 countries and regions in a hundred thousand cities.

And people have asked me,

well what have you learned about human nature

because of these 2 billion people staying together?

And I said,

I think what I've learned

is that at some fundamental level,

people are fundamentally good and we're 99.9% the same.

And I think that we live in these echo chambers

and these bubbles where we other everyone

and we tend to identify as one group

and then everyone else becomes the other group.

And I think one of the best ways

to change your mind about someone, I mean first of all,

no one's ever changed someone else's mind

in the YouTube comment section.

[Interviewer] Not yet.

I guarantee you, I guarantee you,

here's a way to change someone else's mind.

Like have them walk in your shoes or walk in their shoes.

And there's many ways to do that,

and one way is, you know,

obviously to be minorly solicitous,

like stay in Airbnb.

But we're not the only way.

But like get out into the world,

meet the kind of people you disagree with,

and you'll start to realize

that they're not so different than you

at some fundamental level.

And when you start to believe that,

and if you believe we're in the phone book era of AI,

that we're about to have the biggest engine

for curiosity and possibility in the world.

And that technology can permeate the physical world.

And if we can get out people back into the physical world

connecting back together with one another,

I think that's the ultimate promise of the internet.

That the internet was always meant to bring us together.

But I think the physical version

of bringing us together is in the physical world,

why is everyone here physically here right now?

You could just watch YouTube videos,

but you all chose to come here.

And I think that's what I'm optimistic about.

I'm optimistic that I think this is maybe

one of the greatest times in human history to be alive,

with one of the biggest technological revolutions

in front of us,

and if we can just see besides our differences,

we can come together

and I think we can create

such a wonderful world together.

And when I say world, I mean a real world,

a physical world that we can live in together.

[audience clapping]

I hope we see that come to pass.

Brian, thank you so much.

Thank you very much.

Thank you.

[audience clapping]