What We Discuss with Brian Chesky:
- How Airbnb not only survived the pandemic after losing 80 percent of its business during the first eight weeks, but is now thriving like never before.
- Why a company that still conducts itself like a startup is better poised to withstand and grow from business crises than the behemoths who have everything to lose.
- What was going through Brian’s head when he got the news on live television that Airbnb shares were trading at twice their IPO price.
- How does a company leader become successful without losing their mind along the way?
- What Brian sees for the future of travel, and how it’s changed as a direct result of the pandemic.
- And much more…
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Like the rest of us, Airbnb was thrown for a loop when the COVID-19 pandemic struck. It had such glorious plans for 2020 — none of which involved losing 80 percent of its business during the first eight weeks. But as co-founder and CEO Brian Chesky shares with us, some counterintuitive course corrections and startup culture savvy not only kept the company afloat, but ensured it was thriving by the time it went public for double the expected share price.
On this episode, Brian gives us some perspective on the decisions that had to be made during this tumultuous time, and how embracing crisis as a defining moment for the company rather than allowing it to be a catalyst for failure made all the difference. Listen, learn, and enjoy!
Please Scroll Down for Featured Resources and Transcript!
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Thanks, Brian Chesky!
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Resources from This Episode:
- Vacation Rentals, Cabins, Beach Houses, Unique Homes, & Experiences | Airbnb
- Brian Chesky | Twitter
- Brian Chesky | Instagram
- Brian Chesky | Facebook
- Brian Chesky | Medium
- Brian Chesky: The 100 Most Influential People, 2015 | Time
- Clean-Shaven Vs. Bearded: People Trust, Are More Attracted to Men With No Facial Hair, Poll Shows | Newsweek
- Jack Dorsey’s Beard | Twitter
- Joe Gebbia | Twitter
- Paul Graham | Website
- Rhode Island School of Design (RISD)
- How Airbnb Survived the Pandemic — And How You Can Too | Forbes
- Y Combinator
- How Gmail Happened: The Inside Story of Its Launch 10 Years Ago Today | Time
- 1,000 True Fans | The Technium
- Brian Chesky: I Lived on Cap’n McCain’s and Obama O’s Got Airbnb out of Debt | Pando
- Intel CEO: Bad Companies Are Destroyed by Crises… | VentureBeat
- Airbnb Now a $100 Billion Company after Stock Market Debut Sees Stock Price Double | NPR
- Watch: Airbnb Founder Stunned on Live TV by Stock Price | CNN
- Real Artists Don’t Starve: Timeless Strategies for Thriving in the New Creative Age by Jeff Goins | Amazon
- The Airbnb Effect on Housing and Rent | Forbes
- New Flexible Search Gives Guests More Ability to Fit Travel into Life | Airbnb
- COVID-19 Is Making America’s Loneliness Epidemic Even Worse | Time
- How to Use the Airbnb 11-Star Experience Framework to Get Raving Reviews and Repeat Guests | Rental Scale-Up
566: Brian Chesky | Lessons Airbnb Learned to Survive the Pandemic
[00:00:00] Jordan Harbinger: Coming up next on The Jordan Harbinger Show.
[00:00:03] Brian Chesky: And we realized, what if we sold collectible breakfast cereal, probably after midnight, we're fairly desperate, tens of thousand dollars in credit card debt, desperation creates creativity. And there was a lot of Barack Obama-themed memorabilia, we're going to get on this trend. We called up General Mills and we say, we've got this incredible idea for a John McCain, Barack Obama-themed cereal. And like all of a sudden, I hear the dial tone. Like it's not working. My co-founder Joe finds alumni at my college who's got a small print shop. He doesn't even make cereal boxes, but he does like oversized prints. We ended up selling over $30,000 cereal boxes. And that's actually how we funded the company. We actually funded a company selling collectible breakfast cereal. At that point, we said, we're basically cereal entrepreneurs.
[00:00:51] Jordan Harbinger: Welcome to the show. I'm Jordan Harbinger. On The Jordan Harbinger Show, we decode the stories, secrets, and skills of the world's most fascinating people. We have in-depth conversations with people at the top of their game, astronauts, entrepreneurs, spies, and psychologists, even the occasional legendary Hollywood director, undercover agent, or money laundering expert. And each episode turns our guests' wisdom into practical advice that you can use to build a deeper understanding of how the world works and become a better critical thinker.
[00:01:18] If you're new to the show — welcome — if you want to tell your friends about it — I always appreciate that — we've got our episode starter packs. These are collections of top episodes organized by popular topics. It'll help new listeners get a taste of everything that we do here on the show. Just visit jordanharbinger.com/start to get started or to help somebody else get started. And once again, sharing the show is how we grow, so I always do appreciate it.
[00:01:40] Today on the show, Brian Chesky, co-founder and CEO of Airbnb. One of Time's 100 Most Influential People as well. I met him years ago at a dinner. And I thought Airbnb was a fun, but silly idea. Who's going to want to eat somebody else's Cheerios, right? Well, apparently like two million people every single day. That's who. Recently, they had a night with four million guests in one night on the app. Most of them go smoothly. Pretty impressive, right? He started the company essentially because he couldn't afford to pay rent and now he can afford to pay rent in the Palace of Versailles if he wants to. Today, we'll discuss making tough decisions as a leader, making principal decisions as a leader and what to do in a crisis, and a whole lot more. This was a really fun and insightful peek behind the curtain of a multi-billion dollar company. I've really, really enjoyed it. And I think you will as well.
[00:02:28] By the way, if you're wondering how I managed to book all these amazing personalities for the show, it's always because of my network. I'm teaching you how to build your network for free over at jordanharbinger.com/course. And by the way, most of the guests on the show already subscribed to the course. Come join us, you'll be in smart company where you belong.
[00:02:46] Now, here's Brian Chesky.
[00:02:49] You know I used to wonder like, why do guys get haircuts every two weeks? What a waste of money, it's so silly. And then every time I do it, I'm like, I look legit 10 pounds lighter. Like this is worth — it's worth it if you have the means. And also thousands of people are looking at you on camera and they're like, "Dude, are you fat? You look tired. Your eyes are sunken. Like get some sleep, bro,"
[00:03:13] Brian Chesky: Yeah. Exact;y.
[00:03:14] Jordan Harbinger: Which I assume that's got to happen to you too, just because anytime you're in the media, they're like, "Ooh." It's like being the CEO of a company with as many eyeballs on it as Airbnb. It reminds me a little bit of like, you know, when Kim Jong-un makes an appearance or something in North Korea and they're like, "Oh, look at that. He might have gout."
[00:03:32] Brian Chesky: Yes, that's actually a really funny point. I do have employees who like reading into things like, "Oh, he looks like really tan. I wonder if he's been traveling and getting rest," or, "He looks really tired and stuff, so what does this mean?" That's really funny.
[00:03:43] Jordan Harbinger: Right, like, "Oh, he must've been staying up all night thinking about how many people he's going to fire. I bet it's me. It's totally me. I've decided that it's me. I'm going to go around the whole office and tell everyone we're getting fired."
[00:03:54] Brian Chesky: It's actually pretty funny how — there's an old saying the absence of information is filled with dirt. And so that people can like really fill in pieces of information and allow their imaginations to go wild. So it's always something you got to be careful about. And I never really realized that as a leader, you know, you can say really subtle things and suddenly those subtle things can be interpreted to mean something like more than you ever meant it to be.
[00:04:15] Jordan Harbinger: Yeah. I can only imagine the level at which that happens with somebody who has a public company, especially because, of course, like all of these — I used to work on wall street and a lot of these sorts of trader guys would say, "See how we said that, see that. He's using this language, that language. It sounds like he's been in meetings with the advisors and you only call meetings with the advisors when this is happening. And when that's happening. We saw that so-and-so was in New York. He's an advisor. I bet there's an emergency." And it's just like the reading actual just — well, non-literal tea leaves but it's not a thing. It's not real.
[00:04:46] Brian Chesky: I was told — not that I would have a beard — but I said you can never have a beard because investors don't trust beards. They think you're hiding something behind the beard. I thought that was the best one I've ever heard of. But it's kind of like this idea of like, you want to show as a CEO that you're having a little bit of fun, but not too much fun because you show too much fun. You're not focused, but you're not having any fun. Then they're worried you're going to burn yourself out. I like that, you know, like any subtle one degree each way is a possible extrapolation to something that's really far.
[00:05:13] Jordan Harbinger: What's the amount of beard that you can have where they're not where — like, it's obviously not Jack Dorsey level of fun, but it's like somewhere before that. What's the level of beard you're allowed to have? There's no guidelines for this.
[00:05:24] Brian Chesky: I don't think there's a — if you actually look at public company CEOs, there are very few people with facial hair and I don't think there's any mustaches that I'm aware of. And then you'll have some like Trailblazers and like Jack's in Trailblazers and he redefines the facial hair category for the public company CEOs. That's a real boundary breaker.
[00:05:42] Jordan Harbinger: You could grow a mustache and it would make the news.
[00:05:45] Brian Chesky: Actually it would be.
[00:05:46] Jordan Harbinger: Yeah.
[00:05:46] Brian Chesky: Actually that is a really funny thought. I never thought about that. And I also looked terrible in my mustache, but if I did, that would make news. And I don't know if it would help people though. Beyond patting people, having to look at it, I think it might affect the business in a negative way.
[00:05:59] Jordan Harbinger: Yeah, that's a good point. It would be like a stock price dropping two points after Chesky spotted with weird mustache.
[00:06:06] Brian Chesky: Exactly. I think it would drop more than that. Unfortunately, with the most, my mustache doesn't look good.
[00:06:13] Jordan Harbinger: You invented a word that is a verb and a noun and part of our culture. So it's in TV, it's in movies. You hear it on the radio. Like you're going to hear Airbnb in a Marvel movie or a Batman movie or something. How does it feel when you're sitting there? You're just watching something. They didn't clear it with you. That may be cleared with somebody in comms or whatever, but they're talking about something you created and they're using it like a verb like Bruce Wayne is going to Airbnb the bat cave or something like that. Like it's crazy.
[00:06:40] Brian Chesky: Well, I mean, the name Airbnb was purchased on GoDaddy for $7.99. So I just remember — you know, the name Airbnb, Joe and I, my co-founder and I, we would have never named the company, Airbnb, a word in the acronym combined together. The name was actually Air, Bed and Breakfast. If you can imagine, that's even perhaps a more obscure name, but you know, the story is that like, I intend to start a tech company. I was living in Los Angeles and my friend, Joe, who I went to design school with at the Rhode Island School Design, has moved 14 years in 2007 to San Francisco and he comes to me and he says, "Brian, come to San Francisco. Let's start a company."
[00:07:19] So one day I had this moment in my life where the metaphor is as if like the road in front of me looks exactly like the rodent behind me in my life. And I realized like, if I don't make a change in my life, then the road I'm going to travel looks exactly like the road I have traveled. This is the rest of my life. And I had this moment, like, I need to make a change. I don't want to work for a company. I want to be an entrepreneur.
[00:07:39] So one day I packed everything in the backseat of an old Honda Civic, and I drove to San Francisco. I get to San Francisco and Joe tells me the rent is $1,150. So I don't have enough money to pay rent. It turns out that weekend though, an international design conference was coming to San Francisco. And all the hotels in San Francisco were sold out. And so that's when we had this idea. We said, "Well, what if we just turned our house into a bed and breakfast for design conference?" Unfortunately, I didn't have any beds, but Joe had three air beds. So we pulled the air beds out of the closet. We inflated the air beds and we called it airbedandbreakfast.com.
[00:08:13] When we came up with this idea, I remember telling my mom, like, "I'm now an entrepreneur." And she said, "No, actually you're unemployed." And I'm like, "No, no, no, no. I swear to God, I'm an entrepreneur." And that's when I realized when you're starting a company, the difference between being an entrepreneur and employed is kind of a state of mind. And people thought this idea was crazy. I remember the first person I told the idea about. One of them, I said, I told the idea and they said, "Brian." I said, "Yes." They said, "I hope that's not the only idea you're working on." People said this idea will never work. Strangers will never stay with other strangers, but three people did that one weekend.
[00:08:46] To answer your question, I can never imagine that we were going to create a company that basically had a name that became a noun and a verb in pop culture. And the name of Airbnb originally was called Air, Bed and Breakfast. And I remember our first investor, Paul Graham, said, "You can't call your company, Air, Bed and Breakfast, because most people don't want to sleep on air beds and not all your hosts provide breakfast. It's really misleading." That's how it started. And so we said, "Well, we're just going to shorten the name." And so initially, I went on GoDaddy. I guess people do this GoDaddy, I don't know, certainly I did in 2007. And I was just like trying to get — also my co-founder, we're just trying to find like shorter names haveAir, Bed, and Breakfast that were abstract names. And originally I bought Air B and B, A-N-D-B. And I'm like, "Okay, Airbnb." And then I showed somebody and said, "Oh, you work for Airband." And I thought Airband like that doesn't really work because of the A-N-D. So we had to then shorten it, take out the A and the D and it was Airbnb.
[00:09:44] It turned out though it's kind of hard for some people to pronounce B-N-B. So when we first started Airbnb, I would say, "I started a company called Airbnb. Air as in the air you breathe, B as in boy, N as in Nancy, B as in boy.com." I basically said that like a thousand times. So it's pretty funny to imagine a name. And then suddenly it's like in a Calvin Harris' song. It's in [Big Daddy] too. That was probably a highlight for me. Mel Gibson held it up and Will Ferrell cheered. It's been on like dozens of shows, movies, songs. It's pretty wild. Also, maybe even weirder is when you're at a restaurant and you hear somebody say it. It's almost like if you were to overhear somebody saying your name, you know, you would pierce the air. So it's pretty.
[00:10:25] Jordan Harbinger: Yeah, that must be, you got to kind of wonder, like, "Are they talking about me or are they talking about their plans for vacation?" And then it's like, why do I want to get in the middle of that? Because if they were like, "You're never going to believe what happened at this Airbnb." You're like, "Uh, I'm just here to get my salad. Yeah, I don't want to deal with this."
[00:10:39] Brian Chesky: Exactly. Exactly. Exactly. Yeah.
[00:10:42] Jordan Harbinger: I heard you describe it in another interview as the worst idea that worked, which I thought was really funny because that's sort of admitting like, "We didn't think the whole thing through in the beginning and we had the name weird," but that goes to show you that if the mission and the values are in alignment and it's something that people want, you can be, quote-unquote, "wrong" about a lot of other things, right?
[00:11:03] Brian Chesky: You know, I thought one day this would be huge. Thousands of people will use this. That just sums everything.
[00:11:09] Jordan Harbinger: Thousands, yeah.
[00:11:10] Brian Chesky: And so thousands of people, one day, a couple of thousand people will use this product. And by the way, like a couple of thousand was probably as many people as I'd met my entire life at that point. So that was a lot of people. So yeah, when you start a company, you have to certainly believe in it. But I think that the very best people make something for themselves. And I thought this is something I wanted for myself. I wanted to be able to make extra money and meet cool people and share the space I had. It was very intuitive to me. And I thought if I'm traveling, I don't want to be like in sequestered in a hotel district and I can't even afford a hotel. I want to basically have the experience like I was visiting a friend in another city and I can just pay them a little bit of money to subsidize the rent.
[00:11:48] And that was a really simple idea, but I never really thought this would be something that like hundreds of millions of people would use because I think it's hard to imagine behavior changing. So I sometimes say that it's easier for us to imagine living exactly like we are now on Mars, then living differently on this planet, although the second is more likely to happen. But it's really hard, I think for people's mental model to imagine a behavioral or a social change in society. But if you go back to first principles, it wasn't a crazy idea. All you had to believe is that people were willing to trust each other. And we're doing it all the time on the Internet. We were connecting with people on the Internet. We were buying, selling things on the Internet.
[00:12:30] If you look at generations ago, when I told my grandfather about this idea, he said, "Of course," and I said, "What do you mean of course?" He said, "This is kind of like the way I used to travel when I was a kid." He kind of meant that he used to stay in like boarding houses. And so everything was a lot less commercial. And if you really think about it, before there were brands what were there, there were only people and people connecting with one another. So I think that a lot of times ideas that seem bad. They seem bad if you bring them back down to their first principles, you start to realize the only thing you have to believe about this idea is that people were willing to trust each other enough to stay in their homes.
[00:13:07] And you know, of course this never happened before the Internet because there was no mechanism for people to be able to foster or arbitrate that trust. But now of course, there can be. So I think that way of thinking means that almost everything around us could change. We can literally live in a world of our own design because we now have technology we never had before. And so that means that almost every convention could be rethought.
[00:13:31] Jordan Harbinger: I totally got behind the idea early, and I know probably a lot of people say that, but I used to be on this website called CouchSurfing, which still exists, but I don't use it anymore. It's like for young kids to go, "Oh, I'm passing through this random town in Poland who wants to get a beer or like whose garage floor can I sleep on?" And I was really early in this site and I used to have people from all over and people would call me in emergencies and be like, "I'm from Brazil and my other person canceled, or my hotel is closed or they kicked me out for whatever reason." And I'd have guys like sleeping on chairs. It was the time of my life. So as soon as I thought, all right, so this is the commercial version of that. It's a brilliant idea. And a lot of people thought I don't want a stranger in my house. And I was like, this is the most fun you can have on this side of the law, having strangers come over to your house that are vetted, right? That are like, not just — because it's not stranger, stranger. Like you do a good job of making sure it's a real person and things like that. I'm sure that was a process.
[00:14:24] People kind of assume — it's like when I told my mom about it, she's like, "I don't know about that." And I'm like, "Mom, it's not like crazy people from off the street who have no place to stay instead of a hotel." It's one of those things that as soon as people try it, they're like, "This is much better than a hotel. The person who's hosting us told us all the secrets of the neighborhood. And I feel like I'm staying in this quaint little town as opposed to like taking the 50th floor elevator down from the Marriott in the corporate district."
[00:14:49] Brian Chesky: Yeah. It is a great point. I had, by the way, never heard of CouchSurfing until after we started Airbnb. And suddenly I realized that actually there were hundreds of thousands of people doing essentially this kind of free exchange. The problem with CouchSurfing was because there was no money involved, it was a lot of noise to signal. There were some other kinds of problems as well. So it was a fairly inefficient marketplace and there wasn't enough incentive for people to host because they weren't actually getting paid. So they would deny a lot of requests and it became a very inefficient process without a lot of quality. But of course, it was a brilliant kind of movement that I thought was started.
[00:15:23] But of course, like if you really step back, people love homes. That's why they live in them. If people truly loved hotels, they redesigned their homes to look like hotels but of course, they don't. So number one, people love homes. Number two, most people when they're hosting an Airbnb aren't looking to make a profit like a hotel. They're home, they already paid to live in.
[00:15:43] Jordan Harbinger: Right.
[00:15:43] Brian Chesky: There are often, many of them are looking to subsidize their rent. So what that actually means is that they have fewer costs. And so you can actually get really good value. You get a lot in space. The third thing to think about is most people don't go to a city or go somewhere to feel like an outsider. You got to feel like an insider, but the problem is a lot of hotels in a hotel districts with only other outsiders, tourists. And so what a lot of people I think would like to do is to feel like they're in a neighborhood. A neighborhood where they can have a whole home themselves. But the final thing, I think the thing that's most important is the idea that you can actually have a connection to the community-go-to and the people that live there.
[00:16:16] And I think our mantra became basically, our original tagline when we started Airbnb was travel like a human. I think that kind of summed it all up. The idea that much of modern travel, modern tourism was kind of stripping away the humanity out of life. No matter how successful you become in life, you're reminded how much you're mere mortal when you fly and when you try to travel. And we wanted to make it feel much more, much more meaningful.
[00:16:43] Jordan Harbinger: I know you grew up to parents, social workers, they dedicated their lives to helping people, right? So that has to have guided the vision of Airbnb at least a little bit, right?
[00:16:52] Brian Chesky: Totally, yeah. My mom and dad were social workers and my mom, I remember growing up, told me, "I chose a job for the love and I made no money. So you should choose a job that pays you a lot of money." And my first career choice was to be an artist. And my mom said, "I didn't know there was a career that would pay you less than a social worker, but it turns out there is, and they're called artists. And that you're going to live in my basement for the rest of your life." And I promised I wouldn't and she said, "Okay, well, if you become an artist, then you have to promise me that you one day get a job. And that job's a real job and it has health insurance." And so I promised her that, and I ended up going to a design school called the Rhode Island School of Design and I graduated from Rhode Island School of Design.
[00:17:33] And I did end up for at least a couple of years getting a real job with health insurance before I then quit to become an entrepreneur. Whereas my mom said unemployed until it really worked. But yeah, I do think that a life of service is something that I think my parents dedicate themselves to. And, you know, my dad was always about like rooting for the underdog in every sports team.
[00:17:53] And so that was a little bit about, I think, how we grew up. I also think Airbnb's a little different than most tech companies because I'm a designer, not an engineer by training. And so Airbnb has, I think, rooted a little more in the humanities. I think for a technology company, we try to be like a, really a deeply humanistic tech company. And I think that that's something that people are yearning for from large technology platforms today to not feel like a number as part of an algorithm, but you know, really feel a little more like the Internet company actually knows you cares about you. And that's what we're striving to. It's of course, really hard when you're dealing with a hundred millions of people though.
[00:18:27] Jordan Harbinger: And she's still working. She must love her job because if anyone could retire their mom and find her a nice place to live is probably the co-founder of Airbnb.
[00:18:36] Brian Chesky: Either she loves her job or that says something not so great about me. I would like to think it's the first thing. I've offered to help her, but no, she loves working. She's like 69 going on 29.
[00:18:48] Jordan Harbinger: You moved her in with you for a while during the pandemic so she wouldn't be lonely.
[00:18:52] Brian Chesky: To be clear, she moved in with me. To say, I moved her in with presume a nuance. So she moved in and I was like, okay, hey mom — so actually what ended up happening was I think it was like mid-March. The pandemic, I think, was declared a pandemic March 12th, you know, the week of March 15th or so. And so it was declared a pandemic. My mom was in the process of getting a job in San Francisco and relocating. And of course, she would have her own apartment. She gets on the airplane, all of a sudden midway through her flight, she gets an email that her job is now remote. In flight, right?
[00:19:24] Jordan Harbinger: Oh wow.
[00:19:25] Brian Chesky: Everything is now work from home. She lands. She's working in her apartment. Suddenly, I am now running a company in sweat pants in front of an iMac. So I used to go to an office like most normal people. There's a pandemic, everyone's working from home and now I'm trying to manage a crisis in a house. And actually the same chairman now. Beginning of last year, we thought we were on top of the world, we were about to go public — all of a sudden, we lost 80 percent of our business in eight weeks. In a company like our size that loses 80 percent of its business in eight weeks, it's like driving an 18, we are going 80 miles an hour and then slamming on the brakes. Like really nothing good happens. And so I was basically in this like feeling it was a freefall. People were predicting: is this the end of Airbnb? Can Brian Chesky save Airbnb? These were headlines. And so I was just working like 16, 18 hours a day. And my mom came over for like a weekend to kind of hang out and left a few months later. But I appreciated it because, you know, she was there to support me. She brought a golden retriever over, who was with me by my side now. We were one big family and I was 39 years old, back living with my mom, but this time with a job and health insurance.
[00:20:33] Jordan Harbinger: Right. I hope that you reminded her of her speech saying that you weren't allowed to move back in with her when you graduated and leverage the irony a little bit.
[00:20:39] Brian Chesky: A little bit of irony, I'm like, wait a second — it was pretty funny though. I'm like, wait a second. I'm about to turn 40. I'm single and living with my mom in a house.
[00:20:49] Jordan Harbinger: Right, it's not what you think? That's you on every dating app.
[00:20:51] Brian Chesky: All my mom's fears, except for one other giant nuance, I run this company. I'm actually pretty dangerously close to what she was afraid of.
[00:21:00] Jordan Harbinger: Yeah. Like if it weren't for a few million shares or a few hundred thousand shares, you'd be getting money, young man.
[00:21:06] Brian Chesky: Yeah, exactly, exactly. That one thing really saved me.
[00:21:10] Jordan Harbinger: I think it's interesting that you didn't think early on that you could be an entrepreneur because the only entrepreneurs you knew were pizza shop owners. And I had the exact same thought when I was younger, right? Like the only business owners I knew growing up in Michigan were dentists and guys that own like a diner — that was it — barbershop.
[00:21:27] Brian Chesky: I knew Bob from Bob's Pizza. I had another friend who made Bronze Baby Shoes. So if you want to get your baby shoes bronze, that was kind of the other big entrepreneur in my street. And then the third entrepreneur did essentially, if you needed to have your company printed on a t-shirt or a hat. And so those are the three things I thought. And those companies obviously didn't capture my imagination. I think there's a lesson here. The lesson is it's hard to sometimes aspire to something you've never been exposed to. And growing up as a kid, like what were the things that you wanted to grow up to be? A professional athlete. An astronaut in the '80s would have been very popular. If you were incredibly ambitious, you would want to be president of the United States, but being an entrepreneur really wasn't a seemingly available option because it wasn't something in upstate New York in the 1980s that people talk about. And there weren't really a lot of entrepreneurs before that kind of computer and Internet revolution. It wasn't like there weren't that many, but I think that technology and Internet has basically made starting an app, like probably in like the '70s, starting a band, like everyone does it now. It really wasn't that way in the '80s. There wasn't a really easy way to start a really big company.
[00:22:35] Jordan Harbinger: Yeah, that's a good point. It wasn't really — you knew dry cleaners, you knew people who own Chinese restaurants. You knew people owned like very small businesses. But there was no blueprint for anything like what you're doing. I mean, there's still kind of isn't. I guess there is a little bit if you're in the little scene, but not really. Certainly not from a dude going to RISD, going to a design school. When you were younger, you redesigned broken toys, shoes, friend's backyards, and possibly also the layout of the city of what was it? St. Louis when you were seven.
[00:23:02] Brian Chesky: St. Louis.
[00:23:03] Jordan Harbinger: Yeah.
[00:23:03] Brian Chesky: Yeah. So I was a very peculiar kid that was really interested in art and design. And I used to ask Santa for poorly designed Christmas toys so I could redesign them. I don't know if that says something about my curiosity for design or something else. I'll let the audience decide. When I was seven years old, it was the first time I was in an airplane. I got to St. Louis and I have a memory of wanting — I don't know why I was obsessed with urban planning at the age of seven. And I wanted to like redesign the city. I don't know where this came from. I don't know why I was like this.
[00:23:32] And then like, you know, like what was big in the '80s? Air Jordans and a Game Boy. And like, I love these objects, but mostly to redesign them and to really understand how I would disassemble them, try to learn how they're taking them apart. One day, I think I'm like 10 or 11 years old, I go to my friend's house to play and his father was redesigning his backyard. I guess he was having like landscaping done and having a deck built and he was doing it himself. So on the kitchen table were all these architectural drawings and all these like architectural tools, like a T-square and a drawing triangle and a protractor and a compass. And I just thought that is the coolest thing I ever thought of.
[00:24:09] So I started trying to redesign my parents' backyard, but they had no interest in my poorly designed deck. So I would go door to door to neighbors, trying to convince them to install desks. I did not have anyone redesigned their backyard, but I just had this real deep interest in making, creating, designing, not really ever knowing what that would lead to. I was like, should I be an architect? Should I be an artist? Should I be a designer? I didn't really know what I wanted to be growing up. And the arts is not something that is fostered a lot. Art and design is not something fostered a lot for kids anymore.
[00:24:41] I mean, a lot of schools are cutting their art programs, their design programs. There's this huge push to standardized testing, which doesn't really celebrate very much creativity. You know STEM, science, technology, engineering, and math. There's no A in that for art or design. I was a little bit more on my own and I did a lot of my own studying. I would be dropped off at art museum. So that was kind of what my childhood was like.
[00:25:04] Jordan Harbinger: Yeah, it's unusual, but in a cool sort of like — well, nowadays it's cool. Back then it was like design nerd, you know, same as any other, probably.
[00:25:11] Brian Chesky: No, it wasn't. It did not get you a date to the prom. I can confirm that.
[00:25:16] Jordan Harbinger: Yeah. I mean, a lot of us are in the same boat, man, for sure. Each of our niches were equally just like, oh man. You had to pick that one, huh, son?
[00:25:26] Brian Chesky: I think, I think like it might be appealing as an adult to be artistic. Not when you're 12.
[00:25:32] Jordan Harbinger: No, it's just a good way to attract unwanted attention.
[00:25:34] Brian Chesky: Unwanted attention from other guys that will punch you.
[00:25:38] Jordan Harbinger: Yeah, exactly. All right. So you started the business, I heard that when you first started the company you used to go to people's houses or homes, I should say, in New York, right?
[00:25:49] Brian Chesky: Yes.
[00:25:49] Jordan Harbinger: The hosts on the app and visit who essentially your customers are face to face. And this is really incredible to hear this massive company like Airbnb doing something that is so small in scale and frankly, totally unscalable. And also that anybody just let you in New York, like, "Hey, you know that app that you're using that you use to let strangers in? I'm the guy who runs it. Can I come in and talk to you, a total stranger?" I mean, that's highly unusual, man.
[00:26:14] Brian Chesky: Yeah. Well, the way it worked was — let me tell you the quick story, because this is kind of a funny story. So we started Airbnb, we entered this incubation program, I guess it's called the incubator. Y Combinator is probably the most well-known company doing that. And the guy who started Paul Graham's very famous investor and he gave us the most important advice I ever got. We're asking him, like, "You know, Airbnb was just getting started. We don't have a lot of users," and he goes, "Where are your users?" And we said, "We don't have that many, but we have a few people renting their homes in New York City." And we're in Mountain View at that point. And he said, "So your users are in New York and you're here with me in Mountain View." I said, "Yes. He said, again, "You're using New York and you're here in Mountain View. What are you doing here? Go to New York." And we're like, "All right, but what are you going to do in New York?" He was like, "Go to your users." We didn't really know what to do. So we just flew to New York. And this is the winter of 2009, like January, February, March.
[00:27:05] So it's snowing, there's snow on the ground. And we're kind of like trying to meet up with different hosts, but we don't really know how to be helpful to them. Now, in 2009, it was really hard to take photos and put them on the Internet on a listing. Now, obviously, it's very easy to do because every phone has a camera on it. But back then it was quite difficult. We had this idea. We said, "What if we had this button where you could press a button? And a photographer, which has magically show up the next day at your house, photograph all your home. And then the photos that you magically uploaded and the whole thing would be streamlined." We basically sent us email. We said, "Click this button if you want your home photographed by a photographer." We didn't describe who the photographer was. So all of a sudden, the next day, we'd knocked on the door. We were the photographer and it was only when they found out that we were the founder that they realized how small this company was.
[00:27:58] In fact, I remember one time a host asked me, "Oh, by the way, how do I get paid?" And I said, "Oh, you want to get paid?" So I checked my backpack. I opened my backpack and I had a giant bank ledger with like 500 blank checks in it. And so I basically just opened it and I wrote her a hand check and that was how I paid people. Literally, before we had basically wired the ACH, online banking, or PayPal, I was handwriting checks every day and putting them in the mail and paying people. So the lesson is you do things that don't scale to prove out the concept. And then you scale it because to scale is to build technology. The only technology is essentially expensive.
[00:28:37] It's kind of like, don't film the movie until you've perfected the script. You can rewrite the script. It's very cheap. Once you get on set, you start burning a lot of money. So prove the concept in as low tech away as possible. But the other way, maybe the more important lesson is you don't need to worry about building a company with over a hundred million people. There's a famous story of the creation of Gmail, which is obviously Google's mail product. And this guy, Paul Buchheit said, when he created Gmail that Larry Page, I think wouldn't let him ship Gmail until a hundred people inside of Google love the product. And he thought, "Oh, this will take a couple of weeks." It turned out, I guess, to take a couple years till he actually built a product people love. The idea is that to start a successful business, even a hundred million, all you need to do is build a product that a hundred people absolutely love. And as long as those hundred people are not like the only a hundred roles they exist, they're representative of a large population. If a hundred people love something, they're each going to tell 10 people. And everything in the world that is large has started small at some point.
[00:29:40] And so that's a really simple process and it's really easy to do something, I think, that a hundred people actually love. You get to know them, you follow their journey, you perfect every detail but also it makes your company more personal. If you think of people like numbers, just like multimillion datasets, you're going to be very incremental. You're not going to provide a great experience. So that was the basic principle would it led for me to do that was walking through snow with a camera in mind my neck. And I remember saying to myself, when Steve Jobs, like when you bought an iPhone, Steve Jobs didn't come to your house and sleep on your couch but I did.
[00:30:14] Jordan Harbinger: Yeah.
[00:30:15] Brian Chesky: And so I didn't know if that was a good or bad sign. At the time, it didn't seem like a good sign, but it did help us.
[00:30:19] Jordan Harbinger: It's funny because it's kind of like Mark Zuckerberg coming over to sit in my living room and tell me what all my ex-girlfriends are up to.
[00:30:28] Brian Chesky: That would be funny. Well, speaking of Mark Zuckerberg, I also — again like talk about tale of two startups. Mark Zuckerberg, you know, my recollection has created Facebook and, you know, he obviously launched it on the Harvard campus and within two weeks it was a campus sensation. And then, of course, he went through the Ivy League schools, campus by campus.
[00:30:47] Airbnb did not start that way. We were not just a sensation. We launched for the Democratic National Convention in 2008. So if you remember, you know, the biggest thing happening in the summer of 2008 was Barack Obama running for president.
[00:31:01] Jordan Harbinger: Right.
[00:31:01] Brian Chesky: And in August of 2008 because demand was so big for him, they moved him from a basketball arena to a football stadium. I don't know if you remember this. So he's now doing the keynote in Denver in a 60,000-seat stadium where the Denver Broncos play and all of a sudden we're thinking to ourselves, we're all these people going to stay. And that's when we came up with this idea to like, basically relaunch Airbnb for the DNC. We ended up having, like, I don't know how many bookings, like 80 bookings. At that point, I thought we were huge. And then the following week we got like one booking because the convention was over. And at that point, I realized if only there were political conventions every week we'd have a huge business. So we're totally broke.
[00:31:44] You know, those binders that kids put baseball cards in growing up, those plastic binders?
[00:31:49] Jordan Harbinger: Yeah, of course.
[00:31:49] Brian Chesky: Any kid today won't know what we're talking about, but you and I would know. We put credit cards in them. In other words, that's how we funded the company. We take a credit card $5,000 limit, max it out, take another credit card. We probably had $30,000, $40,000 of debt and we were making $30,000, $40,000 a year. So that was kind of a mathematical challenge right there.
[00:32:07] So we're totally broke. We're now been working on the idea for almost a year. It's October, 2008. And we're Air, Bed, and Breakfast, the store name. And we're like, "The air bed thing is not working. Maybe we should get into breakfast." I know what you're thinking — amazing idea. And so of course, we weren't going to sell perishables, like eggs and Barack Obama and John McCain have this, obviously, election looming in November. So it's only a month away. And we realize what if we sold collectible breakfast cereal? I don't know why we thought that was a good idea, but it was probably after midnight. We're fairly desperate. Tens of thousand dollars in credit card debt. Desperation creates creativity. So we ended up designing a Barack Obama and John McCain-themed breakfast cereal. We designed this big blue box, the Barack Obama-themed cereal. We called it Obama O's like Cheerios, the breakfast of change. And then we figured if we're going to do a Barack Obama-themed cereal, we should come up with a John McCain theme cereal. So we made a box that was red for Republicans. It had John McCain on the cover and we called it — we learned he was a captain in the Navy. So we said Captain McCain's, a Maverick in every bite.
[00:33:15] So we designed these two boxes and I thought, okay, we can sell like a few hundred thousand boxes. Like these are really cool. They're going to be fun. And there was a lot of Barack Obama-themed memorabilia and kind of tchotchkes and stuff in October, we're going to get on this trend. And so we called up General Mills, we say, "We've got this incredible idea for a John McCain, Barack Obama-themed cereal." And like all of a sudden, I hear the dial tone, like it's not working. Then we went to like a bunch of medium-sized cereal companies, try to get them to make the cereal boxes. And they all thought we were like maybe mentally ill. And they're like, "This just seems really weird."
[00:33:51] Jordan Harbinger: Sure.
[00:33:51] Brian Chesky: So all of a sudden, my co-founder Joe finds an alumni at my college at RISD who lives in Berkeley, who's got a small print shop. He doesn't even make cereal boxes, but he does like oversized prints.
[00:34:03] Jordan Harbinger: Sure.
[00:34:04] Brian Chesky: And he said, "I can't make you like a hundred thousand boxes of cereal, but I'll print you a thousand boxes for free. And if you sell them, just give me a little royalty because I want to help out a couple of risky guys." So we're like, "Thanks." So we print a thousand boxes each of a total of Barack Obama and John McCain cereal. We charge $40 a box. And to get the word out, I heard that there were these things called media lists. Like startups, paid money to get media lists were as even though, as a journalist, like basically the contact info of producers. And so we got a media list and we got like a hundred addresses of the producers of Good Morning America, Today Show. We actually made these boxes of cereal.
[00:34:43] To be clear, we went to the grocery store. We bought a thousand boxes of cereal. There wasn't like, just go to Amazon and put a thousand boxes of cereal in your cart. We would actually every day go in our big old red Jeep, Stuff the Jeep with cereal boxes, come home, disassemble them, and then hot glue new cereal boxes. We ended up standing up to these producers. They ended up getting on the Today Show and it was on CNN and all of these stories. We end up selling over $30,000 cereal boxes and that's actually how we funded the company. We actually funded the company selling collectible breakfast cereal. At that point, we said, we're basically cereal entrepreneurs.
[00:35:19] Jordan Harbinger: I see what you did there.
[00:35:20] Brian Chesky: Exactly. Exactly. Yeah. And my mom thought, "Are you a cereal company now?" And of course, I mean, it wasn't really clear what the answer was because technically the answer was yes. Of course, we didn't really want to be a cereal company. The reason I say all the stories, I remember thinking in the middle of night, one night assembling cereal boxes with hot glue getting on my fingers, I wonder if Mark Zuckerberg ever assembled breakfast cereal to get Facebook off the ground. The answer was no. It was a foreboding sign for us, but that's actually how we funded the company. But I think it goes to show that like sometimes the most implausible ideas do turn out to work and if you just have enough resilience.
[00:36:00] Jordan Harbinger: You're listening to The Jordan Harbinger Show with our guest Brian Chesky. We'll be right back.
[00:36:05] This episode is sponsored in part by Empower. Are you experiencing chronic stress over money? You're not alone. 70 percent of millennials live paycheck to paycheck with the increasing cost of living in the wage stagnation. Millennials are financially worse off than prior generations. And I know this feeling well. I used to be — when I started this company, I had no money. I had less than no money. I had negative money and I remember the stress and worry of having to cover all of my expenses at the end of each month. If you're experiencing financial anxiety between paydays, Empower can help alleviate that. With the Empower card, you can get paid up to two days early, get a cash advance up to 250 bucks. Imagine, you know, life happens. No matter how careful you are with your finances, you can get a cavity. Your car can break down. You've got grandma's birthday coming up. You totally spaced on it. Empower can really help provide a financial cushion between paydays. Empower charges, no interest and no late fees. Also no credit checks, no minimum balance and no overdraft fees.
[00:36:59] Jen Harbinger: Get cash advance of up to $250 with an Empower card. Go to empower.M-E/jordan to download the app and see terms and conditions.
[00:37:07] Jordan Harbinger: This episode is also sponsored by Nuun. When you work up a sweat from a good workout, or if you're like me running after my two-year-old kid, you lose vital electrolytes and minerals that your body needs in order to keep moving and recover efficiently. Nuun Sport is optimized for hydration and mineral replenishment before, during, and after a workout. I'm always busting my buns there in the morning in the garage. You just drop a fizzy tablet into your water bottle to support your hydration anytime, anywhere. My friends love taking Nuun tablets to festivals, if you know what I'm saying, and I like to take Nuun Sport with me when I go on a long hike or a bike ride, or sometimes on airplanes. Nuun Sport is made with only one gram of sugar and carefully sourced premium ingredients that are certified non-GMO, gluten-free, and vegan. Available in 13 delicious flavors, including fan favorite cherry limeade, which sounds delicious and has an extra boost of caffeine.
[00:37:55] Jen Harbinger: To get your game-changing hydration, visit N-U-U-N.life/jordan and use code JORDAN for 25 percent off your first order.
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[00:38:26] Don't forget we've got worksheets for many episodes. If you want some of the drills and exercises talked about during the show, those are all in one easy place, namely the worksheets. Those are in the show notes. And the show notes are at jordanharbinger.com/podcast.
[00:38:38] Now back to Brian Chesky.
[00:38:41] It's funny that you were in the bed business, and then you were forced to become the breakfast business to get back into the bed business. And now here we are, right?
[00:38:50] Brian Chesky: Exactly, here we are. I like that. I like that.
[00:38:52] Jordan Harbinger: It's not Airbnb. It's air and then it's also a little of B, and a little of the B and then back to the other B. No air anymore.
[00:38:59] Brian Chesky: Exactly.
[00:38:59] Jordan Harbinger: Don't worry about it.
[00:39:00] Brian Chesky: Yeah. No air. Yeah, we went to from B to B to B. Yeah, I like that.
[00:39:03] Jordan Harbinger: Yeah. Yeah. You can use that. No problem.
[00:39:06] Brian Chesky: Thank you. I'm going to use that.
[00:39:07] Jordan Harbinger: So you were in a cash crunch, you solved it with a counterfeit cereal or custom cereal.
[00:39:13] Brian Chesky: I prefer unlicensed cereal to counterfeit.
[00:39:16] Jordan Harbinger: Unlicensed, yes. It's real cereal.
[00:39:18] Brian Chesky: It's real cereal, just was unlicensed.
[00:39:20] Jordan Harbinger: Right, it was like Cap'n Crunch inside one, then Cheerios in the other.
[00:39:23] Brian Chesky: Exactly. It really was Cap'n Crunch and Cheerios. It was actually discount Cheerios because we couldn't afford —
[00:39:28] Jordan Harbinger: Like Kirkland brand.
[00:39:29] Brian Chesky: Exactly. It was actually cheaper than Kirkland.
[00:39:32] Jordan Harbinger: Yeah, there's a level underneath it and you don't want to know what it is. Just buy the box and keep it on your shelf as a collectible.
[00:39:37] Brian Chesky: Exactly. The great thing is that that kind of cereal never expires for like generations.
[00:39:41] Jordan Harbinger: Right. No, it's a hand me down kind of cereal. So speaking of crunches, now, you're in a pandemic. Last year, I assume it was much more of a critical, "oh my gosh, is this going to work" kind of issue. You forwent, forgone your own salary, all the founders, for six months.
[00:39:57] Brian Chesky: Yeah.
[00:39:58] Jordan Harbinger: Raised a couple billion dollars during the early part of the pandemic. And I assume that was kind of like, we don't know if we're going to use all this money, but we damn well sure better have it because anything could happen right now. Right?
[00:40:09] Brian Chesky: That's exactly the case. I mean, it was inconceivable. I think it's important to paint a picture.
[00:40:15] Jordan Harbinger: Yeah.
[00:40:15] Brian Chesky: By the beginning of last year, we were like this worst idea that ever worked that actually did work that hundreds of millions of people use. We had a valuation of nearly $40 billion. So here I am, the son of two social workers, who went to design school. We had like 10 years of incredible success. And that was like part of our identity, that we had a successful company. And then all of a sudden, within eight weeks, we go from feeling like Airbnb is here to stay to Airbnb may not be here to stay. We lost 80 percent of our business, but we didn't know what would happen to the other 20 percent. And at this point, we were estimating that we were going to lose literally billions of dollars. We were at one point estimating, losing a few hundred million dollars a month.
[00:40:58] Jordan Harbinger: Wow.
[00:40:58] Brian Chesky: Losing a few hundred million dollars a month, which is just kind of numbers that are a little hard to wrap your head around. And so at this point, the analogy was, I was like a captain of a ship. The ship had holes in it. We didn't know how long we'd take to fill the holes, but we're really far from land. And we needed a lot of rationing. And so we were like, if this storm goes on for a couple years, even if I cut expenses, how much money will I need? We estimated that number was around two billion dollars.
[00:41:23] Now in the middle of a pandemic, when you're in a travel business and you lose 80 percent of your business, people aren't really looking to fund travel companies in the middle of pandemic. So it was quite difficult to raise money. So we actually took on debt two billion dollars. We did it in record time, but it was a very, very scary period of time. And I just commend the investors who stepped up because it was a little crazy to believe in Airbnb 10 years ago, when you know, when we were starting for a brief moment last spring. It also seemed a little crazy to bet on Airbnb in the middle, in the beginning of a pandemic, but you know, some people stepped up and they obviously did really well.
[00:41:59] Jordan Harbinger: And good for them because that is serious risk tolerance. And then of course, to have this hit right after, and they're just going, "Nah, we were just counting this as part of our portfolio as something we didn't regret.
[00:42:09] Brian Chesky: Yeah, exactly. We were supposed to be the winner in so many people's portfolios, but we go from the winner to not the winner and kind of like, you know, like, they're like, "Wow, this could go to nothing."
[00:42:19] Jordan Harbinger: Yeah, you sort of mentioned that like the news headlines: is this the end of Airbnb? I assume you must stay away from reading all that press now so that you don't freak out. Right? I mean, not that you would.
[00:42:30] Brian Chesky: Yeah. Yeah. I try not to read too much press when times are good, because you don't want to be inconsistent. It's like, oh, I only read good stories about myself.
[00:42:38] Jordan Harbinger: Right.
[00:42:39] Brian Chesky: When press is bad, it's really painful to read, like all the predictions of your imminent demise. It's kind of weird too. It's like reading a memorial about yourself, but you haven't died yet. So it's pretty weird to read those. And that's what it was like last year. You know, we use that as motivation. And, you know, I remember Jeff Bezos once said to me, don't get too hung up on the news, you know, the press. Today's poster boys, tomorrow's piñata. Don't get too high. Don't get too low. And you know, that's kind of one of the things I've tried to do because that's not true or the highs are hot, man. You can lose a lot really quickly as well.
[00:43:13] Jordan Harbinger: Yeah. That is certain. I mean, there's no way you can really — well, how do you prepare for a crisis like this? I think you phrased it once, better to be pessimistic and be right than optimistic and be wrong. But also like that kind of sucks, right?
[00:43:25] Brian Chesky: Yeah.
[00:43:26] Jordan Harbinger: It's a bummer to do that, to have to do that, but it's part of your job.
[00:43:29] Brian Chesky: You know, I don't know how do you prepare for a crisis? Unfortunately, the preparation I had to prepare for the crisis was other crisis. In other words, there was no way to actually prepare for COVID. Like it had never happened before. It was unprecedented. None of us could have ever predicted it. But the benefit I had was that Airbnb was born in the crisis. We couldn't pay rent. There was a great recession in 2008. We had a lot of growing pains, a lot of challenges along the way. So unfortunately, or fortunately, I had been prepared and I was fairly battle-tested before the pandemic. And a lot of professionals CEOs, CEOs of major travel companies had never themselves been in a crisis—
[00:44:05] Jordan Harbinger: Right.
[00:44:05] Brian Chesky: —because they just became CEO. A lot of them weren't even CEO during the great recession.A lot of these like big public companies, they have a little more of a revolving door of CEOs whose tenure was only four or five years. I had been doing it for over 10 years. So I've seen quite a bit of challenges. And I learned some lessons in a crisis.
[00:44:22] The first lesson I learned in the crisis was to be decisive. I think that sounds kind of obvious when I say it. You wouldn't believe the number of people who get paralyzed in the crisis because in the crisis there were a few good options and people like perfection. And so what do you do when you have only three crappy choices? And you've got to pick one, and if you don't pick one, now you have two crappy choices.
[00:44:43] Jordan Harbinger: Right.
[00:44:43] Brian Chesky: And if you don't pick one, now you only are left with that one really, really crappy choice. So decisiveness is really key. That's the first thing. Or another analogy, imagine you're not sure if you should get off on the exit in the highway and you're like hesitating, you're going to collide.
[00:44:56] Jordan Harbinger: Right.
[00:44:56] Brian Chesky: So the second thing in a crisis is you have to be very principally oriented. You know, I had a prior crisis where things were so bad that at one point I remember saying to myself, I don't know what the hell is going to happen. How do I want to be remembered regardless of the outcome? And so I kind of call that a principle decision, not a business decision, a business decision is I'm making a rational decision to optimize a certain outcome to win. A principle decision is I can't possibly predict how this is going to end. So how do we want to be remembered? So to do that, I ended up writing down a series of principles: act with all stakeholders in mind, don't be a villain of this crisis, play for the long-term for this company. So you make a series of principles and those principles can govern lots of decisions.
[00:45:41] The third thing I learned in the crisis is you have to communicate a lot more. If you're used to communicating like every week now you've got to communicate every day. The faster things change and the more freaked out people are, the more communication, the more assurance that you need to have. But the most important thing I learned in the crisis was that the hardest thing to manage in a crisis, to be honest, is your own psychology. When you feel like you're going to lose it all, it's really easy to say why me, to get really down. And the problem with that is that everyone's looking to the leader and the leader thinks they're screwed. Then everyone else thinks they're screwed.
[00:46:16] Jordan Harbinger: Yeah.
[00:46:16] Brian Chesky: And everyone thinks they're screwed, they kind of stop working to fix the situation. And so you have to be optimistic, not blind optimism, but you have to be optimistic because when you're optimistic, you typically work creative. And when you're optimistic, you don't quit. You're like, I'm going to figure this out. And so to manage your own psychology is probably actually the hardest part of managing a crisis. It is unrelenting and it can be like staring into an abyss of despair if you aren't really strong mentally.
[00:46:44] Jordan Harbinger: Yeah. I mean, to give people — well said, first of all, but to give people an idea of what this meant for Airbnb. So the pandemic hits about a billion dollars in reservations, wanted refunds, pretty much instantly overnight, whatever.
[00:46:56] Brian Chesky: Instantly.
[00:46:57] Jordan Harbinger: And issued an extenuating circumstances policy and gave people refunds that normally, you know, "Hey, the refund policy, this trip is tomorrow. Like you can't screw over the owner."
[00:47:06] Brian Chesky: Overrode, the host cancellation policy.
[00:47:08] Jordan Harbinger: Right.
[00:47:09] Brian Chesky: And now the hosts are pissed off.
[00:47:11] Jordan Harbinger: Right.
[00:47:11] Brian Chesky: Because the hosts are like, "Wait a second. It's a pandemic." Some of them are saying, "I'm losing my job. I needed that money."
[00:47:17] Jordan Harbinger: Right. Like this is my backup plan.
[00:47:19] Brian Chesky: This is my backup plan. And we're like, we don't want to create a moral conflict for guests where they're traveling, even though they really shouldn't be, because they're not going to get their money back. And people are advising against crossing borders and we have a lot of cross border reservations. And so one of the hardest decisions I made, it turned out to be the right decision. But what was really hard was to number one, override the cancellation policies. Then number two, we took $250 million off our balance sheet, $250 million.
[00:47:45] Jordan Harbinger: Wow.
[00:47:46] Brian Chesky: And we gave it to hosts. And you know, when you're like a hundred billion dollar company, you can do that. When you're a company incinerating cash, looking to raise emergency money—
[00:47:54] Jordan Harbinger: Yeah.
[00:47:55] Brian Chesky: The worst signal you can give to investors is to just give $250 million to someone else as if you're just — the concern was like a rational person would have said, the worst possible thing to do right before trying to raise two-billion-dollar emergency funding is to just shovel out $250 million of oxygen that you needed.
[00:48:13] Jordan Harbinger: Right. Like, "Was that for advertising?" "No, we just gave it away."
[00:48:17] Brian Chesky: We just gave it away. Like, so wait a second. What are you going to do with the next two billion dollars? That probably did scare off some investors. Kudos to the one that stepped in. That they realized that actually without our hosts, we only have anything. So we need to really take care of them.
[00:48:30] Jordan Harbinger: It was a bold move. And of course, it worked out and then Airbnb staff donates a million dollars in travel credits from the company. So if I work with you, then I can travel and use it as a credit in the app. So they ended up collecting another 10 million for Superhosts, which — you know, that's got to be kind of a proud daddy CEO — actually don't react to that. Proud daddy sounds creepy. Proud founder moment, for sure, right?
[00:48:56] Brian Chesky: Yeah, I tried to like not remember the proud daddy.
[00:48:59] Jordan Harbinger: Yeah, sorry about that. It came out, it slipped up.
[00:49:02] Brian Chesky: I was really proud of our employees. You know, the context story, Jordan, was our employees didn't know. I think they saw the writing on the wall that there was probably going to be a layoff. I was getting asked questions every week. At this point, we hadn't done a layoff, but it seemed imminent. People were asking me in team meetings if there's a layoff. I didn't say yes, but I didn't say no. I said all things are on the table, which is kind of like, don't be surprised.
[00:49:25] Jordan Harbinger: Right.
[00:49:25] Brian Chesky: And at this point while employees don't know which of them we're going to have a job, which of them aren't. And they don't even know if they get laid off at the lever, how long is it before they get the next job, because at this point, people are predicting we're entering an economic depression, not recession.
[00:49:39] Jordan Harbinger: Yeah.
[00:49:39] Brian Chesky: For them to have stepped up and put all that money, it was pretty cool.
[00:49:43] Jordan Harbinger: It's one of the few things that you've done that I didn't really expect, but that turned out to be well, surprise, surprise in accordance with the values that you were raised with and the values of the company, right? Like getting 225,000 places to stay for frontline workers. So they could stay quarantined from loved ones. So they wouldn't spread COVID. And it's got to be inspiring — so proud daddy inspiring — to see your sort of like rented air mattress on the floor slash gimmicky election cereal company pull off boss moves like this sort of one after the other, right?
[00:50:12] Brian Chesky: I appreciate that. Yeah, the thing that I think I'm maybe most proud of is that most of the ideas that we did last year weren't my ideas. They were ideas that came from the culture. So when you have a company, like we have 5,000 employees, on the one hand, I can't be responsible for every decision everyone makes. They're adults, they make their decisions.
[00:50:33] Jordan Harbinger: Right.
[00:50:33] Brian Chesky: But what I am responsible for is the culture that I create and that culture, you know, people do bad sh*at your company, like as a CEO, you're kind of responsible because you created a culture that presumably condones this. Conversely, if you create a great culture, people step up without having you ask them to do things. And so one of those things that you called out was our employees came to us and said, "Hey, we've been reading a lot of reports that we have firefighters, nurses, doctors, EMTs, that are working in the front lines and they need places to stay." Either, they don't want to stay with their family because they feel like they're being exposed to COVID.
[00:51:07] Jordan Harbinger: Exactly.
[00:51:07] Brian Chesky: Or they're serving in another town and so they don't want to be commuting. So we worked with our host community and our hosts offered 225,000 homes for people working on the front lines. That was probably one of the greatest acts of generosity I'd seen in our community. And it was pretty cool. And actually that was an example of a culture permeating, not just our employees, but our actual host community.
[00:51:29] I also think Jordan, like one of my theories is, you know, the company did eventually rebound. And even after a layoff, after having to restructure the company, we rebound. And I think one of the reasons Airbnb came back and had a really huge comeback was I think a lot of people were rooting for the company. I'm not saying everyone was, but there was a lot of goodwill.
[00:51:50] Jordan Harbinger: Not the hotel industry, for example.
[00:51:52] Brian Chesky: Not the hotel industry, but they had way bigger problems to be focused on us last year.
[00:51:56] Jordan Harbinger: Yeah, they had bigger fish to fry. That's for sure.
[00:51:57] Brian Chesky: Way bigger. Yeah, just their own existential survival. So I think people were rooting for the company last year because of, I think much of the acts of generosity, not of me, but in many cases of our own employees and our hosts.
[00:52:09] Jordan Harbinger: The pandemic for you, it's got to kind of be like rebuilding a house that was still on fire, right?
[00:52:16] Brian Chesky: Exactly.
[00:52:17] Jordan Harbinger: Did you feel like you maintain the scrappiness of startup life, at least in the C-suite at Airbnb? Because it looks that way from the outside. I know it's kind of impossible to maintain that as you scale, right? Because you hire like an HR manager from Procter & Gamble and they have like a six-figure budget for something where eight years ago, you were like, "Can you do it for 50 bucks?" or, "Can you do it for nothing?"
[00:52:38] Brian Chesky: Yeah.
[00:52:38] Jordan Harbinger: You know, take everyone to Chuck E. Cheese and now they're like, "Oh, I rented an entire hotel, like whole resort or something like that for this event," you know, like a whole golf club.
[00:52:47] Brian Chesky: You hit on a whole bunch of things there that completely resonate. Number one, the metaphor of — and I've said this actually — a metaphor of like you're running in a building, your house, your house is on fire. You have to save the house, but you can't save every part of the house. So we had to like, basically focus the company on a core of our business. We just shut her a bunch of divisions, but then we had to remodel the house, but it's still on fire and still smoldering. So that was quite difficult.
[00:53:11] The second thing is — you call this out — when you start a company, basically every company starts small. Every single company has ever been started for the most part, started with one, two, three, or four people. But when you're two or three people, you do every job in the .
[00:53:24] Jordan Harbinger: Right.
[00:53:25] Brian Chesky: You do it quickly. You do it scrappily. You might not do it really well. But the one thing is you also have no money. So everything's efficient, it's fast. And you make decisions quickly because time is kind of the enemy. Like you need to get momentum, you need to do things really quickly. Suddenly, you start hiring more people, more people, more people. You hire people from larger and larger companies. And often people at large companies have less of a sense of urgency. It's a nine to five, but maybe it's not nine to five, but it's a little bit less urgency. We don't move as quickly. And it's like the frog boiling as you get larger, you don't notice that you're introducing lots of new processes. You're having meetings about meetings, literally. Like you're not even meeting about the product, you're meeting about meetings.
[00:54:04] Jordan Harbinger: Right.
[00:54:04] Brian Chesky: You get very internally oriented, you start focusing on the culture, what's good, but then you can get so myopically focused on the culture that you're kind of forgetting outside the walls of the company. All these things start to creep in that we kind of call becoming like a big company. And I didn't realize that this very subtle pernicious thing was starting to happen to Airbnb. That we're moving a little slower, becoming a little bit bigger company, getting a little less connected to our community, and becoming a little less focused. None of that was clear until suddenly we had to snap into action, save the company. And all of a sudden we were working day and night, Monday through Sunday. And I think what the pandemic did is it made us a more focused company. But it also made us more like a startup again. It almost thrust us back in time, back to the roots of original vision of people to people, back to like making really fast decisions, back to a bias for action. And I really think that I want to say the best thing that happened to us because it was a crisis, but it was awful tasting medicine, but maybe we needed it at that point.
[00:55:05] And I do think that there was a famous co-founder of Intel, Andy Grove. He said, "Bad companies are destroyed by a crisis. Good companies survive a crisis. But great companies are defined by a crisis." And I want us to be in that third category. And so I said to the company at the beginning of the crisis, and this was how I kind of played a trick on my own psychology, instead of saying why me? I said to the company, this is our defining moment. I had this premonition that this was our defining moment, but I also think in life, like if you focus on something, if you say it, you can, to some extent, manifest it. And I said, "This is going to be our defining moment. We're going to use this crisis as an opportunity to rebuild the company better. If the house is on fire, we will rebuild the house, but it will not be just rebuilt. It will be better than it was before. And that became a rallying cry." Had it not been for that mentality, there's no way we would've made it through the crisis the way we did.
[00:55:56] Jordan Harbinger: Yeah, I agree. I mean, a lot of people were surprised. I read those articles and I thought, no, it can't be the end of Airbnb. One, we use it. My brother-in-law uses it to rent out a room. You can't find unique properties to stay at anywhere else. Right? I mean, you can find a unique hotel here and there, but like, I want to stay in some weird guy's cave that he has that like is next to his private beach or something where he sets up campfire for you. You know?
[00:56:20] Brian Chesky: Weird caves by guys with private beaches.
[00:56:24] Jordan Harbinger: That's what you specialize in.
[00:56:26] Brian Chesky: Yeah, exactly. We have a lot of really interesting spaces in Airbnb. I've seen people rent the space under their kitchen table and get rented before. So you never know what people find on the Internet.
[00:56:35] Jordan Harbinger: It depends on the event in that area, I suppose, but also like some of the famous stuff around here anyway, around the bay, right? It's like tree houses that have working bathrooms in it that are just kind of incredible that normally somebody wouldn't have the incentive to build, even if they really wanted to do it. Because they're just like, "Well, who's going to use that. I'll use it occasionally. My kid will use it." Now, there's people who are like, "Let me throw some AC in the tree house because we have people staying at every single weekend.
[00:57:01] Brian Chesky: Exactly.
[00:57:02] Jordan Harbinger: So you get this sort of unique character from a lot of that. All right. So you go public, congratulations, by the way. What was it like finding out that your stocking Airbnb was worth like, what was it? Like twice that it hadn't been priced. You're on live TV.
[00:57:13] Brian Chesky: Yeah.
[00:57:13] Jordan Harbinger: That's got to be kind of a crazy moment. You know, you're trying to hold it together and then — I'm imagining a montage of things going through your head. Like, "This is great. Should I say that? Don't act too surprised. Keep calm," and then maybe like a yacht floats by or something like that. And then you're like, "Wait, I'm on live TV. Like the share price might be affected by what I say next, you know? Like, what do you do in that moment?
[00:57:33] Brian Chesky: I love the portrayal you have, this kind of internal conflict you can imagine.
[00:57:37] Jordan Harbinger: Yeah.
[00:57:37] Brian Chesky: You're right. Like when you're on camera, you're wondering like, look happy, but not too happy.
[00:57:41] Jordan Harbinger: Right.
[00:57:41] Brian Chesky: Let me tell you, what's going through my head. In April of last year, so we went public, December 10th. So just like a little over half a year before. We raised emergency finances and we were valued at approximately $18 billion. Now, that's still in the grand scheme of things, a big number, but it was less than half of who we were only eight weeks before. And that was warrants that were part of a debt round. Had we raised a full equity round, it might've been less than 18. It could have been like 15, 16, 17 billion. So that was the number in people's heads. Like we were worth about 15 to 20 billion. When we started preparing to go public, July, August, the number in my head that I wanted to clear was $31 billion, because that was the price of the last round of financing.
[00:58:24] And I just wanted to feel like no one lost money in Airbnb. I wanted to feel like even the last investors made something, maybe they made just a little bit. Maybe they would've made more money to invest it somewhere else, but he didn't lose money. So my thing to the bankers was we have to clear 31 billion. We have to create a 31 billion. We can't allow anyone who's investing on Airbnb to lose money. That was my goal. Suddenly, there's more momentum, there's more hype. People get excited. We're starting to approximate that we can maybe go public at 40 billion. And of course, I think the day that we actually issued the stock, you know, it would have valued Airbnb in the high 40s.
[00:58:57] And so the number I had in my head was this is going to be like a 40, 45, maybe $50-billion company. And so then I do a series of interviews. So we basically do the thing on NASDAQ. Of course, the thing on NASDAQ, I'm not in a suit in the stock exchange. I'm in sweatpants on Zoom, like dressed up from the waist up with a nice white button down t-shirt, but I'm still looking pretty casual on the waist down. You do like a series of interviews. So I do like CNBC and I do all these different interviews in advance for the stock trading. And no one ever tells you what time the stock trades, the stock doesn't trade until they have an equilibrium of supply and demand. And it's actually still fairly little things. So you don't know what time you go public. You'll go public at a certain time. And the more demand there is, the more the delay we realize. There was a really big delay. We didn't realize there was so much demand.
[00:59:46] So I'm in the interview with this woman named Emily Chang in Bloomberg, thinking that we were maybe $45 to $50-billion company. And at this point she says, we are now getting reports that your stock is going to be opening at $150 a share, which would have valued us, not at 50 billion, but a hundred billion. And so at that moment, our company had increased in value in this matter of minutes, by $50 billion.
[01:00:10] At that point, it was like my hard drive crashed. I had those like weird flashbacks. Like I started thinking about starting the company, hot gluing cereal boxes, the crazy rise, then the almost losing everything, the emergency financing. She then opens up to me — there's a clip of me on the Internet, it was like the only time in my life, I think, I've been actually speechless. And I took 20 seconds to say anything and it's actually kind of embarrassing, but the good news is I became a TikTok meme apparently. Like all the kids on TikTok turned me into a meme because it was kind of funny. I've never been relevant on social media until that moment. So that was a claim to fame there.
[01:00:45] Few companies in the history of corporate America probably had a year like us last year, where you're about to go public, you almost lose everything. Then you go public at 50 billion, double the same day. Like that's a pretty unusual story.
[01:00:58] Jordan Harbinger: This is The Jordan Harbinger Show with our guest Brian Chesky. We'll be right.
[01:01:03] This episode is sponsored in part by the Build for Tomorrow podcast. Build for Tomorrow is a highly produced narrative show. Each episode digs deep into a big question, historical moments, or critical innovation that can help us understand how change happens. It hits a lot of notes, history, technology, business, psychology, and general curiosity about the world. But the overarching theme is that change can be positive and that we always benefit when we focus on the opportunities ahead. For example, why are we so obsessed with the good old days? Are we really addicted to technology? Are participation trophies actually bad for kids? Should we talk to strangers? And why do people hate being told what to do? When you listen to Build for Tomorrow, you learn that today's worries are often just echoes of yesterday's worries, and that the future is really full of opportunity. That's why listeners say the show helps them feel more optimistic. So check out Build for Tomorrow, wherever you get your podcasts and stay tuned after this episode of the show for a trailer of Build for Tomorrow, right at the very end of this.
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[01:04:00] Jordan Harbinger: Now for the rest of my conversation with Brian Chesky of Airbnb.
[01:04:06] Because the look on your face and, of course, was speechless, but also like kind of what I had described before, but also some of it — like, now that you tell the story, I'm like, ah, that look that you couldn't identify, that was relief.
[01:04:16] Brian Chesky: Yeah. I didn't know my eyebrows went so high. They went like halfway at my head. I was like, I almost became a cartoon character for that moment.
[01:04:26] Jordan Harbinger: You're doing quick math in your head. Like, no one lost money, but also wait, wait, that sounds like a lot, right? It's a funny clip. We'll link it in the show notes on the website as well. Look, I know connection community, they're a huge part of the stated goals of Airbnb. And how are you as you've become a public personality that the CEO of one of the most successful companies in the last few years? How have you kept yourself connected and open without either digging in, because of work or putting up defenses because of your new socioeconomic condition, right? Like how does someone in your position as a tech CEO date during a freaking pandemic? Like, that's got to be hard. Let me know if that's too personal.
[01:05:01] Brian Chesky: That's not too personal. I was working 16 hours a day, so there wasn't a lot going on in my house except for working and doing stress baking of one chocolate chip cookie recipe that I knew. I mean, maybe like another way to answer the question is how do you become really successful without losing your mind?
[01:05:17] Jordan Harbinger: Yeah.
[01:05:17] Brian Chesky: Because, you know, I won't name names, but certainly there's plenty of stories of people that seemed kind of normal, then they became very successful, made a huge sum of money, had a lot of power. And they seem to change and they did things maybe they weren't proud of. Or they kind of became characters in themselves. And I, of course, never really wanted to be that. What's the point of being successful to not like what you see in the mirror? And I don't know if I have a great answer except to say that you have to stay pretty connected to who you were before you started the company. And one way to do that is to stay connected to people you knew before you started the company. No matter how successful I become, I have some friends who will remind me that — they'll humble me very quickly.
[01:05:59] Jordan Harbinger: You ain't sh*t, boy. Yeah, there's a lot of that.
[01:06:00] Brian Chesky: You ain't sh*t. Yeah, those kinds of people. And so I think that's like really important. I think a lot of success, especially like being a tech founder, there's this really pernicious temptation to develop like these weird — I don't even know what you want to call them. It's like messianic tendencies.
[01:06:17] Jordan Harbinger: Yeah.
[01:06:17] Brian Chesky: You almost think you're like, you're a master of the universe because I get how it can be disorienting. Like you have an idea, all of a sudden it becomes part of pop culture. You have more money, you ever know what to do with, but also unlike being like a celebrity or something, you also are responsible for a hundred millions of people, and that can really distort you because there's a lot of responsibility, a lot of power. And I think it's important to remember that there's no real such thing as a self-made person. I think when you start to believe that you made it on your own, that's when you start to feel separate from everyone else. And that isolation can allow you to become really narcissistic, really crazy. Your ego can really grow. Narcissism isn't really, I don't think about thinking you're better than somebody, it's about thinking you're separate from everyone else. I think it's about the separation. So I think the problem is a sense of isolation. I did it on my own, on my own. And you know, when you get really wealthy, you start to like sequester yourself.
[01:07:12] Jordan Harbinger: Yeah.
[01:07:12] Brian Chesky: And so I think the key is to never lose connection. You won't lose your mind if you don't lose connection, usually I mean, you know—
[01:07:21] Jordan Harbinger: Yeah, of course there's exceptions, but yeah, I see what you're saying.
[01:07:24] Brian Chesky: For the most part, if you stay — I think there's like a saying, like stay being rooted. Well, what does it actually mean? Rooted is connected. You're not disconnected. And so I think that that's really, really important. You start to see some people, they have massive success. So we don't really change that much. They still have the same values and principles. And then other people, they are completely affected and the power completely gets to their head, but they also, I think it really disconnected.
[01:07:49] I also think massive success is the amplifier. And whatever you had in your childhood gets amplified. If you have some insecurity, it can get massive, massively amplified. So you have to be very careful, but I just think being humble, keeping your head down is the key. The moment you think you've made it is the moment you stop making it. And I think you got to like be hungry, be curious. And it helps that I was an artist. You know, when you're an artist, it's not cool to make a lot of money. So you're kind of like making a lot of money means you're commercial, you're sold out. And so by those measures, I'm not cool at all, but you know, it is just a good reminder.
[01:08:24] Jordan Harbinger: Look, if you want to throw me a couple shares of Airbnb to tamp things down, I'm not going to say no.
[01:08:28] Brian Chesky: It's like, I'd be kind of like a true artist again, that'd be great.
[01:08:31] Jordan Harbinger: Right. Yeah.
[01:08:32] Brian Chesky: But I think like, just whatever you have to do to like, not lose your sh*t, that's what you got to do.
[01:08:36] Jordan Harbinger: Yeah. Now, that completely makes sense. It's funny about the art culture and like not making money because then you're a sell out. I hadn't thought about that. I definitely agree with staying connected and staying grounded. And I think it's important. I can't remember if I've read this or someone just told me about it but I know you have like a standing call every couple of weeks with like your college buddies. And I thought that's got to be the number one way to stay grounded, because they're all like, you can't probably get away with anything if you're like, "Oh yeah, you know, I got a new bike." They're like, "Oh, you got a new bike. Oh, you're feeling pretty good about yourself. Huh?" And it's like, you just can't get away with anything with those kinds of guys.
[01:09:12] Brian Chesky: There's two things I do every couple of weeks that you said one of them that I think have helped me through this crisis. One is I have a bunch of friends from college, but three that we are all like, used to live together and we kind of hang out and we have like a standing call or Zoom or FaceTime and they're not tech founders. So they're my kind of root to who I was. And that is really, really important. And they basically just make fun of me the whole time, which is probably good therapy for me.
[01:09:38] Jordan Harbinger: Yeah.
[01:09:39] Brian Chesky: The other standing call I had was with my two co-founders, who I started the company with. And that's really important as well, because when you start a tech company, you have massive success. It's like a band that has a lot of success. And what often happens is eventually the band breaks up. In fact, it's much worse for tech companies than bands. I think a lot of bands stay together. I'm not aware of very many tech companies to have three founders, the size of Airbnb, and have stayed together for 10 years. I'm not sure of any actually.
[01:10:04] Jordan Harbinger: Yeah.
[01:10:04] Brian Chesky: So usually people break up. There's some huge blow up and you usually read about it. So I'm pretty proud that like, I was able to also stay connected to my old friends and my co-founders and I kind of felt like if we, as co-founders can stay together for 14 years, that's the ultimate indication of our culture and who I am as a leader that people like don't hate me so much to leave a company. That we want to stay together. So I think that's been a pretty important thing that like keeps me pretty rooted.
[01:10:30] Jordan Harbinger: Yeah. There's not a lot of companies, like you said, with multiple co-founders or three, especially, it's like, where's the lawsuit. I was just waiting—
[01:10:37] Brian Chesky: Exactly.
[01:10:37] Jordan Harbinger: And I looked and I was like, I can't believe that there aren't a bunch of crazy ones. It's almost unheard of.
[01:10:44] Brian Chesky: I'm not aware of a company, you know there might be some — name a company that has a market capital of a hundred billion or more, with three founders that have been together for more than 10 years, maybe there are some, but I'm not aware. Not many.
[01:10:57] Jordan Harbinger: Yeah, not many, certainly not many. I mean, we could go down that road for a while, but I'm speculating. I don't know of any off the top of my head. It'd be an interesting experiment, but the fact that we can't name a ton of them, but we can name a ton of single founder companies that I have to see is doing crazy stuff on Twitter. That's a higher number, right?
[01:11:15] Are you worried at all about the fight that a lot of cities are putting up against Airbnb hosts? You know, what do you think of the argument that like Airbnb is ruining local communities by making housing unavailable? It's not totally unfounded, but I assume you disagree with the fervor with which these people are making that argument.
[01:11:32] Brian Chesky: Well, this is an argument that's going on for about 10 years.
[01:11:35] Jordan Harbinger: Right.
[01:11:35] Brian Chesky: Really, since Airbnb really got going. Let me just kind of back up and just give a little bit of context of this because yeah, I take it very seriously. You go back to the founding story. Joe and I, that first weekend, were totally broke. The reason we started Airbnb was because we couldn't afford to pay rent. And so we basically started Airbnb to be able to stay in our homes, be able to afford our homes. And the story of Joe and I became the story of many hosts in our community. I mean, what people don't realize is that the number one profession of Airbnb hosts are school teachers. The number two profession of Airbnb hosts are healthcare workers. The number three profession are people that are students. So healthcare workers, school teachers, students, these are mostly everyday people. They're mostly not property speculators. Now, there are some, but they're mostly everyday people. That would be the first thing. I'd say 55 percent, for example, for hosts are women.
[01:12:26] That being said, let me just say this, we want to strengthen the communities we're in. I don't want to be like having a pernicious effect on communities. And so what we did starting 10 years ago, we've come up with agreements with more than a thousand cities and jurisdictions, the base of the agreements are two basic principles. Number one, we will pay our fair share of taxes. And so we are now one of the largest collectors remitters of hotel tax. We've collected more than three billion dollars of hotel tax on our platform. So we collect a lot of tax on behalf of our hosts. But the second thing is we comply with local regulations and this involves like a city may say, "Hey, we're concerned about people taking the housing off the market. So we want to have a registration system." To be able to know that these people are people that are maybe local residents. We want to limit the number of nights people rent. So they're going to register and they're going to count the number of nights. And so there's a number of protocols that we've entered into with cities all over the world. But the most important thing is we want to be part of the solution, not part of the problem. And we're constantly trying to update the platform to make it work better and better for cities.
[01:13:31] But the other thing, I just say, one more thing is this, I think that a lot of this, what you're talking about was before the crisis. I'm not going to say nothing is like, this is happening during the crisis, but the tables turned a little bit because what ended up happening is cities started reaching out to us when the crisis began for help. Because suddenly cities that had, were used to tourism, surpluses, or even over tourism and rising housing prices, suddenly had multi-billion dollar tourism shortfalls. People stop traveling to the cities.
[01:14:01] Jordan Harbinger: Yeah.
[01:14:01] Brian Chesky: Suddenly they had a lot of empty spaces available. And so a lot of cities and a lot of communities reached out to us for help. And we actually have agreements with a lot of local destination marketing organizations, cities all over the world to spread tourism. The name of the game is there's not too much travel in the world. It's just that there's too many people going to too few places at the same date. And so what we want to do is be able to help spread out travelers. And so what we did on Airbnb is to try to help solve this problem. We have this feature called I'm flexible where instead of typing in a location and adding a date, you can just click a button I'm flexible and we can show you places and destinations you never thought of. Like, maybe you stay in a Treehouse in Aptus, California. Maybe they didn't know about that. We also have this product called flexible dates, where instead of saying, I want to go from September 10th to 15th, you say, I want to stay somewhere for a night, a weekend, a week or a month, anytime in next few months. That feature has been used 500 million times.
[01:14:57] Jordan Harbinger: Wow.
[01:14:57] Brian Chesky: So we want to point demand to where we have supply, try to balance the market, comply with local laws and regulations. And just also remind people that the vast majority of people on Airbnb are regular people that are making about $8,000 a year and Airbnb will help them.
[01:15:11] Jordan Harbinger: That does sort of change things because I think the quote-unquote villain in this story from the city's perspective is the person who rents out like an entire apartment building or half of one. And then just uses it as an Airbnb business. And now like no one can live in Russian hill on that block because this dude's got 40 units or something for sale.
[01:15:29] Brian Chesky: Totally.
[01:15:29] Jordan Harbinger: That's not the average user of the app.
[01:15:31] Brian Chesky: That's absolutely not the average use case. And I want everyone, like, if they're listening and they're part of a city to know, we have a neighbor hotline. We're working as close as we can with cities and we want to be able to solve any disturbances happening in local communities. And we're working really, really hard. I do think we were late. Like most Internet companies — when I came to Silicon Valley, 2007, the work technology may as well have been a dictionary definition of the word good and might as well be in a synonym. The basic idea was technology was a forward step for humanity and any forward step of humanity was making the world a better place. That's why the old cliche, "We're changing the world. We're making the world a better place." And I think the problem with that theory is that anything that you build, that you unleash and you put it in the hands of hundreds of millions of people is by definition, going to have unintended consequences. How could you possibly predict how hundreds of millions of people will use a powerful tool, whatever that tool is?
[01:16:26] And I think that we had a fairly simplistic view, that technology was good. So therefore, if it grew and was adopted, everything was a forward step for humanity. I think we're now all reckoning with, in Silicon Valley, that things have unintended consequences and that we have to take more responsibility for what's on our platforms. And this is something that I think most every tech company would say they wish they were earlier in coming to terms with.
[01:16:52] We probably, I think, were earlier than most companies because, you know, we started getting a lot of scrutiny 10 years ago because Airbnb represented the Internet moving into your neighborhood. So, you know, we grew really quickly, but when you grow quickly, it takes a while to catch up. What the pandemic did because our growth went down a lot has allowed us, I think, to have a bit of a reset in our relationships with cities. And I'm hoping that despite some of the history of last 10 years, with some of our cities, that we have some challenges and conflicts with, that we can turn the page and be actually a model of how a city can actually work with local governments. So people could actually say, like, "I think they're actually really good actors." And there's a new model for a company. And so that's the vision to build a company that takes responsibility and serves multiple stakeholders. Obviously, easier said than done. You're never going to be perfect. And especially when you're at a massive scale, you're always going to find, obviously, exceptions to that but that's the idea.
[01:17:45] Jordan Harbinger: Yeah. It's got to be scary being the CEO of a company and like 50 or 550 cities are going to war with you. And you're like, "No, I have so many other things I have to worry about.
[01:17:55] Brian Chesky: We're in about a hundred thousand cities, local committees in a hundred thousand communities. You know, we're one of the most international countries in the world. We're in Cuba. We're in China, Brazil, Korea, Russia, Japan, very few companies are in all of those countries at all those local markets.
[01:18:11] Jordan Harbinger: How are you in Cuba? Is that even, that's a thing? That's legal, you can do that?
[01:18:15] Brian Chesky: That's the thing, it's legal, and you can do it.
[01:18:17] Jordan Harbinger: Wow.
[01:18:17] Brian Chesky: In President Obama's administration, the Treasury Department allowed trade between Cuba, the United States. We had a huge moment in 2000, I think it was 16, where we relaunched Airbnb. And two of us are, we're still there. We're actually one of the largest businesses in Cuba.
[01:18:31] Jordan Harbinger: Wow.
[01:18:31] Brian Chesky: So it's actually pretty wild.
[01:18:32] Jordan Harbinger: I didn't think that was still allowed. I guess it shows what I know. That's incredible.
[01:18:36] Brian Chesky: Yeah, we have — Jordan, just give me a point of reference. You know, this summer, our big nights, the summer, we had about four million people every night, staying at a home on Airbnb.
[01:18:47] Jordan Harbinger: Wow.
[01:18:47] Brian Chesky: And these people came from 220 countries and regions. So think about it. You had four million people coming from 220 countries and regions staying at a hundred thousand cities. Imagine all the different cultures living together for the first time in human history. And we have to essentially keep those four million people every night safe. We have to make sure they're compliant with local laws and regulations. We have to facilitate payments. We have to facilitate trust between them. You know, imagine all the people that call you. When you go to hotel, you're used to a front desk. So we have to handle millions of phone calls. Our customer service calls are much more complicated than Amazon's. It's not like the package did or didn't arrive. It's like, "I'm feeling unsafe. I can't get to my building. I'm locked out. The sprinkler broke. There's a neighbor—" You can imagine the hundreds of unique issue types. We have some really interesting and sometimes bizarre stories that come to customer service. So you can imagine the kind of long tail issues that we see.
[01:19:45] Jordan Harbinger: Yeah. At some point, when we have you come back on the show in a few years, I'm going to ask the comms department. Assemble me a list of five super weird things that have happened, that have had to deal with.
[01:19:54] Brian Chesky: Oh we have to do that. That's its own interview. The one in a million happens four times a day.
[01:19:58] Jordan Harbinger: Yeah, like there's a snake in the house somewhere. What do I do?
[01:20:02] Brian Chesky: I'm sure we have a whole category of those. The one and only happened four times a day. So just to put that in perspective.
[01:20:07] Jordan Harbinger: Yeah, there can only be, and it's just, God, someone somewhere is dealing with like a rodent that got out of a cage and the owner's not home or worse, or like there's a Panther locked in the half the house and they're afraid it's going to come back — there has to be that.
[01:20:20] Brian Chesky: Yeah. We've had a lot of situations where we get a call, like we got some pretty weird ones. I mean, this is the more sanitary of them because we got some really crazy ones, but we had a call and somebody said, "My husband can't speak. He's just staring into the abyss. I don't know what's wrong with him." And we're like, "Well, what's wrong with your husband?" "He won't speak. He's just like a zombie. He's like frozen at the kitchen table." And they're like, "Well, what does he do?" "Well, we did eat a whole tray of brownies," and it turns out they weren't normal brownies. And so like, you get a lot of stories like that, but they get even crazier than that.
[01:20:51] Jordan Harbinger: Yeah. You got to clear it with comms and legal before we hear some of those.
[01:20:54] Brian Chesky: Exactly but, oh man, there's some crazy ones.
[01:20:57] Jordan Harbinger: I know we're coming up on time here, but I assume Airbnb is prime to just explode once travel opens back up. When we were doing prep for the show, I saw like there's a bunch of influx of new search traffic during the pandemic. I will warn you that a few thousand of those daily searches are me staying up late at night, fantasizing about where I'm going to go once things open back up. But are there any changes, anything coming down the pipe that you can tell us or disclose? That's not a secret that we might be able to look forward to.
[01:21:22] Brian Chesky: Travel trends are more like what we're launching and products—
[01:21:25] Jordan Harbinger: Yeah, what you're launching? Yeah. What you're launching in the company.
[01:21:27] Brian Chesky: Yeah, I probably can't say much about that.
[01:21:29] Jordan Harbinger: I figured.
[01:21:29] Brian Chesky: We're seeing some pretty big changes to travel. I'll just share this, you know, I don't think the world is ever going back to the way it was before the pandemic. And I think if you believe that, then you have to also believe that travel is never quite going back to the way it was before the pandemic. Before the pandemic, I'm guessing I would have been in the same room with you, for example, like doing this interview.
[01:21:50] Jordan Harbinger: Oh, yeah, sure.
[01:21:51] Brian Chesky: And so like, so many things like this run Zoom or online, and so a world where so much of our life can now be done on Zoom. So much work can be done on Zoom is a world where so many of us aren't necessarily all going back to the office because we realized how productive we can be remotely. And it also means now, a world of much more flexibility. In a world on Zoom and a world of more flexibility is a world where while you're working, you can travel on Airbnb and even live on Airbnb. So what we're seeing is, first of all, we're seeing people being more flexible about when they travel. It used to be that people traveled certain times. Times when they could get time off of their boss. Now you can travel year-round because you can travel and work the whole time. So suddenly, the calendar is open 365 days a year for a number of people. Where they go is totally flexible. I think a lot of times now people are like, "I just want to go anywhere a car ride away where I can gather my friends in a home." They're not necessarily saying, "I need to go to Paris to see the Eiffel Tower." They're much more flexible.
[01:22:46] But even more profound than that is this, people aren't just traveling Airbnb. They're now living on Airbnb because a fifth of our business approximately by night's book is not even travel, it's for stays longer than 30 days. This is a profound shift. I actually think this is one of the biggest shifts in travel since the invention of the airplane or the automobile, which is to say that the whole nature of travel is blurring with living. It used to be that traveling was something you did for a couple of days for a business trip or a week here or there for vacation. Now, people are just nomadic. They're moving around. And I don't think this is just a temporary phenomenon because of the pandemic. I think this is a permanent part of where we live, and this is what borders closed. People going away for summers living a month here a month there. A bunch of families saying, "Let's all go live here for a month or two, wait until borders open up.
[01:23:35] Suddenly people aren't just going away to like Colorado for the summer. They're going to another country for the summer. And so I think you're going to have this fundamental shift in where people live, where people work, where people travel. And this is probably the biggest change to our daily living at one time, since really World War II.
[01:23:54] I think it's mostly an exciting change. We have to be careful though, because you know, like when things change very quickly, people can get left behind. But also, this is also one of the loneliest times in human history. We're living in a pandemic, but there's another epidemic occurring. It's a loneliness epidemic. There is a lot of desperation, a lot of loneliness in the world. One of the things that I'm thinking a lot about is if we allow four million people a night in some nights to live together, you know, really we're not just providing housing where we have like kind of like division of Couch Surfing, we can help bring people together.
[01:24:27] And so the thing that's driving me at this point is how can we stave off this huge loneliness epidemic? What are different ways that we can help bring people together, make this real feel a little bit smaller in a time where it's very exciting? Technology is affording totally new flexibility, but more and more people are spending much of their life online in these relationships that are not necessarily as nourishing as meaningful, offline connection. These are some of the things that we're thinking about and I think that's going to keep us busy for quite a few years to come.
[01:24:58] Jordan Harbinger: Well, you got your work cut out for you, man. This has been an amazing conversation. Thank you so much. I really appreciate you taking the time, man. I know we went a little bit over, but for me, it was worth it. I don't know how you feel.
[01:25:09] Brian Chesky: I appreciate it. Thank you so much. No, it was great. Thank you so much, Jordan, for having me.
[01:25:13] You got it, bud. All right.
[01:25:15] Jordan Harbinger: I'm glad we finally made that happen. This has been in the works for awhile and it always tends to come down to, "Oh, he's got a board meeting. Oh, there's a lot of other things. I mean, he's got quarterly earning reports." This guy's life is, it's very busy to say the least. There's a lot of stress going on at any given point in time. But no surprise, hosts have earned over $110 billion by hosting over 900 million guest arrivals in Airbnb over the last five years or so. That is incredible. By the way, they kept sending me updated numbers over and over and this is kind of like when McDonald's had to keep changing the signs from over a million served to over a billion served to now, I think they just all say billions and billions served because they just kept racking them out.
[01:25:54] Offline, Brian and I talked about designing for an 11-star experience. This didn't make the show, but we talked about how, in order to design an experience, that's not just three, four or five stars, but 11 stars, right? Like you go to space with Elon Musk when you register. This is an exercise that they frequently go through at Airbnb in order to design top-notch guest experiences, as much as they can. And it really is interesting how they go through this process because at Airbnb, especially during the early days, they had to really get to know each individual user. And then the magic was going to be somehow scaling that relationship across the entire company and customer base, which is an enormous challenge. It's similar to design. It would seem, and Brian is a designer by trade and by training. You've got to design something for one person, but then manufacture it for a hundred thousand or a million or a hundred million people. That is a nearly impossible challenge for a person or a company to do. They actually designed an amazing trip for someone in San Francisco that blew the guy away and he literally started crying at the end. So I guess that's how, you know, you've really nailed the 11-star experience when somebody breaks down and cries at the end. Right?
[01:27:01] Brian also said that the biggest leaps you'll make in a company is when you're small, the bigger the company, the harder it is to actually change anything, which actually makes a lot of sense. You've got to start that culture, the values and enforce that culture and those values early, because later on, it's really going to be too late. You're going to have to give at some point, but if you're too flexible on this too early in the game, you kind of end up with a problem when you're trying to build these later on. And also with great power comes great responsibility, we talked about the power of a platform like Airbnb, and they really do have a lot of power. An app like Uber can leverage their network to say, send cars, to get people to go vote or something. Airbnb, they actually threw a ton of money and fostered a ton of connections with frontline workers. I think we mentioned this on the show when frontline workers were dealing with COVID and they were afraid to go home and maybe bring it to their families. Airbnb stepped in and housed a bunch of them. They're housing 20,000 Afghan refugees who need places to live and that are vetted as secure as possible by the government. People who helped us in the war over there.
[01:27:59] Also Brian has pledged to give away the majority of his wealth and has already started doing that, which is pretty admirable. I mean, when you are a billionaire, you want to hand some of it down and I'm sure that he will hand some of that down to his kids if he ever has any. But you know, it's also tempting to just spend a lot of it on yourself. And I just love to hear the fact that he's taken the giving pledge along with Warren Buffet and Bill Gates and all those folks. Giving away the vast majority of their money. This kid was obviously raised right. I'll tell you that much.
[01:28:27] Links to all things Brian Chesky and Airbnb will be on the website in the show notes at jordanharbinger.com. Please use our website links if you buy books from any of the guests you hear on this show. It does help support the show. Worksheets for the episode are in the show notes. Transcripts are in the show notes, and there's a video of this interview going up on the YouTube channel at jordanharbinger.com/youtube. We also have a brand new clips channel. Those are cuts that don't make it to the show or highlights from the interviews that you can't see anywhere else. jordanharbinger.com/clips is where you can find that. I'm at @JordanHarbinger on both Twitter and Instagram, or just hit me on LinkedIn.
[01:29:02] I'm teaching you how to connect with amazing people using the same systems, software, and tiny habits that I use over at our Six-Minute Networking course. The course is free. It's at jordanharbinger.com/course. I'm teaching you how to dig the well before you get thirsty. And most of the guests on the show subscribe and/or contribute to that course. So come join us, you'll be in smart company.
[01:29:22] This show is created in association with PodcastOne. My amazing team is Jen Harbinger, Jase Sanderson, Robert Fogarty, Millie Ocampo, Ian Baird, Josh Ballard, and Gabriel Mizrahi. Remember we rise by lifting others. The fee for the show is that you share it with friends when you find something useful or interesting. If you know somebody who's interested in companies, company culture, Airbnb, founder stories, please share this episode with them. Hopefully, you find something great in every episode of this show. So please share the show with those you care about. In the meantime, do your best to apply what you hear on the show, so you can live what you listen, and we'll see you next time.
[01:29:59] Jason Feifer: We are about to embark upon a historical quest. This quest is going to take us back, back, and back and back again. Then we will keep going and we will find out once and for all, if there ever was a golden.
[01:30:14] Male: We will make America great again.
[01:30:18] Jason Feifer: When does the word again, actually refer to?
[01:30:22] Female: When it was founded?
[01:30:23] Male: So for the slavery stuff.
[01:30:24] Female: Except for the slavery stuff?
[01:30:26] Male: Well, it turns out it depends on who you ask I suppose. Some people probably romanticized the roaring twenties is a lot of fun.
[01:30:35] Jason Feifer: And that sounds fun. We like fun. Rah-rah, look at this headline.
[01:30:40] Female: Are we moving too fast, too fast for health and too fast for thought?
[01:30:45] Jason Feifer: If only it seemed we could go back — back to another time, back before all this, back to — well, back to when? When was the golden age? What are the good old days? Could I find any time at any time in history that everyone agreed that was the good old days? Well, that would be pretty amazing. And if I couldn't, well, would that be a powerful argument against the nostalgia narratives we carry today? And ultimately, what will it take to get backwards looking people more excited about looking forward?
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