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November 5 - November 11, 2017
But Airbnb tapped into something greater than low prices and an abundance of available inventory. It offered an experience that was special and different. Even its imperfections fed into a growing desire for a travel experience that felt a little smaller-scale and more “artisanal” than staying at a standard hotel. It also opened up access to different kinds of neighborhoods than traditional tourist zones, so you could have an experience that felt more local, an advantage Airbnb heavily pushes.
despite what Airbnb would like to believe, not all of humankind is kind.
What is new, though, and what Airbnb specifically has done, is to toss aside the barriers and build an easy, friendly, accessible platform inviting anyone to do it.
press. (It’s a tactic Chesky has since advised to other entrepreneurs: “If you launch and no one notices, you can keep launching. We kept launching, and people kept writing about it. We thought we’d just keep launching until we got customers.”)
Founded in 2005 by Paul Graham and three copartners, Y Combinator very quickly became one of the most prestigious launchpads in Silicon Valley, a “quasi startup factory, university, and venture capital fund rolled into one,” as Fortune called it.
the most successful companies always end up being the ones that participated most eagerly.
None of them would ever forget how painful the struggle had been. “If you are successful, it will be the hardest thing you ever do,” Blecharczyk told YC’s Startup School audience in 2013.
“product/market fit,” a holy grail, proof-of-life milestone that a start-up hits when its concept has both found a good market—one with lots of real, potential customers—and demonstrated that it has created a product that can satisfy that market.
Product/market fit is a key first achievement; without it, there is no company.
For travelers, fees range from 6 percent to 12 percent; the higher the subtotal, the lower the fee. Hosts pay a 3 percent booking fee to cover the costs of payment transfer.
Anytime Airbnb enters into a new market, it has to grow both sides, but the supply, or host side, is inevitably harder to grow. This is why almost all of the fee structure lies on the guest side. The 3 percent host-booking fee basically covers payment processing only; if anything, Airbnb subsidizes hosts with not just the fee but also its free-professional-photography policy and many other forms of coddling, from mailing out free mugs to featuring stories about some of the hosts on its website to flying certain hosts to its occasional launch events and annual conventions.
Why did Airbnb succeed in popularizing short-term rentals while others did not? Much of the explanation lies in the product itself. “Product” is a vague and all-encompassing term in the tech world for everything after the idea: it’s the actual website or app; the way it looks, the way it works, the things it can do, the engineering that powers it, and the way you use it and interact with it (the “user experience”). The very first Airbnb product was simply the oddball idea and a WordPress website, but when it came time to get ready for the third launch, at the DNC in Denver, the founders had
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Chesky’s primary takeaway from this experience: stop making decisions by consensus. “A consensus decision in a moment of crisis is very often going to be the middle of the road, and they’re usually the worst decisions,” he says. “Usually in a crisis you have to go left or right.” From then on, “add a zero” became a euphemism for taking one’s thinking to the next level. He would later call the experience a “rebirth” for the company.
Early to bed, early to rise, and work like hell and organize. —CHRIS LEHANE
Plenty of other industries have gone through regulatory issues on their way to becoming accepted: when eBay was gaining ground, it faced fierce resistance from traditional retailers; one of its opponents tried to pass a law requiring that users have an auctioneer’s license to sell on the platform. Payment start-ups from PayPal to Square to Stripe had to prove their legitimacy to regulators who were horrified at the idea of exchanging money online. “Success almost always results in legitimacy,” says Airbnb board member Jeff Jordan.
Chesky loves peppering his discourses with quotes from history’s great thinkers, often paraphrasing one from George Bernard Shaw: “The reasonable man adapts himself to the environment. The unreasonable man adapts the environment to him. Therefore, all progress depends on the unreasonable man.”
Another one of Chesky’s favorite quotes is from Victor Hugo. “You cannot kill an idea whose time has come,”
“What you can’t solve for,” he says, “is if you built something nobody wants.”
Best Western CEO David Kong, who takes a cerebral but firm approach to the issue of Airbnb, says this would be a serious mistake, akin to repeating the one the industry made by becoming too reliant on OTAs. In a blog post about it, Kong wrote, “Celebrated author and playwright George Bernard Shaw said, ‘Success does not consist in never making mistakes, but in never making the same one a second time.’” (Kong and Chesky might be surprised to discover they share an affinity for quoting George Bernard Shaw.)
“There’s this great quote from Gandhi,” they begin. “‘First they ignore you, then they ridicule you, then they fight you—and then you win.’”
Valley history are filled with examples of founding CEOs who left or broke up after the companies grew to a certain size, over power struggles, money disputes, sexual-harassment incidents, or any number of reasons. Chesky, Blecharczyk, and Gebbia are unusual
“There is basically no time for a learning curve,” Chesky says, teeing up another historic-figure paraphrase. “It’s kind of like the old Robert McNamara saying—there’s no learning curve for people who are in war or in start-ups.”
The most consistent observation from those who know Chesky is that he possesses this extreme level of curiosity, and what could be described as an obsession with constantly absorbing new information. “Brian’s biggest strength is that he is a learning machine,” says Reid Hoffman. “It’s a skill set for all successful entrepreneurs—the phrase I use is ‘infinite learner’—and Brian is the canonical example of that.”
thinking.” (“Up-level” is a common Cheskyism that means taking it up a notch. Other Chesky terms include “skip-leveling,” talking to different people at different levels of the company; and making a “step change,”
think it was Tom Friedman who had a great quote,” he says, paraphrasing the New York Times columnist. “He said, ‘Pessimists are usually right, but it’s the optimists who change the world.’”
He then introduced a theory he’d learned. Called “elephants, dead fish, and vomit,” it was a set of tools designed to encourage difficult conversations: An “elephant,” he explained, is a big truth everyone knows but doesn’t talk about; a “dead fish” is a personal grievance that needs to be aired out, usually with an apology, or it risks getting worse (“I had quite a few dead fish to deal with,” he told the audience); and “vomit” sessions were time put aside for people to get things off their chest without interruption and without risk of judgment.
‘Why not?’” He says it’s also the “most collaborative culture I’ve ever worked in, by far.” The negative that comes with that, Golden says, is not as much efficiency—more people tend to be involved in e-mails and meetings,
