Airbnb CEO Brian Chesky

of the largest travel companies in the world. You came up with the idea with your partners of starting this company around two thousand seven two thousand eight. Did anybody tell you it was a good idea? No? I mean it was pretty universally considered a terrible idea. I um. I remember the first person I told the idea to. I said, Hey, we've got this idea. We're gonna build this website where you like strangers could other strangers in

their homes. And the person who was kind of somebody I looked up to in Los Angeles, he looks at me in the straight face. I said yes. He said, Brian, I hope that's not the only idea you're working on. And that was by the way one the nicer things people said. But the reason I think it worked was because I stumbled into this idea of my roommate. I mean, there was this design conference coming to San Francisco in October two seven. I couldn't afford to pay rent this

design conference conference service to go. All the hotels were sold out. And we have this idea, we said, when we just turned our house into a bed and breakfast for the design conference. I didn't have any beds, but Joe had three our beds. We pulled them out of the closet. We called the air bed and Breakfast dot com. We made enough money pay our rent, But more importantly, we actually ended up making friends of these three people

because they live with us for a week. And at that point, I think we realized if people could experience what we experienced, that this would be an idea that would spread around the world. But little did I know that it was going to be a very difficult uphill road. Where did you get your initial money? Was that the y combinator from Paul Graham? Well, actually, um, there's kind of a weird story about how we raised money. So we had this kind of quirky idea to sell collectible

breakfast cereal. Um So, Barack Obama John Keane are both running for president, and we thought, you know, the breakfast isn't selling the bet that we're bet and we're a bet and breakfast. We're not selling beds. Maybe we can sell breakfast. And so we started selling collectible breakfast cereal, a Barack Obama theme cereal called Obama Ohs, which is like cheerios, and we called it the Breakfast a Change.

And we learned about John McCain was a captain the Navy, so we called it Captain McCain's a Maverick Entervy Bite. And we made these really funny like looking cereal boxes. We actually ended up selling thirty thousand dollars with a collectible breakfast cereal and that was actually originally how we funded a company. So now it's late two thousand eight, we're like desperate. We've launched three times, no one's using it.

I'm hockling cereal boxes in my kitchen. I'm thinking to myself, I wonder if Mark Zuckerberg or Steve Jobs ever had to hock blue cereal boxes in their living room. The answer was no, they hadn't done it. This was a foreboding sign. And I'm going out to dinner at a tire restaurant in San Francisco with the founders of Justin That TV, who are Ye Combinator, and they said, you should join Why Combinator because you guys are dying and I thought, well, it's probably too late. We already launched,

but Paul Graham eventually allowed us to apply. We actually missed the deadline, but he allowed us to apply after the deadline and we got an interview, and that's when Paul Graham said, like in our first question, people actually doing this? And I said yes, and he goes, what's wrong with them? So the interview kind of went downhill from there. He didn't He's the admitted he hated the

idea of airbnb at first. Who didn't get it? But as we're leaving the interview, my roommate Joe, hands him a box of Barack Obama cereal that we made and he looks at it and he goes, what what is this? Why am I getting this? And we said this is how we funded the company, and he looks to us. He said, if you can figure out how to get people to pay forty dollars for a four dour box of cereal. Maybe you will convince them how to sleep in each other's homes. So why commentator let us in

the program? I think we barely I don't know if we got in barely got in. And the moment we got into the program, you know, the recession is occurring. People are desperate to save their homes, and lot of people started trying to Airbnb to save their homes by renting them out. At the same time, you have a great recession which is causing a lot of young people

to feel like, well, I need to save money. You know, Facebook and social media is growing, so people are comfortable meeting people on the internet, and it was kind of the supernova forces that led to an opening for everybody to finally take off. So traditionally people might build a company like yours and five or six years later they would take a public and liquefy for the employees, the founders and also the investors. But you were resisting pressure

to do that. Why didn't you go public sooner? And you have any regrets about not going public sooner than you did. I just didn't feel like we were ready to go public sooner. And I think in hindsight, maybe we could have gone public sooner. I mean, just so it's important. Remember when we were growing really quickly, there were not regulations on the books for Airbnb, and a lot of people are wondering was this business going to get regulated out of existence? That to me was one

of many existential questions. Eventually, we able that we were able to get law as in the books and nearly every big city in the world we were able to collect four billion dollars. Hotel tax became legitimate. We expanded a nationally, We built an executive team. But I felt like going public was a big stage. It was almost like it's almost like, you know, if you're I don't know, there's a kind of a weird analogy, but if you're like baking a cake, going public is putting in the oven.

You know, It's it's hard to change the ingredients after you go public, right, And so I wanted to make sure that everything was kind of baked before we went public. Now, once the pandemic hit, that was more than a decade after we started, I was accused of having waited too long and having missed the I P O window. I would have never imagined what had transpired over the course of but I think looking back, it worked out really

well for everyone. Well, you went public in December after the pandemic, but you obviously were probably you had to lay off some people during that period of time, Is that right? You know? Like when the pandemic hit, I was working on our S one, and like many people, I came back from the holidays and twenty team thinking my life was going to go in one direction, not realizing our entire world was about to get rocked. I felt like a captain of a ship and a torpedo

hit the side. We lost eighty percent of our business in eight weeks, and we were doing tens of billions dollars a year in bookings and then suddenly go from high flying to people predicting is this the end of Airbnb. I mean there were multiple mainstream journalists predicting that we were going to go out of business. It was almost like our business flash before our eyes, and I ended up having to confront this reality David that I realized

we're gonna lose half our business. And so it's like running into a burning house if you can only save half your furniture, Like and half your stuff, what do you take with you? And I said, we're going to get back to the original idea of Airbnb, the individual people. They are sharing their homes and experiences all over the world. We had to make the hard decision I've ever made, which we had to lay off of our workforce nearly

two thousand employees. But I wanted to make sure even in a layoff, we could show compassion, to be really principled, So we end up giving people a year of healthcare. We're I think very chivers our severance. So when you went public in December, you priced the I p O or the underwriters did at half of the price that ultimately ended up that day. So some people might say you left twenty three or four billion dollars on the table. Do you look at it that way where you think

it was miss price or you're okay with it. We came back from nineteen as a somewhere between on the private markets a thirty to forty billion dollar valuation at the depth of the pandemic. Our valuation was below eighteen billion dollars. I mean, we probably would have struggled to raise money at eighteen billion dollar evaluation. We had warrants and to be able to be a hundred billion dollar company eight months or seven months after that low point. It was really hard to imagine any of that was

going to happen. And I think part of the reason our stock popped was I believe we had hundreds of thousands of people in retail trying to buy our stocks. So I don't feel bad. I never took the highest price in any round. We totally could have priced to hire. But it was pretty hard, I think at the time to foresee that this was going to be a company

that was going to reach evaluation like that. Now as we talk, you've just reported your earnings for last quarter and last year, and they were record earnings, record revenues, and so forth. And you said, I think at the release that Covid has changed everything. People are changing the way they work and the way they travel. Can you explain what you mean. I think the world is never going back to the way it was fully before the pandemic, and one of the changes I think, David, it's been

a change in how we work. You know, for many people, not all, but many people had a job at the office. They're not going to be required to come back to the office five days a week, and I think that I don't think CEOs per se are going to determine these policies. I think workers will because all of us CEOs, I think, want the best talent, and I think flexibility is going to be the second most important benefit after compensation. So I think we're now living in a world where

many people are gonna work remotely. They might go into office, but not five days a week. If you don't have to go in office five days a week, you're more flexible, You're less tethered to anyone's city. And so I think what that means is that for millions of people, they can now live anywhere. Some people that don't have kids, like me, can literally live nomadically. You can stay city to city, hopping around. I think a lot of young

people and retires to do that. All of this, David has culminated AIRBB not just being a company about traveling, but now a company about living. Half of people don't realize is half of our nights booked are for stays a longer than a week. A fifth of our knights booked are for stays are longer than a month. So there's this whole new category of travel that's not classic too. Three nights in a city, it's not long term housing, and it's completely emerged because of the pandemic. So let's

go back to your background. For those who don't know your background, what part of the United States are you from. I'm from a small town in upstate New York called Niskey and which is a suburb of Schenectady outside Albany. And your parents they were social workers. My mom and dad were social workers. Both my grandfather's worked for General Electric, but my my mom and dad were kind of lived

normal lives of social workers. And when you're growing up, I understand you wanted to be a hockey play or when you were young, Is that true? Yeah? When I was five years old that would have been nine six, Wayne Gretzky was the greatest hockey player in the world, and I wanted to be just like him. I had posters and Wayne Gretzky in my wall. The problem with athletics is your dreams come crashing down pretty quickly. By the age of six, I realized I wasn't gonna be

Wayne Gretzky. Hey, when that dream went away, you decided you might want to be an artist because you had good skills in that area exactly. I ended up getting a scholarship to go to Ronald School Design, and they only gave away a few scholarships, so it was kind of a big deal to get the scholarship. And my mom said like, well, you know, my mom, Dad, you can go to art school, but you've got to promise me that you one day get a real job. And

I said, well, what's a real job. She said, A real job is a job that gives you health insurance. And I said, okay, I promise I'm gonna go to Risdy and one day I'm gonna a real job with health insurance. That was kind of my ambition. I mean, my high school yearbook quote literally was I'm sure I'll amount to nothing. I don't. I think I was being kind of sarcastic, but I didn't really think I was going to be a tech founder. I mean, you know, I didn't really see very much beyond my small town.

So let's talk about it. You graduate from Rhode Island School Design and then you moved to California, Los Angeles to become a designer, So then you ultimately didn't like it that much and decided to move to San Francisco. Was that right? I liked it for like three months, because there's like a thrill when you're a student. Nothing you make is real, and you just have this yearning that you want to make something that's real, that's not

a shelf and people pay money for. But then after a few months of doing that, maybe a year, I kind of remember thinking my I was like twenty four, maybe twenty five years old. I remember like feeling like I could see the rest of my life and the rest of my life look like a road that disappeared in the horizon and exactly look exactly like the road behind me, and it kind of terrified me. I was like,

I don't really want to just be a designer. I at this point realized, I think I want to be an entrepreneur, but I don't know what I'm gonna build or what I'm gonna start. And this is now two thousand seven, and so I think like the Internet revolution was really taking hold. You know, YouTube was just sold

to Google, it was kind of the biggest company. Facebook was rising, the tech had come out, the ashes, the dot com crash, and it just felt like the gears of the world we're starting to turn in San Francisco, and so I just had this premonition that, like, I have to come to San Francisco. It's pulling me. Right. So you started the company with your roommate Joe, right, yep,

you brought a third partner in. Yeah, so really not long after it was just Joe and I were both designers, so we can design a website, but we can't actually code and build a website. You need a software engineer to do that. And so after we host the three guests, I looked at Joe and I said, like, who's the best engineer you know? And Joe said, well, it's funny you ask, because there was an engineer who used to live with me before you moved in the house of

me named Nate. And so the three of us got together and we said, you know what if you could build a website where you can book someone's home the way you can book a hotel anywhere in the world. And that was the original vision. Um, little did I know how hard it was going to be to get it off the ground, but that was a pretty simple idea. So as you look back on what you've built, what would you say is the best decision you made, and what was the biggest regret you had have so far,

and what you do, what you built. The most important piece of advice I ever got was when I first started Airbnb. It was actually Paul Graham. He told me something. He said, it's better to have a hundred people love your service then have a million people that are kind of like your service but a little apathetic. He should start with a small group and perfect your product. Do

things that don't scale, turn them to advocates. Because of those hundred people love your service, they're gonna tell everyone about them. They're gonna become your marketing And it's easy to improve your service when you only have a hundred customers. When you have a million customers, really hard to change it. And so do things that don't scale, go above and beyond. And that was something we did, and I think that

really helped explain why we're so successful. I think the biggest mistake I made was when you're in your twenties and you never imagine being an entrepreneur and suddenly you're a multibillion dollar company and somebody gives you billions of dollars and you hit on something that's hugely successful. You tend to start to believe that you can do anything, and you try to do everything, and you try to

do everything at the same time. And before the pandemic, we had like ten divisions and we were extending all different places. And in hindsight, I think having too much money is sometimes worse than having not enough money, because I think not having enough money creates constraints, It creates discipline, it creates focus, It forces you to create trade offs. I think when corporations and start ups to get over capitalized, they can avoid making tough decisions. The accountability goes down.

There's a real sense of complacency that goes into the company. And I think a little that lack of focus happened Airbnb before the pandemic. So you have a lot of mentors that have helped you over the years. How did you get to know Barack Obama? Is he's staying at airbnbach he has stayed in the Airbnb is actually um. You might recall that UM we lifted the embargo in

Cuba when he was president. President Obama end up going to Havana, Cuba, and he wanted to bring American businesses with him to show that business is now open between US and Cuba. Well, the problem is there weren't really any of US businesses in Cuba except for Airbnb. So

I went with him to Havannah. I got to know him and we kept in touch, and so I think it was just helpful to have somebody who could help me see the world in a broader away and just think a little more systematically about my decisions and the consequences that we would have on society. So that's where how he became very helpful to me. Now, as I understand that you're spending a year or so going to Airbnb, is around the United States, Yeah, most of the United

States kind of reasonable time zone. So when you want to book an Airbnb, do you have a trouble getting a place where you want to go or no? I you know, there's six million homes to choose from, so I've got more than enough options. I don't really say who I am, Um, I you know, and I think sometimes they find out, sometimes they don't, but um, yeah, I kind of his book last minute. I was in Atlanta, Nashville, UM, Charleston, Los Angeles, now Miami. I need ideas for where to

go next. So when you book when an Airbnb, do you do it yourself or you have a team of people that pick it for you. I do it myself. I I gotta I gotta see whatever else is doing. I mean, I always feel like people who build great products ideally are building products they themselves want to use. I also think there's only so many things you see in the data. You have to like just have a feel for the product, and so I try to use it as much as I can. I always wonder who

sets the rate? Do you set the rate and airbnbad or is they host set the rate? And do you negotiate rates? No? No, no host sets rate. They can charge whatever they want from ten dollars a ten thousand dollars a night or beyond. And you know, we have people renting luxury villas that are incredible, like Luxy villas, and then we people renting like, you know, little spaces

in their backyard. I mean we had in two thousand nine a member when we first launched, we had people renting spaces under their kitchen table because they kind of thought, oh, it's space. I can rent any kind of space. So it's kind of everything from a couch to a castle and everything in between. And they set the rate and we basically take So when you stay at a place, do you ever call up the host and say, by the way, you're charging too much or charging not enough.

I try to give feedback less on the value, but more on the kind of hospitality. Like sometimes like a host will want me to like, you know, like go through some like they'll give me like a rental contract because we used to doing on other websites, and I'm like, Airbnb is a contract. You don't need to do this, um, But it would be pretty weird to be a tech founder of Airbnb and saying, hey, I think you're overcharging me. It would just kind of send a slightly weird message.

But I try to give them feedback. And we have a review system. Guest and host review each other at the end of day. So I've tried to write a pretty detailed review for every host. I I try to be positive but honest about the reviews. But you signed b C or Brian Ky, Brian Sewsky, so they know by the time I leave review who I am. I'd say half the time they know who I am when I book either half of I don't like I don't want to be a secret shopper where I'm like lying

to them and then booking under a pseudonym. But I also don't want to tell them who I am, like I'm expecting special treatment, because then I'm not going to get the real experience. So be half the time I know they know who I am. Half they don't. But it's a pretty fun experience. You're forty years old. Yeah, so at forty you've already achieved more wealth and almost anybody could possibly imagine. Have you thought about stepping back and smelling the roses or doing something else with all

the money you have? No, I I feel like I'm just it's really just getting fun now. I mean it was fun when I started, and then like there was this like corporate adolescence was it was kind of painful, the growing of the company. But I'm having so much fun right now. And if I were to step back, I'd probably only do that to start another company, to spend another ten years just to get back to this place. So when you've got a good thing going, you want

to keep going. And I just feel like, you know, I have so much I still want to do with the company. I think there's like a lot of loneliness in the world, and I think part of our bigger contributions to help try to bring people together around the world living communities. So that's what I'm focused on now. The company that I started and built had to partners with me for the entire thirty plus years and we're still together. It's hard to have three people work together

for a long time. You've had three people working together for quite some time as well. Don't you ever have fights with each other or get jealousies or how do you work together? So so well, it's a great question, David. Yeah. I mean, we're one of the only companies in the world as valuable as we are intact to have three founders have been together for fourteen years. I think it's

a couple of things. Number One, I'm really lucky because I had the gift of having two incredible co founders that are really high integrit and you always put the company before themselves, and they were very supportive of me

as CEO. But the other thing is we had a principle we said we're never gonna allow being right to get in front of the relationship, like if you try to be so principal that you try to win every single argument, you'll kind of see the trees and lose the forest, Which is say that we knew this company would only survive. It had a really strong founding team attack and that mean that occasionally each of us are

going to have to kind of make compromises. So we tried to never let debates go so far that winning an argument got in the way of the relationship. I think that made a big difference. So on philanthropy, giving away money sounds like it's easy, but it takes time to do it. Well, so how are you thinking about that? Are there certain areas you to give away some of the money you've committed to the the given way half of your net worth, but you you know you have to

take time to do it. So for me, I wanted to join the Giving Pledge in my thirties because I thought, you know, the main reason was even though it wasn't at that point ready to give away all my money, I did want to send an example if if it takestent that I could for the next intern entrepreneurs. You know that, like you know, it's it's like redistribute the majority of wealth back to society seemed like a reasonable thing to do was better for everyone, But I didn't

know what I wanted to focus on. I did write in my giving pledge letter, though, that one of the issues that I want to focus on is just helping maybe create scholarship programs helping young kids like me. You know, I wasn't I wasn't poor, I wasn't underprivileged. I was just kind of obscure middle class. But had it not been for a series of people in my lifetime, I wouldn't be here talking to you today. You would have just never met herd of me, and I would have

never left my town. And so I think that so many kids have untapped potential like me that their teachers would have never probably get predicted, would have had the journey that I've had. And I want to help kids see their unrealized potential and maybe help them change reject their lives. So that's maybe one area I'm passionate about, but make no mistake, there's a lot of other things I like to learn about and be able to help.

The final question for somebody that's young, younger than you, if they want to be the next Brian Schowsky, what is the advice about how you would recommend they build a company. I would say a couple of things. The first thing I'd say is, don't listen to your parents. Don't take career advice and your parents. I love my parents.

They want what's best for me. But you know, like your parents, um, and when I use parents or proxy for anyone, and when wise and old, most of them are gonna try to talk you out of crazy things. But sometimes the crazy ideas are the ones that do kind of spread around the world. The second thing I'd say is probably solve your own problem. A lot of people are looking for markets. We weren't looking to go into a good market. We were just trying to solve

our own problem. If you solve your own problem, you may have just solved the problem for millions of other people. And it might be quite marketable and monetize herble, you know. I think last thing I'd say is just like, focus on on on, focus on love. It sounds like a weird thing, but I think a business is really simple. And build a prop company people love working for that creates something people love consuming or using. I just think it's I don't want to say it's so simple, but

it kind of is all comes back to passion. Thanks for listening to hear more of my interviews. You can subscribe and download my podcast on Spotify, Apple, or wherever you listen