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Blitzscaling 18: Brian Chesky on Launching Airbnb and the Challenges of Scale
@ Greylock
12/01/15
Takeaways
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Brian Chesky
12/01/15
@ Greylock
Many people said Airbnb was "the worst idea that ever worked," yet it succeeded, highlighting that unconventional ideas can thrive.
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Brian Chesky
12/01/15
@ Greylock
I attended the Rhode Island School of Design, where I studied industrial design, which taught me that as a designer, I could change the world.
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Brian Chesky
12/01/15
@ Greylock
At RISD, I learned that being disruptive is encouraged, contrasting with my upbringing where I was often reprimanded for it.
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Brian Chesky
12/01/15
@ Greylock
I met my co-founder Joe Gebbia at RISD, and together we decided to start a company without a clear idea of what it would be.
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Brian Chesky
12/01/15
@ Greylock
We created a bed and breakfast for a design conference because we had no money for rent, leading to the birth of Airbnb.
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Brian Chesky
12/01/15
@ Greylock
When guests stayed with us, the experience transformed from strangers to friends in just a few days, illustrating the power of shared living.
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Brian Chesky
12/01/15
@ Greylock
We realized that the original idea of airbeds for conferences could evolve into a broader concept of booking homes anywhere in the world.
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Brian Chesky
12/01/15
@ Greylock
After our initial launch, we didn't see immediate success and even explored creating a roommate matching website before pivoting back to Airbnb.
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Brian Chesky
12/01/15
@ Greylock
We learned that many great ideas often sound ridiculous at first, and that solving a personal problem can lead to a successful business.
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Brian Chesky
12/01/15
@ Greylock
In the early days, we launched multiple times to gain press attention, even if it meant rebranding and changing our approach frequently.
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Brian Chesky
12/01/15
@ Greylock
We decided to allow hosts to offer real beds instead of just airbeds, which improved the user experience significantly.
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Brian Chesky
12/01/15
@ Greylock
In summer 2008, we finalized the product design, allowing users to book homes directly, which was a novel concept at the time.
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Brian Chesky
12/01/15
@ Greylock
We aimed to create a seamless booking experience, ensuring users could book a home in three clicks, similar to the ease of using an iPod.
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Brian Chesky
12/01/15
@ Greylock
We faced challenges in raising funds, with many investors not responding or passing on Airbnb, claiming it didn't fit their investment thesis or that the travel market wasn't big enough, but we eventually secured a $1.5 million valuation for Airbnb.
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Brian Chesky
12/01/15
@ Greylock
I launched Airbnb in August 2008 without a presentation deck, relying solely on the live website, which ultimately failed during a pitch to an investor.
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Brian Chesky
12/01/15
@ Greylock
We went into significant credit card debt, using credit cards to fund Airbnb, which led to tens of thousands of dollars in debt before we launched for the Democratic National Convention.
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Brian Chesky
12/01/15
@ Greylock
To solve the chicken and egg problem of attracting guests and hosts simultaneously, we aimed to generate a lot of press, especially around high-profile events like the Democratic National Convention.
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Brian Chesky
12/01/15
@ Greylock
We started with bloggers to gain initial press coverage, which eventually led to national media attention, helping us gain traction despite being in debt.
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Brian Chesky
12/01/15
@ Greylock
At our lowest point, we realized we needed to pivot from Air Bed and Breakfast to selling breakfast cereal, creating themed cereals to generate buzz and funding.
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Brian Chesky
12/01/15
@ Greylock
We handcrafted cereal boxes and sold them for $40 each, which surprisingly generated $30,000 in revenue and funded the company.
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Brian Chesky
12/01/15
@ Greylock
Paul Graham advised us that it's better to have 100 customers who love your product than a million who just like it, emphasizing the importance of passionate advocates.
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Brian Chesky
12/01/15
@ Greylock
During Y Combinator, we focused on building strong relationships with our first 100 customers, doing things that don't scale to ensure they loved our service.
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Brian Chesky
12/01/15
@ Greylock
By April 2009, we became Ramen profitable, which allowed us to secure a $600,000 investment from Sequoia Capital, marking a significant turning point for Airbnb.
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Brian Chesky
12/01/15
@ Greylock
I got to know my customers very well, which helped me understand that photography was key for unlocking the marketplace.
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Brian Chesky
12/01/15
@ Greylock
We launched Airbnb in New York, where the hosts were local but travelers came from all over the world, creating a unique network effect.
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Brian Chesky
12/01/15
@ Greylock
We targeted major events like the Democratic National Convention and the World Cup to bootstrap our growth, focusing on PR and word of mouth.
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Brian Chesky
12/01/15
@ Greylock
We built a one-click tool to post listings on Craigslist, which helped us gain more distribution until Craigslist shut it down.
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Brian Chesky
12/01/15
@ Greylock
Our growth primarily came from word of mouth and PR, as we focused on making sure customers loved our service.
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Brian Chesky
12/01/15
@ Greylock
We realized that if we could get enough people to use Airbnb, they would tell others about it, leading to organic growth.
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Brian Chesky
12/01/15
@ Greylock
We would go city by city to educate hosts through meet-ups, which increased their engagement and excitement about the platform.
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Brian Chesky
12/01/15
@ Greylock
We understood that the product is not just the website or app, but the experience of hospitality and the sense of belonging.
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Brian Chesky
12/01/15
@ Greylock
We decided to reinvent our office space to reflect the cool homes we showcase, creating a unique and engaging environment for employees.
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Brian Chesky
12/01/15
@ Greylock
We recreated meeting rooms in our office based on actual Airbnb listings, which has become a competitive advantage in hiring.
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Brian Chesky
12/01/15
@ Greylock
People need to be immersed in the world of your product, as it helps them work in the center of the universe of your business.
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Brian Chesky
12/01/15
@ Greylock
The center of your business needs to be the most potent, yet most companies have it as the least potent, often just gray with drop ceilings and cubicles.
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Brian Chesky
12/01/15
@ Greylock
I thought there was a huge opportunity to reinvent the workspace to inspire creativity and passion among employees.
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Brian Chesky
12/01/15
@ Greylock
I lived in Airbnb's for nearly a year out of necessity, which allowed me to deeply understand the product and its impact.
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Brian Chesky
12/01/15
@ Greylock
A strong culture is when people believe in and feel passionate about what you're doing, transforming their work into a calling rather than just a job.
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Brian Chesky
12/01/15
@ Greylock
Culture is defined as a shared way of doing things, and I aimed to create a strong culture where everyone is on a mission and deeply passionate about their work.
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Brian Chesky
12/01/15
@ Greylock
The most important cultural decisions are made when hiring, as the culture becomes the people around you.
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Brian Chesky
12/01/15
@ Greylock
I decided to interview every single person in the early days, which helped shape the culture at Airbnb.
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Brian Chesky
12/01/15
@ Greylock
We have a core values council that advises on maintaining our culture and values, ensuring alignment across the company.
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Brian Chesky
12/01/15
@ Greylock
As we scale, I have to leverage others to maintain cultural practices, transitioning from personal interactions to broader initiatives.
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Brian Chesky
12/01/15
@ Greylock
Culture is about repetition; it's essential to continuously reinforce the values that matter to the company.
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Brian Chesky
12/01/15
@ Greylock
To maintain culture as we scale, I focus on designing every moment to reinforce our values, like reminding employees to champion the mission.
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Brian Chesky
12/01/15
@ Greylock
You can’t control everything in a culture, but you can set a few key norms that everyone must adhere to, like being hospitable.
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Brian Chesky
12/01/15
@ Greylock
Learning to hire and manage effectively became crucial as I transitioned from building a product to building a company that creates products.
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Brian Chesky
12/01/15
@ Greylock
Moving from intuition to data-informed decision-making was essential as we scaled, shifting from personal interactions to data analysis.
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Brian Chesky
12/01/15
@ Greylock
When you're a startup before achieving product-market fit, thinking long term seems preposterous because you might not even have a long term to consider. You're focused on survival, not on future plans.
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Brian Chesky
12/01/15
@ Greylock
In a startup, you often don't have a detailed plan or strategy; your roadmap might only extend to the next two weeks, and you need to create roadmaps as you grow to guide your team effectively.
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Brian Chesky
12/01/15
@ Greylock
The overall thesis of blitzscaling is that what got you here won't get you there. As you scale, you need to shift from a short-term focus to long-term planning, considering what you want to achieve in one to two years.
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Brian Chesky
12/01/15
@ Greylock
As a company grows, the role of the founder changes significantly. You start by doing everything yourself, but eventually, you need to hire people, managers, and executives while maintaining the company culture.
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Brian Chesky
12/01/15
@ Greylock
Starting a company involves multiple stages, and each stage can be as complicated as the first. The initial stage is about solving your own problem and finding a small group of passionate users, while later stages require more complex management and strategy.
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Brian Chesky
12/01/15
@ Greylock
In startups, being adaptable is crucial. No one is an expert at everything, and those who can scale are often curious and open-minded, rather than know-it-alls who limit their growth potential.
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Brian Chesky
12/01/15
@ Greylock
The ability to learn continuously is key for managing scale and blitzscaling. Founders must be open to feedback and surround themselves with smarter, more experienced individuals to navigate challenges effectively.
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Brian Chesky
12/01/15
@ Greylock
As you scale, competition changes. Initially, you focus on survival, but as you gain traction, you face existential threats from competitors who may try to copy your model and undermine your success.
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Brian Chesky
12/01/15
@ Greylock
When facing competition, it's essential to focus on building a strong community and product. The ultimate way to win is by creating a better experience for users, which is often overlooked by competitors focused solely on rapid growth.
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Brian Chesky
12/01/15
@ Greylock
Regulatory challenges can hit unexpectedly, similar to being punched in the face, and startups must be prepared to navigate these issues as they arise, particularly with short-term rental laws from Attorney Generals who can impose serious consequences.
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Brian Chesky
12/01/15
@ Greylock
The New York State Attorney General's predecessor, Elliott Spitzer, was particularly intimidating, which made us question whether to fight back or comply with their demands.
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Brian Chesky
12/01/15
@ Greylock
When confronted with a request for personal information on users, we viewed it as a fishing expedition and decided to challenge the Attorney General in court, which we ultimately won.
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Brian Chesky
12/01/15
@ Greylock
Navigating government relations was a huge challenge for us, and we learned through trial and error that fighting wasn't the best approach; instead, we aimed to partner with cities.
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Brian Chesky
12/01/15
@ Greylock
We realized that as a company promoting community living, we needed to foster positive relationships with cities rather than adopt a confrontational stance.
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Brian Chesky
12/01/15
@ Greylock
I learned that engaging with those who dislike you can reduce animosity; it's about fostering understanding rather than seeking approval.
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Brian Chesky
12/01/15
@ Greylock
During a listening tour in New York City, I met with many critics of Airbnb, which helped reduce negative sentiment towards the company over time.
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Brian Chesky
12/01/15
@ Greylock
In the wake of the Paris attacks, we had to quickly account for the safety of our employees and hosts scattered throughout the city during the crisis.
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Brian Chesky
12/01/15
@ Greylock
We mobilized our hosts to provide housing for those in need after the attacks, demonstrating our commitment to community support in times of crisis.
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Brian Chesky
12/01/15
@ Greylock
The experience of managing a crisis like the Paris attacks reminded me of the early chaotic days of Airbnb, highlighting the constant challenges of running a startup.
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Brian Chesky
12/01/15
@ Greylock
I learned the importance of seeking knowledge from experts and being shameless in asking questions to gain insights and understanding.
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Brian Chesky
12/01/15
@ Greylock
I got really lucky with my co-founders; I can't provide a guide on how to pick them because it just fell into my lap.
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Brian Chesky
12/01/15
@ Greylock
Your co-founders should be better than you or at least feel like equals; otherwise, they become proxy early employees that can't scale.
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Brian Chesky
12/01/15
@ Greylock
You need to find people you admire and trust, as you'll be around them for long hours; if you find them annoying after a few hours, it won't work in the long run.
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Brian Chesky
12/01/15
@ Greylock
The best preparation for creating a company is to create something, whether it's a club or a product; just start creating.
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Brian Chesky
12/01/15
@ Greylock
Conviction in your idea builds over time through repetition and real-life experiences; talking about it helps solidify your belief.
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Brian Chesky
12/01/15
@ Greylock
A leader must have conviction; if you're certain about the direction, people are more likely to follow you.
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Brian Chesky
12/01/15
@ Greylock
Most successful companies have more than one product; transitioning from a single product to multiple products is a significant challenge.
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Brian Chesky
12/01/15
@ Greylock
Creating a new business within an existing successful company is different from starting a new business from scratch; internal dynamics can inadvertently hinder progress.