foreign it is a great pleasure and even greater honor to have you with us at Stanford GSB well thank you for having me wow it's a big room here I'm pleased to say that you are seated in front of hundreds of globetrotting MBA students whoa many if not most of whom are your most loyal customers that I can assure you so thank you well thank you I gotta I gotta hope I hope you do well as I was gathering materials for this interview Brian I found myself transfixed by a certain photo in your high school yearbook oh what captivated what captivated my attention was not the photo itself which was perfectly fine but rather the caption underneath the photo yes why don't we take a look on the big screen I didn't know there would be visuals today this is going to be oh God already [Applause] Brian the good news is as of the close of yesterday's trading session your prediction turned off to be turned out to be slightly Off the Mark yes by 8.4 billion dollars to the exercise my uh my dad was not very happy about that I remember I I got home one day and he's sitting in the dining room with that opened and it just I don't I if you had told me when I was in high school that I would be here talking to all of you I just thought it would it was it's kind of boggles my mind you know to be here right now so the founding story of your company Brian will be familiar to many in the audience but as a quick refresher could you walk us through the origin of Airbnb yeah I'll do that I'll do the quick version but so so I'm from upstate New York um my um my parents are both social workers and I remember my mom telling me one day I think I was like in high school and she said you know I chose a job for the love and I didn't really get paid any money so you should make sure that you get a job that pays you a lot of money and so then one day I was really interested in art and design and then like like I asked Santa for poorly designed toys so I could redesign them like really peculiar things like that and then one day I tell my mom I said I'm gonna be an artist and she said oh my God you chose the only job in America that'll pay less than a social worker you're going to get paid nothing and that was probably the pretext to that yearbook quote and I said no Mom I promise I'm gonna get a job and she said a real job I said what's a real job she said a real job's a job that gives you health insurance so you don't have to live in my basement so that was the context and I said all right I'll promise you I'll get a real job with health insurance I get to RISD thinking I want to be an artist and then I I felt like the moment I got on campus I was born like 100 years too late for what I wanted to do because you know like I was like an artist I was a painter a drawer and photography had replaced a lot of the need in society to do a lot of things I want to do and I didn't know what to do at RISD and all of a sudden you have to pick a major and I was a freshman and there was a department head and he said there's this field called industrial design it's a design of everything from a spaceship to a toothbrush and everything in between and I thought to myself okay that's what I'm going to do so I got into industrial design I graduate RISD I'm now I moved to California I wanted to come to California I was like I didn't really know the difference in Lan SF very much never been to California so my friend was willing to come to La so I got my friend to come to LA with me I get a job as an industrial designer at a design firm I'm like designing products for um for like entrepreneurs and I even um I like the firm I was at was like they had like really small budgets so I would do like products like all the different times and so people bring me ideas and we think about what's the market strategy um you know how how are we going to design this product how do we manufacture it where do you distribute it and because we were so small budget I got to actually do the entire thing now it's 2006. one day I my boss comes to me and he says you're going to be on a reality TV show and I said what and there was a precursor to a Shark Tank the show called American inventor and it was like a spin-off of American Idol and there were these contestants and they would get fifty thousand dollars and they have to hire a design firm and I was the firm that one of them hired and so all of a sudden before I knew it I was designing a toilet seat for a magician and that's kind of and now at that moment it was it was a cool project but I realized that myself what's the difference between me and this magician and I thought to myself the difference is they made the chance to be an entrepreneur I didn't and I was designing other people's products so my life is like I'm in a car and the road in front of me looks exactly like the road behind me and all of a sudden I get a package in the mail it's they're see it's a it's a package and it's a seat cushion but it looks in the shape of a human buttocks with a handle and it's it's a product called buns and it's from like friend from RISD and he says I started this company we're manufacturing this product now by the way the product's beautiful ended up getting sold in the Museum of Modern Art gift shop so it's a really nice product and he and he said come to San Francisco and this was like my called adventure and you know like there might be a few times in your life where you make a decision and everything about your life changes after that decision and that's what happened I pack everything in the backseat all Honda Civic I have a thousand dollars bank I get to San Francisco and then Joe tells me the rent is one thousand one hundred fifty dollars and I thought wow I should have asked that before I came up to San Francisco but it turns out that weekend an international design conference was coming to San Francisco all the hotels are sold out and we had this idea we said well what if we just turned our house into a bed and breakfast for a design conference unfortunately I didn't have any beds but Joe had three air beds we pulled them out of the closet and we call the airbed and breakfast.com and at that point my mom said so I guess you don't have that job of health insurance anymore and I said no Mom I'm an entrepreneur and she said no you're unemployed and that's when I realized when you're starting it's mostly in your head wonderful back then the idea of renting out your bedroom to strangers sounded completely foreign and even visible to Silicon Valley investors in 2008 you sought to raise a hundred and fifty thousand dollars for your budding Enterprise yeah you approached more than a dozen investors all of whom sadly turned you down yeah in fact I have here a couple of those rejection emails investors sent to you these exhibits are great and it's slightly embarrassing but would you be so kind as to read one of them out for our edification yes thank you you want me to read them yes okay so we'll read this one uh oh I know this person okay hi Brian apologize for the delayed response we've had a chance to discuss internally and unfortunately don't think this is the right opportunity for blank from an investment perspective this is my favorite part the potential Market opportunity did not seem large enough for our required model now it's travel about the same size as oil but it wasn't large enough but you can imagine like they didn't see it travel they saw strangers sleeping in other people's homes like I'll give you an example the first investor Joe and I ever met was in university Cafe this Cafe an investor walks in he goes to the get a smoothie he sits down he never picks his head up he's drinking a smoothie he's like on a straw picking up a smoothie we're pitching him halfway through the presentation he gets up because he has to like move his car we still haven't seen him since so that was our first pitch we pitched Paul Graham at y combinator we end up getting a y Commander the first question Paul Graham asked me is people are actually doing this like staying each other's homes and I said yes so the second question was well what's wrong with them the interview kind of went downhill from there but over the course of this journey you know we um we're about to leave our interviews and Joe takes out a box of cereal and a box of cereal we design so we'll take a quick detour we provided housing in 2008 for the Republican and Democratic national conventions and you remember that was when Barack Obama was running for president it was like a huge movement and that weekend we launched and we got like 80 bookings and I thought at this point we've made it we're huge like a bunch of blogs covered us I'm like we're like the Beatles of tech right now and then all of a sudden the next weekend for uh for Senator McCain we got two bookings and then the week after we got no bookings and I realized if only there were political conventions every week we'd have a business so we recall the air bed and breakfast the air beds weren't selling so we said I know what you're thinking why not breakfast and so we created this Barack Obama and John McCain theme breakfast cereal we call the Breakfast the Obama oh cereal Obama owes like little Cheerios the breakfast of change and we learned about John McCain and he was a captain in the Navy and I thought oh my God captain Captain McCain's a Maverick in every bite so we made these boxes and at this point my mom's like yeah you're definitely unemployed like this is just not a good sign um and I and so we end up designing these boxes we call General Mills like hey can you make a hundred thousand of these they're like please don't ever call us again um if you do we'll call security so we ended up I'm making that up I can't remember who it was but some big cereal company so we end up getting like a thousand box cereal we hand goulded them ourselves like I remember handling cereal boxes these collectible breakfast cereal thinking I wonder if Mark Zuckerberg ever glued cereal boxes and the answer was no he didn't this is not a good sign but we ended up making like thirty thousand dollars of collectible breakfast cereal so we basically said at that point we're cereal entrepreneurs and that was how we funded the company so we are in this interview Paul Graham he's like what's wrong with you like these people why are strangers staying together and we by when we leave the interview we give them these boxes of cereal and he said what are these and we said we made these he goes why did you make these he said actually this is how he funded the company because no other investors give us money and he said well if you can figure out how to get people to pay forty dollars for a four dollar lots of cereal maybe just maybe you can figure out how to get strangers to live with each other so that's when we entered Y combinator in 2009 after you know a couple dozen investors just thought this was not for them so now that you get your cash infusion from selling breakfast here yeah you've pivoted back from breakfast to beds yeah we realized the market size for housing was probably better than breakfast and one of the keys to airbnb's initial success was its emphasis on accuracy over speed to Market yes instead of targeting millions of potential customers at once you focused on converting 100 people at a time what gave you that discipline okay so it's the first day of Y combinator it's January 2009. by the way I want to set the stage for you do you remember what was going on in January 2009 like like like economic crisis the Great Recession the economy was so bad and why come here has thing called demo day so the end of three months all these investors come Paul Graham sends us an email before why common air starts he says the economy is so bad we don't know if any investors will show up for demo day so if you want to defer you can defer that's how bad it was and so we said no we're going to do this so we get to Y combinator it's the first a and I get the worst piece of advice I ever got and the best piece of advice I ever got the worst piece I've ever got was Paul Graham you have to move to Mountain View we never did I'm like you don't need to move a Mountain View you can be anywhere um although it's cool in Mountain View um but then I got the best piece of advice I ever got he goes to the Whiteboard and he draws like it's all hard to visualize but he draws like imagine if you were to take a section plan of the Washington mall that like that long like it's just like a little stream of water and then he does another section of what would look like a well and he said these are the same volumes but he said it's better to have a hundred people that deeply love you if this axis is number of people and this acts as love focus on 100 people that love you rather than getting a million people that kind of like you and I think this is a profound piece of advice it may have been the best piece of advice ever gotten and it actually runs counter-intuitive to almost everything that everyone says everyone focuses on scale but scale requires people to have a deep passion because if you focus on 100 people love you there's two things that happen the first thing is how do you know how to make something for a million people I don't know where to start but if I pick one person in the audience and I study you and I take your journey and say how do we like improve this part of the journey how do we prove that part of the journey you can actually do something really personal and if you design something keep iterating until they love it and don't stop improving until that one person loves it and you're not allowed to get the second person to the first person loves it and then you get the second person and you keep editing until they love it and then the third person and what ends up happening is two things one you design this perfect experience which is a different part of your mind than the industrial part of your the your your your mind that has to figure out how to scale this and the second thing is when people love your service they become your marketing department they tell other people so the first day why come here they give you this t-shirt and on the T-shirt it says make something people want and we thought what if we went even further make something people love and so we've now done these exercises we had this process I named after the movie Snow White I learned that Walt Disney in 1937 created Snow White it was one of the first used of the storyboard because was like this really long feature link animated movie and he storyboarded the experience and I thought to myself what if we storyboard the perfect experience for the Airbnb we actually hired Pixar storyboard artists to do this and then we what we like to do is like pick one frame of the experience so the moment of truth in Airbnb is when you check in right you're like is this going to be what I think it is and there's a really bad version of check-in like the host didn't show up and there's kind of a good version of a check-in they showed up but we wanted to think to ourselves what would make the experience something people love and so we created this exercise we thought like you know when you go on Airbnb that's also true Uber like a five-star mostly means like nothing bad happened and we thought well what if there was like a six star what would that be when you check into Airbnb and the six star is you get to your Airbnb and you know there's like a bottle of wine waiting on a table and there's like some fruit and they like have a handwritten note to you and like okay that's like really nice and then I thought well what would a seven star experience be a seven star experience is they get a limo they pick you up the airport and there's this like whole curated experience you get to the you get to the house and they know you like surfing and there's a surfboard they are waiting for you and all that stuff so then I thought what would an eight star experience be like an eight star experience you get to the airport there's a giant elephant and you get on the elephant and there's a parade in your honor and you go to your Airbnb so what would a Nine Star experience be The Nine Star experience is the Beatles check-in you land and there's five thousand teenagers cheering your name and you get your Airbnb you have to do a press conference in the front lawn so what's a 10 star experience keep going a 10 star experience you show up and Elon Musk says we're going to space you do get back eventually and point of this story is that you maybe can't make an 8 9 or 10 star experience but most people try to design something that's just good enough but if you can add that six or seven star if you can design something really amazing and you use the part of your brain the handcrafted part of your brain to create that perfect experience then you can reverse engineer how to industrialize this Millions times over and what happens is people love your product and they tell everyone else about your product and what ended up happening in our business is Hilton was started in 1919 over a hundred years ago and we were able to have the entire growth of Hilton in 10 years and this is how you do it without you know we had some marketing but not you know initially not a lot as you said Word of Mouth marketing really helped Airbnb get off the ground in major cities around the world yet one corollary of your newfound success is that government regulators and the powerful hotel lobby were now breathing down your neck how did you deal with those Regulators oh man um yeah I I um there were some things that were initially out of my depth like they did not teach you at RISD how to work with government Regulators um so I I always grew up thinking if like people don't like you you should avoid them that seems kind of intuitive right um or you should fight them and like disagree with them and they're your opponent and then in 2011 um I hired a uh an executive my first executive her name is Belinda Johnson she was our uh Chief legal officer eventually became our CEO and she told me something that was counterintuitive to me she said if people don't like you you should meet with them and I said really why would I do that wouldn't it go horribly wrong and she said no because it's hard for people to hate you up close and I think that's a really important lesson you know so I said okay well who doesn't like me and it turned out a lot of people and so instead of me having a tour where I went on tour to meet everyone like me I told our team um I want to meet everyone who doesn't like me and it turned out they kept me busy for a long time and um but I would meet with these government officials and sometimes the meetings would start a little a little they were a little hostile at first but I had a rule that I would always listen first and seek to understand them and I think you know my dad used to say like 90 of life is just showing up it's actually not true in Tech but when it comes to showing respect 90 of life sometimes is showing someone respect and listening to them and if you just get in the mindset of listening to people then through creativity you can decide you can realize a win-win and I realize they you know like I would hear from them we tell the story and then through that I had this image that we create this model City and we'd roll out the regulation everywhere and I did it in one city and I get to the next city and they're we're like yeah uh but we're different you know we're not Portland we're not San Francisco we're not Los Angeles and so then I realized we had to treat every city personally so we actually started meeting with like hundreds of cities we have now 90 of the top 200 markets have a regulation in place we've uh collected six billion dollars of Transit oxy tax since we started and I I I think maybe the final lesson I'll just say to this is somebody asked me um what is the biggest thing you've learned or the biggest surprise that you've learned starting Airbnb and I'll tell you what it is and this is proven from firsthand experience and from data you know everything's been used more than a billion and a half times it was like the worst idea that ever worked it wasn't supposed to work in fact the first time I told somebody the idea he said Brian I said yes he said I hope that's not the only idea you're working on but a billion a half times later what I've realized is the thing that surprised me is not how different people are it's actually how similar people are and I think we live under this illusion that we're so different than everyone else and I think we tend to focus on the one percent that makes us all different and that's really good there's really positive parts of preserving our culture and understanding our diversity but when you start to think the other is so other from you that gets very very pernicious and having met with you know people all over the world I realized that people with strongest opinions about other people are the ones without passports and the people the strongest opinions about business people or government or people have never worked in those businesses and so if we can build Bridges meet people bring people together we will realize the other is not so other there were 99 the same and actually through creativity you can actually find win-wins through everyone so that's probably what I learned from that lesson at the same time that Regulators were encircling you you had to navigate internal growing pains in short order you found yourself at the helm of a multinational company with many hundreds of employees around the world as you mentioned earlier you are a designer by trade not an engineer how did you leverage your background as a designer to inspire loyalty and followership among your employees whoa wow loyalty and followership I like that um well so let's go back to RISD when I got to risty I'm 41 so I I was there in the early 2000s there was this huge obsession with the idea of Designing design kind of like having a seat at the table you know there's this kind of thing that like artists and designers are usually not in positions of power I mean you take the Fortune 500 how many CEOs The Fortune 500 companies went to design school I don't know if there are any very few so how many board members there's probably an average of like maybe 12 members or 10 to 12 members per board so maybe approximately 600 board members in this Fortune 500 how many of them are creative people or designers not many okay let's go down the list how many executive teams do you have designers or creative people on the executive team and even today not very many and so at RISD there was this whole movement well how can we get designed in the boardroom and Joe and I had this kind of audacious almost arrogant thought why would design be in the boardroom why wouldn't design run the boardroom why don't we start a company and I think I'll just stop by saying to me design I think a lot of people think of design is how something looks and to me design is a much deeper idea design is how something fundamentally works you know I think design makes the complex simple and it focuses on every single detail design is really about understanding the essence I think what Steve Jobs has said design is a fundamental soul of a man-made creation that reveals itself through subsequent layers and so I think that design it's not just how something looks it's how a way to think about the world and a way to simplify and Engineers I think tend to want to narrow in reduce my co-founder Nate likes to narrow in and and get very focused on a problem you can contain because you got to build it and designers we tend to want to zoom out to the frustration engineers and be very very holistic but I do think that that holistic thinking affected everything I think it changed how we ran the company you know I can talk in a second about how we run the company it's really different than most of the tech companies it you know it is do you have to tell a story constantly so we learned how to be really good storytellers a lot of of people build products and understand stories it helped understand how we design our products how we make our products so it was really kind of everything and it's weird it's almost like I'm an anomaly that I'm even here like the fact that I went to a design school and I ran a giant tech company it is a kind of a weird anomaly and if you imagine like a human body there's The Head and the Heart and if you were to cut off the body at the head and take the head and you cut it off at the left side or whatever that's kind of the the world of business we don't usually use our full Minds to like run companies and I think we tend to get very myopically focused near term on that which is extremely measurable you know not everything that counts can be counted not everything that that can be counted counts and so that was a quote by Linus Pauling a Nobel prize-winning scientist and so I think I think that's kind of how I think about design is just really trying to understand the essence of something and really distill it down Brian let's fast forward to the pandemic yeah Airbnb lost 80 percent of its Revenue over eight weeks in March and April of 2020. you had to lay off nearly a quarter of your Workforce that's nearly 2 000 employees what lessons in crisis management can you impart to us oh geez um well let me just let me start by saying this um for many years I would tell this founding story of Airbnb I've literally told it now like thousands of times and I remember saying to myself um I'll probably never have a crazier chapter in my life than starting Airbnb and little did I know about a pandemic that was about to come that would turn our entire world upside down but let me actually go to a few minutes before the few few months before the pandemic so Airbnb we started we go on a rocket ship it's amazing and it's late 2019 and we're preparing to go public and I go on a hike in Bolinas California it's like a couple hours north of here and I go on a hike with my co-founder is Joe Nate and we're reflecting on this amazing company bill it was like at the time valued at 30 billion dollars and we're feeling really proud of ourselves but something is gnawing at us and the thing gnawing at us is it's maybe it's like Airbnb was an adolescent and it was about as awkward as my actual adolescence you saw that photo and um you know we kind of like looked like a human like an adult but we like we had the body of adult we were like kind of still kids and it was like I realized that like the company was like we were like growth was slowing costs were Rising we had 10 divisions at Airbnb so like a homes division experiences we had a transportation a magazine and then each division had subdivisions we had basically like 10 marketing departments we were building software the way most tech companies do which is you try to uh you know kind of decentralize as much as possible allow people to move quickly every person is like a cell in a body you have an individual task be of the information the entire company we democratize data and you do a lot of experimentation in a b tests to figure out like what you want to do we're spending a lot of money in Performance Marketing and the aggregate of this I felt like we had lost that magical like 10 star experience it was starting to become like another company there was a bit of bureaucracy it was difficult to get work done and I just I didn't know what to do and I remember telling Joe and Nate I feel like I had a dream that I left the company and I just came back and they said would you find I said I was kind of horrified because this is not quite the company we set out to build but we had an IPO coming up and they're like what do you do and I said I don't know I mean we have an IPO we're not going to rebuild the company so we're going into the new year and I'm like thinking we need to make some changes I don't know what we're going to do and all of a sudden the pandemic hits and our business drops by 80 percent in eight weeks and we were doing tens of billions of dollars and when you're our size in the business drops by 80 percent in eight weeks that is like being an 18-wheeler going 80 miles an hour and then you slam on the brakes nothing good happens and this was like you know I um I've never had you know within weeks journalists were predicting is this the end of Airbnb this is weeks after we are preparing for what's supposed to be like one of the hottest IPOs in years and it was completely bewildering and I I you know I've been I'm lucky that I've never had like in your death's experience but what it's been described to me is like your life flashes before your eyes and I think we felt like we had at least felt like at the time a year to have business experience and at that moment we realized not everything mattered and it was like if you have to go into house and your house is burning and you can only take half the thing in your house what would you take and that was the exercise we had to do and you can learn a lot about people in a crisis and the person that I think you sometimes learn the most about in crisis is yourself and the hardest thing to do in a crisis is a few things you need a crisis but the hardest thing to manage the Christ you know what the hardest thing the management crisis is what I found the hardest thing to manage the crisis is your own psychology because people look in your eyes and they and if you think you're screwed they see your eyes and they say well you have the most information and so you need to be optimistic but it can't be optimism that's like delusional has to be rooted in some some truth some reality that people still want us to exist and this is why and so that optimistic mentality is the mentality you need to be creative and you need to be creative because in a crisis you often have no good Solutions so the first thing is you need to be optimistic the second thing in a crisis that I found is that you need to be decisive and I think this is a struggle for a lot of data driven people because there's not a lot of data in the crisis all the data is out the window and what do you do when there's no data you have to lean on something you need to have courage but what does courage lean on Courage has to lean on principles in other words in a crisis I don't think you make business decisions as much as you make principal decisions and a principal decision is like if I can't predict the outcome how do I want to be remembered and I think if you think of yourself as this is our defining moment how do we want to be remembered that is the mentality that you need to navigate out of the crisis and so we use those principles and we basically a thousand of us got into a foxhole and rebuilt the company from the ground up we had to reduce the size of our company and do a layoff that was the hardest thing probably I ever had to do you know we reduce the payoffs of all the executives we had we're spending nearly a billion dollars on marketing we took it to zero I became our marketing department I started just doing press interviews I did 100 interviews that year and we just really got focused and we actually changed how we ran the company and I'll just say for a second now we now run the company so most large companies are divisional right so you have like uh like whatever like if you're a company you may have like a bottle Division and you have like a snack division so you're like a divisional structure we got back to being a functional organization so we have a Design Group a Marketing Group a finance group an operations group we basically reduced all the things we're working on the company to just a few things and then I decided that I wanted only leaders that were going to be in the details I didn't want anyone that was just a manager of people it was like if you're um like a general in the Cavalry you have to actually know how to ride a horse and so you had to actually have your hands dirty and so we had a team of experts and we all huddled together and we basically said we're not going to do just this agile continuous shipping of features every single hour of every single day and I'll give you a sense of what I think is wrong with software development Silicon Valley the general premise the software develop on the Silicon Valley is to like democratize data and anyone can ship anything and this initially is faster but when you start adding thousands of people this slows you down and I'll use an analogy let's say we're all making a car and one team is designing the tires and they design this new type of tire but now that tire has to fit on a wheel so you have to work on the wheel team the wheel team's like oh wow we need to actually make the wheels bigger to work with this tire but to do that then that actually changes the shape of the car so now you need to update the body of the car but maybe that makes the car heavier and so maybe you need a different battery and to manufacture it from Battery you need to actually capitalize that but the finance team needs to like set different expectations investors and do you see how everything starts to tie together so we basically had this idea that what if we thought of the entire company as just one continuous like one fluid organization I don't push decision making down we pull it in we try to pull as many decisions into us as possible and be in the flow almost like an Orchestra conductor each executive doesn't have their own swim Lanes we all work together on a few discreet things every project in the company every major project we review every either every week every two weeks every four weeks we have these two releases a year these releases are where all the work together converges to make sure everyone's coordinated we make sure that product and marketing are in lockstep at most companies product people are like chefs and marketing people like waiters and if the waiter goes in the kitchen the chef yells at them and there's just no collaboration and I thought well what if product and marketing were like working in in in in tandem with each other so it was just like really different way of working and I think the way to summarize it is we took the best of software and the best of Hardware development and we put it into one system because the problem with software is there's no constraints sometimes and so things can be a bit of a free-for-all and the free-for-alls can slow you down so we basically rebuilt the company for the ground up and to give you the punch line before the pandemic that year before the pandemic we lost a combo 100 million dollars there was a question of could we be one day profitable and fewer than three years later we have now done 3.4 billion dollars last year in free cash flow nearly 40 percent of our Revenue becomes free cash flows for every dollar almost 40 cents becomes free cash flow and the amazing thing about this whole system is we never even focused I never focus on trying to make a lot of money I just focus on being as efficient as possible obsessing over the experience focusing on every single detail and getting really really detailed and we would immerse for hours on a certain topic I you know we wouldn't you know we didn't have strategy sessions we lived with a strategy we would have like 20 conversations not one Deep dive and I think that way of working which I think came a little bit from my design background really helped us create this huge business turnaround I've got two more questions for you Brian before we turn it over to the audience I've got an easy one and a slightly tougher one okay why don't I give you the more difficult one first if that's great let's do it one long-standing criticism of Airbnb is that it might be exacerbating unaffordability in densely populated cities like San Francisco by diverting housing stock that otherwise would have been made available to long-term tenants who reside on those cities is there any Merit to those concerns yeah there absolutely is marital concerns and let me just zoom out for a second and back up when we started Airbnb we started it the origin story is Joe and I couldn't afford to pay rent in other words Joe and I couldn't afford to pay for a housing and in 2008 many people turned to Airbnb 2019 during the financial crisis to put their homes in Airbnb but over the time I learned a lesson you know when I came to Silicon Valley in 2007 the word Tech may as well have been a dictionary definition for the word good and if you were in Tech you were taking a step forward for Humanity and therefore making the world a better place and so therefore if you grow and what you're doing is virtuous therefore you're making things better and I think you know 15 years later we've now realized another truth that if you create something really powerful a tool or a platform and you put in the hands of hundreds of millions of people that they are almost always going to use it and there are going to be unintended consequences things that you didn't foresee and the faster something grows the more it can hit you very quickly and I think there is a concern about how fast technological progress is going and so this was a huge issue airme wasn't designed for people to remove housing from the market so this kind of coincided with our working with cities and we meet with regulators and they said we have these concerns and said well how can we fix it a lot of them would say well we want to know in our city that people who are renting their homes this is the home they live in or the least they live there some of the time she said okay how will we solve that and we ended up coming up with a registration system where they would register they may have an available number of nights they can rent a year maybe at the show proof of residence we will handle like hotel tax that will go to bettering cities but I think again it's all about working with cities not believing that your product is inherently like virtuous maybe your idea is but always knowing there's unintended consequences and that's we've tried to do and I'll just say again the heart and soul of Airbnb still lies in the Everyday People 90 are individuals and that's kind of mainly where where most of our activities for those for those entrepreneurs and aspiring entrepreneurs in the audience what are some post-covered Trends in travel that have captured your attention well um I want to can I talk about a travel Trend and then I think a driver of the Travel Channel I want to talk about like two Trend Okay so when when the pandemic occurred people had to shelter in place and suddenly people were doing their jobs on a laptop and then many people realized well I could take my laptop anywhere and so suddenly people were untethered from the place they lived and so we started noticing that airbnbs were starting being booked for like 30 days or longer last quarter a fifth of our nights booked were for stays of longer than 30 days nearly half our business is now longer than a week and very few people stay in a hotel for a week or longer and so it's actually become a fundamentally different use case in other words people are living on Airbnb that was a really big Trend the other Trend that happened was because people weren't going to cities because many things the cities were closed they couldn't cross borders they couldn't you know there wasn't really an urban travel available across border people started going to small towns rural communities national parks in other words they started going from 100 cities to a hundred thousand places all over the world so the two pandemic Trends where people staying longer and going everywhere we've now seen a rebound of a lot of people and now this goes my other my other point so the other trend is that a lot of people have been like kind of stuck in the house or landlocked for the last few years and they want to get out and the pandemic is ending who knows when exactly it's over but the pandemic's ending and I think there's a lot of people that have pent up demand but I'll just end with one last Trend a trend I'm actually concerned about I think we can maybe help a little bit so during the pandemic we hired um the now Surgeon General in the United States he's he was also certain general for Barack Obama um Dr Vivek Murthy and he said something to me that and we hired him by the way because covet had occurred and we wanted to keep the home safe and so we designed this like cleaning protocol and he said something to me I'll never forget he said do you know what the number one killer in America is and I said I don't know is it heart disease is it cancer and he said no in a larger sense the number one killer in America is loneliness that there's a lot of studies that show that people that are lonely the pernicious health effects is it's equivalent of smoking a pack of cigarettes a day and people that are chronically lonely live uh 15 years shorter than people who aren't and I always thought okay that's really bad but I had this image in my mind of like maybe elderly people being lonely and so I started looking at the cohorts and it turns out that the loneliest people in America are not senior citizens they're teenagers that depending upon the stats you see some somewhere like two out of three teenagers are chronically lonely that correlates to feelings of hopelessness and depression one out of three adults in America is lonely but two out of three teenagers is lonely one in five teenagers has made a suicide plan in the last year and I I said why is this happening this is so crazy and I think what's happening as I think Modern Life is making us lonely and I think what's happening is like you know you know 10 15 years ago we had these amazing magical devices where they brought us to this world and we could connect with everyone but social networking which was two-way friends became social media which was an audience and followers and you're performing and the thing about and it's not that social media is causing this I mean fewer people have families people people go to a church or a bowling alley there's less physical proximity now the office is zoom the mall is Amazon the theater is Netflix the grocery store sends a car and and all these things are fourth step for Humanity and I think they're all really great inventions but they're like ingredients you can't you we've got to balance um people being online and connecting with people having meaningful physical interaction in the real world and this is something that I think we're not going to solve not under some delusion that we're going to solve this problem but I would like for us to be able to focus on helping because I think travel is a great way for people to connect and I want to move Airbnb even more towards a platform where it's either a way to do reunion trips or your friends because a lot of people now their friends don't live in the same city when you guys graduate many of you are going to live in different cities than your friends and you'll never see your friends again unless you some of you travel and the other thing is how do people meet each other these days and so I'm thinking a lot about how can airbnb's platform be used to bring people together to make the world feel a tiny bit smaller because we verify the identity of more than 100 million people on our platform and if we could bring people together make things feel a little bit more intimate that's something that I think I'd be very interested in so it's like if I'm a designer it's almost like we're designing how people connect together excellent well thank you very much for sharing with us your insights today Brian thank you would you like to take a few questions from the audience thank you so much for sharing your stories Brian my name is Florian dalos and I'm a second year MBA student here and I would love to understand a bit more about the co-founder Dynamics I find it really interesting that in Silicon Valley so many co-founder stories end with conflict or lawsuits but you at Airbnb seem to be one of the companies where co-founders have stuck together through thick and thin so I would be curious to understand what the secret to the cohesion between you Joe and Nate was oh man that's a great question I like to think like why am I on stage right now and not the person I thought maybe I would be in my high school yearbook and the answer you know in addition to a lot of hard work is a lot of luck but I don't think of my luck as that we came up with this idea at this time I think the luck I have is having met my co-founders Joe and Nate uh that was is what makes me so lucky you're kind of like the average the people you're surround yourself with and I remember when I met I knew Joe from Misty but Joe and Nate are really special each of them had businesses in high school I think that it's really important that when you pick Partners they're people that you can be friends with they're people you can imagine spending more time than your spouse because you're going to probably spend more time your co-founder than your partner actually and they're people that are so good they almost intimidate you they challenge you but they're also complementary one time like a decade ago we each did like some kind of personality test I don't it wasn't like in Enneagram it was like one of those kinds of things and there's like you know the personality tests are on like a wheel right and they kind of put you know wheel and it turned out that when they plotted our three personalities they formed a perfect equilateral triangle and it made so much sense that it's about the sense of mutual respect people that are so good they almost intimidate you but they're so complementary and there was such a deep respect and we had a rule the rule was that that winning an argument was never more important than preserving the relationship and the reason that's important is because if you start a company you're gonna have to debate like a hundred thousand things at least ten thousand right you're probably debating like three things a day and so it's like a thousand things a year 10 years that's ten thousand things so no one argument can be the thing it has it has to be this larger sense that we're a band and I think you got to really work hard at the relationship almost like exercising if you don't keep exercising you lose you get out of shape and so we worked really really hard and one of the things we did in 2009 is we said every single Sunday we're going to meet no matter how busy we get well now it's like sometimes Sunday becomes Thursday but we basically meet every single week and to this day we still do those calls and I think a lot of human connection requires Constant Contact constant connection a deep sense of respect a sense that like you know I'm only here because of them a sense of humility and gratitude and the sense that I'm never going to try to win because if I win alone I'm not going very far hi my name is Tomo MBA Juan I was curious to learn about the principles you mentioned when you're talking about covet response uh what are your current principles have they changed a lot are there any uh design process so to say a redesign process when you're thinking about principles you operate on So when you say principles do you elaborate time a bit more yep you mentioned in the covet response section um that prints everything comes kind of comes to the principles that you're rely on so I was wondering what are those and how it has been formed yeah I mean I think that like I like to come from a sense of first principles and um every I think every different situation I actually like there are some Universal principles for the company but like say the crisis we wrote down a number of principles the first principle we said is act fast and that's why we said we have to be intuitive we have to be courageous we have to move very quickly a lot of people it's like imagine me on a car chase and you're like you like pause what should I turn you're dead so we had to act fast the second thing is we had to preserve Cash Cash was like oxygen the third is we said let's act with all stakeholders and Minds we didn't want to be villains of the crisis and the fourth principle I said is we want to play to win the next travel season so even when everyone's retrenching we were thinking about like kind of going forward and I think that principles are really important because they become like your Guiding Light in the sky and they also I remember going to the board we had you know when the Christ was going on we had to have Sunday board calls because it was almost like three months was happening every week and instead and I told them I'm gonna make like a thousand decisions I can't run every decision by you so here are the principles I'm going to use let's align on these principles and if I stick to those principles we can then stick to this and I generally think that's just one example but every project I do I try to identify what are some immutable foundational truths that you couldn't further distill down than those things and make sure that you communicate them to people my name is Roman Scott I'm a sophomore State political science and I just want to ask some for somebody who's aspiring to be an entrepreneur if there was one thing you could tell yourself when you were growing up or one piece of advice you could give yourself what would that be one piece of advice um I would say just start making something you know for example I went to risty and I took all these classes um but it's funny enough one of the things that probably prepared me more for entrepreneurship than RISD is that Joe and I both ran like student organizations so I ran like a club hockey team Joe ran a club a basketball team and Joe and I had the hardest marketing challenge in the world how do you get art students to go to a sports game and we had like little budgets but the point is like I think I think that a lot of the intent I think there's going to be a Temptation for people in this uh for you all in this audience to seek prestige because you're at a prestigious school I think the problem with entrepreneurship and it's summarized my mom's story is when you're starting out the line between being an entrepreneur and being unemployed is kind of in your head and so you have to be very careful about seeking Prestige because seeking Prestige sometimes means you won't get your hands dirty and if you don't get your hands dirty you don't actually learn the underlying principles how do you make something how do you struggle through something how do you describe a story how do you convince someone else and so I think making something it could be like a little toy I mean not physically toy but like a like a thing for fun and I think just the other thing I'd say is somebody asks like how do you start becoming an entrepreneur I say you start you just start you start you don't think you act you start very few entrepreneurs make plans um you know I I like the business plans like expire the like moment you do the first thing and so instead of making plans I would just make something and it makes something with the resources you have off with you and your friends anything that process of making something is great and by the way the other trick I'd say is make something for yourself solve your own problem the first weekend Joe and I were like wait a second let's make a little website so we can rent our apartment and make some extra money that did not seem like a billion dollar idea renting through air mattresses in an apartment and so there's a lot of investors that say we like to invest in big markets well what's the market size for people sleeping on air mattresses so the problem is that like I wouldn't focus on markets that focus on solving a problem for yourself or somebody in your life it doesn't even have to be a big problem it could be something kind of fun and just start making just start doing something Brian Before I Let You Go it is a view from the top tradition to end each session with a number of Rapid Fire questions may I invite you to play along yes let's do it when was the last time you stayed in a hotel um when I had these fake glasses and fake mustache um I I think I stayed one I think was like last year for like an event and what is the most memorable Airbnb you've stayed in well um I stayed in a tree house in Burlingame California by this couple Doug and Linda so it's a very quick story uh this is not rapid fire so maybe I should not tell a story well anyway I will tell a story because now I've half started the Tony Story So this woman named Mackenzie her mother her mother and father were Doug and Linda the father builds her tree house in the backyard she plays in treehouse growing up then she graduates high school goes to college and it was treehouse in the backyard and they're like what do we do with a tree house and one day MacKenzie's like why don't you put on Airbnb the house ended up paying for the mortgage and it was this amazing experience and finally I learned that you your own apartment in San Francisco is listed on Airbnb how much do you charge per night and well um it's free but boy I do I have some cleaning fees no just kidding um um it's free and when you stay with me um you know it's a pretty cool experience because um it's me and my co-host Sophie Supernova who is my 18 month old Golden Retriever and I make what I call chesky's chips chesky's chips are an old family recipe of chocolate chips that I got actually off of Google but um and then we make dinner together and then I take them on a tour the next day to the office where I tell them the story of Airbnb and and I think I'll just end by saying this um you know I think on the surface Airbnb is about space and it's like oh stay with me but I think below the spaces the thing about Airbnb when it works the best it's really about people it's really about connecting to one another it's the idea that the best way to change someone's mind about someone else is to walk in their shoes and the best way to walk in the shoes is literally to be in their home and I think that if more people could live together then I think you know obviously a lot of Minds would be changed and so that's kind of what we're trying to do perfect thank you for making the time today thank you it's been a great pleasure thank you [Music]