With creativity you can always find a way.

You can design the world around you.

You can live in a world of your own design.

From: Joe Gebbia

Date: September 26, 2007

To: Brian Chesky

Subject: conference

brian

i came up with a name for turning the house into a place to stay…

airbed & breakfast

ha!

airbedandbreakfast.com will be a simple 4 page site or so.

then it occurred to me that it could be a place for other designer people in san francisco to list a room (or airbed) in their own houses specifically for the conference. and if we hurry we could ping the idsa to put some of their ubiquitous Connecting ’07 ads on it…for a fee, of course.

the ideas never end.

joe

It seemed insane that you would actually be able to pay somebody else and be able to book something with them, and you would get a reputation system.

We decided, let's just do it. And at the time we're like, "This is a little too crazy. It's a little too scary. I don't know if we're allowed to do this. I'm not sure if it will work." We decided to do it anyway.

At this point, I get introduced to a whole bunch of investors. Probably 15 angel investors. We were raising $100,000 to $150,000 at a $1.5 million valuation. We were at $1 million and eventually someone convinced us we'd get a $1.5 million valuation with an extra $50,000.

So we were trying to sell 10% of the company for about $150,000 and of the 15 people we got introduced to, we got introduced over email, I think about six, seven or eight of 'em didn't even reply to the email so we never heard from 'em again. About seven or eight replied, of those, half of them said, "This doesn't fit my investment thesis." Which is weird, 'cause their investment thesis was like consumer internet companies, we were consumer internet, so I assumed that we fit their thesis, but we didn't. Or they said the market wasn't big enough.

One person said, "I'm just not excited about travel as a category," so we're like, "Okay," and then we ended up meeting a few more investors and they all passed on us. The low point was, we ended up launching in August 2008, we meet with the angel, Mike Maples, and we decided, I was so cocky I said, "I'm not even bringing a deck. I'm just gonna show him the live website."

We launched that day on TechCrunch. We had 10,000 people visit our website. I go there without a deck. I have a website, I type in the website, it doesn't work. So I basically sat in front of him for like an hour, and I didn't know what to say. I'm trying to explain to him this concept, and he's like, "I have no idea what you're talking about."

Barack Obama was coming to Denver. There were 80,000 people coming or there was an 80,000 seat football stadium and they had 27,000 hotel rooms. We thought, "Wow! There's an opportunity here." Plus, it's very grassroots. And we contacted New York Times, CNN and they thought, "What are you talking about? This is crazy. No one's ever gonna stay with other people."

So we ended up just reaching out to the local newspapers. They ignored us, and we had this idea, “Why don't we just start by getting anyone to write about us?”

We felt like if some people write about us, other people would refer to them. So we literally started with bloggers. I wouldn't be surprised if some middle-school student wrote about us for the school paper. But, if we literally got bloggers to write about us, then people would Google "DNC," they would see us come up, 'cause all these bloggers wrote about us. Then the local newspapers would write about us and eventually we worked our way up until CNN, New York Times got it. It started getting traction, but we were still in debt.

So, this is now almost a year into the business. We're tens of thousands of dollars in credit card debt, every investor said no to us, we've launched three times, we've got national press, and we have almost no customers every single day.

And now one of my co-founders decides he's moving to Boston, he's getting engaged, and his fiancé's maybe not interested in living in the west coast and it was unclear if we were gonna stay together as a founding team.

Everyone hits rock bottom, for me this was rock bottom.

One of the things that kept me going is I remember the worst days at Airbnb were better than my very best days at the job I had before that.

And I said my worst day here is still better than the job I had before because I’m doing what I love and even if I’m failing at what I love, I’m doing it, and there’s something incredibly powerful and special about just the pursuit.

We called General Mills, they were like, "What are you talking about? You seriously think we're gonna make unlicensed presidential-themed cereal?" We're like, "Okay, I guess you won't."

And so then, we called these medium-sized cereal companies. They're like, "Great, just send us a non-refundable check for $200,000." I'm like, "OK, that's not gonna work."

So we found this guy in Berkley. He was an alumni of RISD. He says, "I can't print you 100,000 boxes of cereal, but here's what I'll do. I'll print you 1,000 boxes of cereal for free, just give me a royalty." We're like, "Thank you!"

One day, Joe comes back with 1,000 pieces of giant cardboard. I'm like, "What the hell is that?" He's like, "These are the cereal boxes." They were just pieces of cardboard we had to fold and glue into boxes. No one told me that. So, to fund the company we basically folded, like giant origami, 1,000 boxes of collectible breakfast cereal, had to pack cereal in them, and we sold them for $40 a box. We thought, “Who was going to pay $40 a box?” But they were limited edition, so we hand-numbered every one. We called it limited edition. And we ended up selling $30,000 of cereal. And that's actually how we funded the company.

This week’s award for best marketing promotion related to the election goes to AirBed & Breakfast, the peer-to-peer pad crashing site for travelers. (You list how much per night you want for travelers to stay on your floor, and they book through the site).

Today, I received a package from AirBed & Breakfast containing the two boxes of cereal pictured above: Obama O’s and Cap’n McCain’s. In addition to the physical boxes of cereal, there are two catchy jingles for each cereal (embedded below), and a Webpage where you can vote for the cereal you prefer.

I told one mentor of mine about this business. He said, "Brian, I hope that's not the only idea you're working on."

My mom said, "If you need money, you don't need to have strangers stay in your home. Let me send you money."

So people were very worried. And you start wondering about the decisions you've made in life to get here. So I could tell you, I didn't feel successful or smart, or talented at this moment. I felt like the world was against me. I'd go to sleep, my heart pounding every night. I'd wake up like wide awake, like, “What am I gonna do? How am I gonna get through the day? We have no money.”

So we meet with Paul Graham at Y Combinator. And he thought the idea was absolutely terrible. In fact he said, "People are actually doing this?" And I said, "Yeah." And the second question was, "What's wrong with them?" And I said, "Oh shit!"

So I thought this was a really bad interview, but by the end of the interview, Joe hands him a box of Obama O's. And Paul Graham thought that we just bought this stupid box of cereal. And he's like, "No, this is how we funded the company." And Paul Graham said, "If you can convince people to pay $40 for a $4 box of cereal, maybe you can get strangers to stay in other strangers homes."

And he also liked us 'cause he said we were cockroaches. And he said, "It's an investment nuclear winter and the only people that will survive are cockroaches, and you're a cockroach."

And so I'm like, "Thank you!" It was actually the nicest thing. For six months, that was the only compliment I got, was I was a cockroach. And I remember calling my mom like, "Mom! I'm a cockroach. I got in!"

The first thing Y Combinator did was, it basically created a structure for us to work on it full time, and live together.

So in other words, we were all kind of working on it, but it was like everyone had other things going on in their life. And I think the enemy of a start-up is everyone else's life. It's true. You have a life and you have vacations and you have conferences and you go away and you do other stuff and it's like, that's the enemy of start-up.

You know, Paul Graham used to say, "Start-ups don't die, they just fade away."

And so, you know, we basically decided, for three months, Nate would move from Boston to San Francisco and we'd wake up at 8:00. We'd go to bed at midnight, seven days a week, and we'd work from eight to midnight, every single day. And seven days a week, we'd get a full night's sleep, but that was it. And we would, in that dedication for three to four months, created this real serious rhythm where we weren't doing other things. We were totally focused.

So Paul Graham said, "All you have to do is get 100 people to love you. Don't worry about millions of people." That was totally freeing. 'Cause until then I was like, "How the hell am I "gonna get a million people to do this if I can't even get my mom or my sister to do it?" But I can find 100 people.

And so we literally decided, do things that don't scale. If all you need to do is get 100 people to love you, do things that don't scale. It turns out, 100 people that love you is really hard, 'cause it's easy, 100 people to like you, 100 people to love you means you need to meet them. You need to understand their problem. And so we literally would fly, during Y Combinator, from Mountain View, we commuted from Mountain View to New York.

Joe and I would go to New York, and we'd go door to door, 'cause New York was where most of our community was. And we would meet with every one of our hosts. And we'd live with them. We literally would live with them, we'd write their first reviews for the places. And in fact, I would go there and I would be like, "Wow, the photos are terrible! This is actually a really nice house." And the host was like, "Well, I can't figure out how to get photos onto my computer." This is before really the iPhone and high quality camera. This was like people had to plug a camera into their laptop.

So we thought, "What if you just clicked a button and a photographer next day would magically show up and photograph your home?" And we thought that would be amazing.

And so I went home with Joe and we borrowed a camera from one of our friends in Brooklyn who was a photographer, and we knocked on the door and they're like, "Hello?" Yes, I'm here, the photographer. And they're like, "Wow, this is a small company, the founders also photographing my home."

I used to also carry a bank ledger in my backpack. And if you need to get paid, I'd just write you out the check and knock on your door hand you a check. So, that was also a reminder of how small we were. But the point was that doing things that don't scale.

On Airbnb, the hosts were in New York but the travelers came from all over the world. So people from all over the world would hear about and discover homes in New York. They would travel to New York, and they'd also travel to San Francisco, and then they'd go back to their city and they'd spread the idea.

The other thing is they would go from a guest to a host. And so the network naturally grew. But we also targeted events, so... We targeted the Democratic National Convention. We built D.C. through the inauguration 2009. We focused on music festivals and concerts. The World Cup, the Olympics, these are early, not the most recent one, but the one before. So events and PR were probably the main ways that we bootstrapped.

And then we built this one-click post-to-Craigslist tool, that Craigslist allowed us to do until they shut it off a couple years into it. But, we allowed hosts to basically, with the single click of a button, click and distribute their post to Craigslist to get more distribution. And so the listings would get re-listed onto Craigslist and they would feed back.

We started a little bit of Google advertising. But the main way it grew was through word of mouth and PR. And PR, we used to promote the events. We didn't have any partnerships. We tried to partner with event companies. We tried to partner with, partnerships in your early stage company I found never work, 'cause there's so much red tape and paper that by the time you ever get done, you're dead.

And so, but PR is super. If you've got an idea that's noteworthy, people will talk about it. And almost the more absurd the idea, in some ways, the better, because it's worth writing about. Like, it was absurd people were doing this so they couldn't stop writing about it. And so that was actually a good thing. Being kind of a provocative idea was good to get the word out.

And then we thought, "if we just get enough people to use it, "they'll tell everyone else about it." And so this idea primarily grew through word of mouth.

And then we would go to cities and then we would educate the host. We would do these meet-ups. So we'd go to a city, and we called it turning on a market. We would do a meet-up. We would meet the 10 or 20 hosts, we'd educate them.

I didn't say this to Oliver Samwer, but my view was, my biggest punishment, my biggest revenge on you is, I'm gonna make you run this company long term. So you had the baby, now you gotta raise the child. And you're stuck with it for 18 years. 'Cause I knew he wanted to sell the company, I'm like, "No, no. You're running this company."

And I knew he maybe could move faster than me for a year, but he wasn't gonna keep doing it. And so that was our strategy. And we built the company long term. The ultimate way we won is, we had a better community. He couldn't understand community. I think we had a better product. It was a do-or-die time.

We ended up flying to Europe, we hired bunch of country managers, we flew them all to San Francisco and we basically trained them for a month or two. We said now go to your countries, hire your team, here's how you open a market, here's how you open cities and we opened, I think like 8 or 10 offices in like three months. It was actually totally insane. We hired hundreds of people and the whole speed of the company picked up at that point. And a couple years later, obviously, it was game over.

For a long time, Chesky’s relentlessness meant he was running the company like a rhinoceros: Point him in the right direction and he’d put his head down and hammer out a solution.

When a guest ransacked a host’s apartment in 2011, he managed the potentially crippling PR nightmare with such fierce attention that it actually led to features that improved the service’s professionalism and trust, including 24/7 customer service and comprehensive insurance coverage.

If you want to build something that’s truly viral you have to create a total mindfuck experience that you tell everyone about. We basically took one part of our product and we extrapolated: What would a five-star experience be? Then we went crazy.

So a one-, two-, or three-star experience is, you get to your Airbnb, and no one’s there. You knock on the door. They don’t open. That’s a one star. Maybe it’s a three star if they don’t open, you have to wait 20 minutes. If they never show up, and you’re pissed and you need to get your money back, that’s a one-star experience. You’re never using us again.

So a five-star experience is you knock on the door, they open the door, they let you in. Great. That’s not a big deal. You’re not going to tell every friend about it. You might say, “I used Airbnb. It worked.”

So we thought, “What would a six-star experience be?” A six-star experience: You knock on the door, the host opens. “Hey, I’m Reid. Welcome to my house.” You’re the host in this case. You would show them around. On the table would be a welcome gift. It would be a bottle of wine, maybe some candy. You’d open the fridge. There’s water. You go to the bathroom, there’s toiletries. The whole thing is great. That’s a six-star experience. You’d say, “Wow, I love this more than a hotel. I’m definitely going to use Airbnb again. It worked better than I expected.”

What’s a seven-star experience? You knock on the door. Reid Hoffman opens, [you] get in. “Welcome. Here’s my full kitchen. I know you like surfing. There’s a surfboard waiting for you. I’ve booked lessons for you. It’s going to be an amazing experience. By the way, here’s my car. You can use my car. And I also want to surprise you. There’s this best restaurant in the city of San Francisco. I got you a table there.” And you’re like, “Whoa. This is way beyond…“

So what would a ten-star check-in be? A ten-star check-in would be The Beatles check in, in 1964. I’d get off the plane and there’d be 5,000 high school kids cheering my name, with cards welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindfuck experience.

So what would an 11-star experience be? I would show up at the airport and you’d be there with Elon Musk and you’re saying, “You’re going to space.”

The point of the process is that maybe 9, 10, 11 are not feasible. But if you go through the crazy exercise of “keep going,” there’s some sweet spot between “they showed up and they opened the door” and “I went to space.” That’s the sweet spot. You have to almost design the extreme to come backwards. Suddenly, doesn’t knowing my preferences and having a surfboard in the house seem not crazy but reasonable? It’s actually kind of crazy logistically, but this is the kind of stuff that creates great experience.

When in doubt, we’re just going to go above and beyond for customers.

One of Chesky’s strengths is his humility in recognizing his own deficiencies as a leader, and his willingness to look to others for wisdom. In addition to seeking help from Donahoe and Sandberg, he also spoke to Amazon CEO Jeff Bezos, who recently told him, “This company is going to be massively successful as long as you don’t fuck it up.”

Chesky has consulted with Groupon cofounder Andrew Mason on international expansion, former CIA director George Tenet on corporate culture, and even Apple design SVP Jony Ive on product design.

But none of those heavyweights could give Chesky the deeper education he needed on how to run a hospitality company. He wanted a mentor who could have more impact on Airbnb than on himself.

In early 2013, Chesky and his senior executives met with people from traditional hotel groups. “[They didn’t] inspire us or fit with our culture,” Chesky says. “That’s what led us to Chip.”

The two stayed in touch last spring, and by June, Chesky had made up his mind: This was the guy. The rhino had a target in sight.

He offered Conley a full-time job, yet Conley declined. He was pretty happy living a sun-kissed life trotting the globe in search of the next Burning Man. But Chesky kept up his charm offensive.

“I’ll never forget it,” recalls Laura Hughes, Airbnb’s global hospitality lead. “Brian was like, ‘I’m going to dinner tonight with Chip, and when I come back, he’s going to be an employee.’”

Chesky had hoped to get Conley to agree to consult eight hours a week. Before dinner was over, he had persuaded him to commit to 15 hours.

One of the things we decided was, how can we reinvent the office? There were like 100 ideas, but I'll just give you one of 'em.

One of our offices that we had, you walk in the lobby and there were photos of our homes around the world. And so you go to this lobby, and I remember people were just walking in our lobby and lookin' at all of these homes, like, "Oh, these are awesome." And I thought, I couldn't figure it out, but I thought there's gotta be a better way than just showing photos of our homes. And I couldn't figure it out.

One day, I'm walking home, I'm walking from my house to -- I'm walking down the street. And I pass a furniture store and it's late at night and the furniture store was lit up. They light it up at night and it's like, there's a floor-to-ceiling window. And I just look in and it's a showroom. They've basically recreated these rooms. And it was hilarious. I thought it'd be really funny just to have a meeting in the showroom. And in fact, the next day I took somebody to a meeting in the showroom and we were hanging out in the dining room of a furniture store, but you feel like you're in a living room. It was actually kind of fun. It was kind of absurd. You're like having a meeting in Ikea, but it was actually kind of fun.

And suddenly we realize, what if all of our meeting rooms were actually modeled piece by piece after apartments on our website. And we ended up doing that.

And so, I remember one time we emailed somebody. We said, "Hey, do you mind if we recreate your home "in our office?" And they were like, "What?" And I'm like, "Yeah, all I need is an inventory of everything in your home." And so some people did it, and we literally recreated the rooms.

So you go there and our meeting rooms are literally homes you walk into. Like showrooms of our homes. It's a subtle little reinvention. It doesn't cost a lot of money 'cause people's homes, the furniture they put in is actually cheaper than most office furniture. It's really creative and we have tens of thousands of people a year who fly or come to our office to tour our office now and our office has become a huge competitive advantage in hiring. 

The first thing we do is we try to just take in all the inputs. So, what are the inputs we get? Inputs are customer service calls. Inputs are social media posts. We do tens of thousands of listening sessions with guests and hosts and then inputs are like basically user behavior right?

You can see what people are clicking. You can see retention. You can see when somebody churns and then if there's a party and we don't handle it right, they churn, they don't come back, and then we see people in their network don't list and you can start to measure that so those are your inputs.

You basically now have an organization of maybe millions of issues and you can bucket them to like say 100 or 200 types of things.

The next thing you do is you look at the frequency and the severity. 

So severity might be like a safety issue, very infrequent, but when it happens is really serious.

A frequent issue is like I'm upset with a refund. Not as severe but very frequent, that happens all the time.

Then you then you start to look at relationships. Like, you know, we notice a lot of hosts are complaining about pricing being confusing, a lot of guests are complaining that hosts are charging too high fees, and then we start to realize, wait a second, if we make it easier for hosts to price and they understand what guests are actually paying they might actually do a better job pricing and guests won't complain as much. So you start to find connections, so that's the science part.

The art part now it's actually picking stuff because you have a list, you have some matrix, like severity, frequency, this and that, but the real ability is the art form of a group of 10 or 20 of us deeply understanding the issue so well.

We live the product. We use the product. I host, I've read thousands of things, you just take thousands of inputs you put them in your head and then you just go through and you can't paint by numbers, you can't be purely algorithmic, that's why that's the art, you could, but I think it's never as good as your intuition, but your intuitions form all these data points.

I like to tell people we have to have permission by the customer to do something new and we only have permission to do something new if they love what we currently do and if they're complaining on Twitter about upfront pricing, about doing chores when they check out, about customer service taking too long, then we don't have permission.

They don't want us to do something new because they're gonna think we're gonna bring problems to that category, so I told the team, “We have some big ideas, AI is going to unlock so many of them, but we don't have permission to do new things until people love our core service, so we're going to basically create a blueprint of every single thing people are complaining about.

Albert Einstein used to have a saying, “The best way to keep your balance on a bicycle is to keep moving,” and I think the best way to keep your balance in the world of AI is to keep moving forward and just adopt the tools don't fight it and see where it takes us but it’s going to be pretty wild…

I think trying to ban AI is like trying to ban electricity, you're going to be on the wrong side of History. The Genie is out of the bottle you can't put it back in the bottle.

All these really good ideas, or big ideas, often sound like stupid ideas. Somebody once told me in the early days, “Don't worry about anyone stealing your idea. If it's any good, everyone will dismiss it.” And that was exactly the truth.

I think that Airbnb before the pandemic probably raised too much money. And we didn't raise as much money as others. I think that in hindsight not having as much money means you have constraints. Constraints means you have to say “no,” you have to make hard decisions.

So you have to basically be relentlessly doing cultural things every week. And so, I do as many cultural things as I used to do, but now they're no longer person-to-person.

The main leverage points I have now with culture is having people do things on my behalf. You would call it leverage. They're doing it for you.

So in the early days, I did all the interviews. Then I trained people, I hand picked people and I said you should do the interviews and here's what you interview for. So I spent days with them showing them how to interview. So then they started interviewing. Then we had all these people, so I had to create an inner circle that trained those people. I used to meet every single employee and give them a personal orientation.

Then I started doing weekly orientations to groups of people. And now we've recorded it all 'cause we hire people all over the world and so we've institutionalized this whole on-boarding week and we carry all the videos and stories, I do the Sunday night email series, I think you've seen some of the emails.

Every Sunday night, I write an email to the company that's not really a tactical email, but a more, kind of, above the trees, kind of, fairly thought provoking, kind of cultural email. Because I find that, if, on your first day, you say something to somebody, they kind of remember, but then a hundred people said a hundred things after that. So you have to continue to repeat things.

So I think culture is about repetition. It's about repeating over and over and over again the things that really matter at a company. And then, it's about trying to design as many things, like the space, when you check in, there's a key card, and when you check your key card, above it says, "Champion the Mission," it's one of the values and it reminds you every day to do that. So there's a lot of subtle things that we do. And I think it's like that touch point. What is every moment that can be designed to reinforce how you want people to value things. And it all can be designed.

None of our valuations are really that real without liquidity for the value of the company. I try not to let this go to the heads of us or the employees. We’re not successful yet. We’re successful when we’re profitable for a really long time and we’ve truly delivered on our promise for millions of customers all over the world and we’ve created this new economy around sharing that’s all over the world and that’s a lot of years away.