Invaluable learnings from Brian Chesky, CEO and Co-founder of Airbnb

If you have ever heard Brian Chesky speak about his experience co-founding and scaling Airbnb you have likely been swept away by his passion and humble and fun personality. He is incredibly insightful and below is a collection of invaluable nuggets I've picked up from listening to him.

Coming up with the big idea

You may know that Airbnb started as airbed and breakfast, aimed to cater for visitors of large national conventions when hotel rooms were selling out. What you may not know is that Brian and his co-founders didn't feel like that idea was the big one. They knew there would be a big idea, but that airbeds and breakfast wouldn't be it. It was merely a thing that kept paying the rent so they had enough time to think about the big idea, which would be some "social networking something" he's said. A huge lessons from it, Brian has stated, was that all the really good ideas or big ideas often sound stupid when you first hear them. In fact, someone once told him "don't worry about anyone stealing your idea, if it's any good everyone will dismiss it!"

Having resilience and becoming a "cereal entrepreneur"

After a year into the business they had tens of thousands of dollars in credit card debt (the founders had a book with plastic sleeve pockets like ones you use to collect hockey or baseball cards but filled with credit cards to keep track of all of them), almost no customers (as there were no large conventions anymore) and a co-founder team that might be dissolved. For Brian, he felt like this was rock bottom. Deep in debt, they didn't know what to do, they were desperate and thought the airbed part wasn't going to work out. But what about breakfast? Everyone needs to eat, right? As such, they created Presidential-themed breakfast cereal called Obama-O's and Captain McCain's (this was in 2008 for the run-up of the presidential election) which they sold for $40 a box and managed to raise $30,000 to keep the business funded and alive. Pushed into a corner they came up with a crazy idea to survive, which worked, and they have kept this experience as one of Airbnb's core values, i.e. being a "cereal entrepreneur".

Image from Airbnb's website with stated values, one of which is "Be a Cereal Entrepreneur"

Becoming a cockroach

After they had plowed through the $30k they managed to raise from selling cereal, people told Brian and his co-founders that they should consider applying to Y Combinator, the hugely successful and reputable seed accelerator. As such, they met with Paul Graham who told them straight that he thought the airbed and breakfast idea was terrible. However, at the end of the interview Joe (Gebbia) handed Paul a box of Obama-O's and showed him that's how they funded the company. Paul's response was: "If you can convince people to pay $40 for a $4 box of cereal, maybe you can convince strangers to stay in other strangers' homes". He also liked the Airbnb founders because he thought they were cockroaches. This was in 2008 in the start of the financial crisis, so Paul told them there was "investment nuclear winter and the only people who will survive are cockroaches, and you're a cockroach". That's how Airbnb got into Y Combinator, which was a big turning point for them.

Rhythm and advice: two main takeaways from Y Combinator

Brian has mentioned that there were two main things that Y Combinator did for Airbnb, namely:

1) It created a structure and rhythm for the founders. "The enemy of a start-up is everyone else's life" Brian has said, and working from 8am to midnight every day for 3-4 months created a real serious rhythm where they weren't doing other things but were totally focused on growing the business.

2) Paul Graham gave them a series of advice that "probably changed their business forever" according to Brian, who went on to say that the most important single piece of advice Paul gave them was that it's better to have 100 customers that love you, than having a million of customers that just sort of like you. If you have 100 people that absolutely love your product, they'll tell 100 people and then they'll respectively tell 100 people (or even 10 people) and that's how you grow virally. That advice was totally freeing, Brian has shared, as finding a 100 people that love Airbnb didn't seem as daunting as finding millions of users. This was the moment where they decided to do things that don't scale. If you only need 100 people to love you, do things that don't scale, such as meeting your hosts in person, designing personal experiences, etc.

The concept of 7-star design

Airbnb has a concept of 7-star design, which partly originated from the fact that two of the three founders are designers, together with a view that design relates to functions and experiences, not just to items and widgets. The 7-star design concept also relates to the fact that on the internet and in marketplace businesses, 5-star ratings (for an Uber ride, f.ex.) is the paradigm. It's the norm for the customer to give, even though the service might not be that impressive. You rate your Uber ride 5-stars unless your life was in danger, in which case you might give them a 4-star rating. As such, the bar for a 5-star rating is really low.

Brian has said the goal for Airbnb was not to get to a 5-star rating. They wanted the product to be so good that the customers would tell everyone about it and that it would have a meaningful impact on their lives. Imagine if someone had booked Airbnb but had such a great experience that they didn't leave a 5-star rating, instead emailed the company asking them for a 6th star.

They subsequently played around with the idea of what a 5-star check-in experience would be, and came up with the following (hilarious) scale:

The 5-star check-in experience is that the host gives you the address, you get to the house, you knock on the door and they're there. They open the door and they let you into the house.

That's a pretty low bar, so they asked; Ok, so what would a 6-star experience be like?

A 6-star experience is probably that they pick you up at the airport. You don't have to knock on their door, they actually pick you up at the airport and take you to the house.

For a 7-star check-in experience, they don't pick you up at the airport. They send a limousine to pick you up and when you open the limousine door there's pringles and coconut water there because the hosts have gone to the trouble to figure out that's what you like, and next to them there are some surfing magazines because they know that you're into surfing.

So what would an 8-star experience be like? In an 8-star check-in, you get to the airport and all of a sudden you see a giant elephant walking by the terminal. You get on top of the elephant and discover there is a parade in your honor and you get paraded away to your Airbnb.

If that's an 8-star check-in, how do we get to 9 stars? In a 9-star check-in, the moment you step off the plane there are 5,000 screaming 13-year old boys and girls holding signs with your name on it. Brian calls this the Beatles check-in, replicating 1964 when the Beatles came to America. They scream your name and follow you around and you do a press conference on the lawn in the front of your Airbnb.

And so, what's a 10-star check in? In a 10-star check-in, you get to the airport and there's a little card with your name on it. You're like "great, there's my ride" and then you realize the person dressed in the limo suit is Elon Musk and he just takes you to space.

This is exaggerated to make a point, Brian has noted, but if you need to find 100 people that really love you then it's very easy to take for granted that the 5-star experience is what people expect, but to build something people love you must do something more than they expect. Every moment is an opportunity to do something slightly more than people expect, and playing this out going all the way to 10 may be extreme but suddenly 6 or 7 stars seems totally achievable. Airbnb apparently applies this to a variety of things and storyboards every step of an experience, be it facing customers or internally, such as recruitment or improving the office environment.

Everyone should be a product person

After running out of space in their apartment/office and having to convert his bedroom into a meeting room, Brian stayed in Airbnb's around San Francisco for almost a year. This gave him a golden opportunity to test his hosts, but also derived a huge message to the company, being: this is not a job, not even a career, this is a calling, a passion. Inspired by the old parable about the two bricklayers where a man walked up to one of them and asked: What are you building? "I'm building a wall." Then asked the other man: What are you building? "I am building a cathedral." Brian told his team that you're not building financial systems, you're not building a website, but instead you're building this mission, something that is only possible if you're constantly using the product so all of you need to be a product person, and deeply passionate about what you are selling. You should use the product when you travel, you should use the product when you're home, hosting, and you should become an expert in every aspect of your product. 

Designing a culture

Brian has said: "A culture is a shared ways of doing things" and that he doesn't necessarily believe there are bad cultures and good cultures, but instead strong cultures and weak cultures. He wanted Airbnb to have a strong culture, a culture in which everyone was on a mission, the mission was shared and a set way how certain things were done. When they learnt about Zappos and other companies with strong cultures, they learnt that a strong culture is founder-led, and when the founders impose this strong way of doing things people buy into it and create something larger than just a job. In a weak culture it's lame to hang out with your co-workers, but in a strong culture it's totally natural, he argues. When you are starting a company, the most important thing is hiring and the important culture decisions you make are the people you surround yourself with. The importance of hiring led Brian to interview "the first couple of hundred employees" at Airbnb.

When scaling quickly, every 6 months it's a different job

Brian has shared that someone once told him when scaling quickly, every six months you keep your job it's a promotion. He further stated that you can even say that every six months it's a totally different job. It's hard to be the right person to start a company and also be the right person to manage it when it has 1,000 employees because you have to be different types of people. The most important thing thus becomes being adaptable, because no one is an expert at everything. He has seen people who have been able to scale, and those who haven't. From that, he's identified two points on those who were able to scale. One is having general intelligence and talent. If you are over your head when you start it's hard to ever not be over your head when scaling. The second point is being curious and adaptable; "We have to be kids at heart at start-ups, I find. In the sense that you're curious, you're open minded, you're welcoming and adventurous and you're not a know-it-all. Know-it-all's will never scale in start-ups because if someone is a know-it-all, they know everything, so they'll never know more, so they're not going to scale. If you're not a know-it-all you're shameless about getting feedback."

Conviction and resilience gets you through tough times

You need to have conviction and resilience to keep going through tough times. You have to be passionate about what you're doing because there will be days when it's so hard, it's easy to stop believing in it. Brian has mentioned he got this deep conviction Airbnb would work during the first weekend when they hosted three guests and he saw how his life changed, and how other peoples' lives changed. If people can experience what he experienced the first weekend he hosted guests, this will be an idea that can be spread around the world, he thought. The Airbnb founders had discovered something and their Y Combinator mentor Paul Graham usually asks: "What insight do you have that no one else has?" A discovery is something that not always happens in a laboratory, but something you have hacked and discovered yourself. The Airbnb founders discovered that staying in other people's homes was deeply rewarding, saved money and something that clearly was non-intuitive.