0:00And the problem is Silicon Valley's in a bubble. And society feels like AI's happening to them, not for them. But I've talked to AI AI leaders and I say, "Do you talk to any normal people?" I I I talked to one famous person, I won't mention who, and I said, "Do you talk to a regular person?" He goes, "Yes, such and such." And I'm like, "Well, that's your nanny. You pay them."
0:23And they're like, "Well, this and that." I'm like, "That's your chef. You pay them." And I'm like, "We need to talk to regular people that we don't pay." And what they're going to say is they feel like they're not a part of it. That it's happening to them. They don't understand it. And I think [music] that is very, very scary. So, we have to basically bridge this great divide between society and Silicon Valley.
0:44Today on the CEO Signal, we're talking to Brian Chesky, co-founder and CEO of Airbnb.
0:52[music] Chesky started Airbnb almost 20 years ago with a pretty simple idea, make it easy for travelers to stay in other people's homes.
1:00That idea created a new category of travel and turned Airbnb into one of the world's best-known consumer companies.
1:09But Airbnb is changing, and so is Chesky's role. He's returned to a more hands-on founder approach as the company pushes beyond homes into new [music] categories, including hotels.
1:20And he's rebuilding Airbnb to be AI native. What does that mean for the company, its competitors, and the millions of people who use it? From Semafor, this is the CEO Signal.
1:43Uh very good to be in San Francisco with you. We are actually in Airbnb's headquarters right now.
1:49And we're going to have a really interesting interview ahead of us with kind of an unconventional CEO. Brian's the first person that we've interviewed who comes from an industrial design background.
2:01Yeah, which is very unusual in the C-suite these days. And uh I've interviewed in the past, but you've known him for longer than I have.
2:08How did you first meet him?
2:09I got to know him when I was in the Obama administration. We made him a president's ambassador for global entrepreneurship. And back then, Airbnb was relatively new, but he was on a mission to create a new category of hospitality and travel.
2:26And he's clearly done that in the intervening years, but he's also run into some tension with big cities and other critics that allege that Airbnb's uh use of short-term rentals has actually inflated the cost of accommodation in some of these big cities. And I want to hear how he's thinking about that right now.
2:43I'm really interested in how he sees Airbnb's responsibility regarding housing and affordability, but I'm also really interested, since we're here in Silicon Valley, in hearing about the biggest corporate responsibility issue of our time, AI.
3:00Absolutely. Let's bring him in.
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3:27Brian, it's great to see you. Um you know, we first met during the Obama administration. You were president's ambassador for global entrepreneurship. Uh and you were it was pretty early on in Airbnb, and you were building this new category, if you will, of hospitality. But you came to it from an unusual place. You were uh design student, industrial design student, at RISD.
3:53So, tell us about how design has informed your leadership and informs your life as a CEO.
4:00I'll just go back to a second. I went to Rhode Island School of Design, RISD, and I studied a field called industrial design, and for those who most people might know what it is, but the way RISD described it is industrial design is the design of everything from a toothbrush to a spaceship and everything in between.
4:16So, in other words, it was a very broad education, but there was a there was a huge topic at RISD when I was at RISD.
4:21And the topic was how do we get designers in the boardroom? Like, how do we get a voice at the table? And I was at RISD, I interned, I worked all these companies, and all these designers were working not for the CEO, but typically for engineering, but sometimes marketing. And [snorts] so, it was definitely a second-rate function. And so, one of my friends at RISD who became my co-founder, we had this radical thought, cuz everyone at RISD's like, how do we you
4:50know, it's all about like advocacy. How does design get in the boardroom? And we kind of thought, well, what if design just ran the boardroom? Like, what if like I stopped asking permission and started a company?
5:01So, what does it mean design running the boardroom in a day-to-day way for you?
5:06That's a really good question. So, yeah, what does it mean to be a designer CEO?
5:09You know, I think a lot of people think of design as how something looks.
5:13And so, they say, well, how could something how something looks help you be a CEO?
5:18I've always thought of design as how something works. Mhm. Does Another way of saying design is design is just a way to assemble something better. And kind of that's what a CEO does. You assemble resources. You assemble teams. You assemble people. You assemble product offerings. I have a rule at Airbnb that we don't ship anything unless we're proud of it first. This is antithetical to most companies. Cuz most that's called taste.
5:44In most companies, how do you know better? Ship it and let the customer decide. And some people say that's arrogant. Like but we call that pride. That like you're an an artist signs their name to something. So we don't ship anything unless we are proud of it first. So I think part of that that's part of what designer is. It's also about absorbing as much complexity as possible. I love to take a huge amount of complexity
6:13and distill it to its essence. There's this word in design called simplify. And a lot of people think simplify is about removing things. But that's not what simplifying is. Simplifying is understanding something so deeply that you get to its essence and you can remove everything that is not its essence.
6:33Can we go back to what you're saying about design and taste? You've said people think design is about how something looks and it's not. It's much more than that. And I take that on board. But I are you a visual thinker?
6:45Definitely. I find yourself sketching out your ideas Yes. I'm a very visual thinker. Um I I have my own kind of weird way I I have a s- It's almost out How do I say this? Imagine like a chessboard.
6:58And you're like trying to navigate in a chess. But imagine the chess board's like there's like it's like a a dice. But now imagine Three-dimensional, four-dimensional.
7:09Now imagine there's like it's like almost like a sphere and there's like a hundred games of chess and they're all in every every game, every piece affects every other piece. So what I've created in my mind is a three-dimensional lattice of the company. It's a three-dimensional like almost color and shape. And I can see like every department, every pixel and I've basically created this three-dimensional model in my head that I don't recommend other people do.
7:36Everyone's got to find their own way of doing it. But like Airbnb is a shape and a color and a space and I'm always trying to refining it. And so, that's kind of what I do.
7:44So, let's talk a little bit about what Airbnb is.
7:48So, tell us what is Airbnb today?
7:52That's a great question because you know, Airbnb's a noun It's We're one of the only brands that's a noun and a verb, like Kleenex. And the noun and a verb means to get a house for less than 30 days for travelers. Um so, on the surface, that's what we are. Some people call it short-term rentals. Um [clears throat] And that's I like to say that's what we were.
8:12So, the question is, what are we becoming?
8:15I think we are becoming something much more. I think Airbnb is becoming a global community where you can travel anywhere and live anywhere.
8:24And so, we're now adding services. Like, if you want to rent a car through Airbnb, if you want to get a massage at your Airbnb, if you want to um, you know, if you go to Paris, you want to get photos. If you want to go on experience, you can get like I went to Amsterdam recently. I stayed in the house in the canal.
8:41And I also went on this like little really cool boat ride along the canal.
8:45So, at then the question is, well, what is Airbnb now?
8:49I think it's a global community of host that can offer these one-of-a-kind spaces, services, and experiences for travelers all over the world. And I think that, you know, [clears throat] our mission or like why we exist is much more than just saving money. It's much more than just families being able to have a house to cook and, you know, be spend time together, although that's very important. I think there's a higher purpose, a higher calling.
9:17I think the higher calling speaks to maybe a problem we have in society today, which is I think there's a lot of loneliness emerging. And so, I think it's parasocial. The lonelier we get, the more we go to social media, almost like turning the TV on in the background, to not be lonely.
9:35But, the more time we spend on the screen, the lonelier we get. So, what we want to do in a single sentence is get people off their devices. We'll use a device to get you off a device in the real world where you connect and meet either people you don't know or you reconnect with people you do know and have these meaningful experiences. That's why we exist.
9:56What are you actually finding among both hosts and guests in terms of their readiness to do that, their appetite for these experiences that you're adding?
10:05Well, [clears throat] I think that on the host side, we used to have We have a saying, "Money is the hook." And that like the people in the community is the reason they keep doing it. Very few people host cuz they want to meet people. They host because it's a really good way to make some extra money. Um and then they discover something surprising. They get that first review. A guest leaves a thank-you note.
10:31Um they um you know, a host may have a child and a somebody comes from Italy and the child learns to speak a little bit of a couple words of Italian. And they realize they can travel without ever leaving their living room. They make extra money and they use it to upgrade their house. A lot of guest use Airbnb because they want to get more space and want to save money.
10:54That's the main reason they start. They also discover something they weren't looking for, which is I feel like I live in this community. I feel a little more connected.
11:03I agree with you. I concur people are lonely and they're desperate for community I and they're finding it in in live events. They're finding it in uh travel. They're finding it in Sometimes travel can be lonely though. The fact what you're trying to do is infuse it with humanity is really spectacular.
11:24But, to facilitate that, to make that come alive, are you really just like a super booking agent or a uh reservation system. In other words, you're connecting the host, the masseuse who's going to provide the massage, the person bringing the boat into your experience in Amsterdam, you know, so you can ride the canals. Is that really what's behind this?
11:50I would say there's something larger.
11:53I think that's probably what Expedia is and that's probably what Booking.com is. Booking.com their name is literally booking.com. So I think they're a booking agent. One of my I'll answer it with a quote.
12:05One of my favorite designers was a designer called Charles Eames. Great industrial designer of the 20th century and I studied him at RISD and he said, "The role of a designer is that of a very thoughtful host anticipating the needs of their guest." And I think of Airbnb, the application and the company, as the kind of map the Uber host, the the the ultimate host and that we're like the dinner party.
12:31We're like setting up the vibe. We create the conditions for magic. We are not the magic. We are we always have to remind ourselves and it's different than say Apple. Apple makes the magic. They make this product that's magical.
12:44We are not the magic. We set the the conditions for magic and the magic is the community. So we're kind of like, you know, Airbnb's like a city. We have 5 million people every night. So the magic are the people in the city. We're like the mayor of the city council and like we're we're like we're like trying to create the conditions. We're also the fire department, we're the police department. We're the sanitation department. We have but we're distributed. We are a giant distributed city.
13:10And that's essentially what my job is. I'm like a mayor of the of a giant distributed city.
13:16host. I mean, I I this resonates with me. I grew up in the hotel business. My father was you know, his high school yearbook said there's a host born every minute and he was you know, he and my mother created Hyatt. It was a concept, right? It was a name, but it was a concept of a vision about design and hospitality and experience and things like this. So, what you're saying very much resonates with me and your notion of community
13:46Well, in his yearbook it said there's a host born every minute and that's what his friend said about him, you know, in his high school yearbook.
13:55I don't mean to jump in to whatever question you ask, but I want to just say something um about that cuz I love that. This idea of hosting, there's a host born every minute. I think it's innate in all of us. And if we actually look through history, we did not invent hosting. Hosting well and I'm proud that we did not invent this.
14:14What we invented was a system of trust to allow this thing that naturally happens in humanity to happen at a scale of 3 billion people. That's all we did. This thing was innate. Your father discovered the same thing that I accidentally discovered. That there's something in our DNA biologically to want to care for one another.
14:36Just to wrap up this thought, you've identified this much broader definition of what you're really doing in this company. How does it change your sort of founder ambition? You know, your sense of what the next frontier is. You cracked this, you know, you redefined hospitality at the beginning of this company. Now you've obviously expanded into new categories. We think of those as fairly kind of I think most of us look at those as kind of oh, these are product extensions, you know. Um but are you thinking about something much broader?
15:06I'm 45 years old. I started this company when I was 26. I never thought I'd do anything for for 19 years, let alone be a founder and CEO. If my mission was to basically mainstream sleeping at home instead of a than a hotel, then I'm done. I I can get more homes, but kind of I did it I should hand the keys over to some professional CEO and they can just kind of scale it.
15:32Thank God that's not the end. That's just the beginning. I think what we're trying to build is a community.
15:39Um we're going to launch a bunch of stuff next year that I probably can't preview now, but I want to basically there's no social graph. Facebook was creating a digital social graph. I want to create a real world social graph where we have this really robust profile, this trust credential. We verified 200 million identities. So, imagine if we verified you are who you say you are. You have a profile. You have your whole library of preferences.
16:06And then we can then figure out how you're connected to everyone else in the world.
16:10And then our job is matchmaking. We can help you find a house, not just to travel, but maybe find a roommate. We can help you like move into a community and integrate. We can find you help a long-term rental. We can help you go on this like sojourn or the you know, in other words, we're really trying to build this community and really try to make the world smaller.
16:34And I think we're quite a just to be to be self-critical, we've accomplished the mission of mainstreaming staying in a house, but we're very No one would say oh Airbnb has solved loneliness. Not that we are even going to do that.
16:47But we we really feel like that's the next 20 years is building a community to make the world feel smaller. And I think the vectors of technology are against us because AI if you thought social media was powerful, I think AI is like social media times a thousand. And so that's what the next 20 years about is about the world is about gluing us to devices.
17:11It's going to do some really intense things and I want to try to maybe fight against that.
17:22There was a time when you said you were ideologically against hotels. You're now offering some boutique and independent hotels in the portfolio and the experience.
17:30Um what changed your mind?
17:32I think a couple things.
17:34The first thing is that um you know, when I was young, I couldn't afford to stay in hotels and I basically I was 26 and I we discovered there's this thing that's very very affordable. And then my identity got associated with something. And I think one of the things that makes for a really good culture and mission is that you don't just stand for something, you stand against something. Great cultures kind of need enemies.
18:03And a natural enemy was a hotel.
18:07So you're saying we're the enemy? Wow.
18:09Not anymore. But our first our first tagline was forget hotels. And I just had this like very ideological view that Airbnb is about local, it's about authentic, and that hotels were like hermetically sealed places that were taking you out of the community.
18:26And so it it was not because you thought you'd reached the limit of what you could do in home.
18:32So then my mind changed. Maybe I need to revisit my values. Maybe maybe ideology's a little bit dangerous. And I by the way, I think that's a separate topic. I think ideology can be dangerous because your beliefs become your identity. And that's a that's that is antithetical to curiosity.
18:50Are you an ideological leader?
18:55Somewhat. But I'm an ideological leader that I hope changes his mind.
18:59So say more about that.
19:00Our guests told us we want hotels.
19:03I started meeting with with I started meeting hotels. I realized that a bunch of boutique hotels wanted to list on Airbnb and that they have these they cared a lot about hospitality. They That they really cared about design. That they cared about the community. That some of these people were very similar to me. And there's this old idea it's hard to hate someone up close.
19:24And the moment and they also started liking me even though they demonized me. We were like wow, we're actually really very similar. And then I learned that half the hotels in the world are boutiques and independents. 99% of hotels in Italy are independents.
19:39And they're very local and they're of their community and I started realizing I've created a character of an entire industry for 15 years cuz I maybe needed an an enemy. And maybe maybe the enemy should be loneliness. Maybe the enemy should be misunderstanding. Maybe the enemy should be mass production. Maybe the enemy should be an idea not a person or a company or an industry.
20:00Well, you and I have known each other a long time. I'm glad I'm not the enemy.
20:04And by the way, not only are you not the enemy, we now have a hotel business. And it's one of our fastest growing businesses. And you can now go on Airbnb, you can book hotels, and we'll give you we'll give you 15% towards your next. So we're trying to get people to stay in hotels.
20:18you really back to my earlier question.
20:21So are you really a big part of what's driving your ability to create this social network and community, this reservation system that exists behind the scenes of packaged as a um community builder?
20:36Yes. Yes, maybe on the surface the way to say is it looks like a booking platform, but if we do our job right, we're actually so much more. We provide, you know, we underwrite like we work with insurance providers underwrite $3 million damage. We handle like 20 million customer service contacts. We mediate disputes. We teach host how to deliver great hospitality. We provide So we do all these things that people don't see.
21:00And we just try to get out of the way to make sure all these great connections happen.
21:04Is the problem you're really solving a trust problem.
21:07Yes, I think that I think that what we invented was not a booking platform. We did not invent staying in a home. Obviously, that's existed for thousands of years. I think we invented a way for 3 billion people to trust one another.
21:25[music] Let's talk about housing a little bit.
21:31Yeah, this has been a recurring theme as as Airbnb has grown, uh one bit of pushback you've had quite consistently is from cities and and various other opponents, yeah, saying that you push up housing costs.
21:43And you're trying to address that at the moment with a new program, um $250 million you've allocated to What are What are you trying to do and how much can you actually achieve with that some money?
21:56Yeah, so let's maybe we'll talk about the program and then we can talk a little about what I've learned about our impact on housing. So, we announced um maybe a month ago, I went to Austin, Texas, and I announced a $250 million fund to do last dollar um building. So, essentially, there's thousands of projects in America where they have like 90, 95% of the money, but they're like stalled the last dollar.
22:22And so, if you can come in and put in the last dollar, you'd unlock a huge amount of housing. So, in Austin, Texas, for I don't remember what it was. I think we had five or seven million dollars, we were able to unlock 300 housing units because the ROI was not high enough for anyone else to put money in, but it's not philanthropy. We'll get our money back. It's just the yield wasn't quite an investment grade enough for others. We thought, "Well, this is a really good use of money. We'll get our money back, but we're also going to be
22:51on the right side of this issue." That we believe this $250 million will actually unlock $5 billion of housing.
22:58[snorts] Then we started I started doing more research about housing. I was like, well, why are our cities expensive?
23:04And not to make this so simple about supply and demand, but we build fewer I learned this crazy stat. We build fewer housing units today than in 1950 with twice the population.
23:19So, there is we I mean, I think Airbnb we and may know well as anyone in the world that when you constrict supply and you subsidize demand, prices go up. It's just we see it every day. Like, when we add more units of of Airbnbs to a city, prices come down. So, we basically want to encourage cities to build more housing. So, another thing we did is we noticed that Austin, Texas compared to New York City Austin, Texas last 10 years have built
23:48140,000 housing units in a much smaller city. And the housing prices since the pandemic or since 2022 are actually down 18% cuz they built housing. New York City home prices are up 30%. Now, New York City is a fascinating city cuz New York City we were blamed for 15 years for rising housing prices. And we can debate whether we were or not. They banned us.
24:12We are no longer in New York City. There are you you're not going to find hardly any units for less than 30 days. And since Airbnb was banned, I think housing prices are up almost 18%.
24:21you think you have any responsibility for the housing crisis?
24:24I think we have a responsibility.
24:27I think there's a difference between having a responsibility and being the primary cause.
24:30So, over the course of 10-15 years, we made deals to all sorts of cities. They would make they would have restrictions like you can only rent for X number of days a year, which is a proxy for I live there. What we found is we typically comprise about point 5% of housing in a city. And of that 0.5% quite a lot of it is somebody's primary or secondary home.
24:53[snorts] There's typically more pied-à-terres or unoccupied homes in a city. And the experiment was played out in New York. So, we sometimes on the wrong side of the issue. But we also I think people think we're about 20 30% of housing.
25:06And they think these are always units taken off the market. So, what we want to do is two things. We want to make sure we are on the right side of this issue. So, if housing is taken off the market, we will work with cities to restrict it. But at the same time, we want people to know that you can ban Airbnb like New York it's still going to be expensive. So, we need to basically encourage the building of more housing.
25:25I mean you you've been fighting this fight for 15 years. Housing is looks like it's only becoming more unaffordable not less so. Do you think the pressure on you is going to grow from here or do you think you've started to turn the tide of this argument?
25:37I think that the affordability matter is going to get much worse.
25:42Because I think even more people want to move to cities and that what happens is this is when you stop building housing in a city it becomes scarce and something that's scarce becomes a luxury. So, suddenly living in a city becomes a luxury becomes a scarcity. And so, I think that this issue is going to be worse. I think the two I'm I will predict that the two biggest topics in the 2020 election will be at a it'll be a local issue affordability and a macro issue will be AI. Those will
26:11be the two things people care about and they can they the one makes the other worse because AI is creating fears of job dislocation.
26:19And a lot of people are saying, I can barely afford my bills as is and now what happens if AI starts doing my job and I can barely afford my housing now?
26:28So, let me ask you Brian. First of all, this is an area of great interest to me. Um the housing uh and in Chicago which is my hometown, we're very focused on.
26:39In fact, we've just done a similar situation an investment to help uh uh a group that is building housing. How can we deliver homes at $350,000?
26:52And ours is as you said the last dollars. And the goal is is that when that home sells, the money goes back into a fund that is used again to build more housing. So, it's basically like a revolver is a way exactly what we're doing.
27:06Uh it So, we ought to team up in Chicago.
27:09Um but what I what I'm interested in is since you're active all across the United States, what are you learning about the impediments to cost?
27:20Uh besides it's the last 5%. You know, what else is it that is keeping us from being able to deliver an affordable house?
27:28I've learned and I don't want to masquerade as a housing expert. Um so, I'll just say what I've learned from housing experts. So, the first thing is there's too many rules and policies and many of them were well-intentioned, like environmental impact, um safety, but we didn't realize the cost. There's a second thing that's happened in America and it's happened over road, which is essentially not in my backyard NIMBYism.
27:52That everyone wants more housing, they don't want it in their neighborhood. So, therefore, we have to think differently. I'm just one voice. So, we need help of other people.
28:03The CEO Signal is [music] presented by PwC. AI investments are delivering very different results [music] across companies and those results can change faster than leaders expect. Some companies see big swings pay off, then fall flat. Other companies struggle early, then start to see results. PwC found that 51% of CEOs reported a change in the business impact of their AI investments over just 8 months, moving between positive, neutral, [music] and negative.
28:35True resilience depends on sensing disruption early and acting [music] on it. The best prepared companies combine long-term thinking with strong AI foundations, [music] because when conditions shift, resilience is about how quickly you can recalibrate.
29:01So Brian, let's let's switch topics a little bit and talk about the founder and the CEO. And you've said that no one's born a good CEO. So what have been some of the hardest things as a founder for you to learn as you become a CEO?
29:21You know, it's so funny.
29:22I think I I felt like I was born a good founder.
29:25Um and because being a Meaning what?
29:29being a founder is like having ideas and just making stuff. And convincing people to make it with you and convincing people what you're working on is the most important thing. And I was always kind of good at that. And that I don't know, maybe maybe I just learned to do it my whole life. I would make this thing, I'd convince my friends to do this thing with me and that's a founder.
29:49It's it's And most people can be a founder. Not most people can't be founders of giant companies, but most people can make something. Um you know, you can learn there's plenty of information, you can do something. Most people can't be a good CEO and no one starts a good CEO. So to be a CEO, you have to learn how to lead. You have to learn how to manage often people older than you.
30:13You have to learn how to do things. And so I was taught I I had a I I learned a lot of things are counterintuitive. The first thing I did was I treated hiring as a chore.
30:26I didn't enjoy the process. So the way you hire executives is you hire a search firm and a year later or 2 years later, you find out if they worked and didn't work. And the problem is if it didn't work, they've taken a company in this direction, they've hired all these people, and now they leave and all the people are there for them, and you basically have to now go into the department and fix everything about the department, and it's like this huge slog. And And And the problem with is having done something for 19 years,
30:56I've lived with all the mistakes I made 10 years ago. Like I am still today fixing mistakes I made 10 years ago, and very few people do that. So, I learned Here's what I learned about being a CEO that I didn't know and I wish I learned. The number one thing a CEO does is recruit talent. If I were starting a company today, my first employee would be a recruiter.
31:19And so, I spend 2 3 hours a day recruiting. I learned that the better the people, the less they have to be managed. So, the more time we spend recruiting, the less time I have to spend managing.
31:31So, that's a huge commitment, 2 3 hours a day.
31:33And I don't just hire my executive team. I help hire the top 200 people in the company. So, all the directs to my ET, my executive team, I treat as the co-hiring manager.
31:46Because when the executive retires, there's an expectation they might become a part of my team. And so, they have to be my people, not just their people.
31:56But also, I want them to feel a direct connection to me. I want them to join the dream. What I mean by that is we're hiring for the future. We're always reaching. And if you join for the executive, you're joining for the Airbnb of today. But if you join for me, you're joining for the dream of tomorrow, because the founder is the keeper of the dream. We're not just a short-term If you You're not just joining a short-term rental company. You're joining a company combating loneliness. And that person is a different person than the person
32:24joining a short-term rental platform. So, the first call I make every morning is to my recruiter. The last call before I go to bed is to my recruiter. Most CEOs don't do this. And I am always just meeting talent. You know, there I'm always trying to meet people having an overabundance of talent and I'm just constantly trying to create the conditions for greatness. So, I review a ton of work.
32:46Once I onboard an exec, I spend a ton of time with them. I micromanage them, so to speak. And then I let go over time. Most people start by letting go and then they pull in later and then the exec lose confidence. So, you want to like start really connected. And even if they know more than you, they don't know your way.
33:06And they you would need they leaned you need to learn to finish your sentences with them. And so, I spend ton of time recruiting. I'm very hands-on and then I let go over time.
33:15So, can can we talk a little bit about how Yeah.
33:17this design ethos and this taste sort of centrality of taste expresses itself just in the structures of the company cuz I'm I'm very curious about how you infuse Yes.
33:28something that will never appear on the balance sheet or the P&L, like taste, into the company. So, tell me how you have structured the company if you aren't going for that traditional divisional approach.
33:38So, the first thing is we are functionally organized and so, I'll a lot of people are if they in case someone doesn't know, all companies are started functionally. Functional just means um expertise-oriented. So, marketing, design, product, sales and all of them roll up to me rather than at most companies, there's a president of this group, a president of this group and then you have a separate G&A group of finance, legal, HR and they are like called corporate and then you've got divisions. What that does is it
34:06separates the CEO from the product, design, marketing cuz they kind of have their own people and they become kind of a like um a like asset allocator. And they're a strategist. And I'm not saying that's a bad thing, but there's a potential detachment. So, what I do is I basically this happened during the pandemic.
34:30We the pandemic happened.
34:33Um we lost 80% of our business in 8 weeks. And at that moment, we were actually we actually restructured in divisions. And I went back I had been studying Steve and all these other founders and I noticed that most founders were div- not divisionally organized cuz they wanted to be close to the customer. So, I removed layers. The next thing I decided to do was I decided I would be the editor-in-chief of the company.
34:57And so, I said, "I'm going to review every single thing that we do before we ship it." Because I wanted to institute a quality control. But I had this huge objection. Everyone's like, "Oh my god, this is disempowering. You're a micro-manager. You're going to slow everything down."
35:12And my answer So, there was real pushback.
35:13Oh, huge pushback. It was very unpopular.
35:16[snorts] And my answer was I won't do this forever, but this is like a kind of a cheesy analogy, but like a golf instructor, you've got to like watch their swing, and eventually you can let go, but if somebody develops a bad swing, it's really hard to fix. So, I said, "You're all going to sit with me, and I'm going to review every single little detail."
35:36So, I decided I was going to go I was going to skip all the layers, go to the ground level, and all the managers would work with me. They would have their say, but I would make all the final decisions in the room.
35:47And then over time, I would let go of details, but only after there was an Airbnb way. And I was basically trying to teach people simplicity. I was trying to teach people we care about details no one ever notices. I decided to create these little innovation pods. I worked with one pod, made it perfect, then I scaled it. So, it's all about like kind of these little systems. That's kind of those are some of the things I did.
36:11Isn't there a trade-off?
36:13In the short run, there's a trade-off.
36:15In the long run, I found that it's actually more efficient, weirdly. But it's actually a paradox, because when you create divisions, there's politics, because people have to advocate for resources. There's bureaucracy. They have to coordinate. You've You've introduced coordination tax. So, what I found was you slow down to make things perfect, but eventually it's way more efficient. So, we have lots of little teams, but my job is to make sure that teams can move independently, but they all can fit together. And I do
36:45these reviews every week. Twice a year I bring up the top 100 people in the company. We review the whole road map. We do We don't do an annual plan. We do a bi-annual 2-year plan. And we are constantly making sure everything stitches together. So, that's how I reconcile the two.
37:03[music] We're sitting in San Francisco. You've been an early adopter of AI in this company. You're close to some of the founders of the AI revolution like Sam Altman.
37:17How do you think about AI responsibility in a business like Airbnb? Um what do you see coming our way?
37:28[clears throat] I think that This is a big big topic. I think that AI is even more powerful than people realize. I think the stakes are even greater than we're acknowledging. I've heard people compare this to industrial revolution. I mean, this is a thousand times that. I mean, or what This is a cognitive revolution. This is like we're almost a new species.
37:57This is not just changing work. This is kind of scary and exciting. I mean, it depends. This is like splitting the atom, but like way more powerful cuz splitting the atom is like just energy, you know, and that can light up a city or destroy a city, but this this can change everyone's job on the planet. This can dislocate every job we've ever seen.
38:19This can create all sorts of new jobs, but we're not sure if we're going to be prepared for it. This can change our even a sense of what is a human. This challenges the idea of consciousness. This challenges so many things. And I think that we basically created the ultimate Promethean moment. We've unleashed this crazy amount of power. And I think as a society we are not prepared for what we just unleashed.
38:47We are not at all prepared.
38:49Do you think the industry around you in Silicon Valley can regulate itself credibly?
38:56Not by itself. And I also don't think Washington can impose regulations on it cuz I don't think Washington and even understands the technology well enough. And I've talked to President Obama a lot about this. That this is going to have to be a partnership. That there's a big problem happening right now. And the problem is Silicon Valley's in a bubble. And society feels like AI's [clears throat] happening to them, not for them.
39:23And so it used to be technology was like this train, and all we had to do is get on the train and ride it into the promised land of progress. And now people feel like they're on the train tracks, and the train called AI is coming for them. And so the solution is first of all, AI leaders have to stop fighting. Get in a room, share best practices. We need to then also invite society.
39:47Society could be DC. It could be all the creative people in Hollywood that and all these people think their whole livelihood's going to be taken away.
39:56But I've talked to AI AI leaders and I say, "Do you talk to any normal people?"
40:00I I I talked to one famous person. I won't mention who. And I said, "Do you talk to a regular person?" He goes, "Yeah, such and such." And I'm like, "Well, that's your nanny. You pay them." And they're like, "Well, this and that." I'm like, "That's your chef. You pay them." This is like a very a bi- billionaire. And I'm like, "We need to talk to regular people that we don't pay."
40:20Like, we in Silicon Valley use this word humanity. I have nothing against the word humanity except there's a detachment. We should talk about people, not humanity. We should talk about a school teacher in Ohio or a mill worker here or there and just talk about how do they feel about this technology. And what they're going to say is they feel like they're not a part of it. That it's happening to them. They don't understand it.
40:45And I think that is very, very scary. I don't subscribe to the notion that anytime soon this is going to lead to destruction of humanity. AI is not going to AI itself won't lead to destruction of humanity anytime soon. Technology exponential technology technological progress could if we're not careful.
41:06So, we have to basically bridge this divide between society and Silicon Valley. And we need bridge builders because we alone, a bunch of like math people, not me but most like math people, cannot rebuild society alone. We must bring people together. AI can go in two directions. It could either lead to mass dislocation to like massive upheaval of society or it could lead to a renaissance.
41:34That it's like nuclear energy. It can light up the world or destroy the world. AI is neither good nor bad. It's whether or not we work together. And right now we're not working together. And the not working together is perilous.
41:49Who should bring everyone together and what's the constructive role you should play given you sit with a foot in both perceptions. You see the possibility. You want to improve trust. You want to grow community. But you also see the potential apocalypse that could happen.
42:12I think people smarter than me should should have that answer or should convene people. Um I think, you know, I think that maybe we need to convene people at a national level. I think we probably need to also convene people at a international level. Um a lot of people say, "Well, if US slows down, China won't." And there's really just two countries that are in the lead, US and China.
42:41My counterpoint is I also don't think China wants our people. I don't not an expert on China, but I know that they do not want instability. And AI is going to cause instability.
42:51So, I actually think that US and China have a mutual interest in working together and not having instability. And my practical recommendation is don't try to like solve saving humanity. Every year just start with actually a small not small problem, but the problem in front of us. The current problem in front of us is cybersecurity. The AI can basically do huge damage and penetrate all these systems.
43:17Bioterrorism is not a current problem because, you know, or like AI becoming sentient and becoming like Terminator, we're not there yet. So, don't try to solve the like long-term compact of saving humanity. We're not there yet. We also don't know where the technology is going. So, let's just start with cybersecurity, something very, very simple.
43:37I mean, not simple, but like simpler than ending humanity. And let's start there and say, "How do we make sure all of our systems are safe?" Cuz they're not safe. We can like definitely take down the world economy. And then next year we're going to have a new problem. And let's talk about the new problem. And we just call one foot in front of the other.
43:54And what's your role?
43:56My role is probably twofold.
44:00A lot of AI leaders do seek advice from me for some reason. Um and I I don't know what that reason is.
44:07I think maybe it's because they want a very a variety of opinions and I'm a designer and I feel like I kind of have a foot in I'm kind of like Imagine [snorts] Silicon Valley is like a nightclub and there was a bouncer at the door and the bouncer looked away and I snuck in 19 years ago. Cuz I wasn't supposed to be here. I'm a designer and this is a bunch of engineers and mathematicians.
44:29And so because I'm a designer I have like a foot in technology. I can talk about technology. But I also can talk to regular people because I'm not a technology person so to speak. And so I think I can be one of those bridges. I can be an advisor and helpful sounding board to many people in Silicon Valley and remind them that like the only normal people we talk to are people we pay. We should talk to normal people we don't pay. People who are willing to tell us to f off and tell us why they
44:58don't like us and like, you know, really listen to people.
45:01[snorts] And the other thing I think I can do is and this is the other side is part of the other reason people don't like AI is because it doesn't feel like it's for them. You know, a lot of AI's enterprise. When people hear AI enterprise, they hear job automation. It sounds all like job automation. AI doing my job.
45:22So we need to create AI that helps regular people and I want to basically with Airbnb I'm, you know, trying to use AI to bring people together in the real world. I've also separately taken a bunch of money. I'm funding a lab. And I'm that in this AI lab I have this whole premise is how can we basically have AI benefit regular people? Not benefit all of humanity.
45:48Is that a consumer product you're driving to with that or something else?
45:52Unclear because it's still lab and we're not sure yet. But I basically think AI like we we we are way too academic. We use words like abundance and humanity and you know, we do these we have these like very like macro things and I think we are losing people because we're not talking about people. And so I think that we just need to put design principles and humanity into AI. But we
46:20can't stop it. Don't bother trying. But we can we can shape it. We can regulate it. And we can only do that with through cooperation. And if people listening think they need to impose regulations on Silicon Valley, they're going to get it wrong. Because they're going to regulate us incorrectly.
46:37And if people in Silicon Valley think the best thing is no regulation, I'm going to tell everyone in Silicon Valley, you're going to invite more regulation because by not having any regulation, bad shit's going to happen and there's going to be an over correction and then it's going to be like a hammer coming down. So the best thing is for us to all work together and we're not working together right now and that's the problem. We are not working together. Society and Silicon Valley is a divide. We must bridge together. We need bridge builders. I'm I'm I'm calling everyone. Bridge building
47:06between AI and society. We need to work together now. We can't leave society behind.
47:10Brian, fantastic. Thank you so much.
47:14This is really great.
47:15Thank you very much. Thank you Brian.
47:16Thank you very much for having me today.
47:19Stay with us. Penny and I will be back after the break [music] with the readout.
47:24Are you ready to bust some silos?
47:26It is time to get on the same page.
47:30Zero full stack mesh.
47:31Dynamic collaborative ecosystem.
47:33One plus one equals three.
47:35Left hand meets right hand.
47:43[cheering] At PwC, we don't just talk tech. We make yours work harder together.
47:48Great plan. Let's do it.
47:49We'll get that going.
47:50So you can become a more intelligent enterprise.
47:54[music] Edge, that was fascinating.
48:00Yeah, Penny, I think we got a lot of quite unexpected insights out of that conversation. It was a much, much bigger conversation than I was expecting going into it, frankly. And I think we both came into this really curious about Brian as the first designer CEO we've interviewed for this series. And there's no question that's absolutely central to what he's doing. You know, what fascinated me was the moment that anybody listening to this show wouldn't have caught, which is when he described
48:28the sort of 3D model he has in his head of what Airbnb is today. And he sort of held up his hands and almost kind of It had shape, it had color.
48:38Yeah, exactly. Just sort of painting a picture for us. He's a very visual thinker. But at its base level in the company day-to-day, how this designer vision expresses itself is what he calls taste.
48:52And what he means by that is he's constantly trying to reduce things down to their essence, to find something simplified, pure. And what I loved is the way he described how you should never ship a product that you're not proud of. And I think that is something a lot of other CEOs can learn from.
49:10But it also expresses itself in centralized control. And in fact, he told us he in some respects, he micromanages people initially to infuse within them his vision of where he's taking Airbnb.
49:26And not many CEOs will admit that they're micromanagers, but he turned that into a virtue saying what you want to do is micromanage people so that ultimately you can let go and they will be going in the direction you've you've set them on. But the way in which this expresses itself in the most unusual fashion is his approach to hiring.
49:46And he's talking about spending two, three hours a day on his hiring decision. The first call he makes is to the recruiter. The last call of the day he makes is to the recruiter. And what was so interesting to me is he's not just building his senior team of direct reports. He's going a layer above it beyond them. And his rationale for that is very interesting. He's trying to create the next generation of people who may be directly reporting to him, but at the very least, they're the people who are not just buying into the vision of
50:14his direct reports. They're buying into his vision and that's how he gets His vision was absolutely central. Um the other thing that I found fascinating is he believes in the benefit of having a common enemy. And initially for Airbnb, that was hotels.
50:31Yes, but then he quickly pivoted and said, "But I don't think your enemy should become your ideology because over time, what he learned from his customers is actually his customers like hotels. They're hotel users and he's getting more and more into working with hotels.
50:50Yeah, I don't think he was just being polite to you there, Penny. I think that was actually quite sincere. But so, he's identified a new enemy, which is loneliness.
51:00I've got to say when a journalist hears a CEO say something like that, we we tend to think that's a little vague. That's a little woolly.
51:07He's trying to make that much more concrete, though. I think what he's saying as he talks about this sort of social graph and about the level of trust that Airbnb has managed to build between hosts and guests with its current set of products is actually he's giving us a clue to the next generation of products come from this company and to a much, much bigger ambition that he's trying to aim for with that.
51:29The other thing that really um caught my attention was his alarm about AI. It was much stronger than I had anticipated. He describes AI as being a thousand times stronger and more potent than the change that we experienced with the Industrial Revolution.
51:49Yeah. I mean, that's a striking prediction that, but what I liked is actually how he brought this back to where we started from, and that's design. What he's saying is that the companies around this headquarters here in San Francisco, Silicon Valley, have sort of lost sight about how to design for people. You know, he talks a lot about this lofty idea of humanity, but I think so many companies can learn from this. It's not just a Silicon Valley problem. A lot of companies need to
52:17spend more time thinking about what it means for ordinary people.
52:21And he saw himself as the bridge that could be a part of the solution to this challenge. So, it was a fascinating discussion. I really enjoyed it.
52:31And I think we all need to be watching Brian Chesky as he tries to design that bridge.
52:36And Annie, thank you.
52:38[music] And for more conversations like this, don't forget to follow the CEO Signal wherever you get your podcast, and like and subscribe.
