6: This is my kitchen table and also my filing system over much of the past three decades. I've been an investor in the highest

19: quality of mankind. I've often thought as private equity. And then I started interviewing for my watch your interview with

25: coach. I know how to do it. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted

32: some 250. I said fine I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay

38: there. You don't feel inadequate now because the on the second wealthiest around the world is that right.

44: One of the most important companies in the travel industry today is Air B and B. It started less than two decades ago as a

52: concept of renting out one's room to make some extra money. Now all over the world people are renting out their homes their

58: apartments to other people. I actually used an air B and B recently in Alaska and found to be quite good experience.

66: I sat down with Brian Chesky who conceived of Air B and B has now built it into one of the largest travel companies in the

71: world. When you came up with the idea with your partners of starting this company around 2007 2008 did anybody tell you was

79: a good idea. No. I mean it was pretty universally considered a terrible idea. I remember the first person I told the idea to. I

87: said hey we've got this idea. We're going to build this Web site like strangers CDOs other strangers in their homes. And the

94: person who was kind of somebody I looked up to in Los Angeles. He looks at me with a straight face. I said yes.

99: He said Brian I hope that's not the only idea you're working on now which by the way one of the nicer things people said. But

105: the reason I think it worked was because I stumbled into this idea of my roommate. I mean there was this design conference

112: coming to San Francisco in October 2007. I couldn't afford to pay rent. This design comes coming two years ago. All the hotels

119: were sold out. And we had this idea. We said when we just turned our house into a bed and breakfast for a design conference I

125: don't have any beds but show at three our beds. We pulled them out of closet. We called the air bed and breakfast dot.com.

131: We made enough money pay our rent. But more importantly we actually ended up making friends of these three people because

135: they live with us for a week. And at that point I think we realized if people could experience what we experienced that

142: this would be an idea that would spread around the world. But little did I know that it was going to be a very difficult

147: uphill road. Where did you get your initial money. Was that the Y Combinator from Paul Graham. Well actually there's kind of a

156: weird story about how we raise money. So we had this kind of quirky idea to sell collectable breakfast cereal.

162: So Barack Obama John McCain are both running for president. And we thought you know the breakfast isn't selling for the bet.

167: We're betting we're a bed and breakfast. We're not selling beds. Maybe we can sell breakfast. And so we

174: started selling collectible breakfast cereal a Barack Obama themed cereal called Obama O's which is like Cheerios. We called

179: it the breakfast change. And we learned about John McCain with a cap in the Navy. So we called it Captain McCain's a maverick in

185: every bite. And we made these really funny looking cereal boxes. We actually end up selling thirty thousand dollars with a

192: collectible breakfast cereal. And that was actually originally how we funded the company.

197: So now it's late 2008. We're like desperate. We've launched three times. No one's using it. I'm hauling cereal boxes in my

204: kitchen. I'm thinking to myself I wonder if Mark Zuckerberg or Steve Jobs ever had to hock Lew cereal boxes in their living

209: room. The answer was no. They hadn't done it. This was a foreboding

213: sign. And I'm going out to dinner at a Thai restaurant in San Francisco with the founders of Just Night TV who are Y

220: Combinator. And they said you should join the Y Combinator because you guys are dying. And and I thought well it's probably

226: too late. We already launched the Paul Graham eventually allowed us to apply. We actually missed the deadline but he allowed us

232: to apply after the deadline. And we got an interview and that's it. Paul Graham said like in our first question people actually

239: doing this. And I said yes. And he goes what's wrong with them. So the interview kind of went downhill from there. He didn't. He

246: admitted he hated the idea of everybody. At first he didn't get it. But as we're leaving the interview my roommate Joe hands him

253: a box of Barack Obama's cereal that we made. And he looks at it. He goes What. What is this. Why am I getting this. And we said

259: this is how we fund the company. And he looks to us he said if you can figure out how to get people to pay forty dollars for a

265: four dollar box of cereal maybe you will convince them that sleep in each other's homes.

270: So Y Combinator let us in the program. I think we better. I don't know. We got in barely got in at the moment. We got into

278: the program you know. The recession is occurring. People are desperate to save their

283: homes. And a lot of people started turn to everybody to save their homes by renting them out. At the same time you have a

289: great recession which is causing a lot of young people to feel like oh I need to save money. You know Facebook and social media

296: is growing. So people are comfortable meaning people on the Internet. And it was kind of this supernova forces that led to

302: an opening for everybody to finally take off. So traditionally people my. A company like yours in five or six years later they

308: would take it public and liquefy for the employees. The founders and also the investors. But you were resisting pressure to do

315: that. Why didn't you go public sooner. And you have any regrets about not going public sooner than you did.

322: I just didn't feel like we were ready to go public sooner. And I think in hindsight maybe we could have gone public sooner. I

328: mean just as important. Remember when we were growing really quickly there were not regulations on the books. Ferebee and B

333: and a lot of people were wondering was this business going to get regulated out of existence. That to me was one of many

340: existential questions. Eventually we able that we were able to get laws on the books in nearly every big city in the world. We

346: were able to collect four billion dollars in hotel tax became legitimate. We spent it nationally. We built an executive team.

353: But I felt like going public was a big stage. It was almost like it's almost like you know if you're I don't know kind of a weird

361: analogy but if you're like baking a cake you're going public is putting the oven. Might know it's hard to change the ingredients

366: after you go public. Right. And so I wanted to make sure that everything was kind of baked before we went public. Now once the

373: pandemic hit that was more than a decade after we started. I was accused of having waited too long and having missed the IPO

380: window. I would have never imagined what had transpired over the course

384: of 20 20. But I think looking back it worked out really well for everyone. While you went public in December of 20 20 after the

392: pandemic but you obviously were probably you had to lay off some people during that period of time. Is that right. You know when

398: the pandemic hit I was working on our S-1. And like many people I came back from the holidays in 2019 thinking my life was going

405: to go in one direction not realizing our entire world was about to get rocked. I felt like a captain of a ship and a torpedo hit

411: the side. We lost 80 percent of our business in eight weeks and we were doing tens of billions dollars a year in bookings and

418: then suddenly go from high flying to people predicting. Is this the end of air B and B. I mean there were multiple mainstream

424: journalists predicting that we were going to go out of business. It was almost like our business flashed before our eyes. And I

429: ended up having to confront this reality David that I realized we're going to lose half our business. And so it's like running

434: into a burning house. If you could only save half your furniture like in half your stuff what do you take with you. And I said

441: we're gonna get back to the original idea of Air B and B the individual people that are sharing their homes and experiences

447: all over the world. We had to make the hard decision I ever made which we had to layoff 25 percent of our workforce nearly 2000

454: employees. But I wanted to make sure even in a layoff we could show compassion to be really principled. So we end up giving

461: people a year of health care. We're I think very generous severance. So when you went public in December of 2020 you

468: priced the IPO or the underwriters did at half of the price that ultimately ended up that day. So some people might say you left

475: twenty three or four billion dollars on the table. Do you look at it that way or you think it was mispriced or you're OK with

480: it. We came back from 20 19 as a put somewhere between on the private markets a 30 to 40 billion dollar valuation at the depth

488: of pandemic our valuation was below 18 billion dollars. I mean we probably would have struggled to raise money at 18 billion

494: our valuation. We had warrants. And to be able to be a 100 billion dollar company eight months or seven months after that

501: low point it was really hard to imagine any of that was going to happen. And I think part of the reason our stock popped was I

507: believe we had hundreds of thousands of people in retail trying to buy our stock. So I don't feel bad. I never took the highest

514: price in any round. You totally could have priced a higher but it was pretty hard. I think at the time to foresee that this was

520: gonna be a company that was going to reach a valuation like that. Now as we talk you just reported your earnings for last

526: quarter and last year and they were record earnings record revenues and so forth. And you said I think at the release that

532: Covid has changed everything. People are changing the way they work and the way they travel. Can you explain what you mean. I

538: think the world is never going back to the way it was fully before the pandemic. And when it changed. I think David it's

544: been a change in how we work. You know so for many people not all but many people had a job at the office. They're not going

551: to be required to come back to the office five days a week. And I think that I don't think CEOs per say are going to determine

558: these policies. I think workers will because all the CEOs I think want the best talent. And I think flexibility is going to

565: be the second most important benefit after compensation. So I think we're now living in a world where many people work

570: remotely. They might go into office but not five days a week. If you don't have to go into office five days a week you're more

576: flexible you're less tethered to any one city. And so I think what that means is that for millions of people they can now live

583: anywhere. Some people that don't have kids like me can literally live no magically you can stay city to city hopping around. I

590: think a lot of young people and retirees do that. All of this David has culminated in Airbnb SBB not just being a company

595: about traveling but now a company about living half full. But people don't realize is half of our nights booked are for stays

603: a longer than a week a fifth of our nights booked for stays or longer than a month. So this is a whole new category of travel

611: that's not classic two three nights in a city. It's not long term housing and it's completely emerged because of the

617: pandemic.

647: Let's go back to your background. For those who don't know your background what part of the United States are you from. I'm from

653: a small town in upstate New York called New Scheme and which is a suburb of Schenectady outside Albany. And your parents they

661: were social workers. Yes. My mom and dad were social workers. Both my grandfathers worked for General Electric. But my my mom

666: and dad were kind of live normal lives as social workers. And when you were growing up by understand you wanted to be a hockey

672: player when you were young. Is that true. Yeah. When I was five years old that would've been 1986. Wayne Gretzky was the

678: greatest hockey player in the world. And I want to be just like him. I had posters of Wayne Gretzky on my wall. The problem with

683: athletics is your dreams come crashing down pretty quickly. By the age of six I realized I wasn't going to Wayne Gretzky. I was

689: when that dream went away you decided you might want to be an artist because you had good skills in that area. Exactly. I

694: ended up getting a scholarship to go to Rhode Island school design and they only gave away a few scholarships. So it was

700: kind of a big deal to get the scholarship. And my mom said like well you know my mom DAX you can go to art school but you got to

706: promise me that you one day get a real job. I said well what's a real job. She said A real jobs job because you health insurance.

713: And I said Okay I promise I'm gonna go to Disney. And one day I'm getting a real job with health insurance. That was kind of

718: my ambition. I mean my high school yearbook quote literally was I'm sure all to nothing. I think I was being kind of sarcastic

727: but I didn't really think I was going to be a tech founder. I mean you know I didn't really see very much beyond my small

732: town. So let's talk about it. You graduate from Rhode Island school design and then you move to California Los Angeles to

739: become a designer. So then you ultimately didn't like it that much in your side. The move to San Francisco was that right. I

745: liked it for like three months because there's like a thrill when you're a student. Nothing you make is real. And you just

751: have this yearning that you want to make something that's real that's on a shelf and people pay money for. But then after a few

756: months of doing that maybe a year I kind of member thinking might I was like 20 for a maybe twenty five years old. I

764: remember like feeling like I could see the rest of my life and the rest of my life look like a road that disappear in the

770: horizon. An executive exactly like the road behind me a kind of terrified me as a guy. I don't really want to just be a

775: designer. I at this point realized I think I want to be an entrepreneur but I don't know what I'm going to build what I'm

780: going to start. And this is now 2007. And so I think like the Internet revolution was really taking hold. You know YouTube was

788: just sold to Google. It was kind of the biggest company. Facebook was rising. Tech had come out of the ashes the dot.com

794: crash. And it just felt like the gears of the world were starting to turn in San Francisco. And so I just had this

801: premonition that like I have to come to San Francisco it's pulling me. Right. So you started the company with your roommate

807: Joe. Yeah. Yeah. You brought a third partner in. Yeah. So really not long after it was just Joe and I were both designers. So we

814: can design a Web site but we can't actually code and build a Web site. You need a software engineer to do that. And so after we

821: host these three guests I look to Joe and I said like who's the best engineer you know. And Joe said well it's funny you ask

828: because there was an engineer who used to live with me before you moved in the house a man named Nate. And so the three of us

834: got together and we said you know what. If you could build a Web site where you can book someone's home the way you can book a

839: hotel anywhere in the world. And that was the original vision. Little that I know how hard it was gonna be to get it off the

845: ground but that was a pretty simple idea. So as you look back on what you built what would you say is the best decision you made

851: and what was the biggest regret you have so far in what you did what you built.

856: The most important piece of advice I ever got was when I first started Airbnb. It was actually Paul Graham. He told me

863: something. He said it's better to have 100 people love your service than have a million people that are kind of like your

871: service. But the little apathetic he should start with a small group in perfecting your product. Do things that don't scale

878: turn them to advocates because of those hundred people. Love your service. They're going to tell everyone about them. They're

883: going to become your marketing. And it's easy to improve your service when you only have a hundred customers. We have a

888: million customers. Really hard to change it. And so do things that don't scale go above and beyond. And that was something we

895: did. And I think that really helped explain why we're so successful. I think the biggest mistake I made was when you're

903: in your 20s and you never imagined being an entrepreneur and suddenly you're a multi-billion dollar company and somebody

909: gives you billions of dollars and you hit on something that's hugely successful. You tend to start to believe that you can do

916: anything and you try to do everything. You try to do everything at the same time. And before the pandemic we had like 10

922: divisions and we were extending all different places. And in hindsight I think having too much money is sometimes worse than

928: having not enough money because I think not having enough money creates constraints it creates discipline it creates focus. It

934: forces you to create tradeoffs. I think when corporations and startups get over capitalized they can avoid making tough

941: decisions. The accountability goes down. There's a real sense of complacency that goes into the company. And I think a little

948: that lack of focus happened M.B.A. before the pandemic. So you have a lot of mentors that have helped you over the years. How

954: did you get to know Barack Obama and is he staying in air BMD. He has stayed in there. Bambi is actually. You might recall that

962: we lifting the embargo in Cuba when he was president. President Obama ends up going to Havana Cuba and he wanted to bring

968: American businesses with him to show that business is now open between U.S. and Cuba. Well the problem is there really any U.S.

974: businesses in Cuba except for Air B and B. So I went with him to Havana. I got to know him and we kept in touch. And so I think

981: it was just helpful to have somebody who could help me see the world in a broader way and just think a little more

985: systematically about my decisions and the consequences that we would have on society. So that's where we were how he became

991: very helpful to me. For somebody that's young. What is the advice about how you

996: would recommend they build a company. The first thing I'd say is don't listen to your parents. Most of I'm going to try to talk

1001: you out of crazy things but sometimes the crazy ideas the ones that do kind of spread around the world.

1018: Now as I understand it you're spending a year or so going to air B and B is around the United States. Yeah. Most the United

1025: States kind of reasonable time zone. So when you want to book on air B and B do you have trouble getting a place where you want

1031: to go or. No I you know there's six million homes to choose from so I've got more than enough options. I don't really say who I

1038: am. I know. And I think sometimes they find out. Sometimes they don't. But yeah I kind of his book last minute I was in Atlanta

1046: Nashville Charleston Los Angeles now Miami. I need ideas for where to go next. So when you book someone and they're being

1053: beat you do it yourself and you have a team of people that pick it for you. I do it myself. I got it. I got to see what everyone

1059: else is doing. I mean I always feel like people who build great products ideally are building products they themselves want to

1066: use. I also think there's only so many things you see in the data. You have to like just have a feel for the product. And so

1071: I try to use it as much as I can. I always wonder who sets the rate. Do you set the rate in air being based or is the host set

1078: the rate. And do you negotiate rates. No no no. The host sets would rate. They can charge whatever they want from ten dollars

1085: at ten thousand dollars a night or beyond. And you know we have people renting luxury villas that are incredible like 20 30

1091: scrupulous villas and people renting like you know little spaces in their backyard. I mean we had in 2009 a member when we first

1099: launch we had people renting spaces under their kitchen table because they kind of thought oh it's space I can rent any kind

1103: of space. So it's kind of everything from a couch to a castle and everything in between. And they set the rate and we

1109: basically take 15 percent. So when you stay at a place do you ever call up the host and say by the way you're charging too

1115: much you're charging not enough. I try to give feedback less on the value but more on the kind of hospitality like sometimes

1121: like a host will want me to like you know like go through some like they'll give me like a rental contract because I'm used to

1127: doing other Web sites and I'm like air B is a contract you know when you do this. But it would be pretty weird to be a tech

1133: founder of Air B and B and saying hey I think you're overcharging me. I would just kind of send a slightly weird

1137: message but I try to give them feedback and we have a review system. 70 percent of guest and hosts review each other at the

1144: in the stay. So I try to write a pretty detailed review for every host. I try to be positive but honest about the reviews.

1151: But you sign it be she or Brian Chesky Brian Chesky. So they they know by the time I leave review who I am I'd say half the

1158: time they know who I am when I book the other half. I don't like I don't want to be a secret shopper where I'm like lying to them

1163: and booking under a pseudonym. But I also don't want to tell them who I am like I'm expecting special treatment because I

1169: then I'm not going to get the real experience so that half the time I know that they know who I am half they don't. But it's a

1174: pretty fun experience. You're 40 years old. Yeah. So at 40 you've already achieved more wealth than almost anybody could

1180: possibly imagine. Have you thought about stepping back and smelling the roses or doing something else with all the money

1186: you have. No I'm I feel like I'm just. It's really just getting fun now. I

1193: mean it was fun when I started. And then like there was this like corporate adolescence was was kind of painful the growing

1199: at the company. But I'm having so much fun right now. And if I were to step back I'd probably only do that to start another

1204: company to spend another ten years just to get back to this place. So when you have got a good thing going you want to keep

1210: going. And I just feel like you know I have so much I still want to do with the company. I think there's like a lot of loneliness

1215: in the world. And I think part of our bigger contributions to help try to bring people together around the world living

1220: communities. So that's what I'm focused on. Now the company that I started and built had two partners with me for the entire 30

1227: plus years and we're still together. It's hard to have three people work together for a long time. You've had three people

1233: working together for quite some time as well. Don't you ever have fights with each other get jealousies or how do you work

1238: together so so well. It's a great question David. Yeah I mean we're one of the only companies in the world as valuable as we

1244: are in tech that three founders have been together for 14 years. I think it's a couple things. Number one I'm really lucky

1252: because I had the gift of having two incredible co-founders that are really high integrity in the OS but the company before

1257: themselves and they were very supportive of me as CEO. But the other thing is we had a principle. We said we're never going to

1264: allow being right to get in front of the relationship. Like if you try to be so principal that you try to win every single

1270: argument. You'll kind of see the trees lose the forest which is say that we knew this company would only survive. It had a

1277: really strong founding team intact. And that mean that occasionally each of us are going to have to kind of make

1284: compromises. So we tried to never let debates go so far that winning an argument got in the way of the relationship. I think

1291: that made a big difference. So on philanthropy giving away money sounds like it's easy but takes time to do it well. So how are

1297: you thinking about that. Are there certain areas you want to give away some of the money you've committed to give away half

1301: of your net worth. But you know you have to take time to do it. So for me I wanted to join the giving pledge in my thirties

1308: because I thought you know the main reason was even though he wasn't at that point ready to give away all my money I did want

1314: to set an example. If I take something I could for the next gen entrepreneurs you know that like you know it's it's like

1321: redistribute the majority wealth back to society. Seemed like a reasonable thing to do was better for everyone. But I didn't

1327: know what I want to focus on. I did write in my giving pledge letter though that one of the issues that I want to focus on is

1334: just helping maybe create scholarship programs helping young kids like me. You know I wasn't I wasn't poor. I wasn't

1340: underprivileged. I was just kind of obscure middle class. But had it not been for a series of people in my lifetime I wouldn't

1347: be here talking to you today. I you would have just never met her to me and I would have never left my town. And so I think

1353: that so many kids. Have untapped potential. Like me that their teachers would have never probably forget predicted would have

1361: had the journey that I've had and I want to help kids see their unrealized potential and maybe help them change their lives. So

1367: that's maybe one area I'm passionate about. But make no mistake there's a lot of other things I'd like to learn about and be

1373: able to help. Final question for somebody that's young younger than you. If they want to be the next Brian Chesky what is the

1379: advice about how you would recommend they build a company. I would say a couple of things. The first thing I'd say is don't

1387: listen to your parents. Don't take career advice on your parents. I love my parents. They want what's best for me. But

1392: you know your parents. And when I use parents or proxy for any and when wise and old most I'm going to try to talk you out of

1399: crazy things. But sometimes the crazy ideas are the ones that do kind of spread around the world. The second thing I'd say is

1406: it's probably solve your own problem. A lot of people are looking for markets. We weren't looking to go into a good

1412: market. We were just trying to solve our own problem. If you solve your own problem you may have just saw the profit millions

1417: of other people and it might be quite marketable and monetized. Well you know I think that's the guy I'd say is just like focus

1423: on on on. Focus on love. It sounds like a weird thing but I think a business is really simple and build a company. People

1429: love working for that. Create something. People love consuming or using. I just think it's I don't want to say it's so simple

1437: but it kind of is all comes back to passion.