Airbnb CEO Brian Chesky prides himself on thinking very differently than other CEOs, and his answers to the Decoder questions about how he structures and manages his company were almost always the opposite of what I’m used to hearing on the show. Airbnb is pretty much a single team, focused on a single product, and it all rolls up to Brian. That’s very different from most other big companies, which have lots of divisions and overlapping lines of authority.
And Airbnb’s relationship to cities is changing as tourism changes. Airbnb used to be the poster child for a tech company that showed up without permission and fought with regulators, but as the company has grown and the pandemic has changed things, it’s entered what is hopefully a more mature phase — it just came to a deal with New York City after ten years of argument. I asked Brian about that and about what it’s like to run a public company now — the transition from scrappy startup to public company engaged with regulators is a big one.
Of course, I also had to ask about cryptocurrency and the metaverse — does Brian think we’re all going to be visiting virtual NFT museums on vacations in the future? You have to listen and find out.
Brian Chesky, you’re the co-founder and CEO of Airbnb. Welcome to Decoder.
Thank you very much for having me today.
I am excited to talk to you. It has been almost a year since Airbnb went public. You’ve made some product announcements. We should talk about all those. There is a pandemic going on — not sure if you have heard about it. I am very curious if the pandemic has affected the business. Airbnb is sort of a paradigmatic marketplace internet company. Uber is a taxi company that doesn’t own cars. Airbnb is a travel company that doesn’t own hotels. What has that been like during the pandemic? How have you changed the business? How have you had to react to that?
It is kind of interesting. To take you back to right before the pandemic: I remember coming back from the holidays in early 2020, thinking — like probably most people in the world — that my life was going to go in a certain direction, not knowing two months later that everything would be turned upside down. In late January, we noticed our China business dropped by 80 percent in a matter of weeks. I had never seen anything drop by more than 5 percent. I remember saying seemingly innocently at the time, “Wow, if this spreads outside of China, it would be very bad.” Not realizing that, within a few weeks, COVID-19 would go to Europe and then, of course, to the United States.
By March, our business started dropping precipitously and we lost 80 percent of our business in eight weeks. Losing that much business in eight weeks when you’re Airbnb’s size — it’s like driving an 18-wheeler at 80 miles an hour and slamming on the brakes. You just cannot change direction that quickly without really dramatic things happening. There was a lot of panic around me, certainly, in the public. There were a lot of predictions of our seemingly imminent demise. There were people asking: “Will Airbnb exist?” “Can Brian Chesky save Airbnb?” These are verbatim headlines from last April. I think that a lot of people thought that we would be more impacted than hotels and other companies.
Maybe the reason why is because they just assumed what kind of arrived recently would go away earlier. Airbnb has not been around for a hundred years, so how could it be the thing that endures for the next hundred years? I understand that line of thinking, but something totally different transpired. If you cut forward, by the end of the year, we suddenly went public. We were stronger than we were before the pandemic. So how did that happen? How do you even explain that? The way I would explain it is that we had an adaptable business model. We didn’t have to pour concrete. We had millions of homes. We had nearly every type of space you can imagine from small bedrooms and apartments to yurts, to tree houses, to villas and entire homes, in nearly every community in the world.
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