The Secret Art of Micromanagement with Airbnb CEO Brian Chesky

22:06And I think we handled the layoffs with quite a bit of compassion. And I ruined it writing this layoff letter that got quite a bit of attention because I think we really, really went above and beyond to take care of people that were affected. We even created an outplacement agency to find other positions for them. We created this alumni directory. We gave people like a year of healthcare when that was like not kind of standard to do that in the United States. So we did a number of things. And then once we were smaller, we're nimble. We don't have a lot of projects. We have this newfound sense of urgency.

22:36I told people, this is our defining moment. Then I really focused on my leadership team. And I gathered like the few dozen top people in the company together and said, I really need you guys. I need you all. Like, this is our defining moment. And everyone just rallied together. And those were just like, I mean, I could go down the list. There's like 50 things I could probably mention, but those are some of the big principles. But it was about action. I mean, I think the other thing, if I said before, the first principle was like optimism, having the right mentality and projecting the right mentality.

23:08The other is action. And I think that like so many people, and this is the problem with people that rely too much on data. They struggle in times of change and crisis because the data is murky or they have to rely on their intuition. and they start making pros and cons lists. And these things are generally not the best decision-making framework for a crisis. And so we were all about making fast, decisive, bold actions. And it's like if you're on a highway and you're not sure if you get off the exit, the worst thing you can do is kind of like, I don't know which way to go. And you hit the divider.

23:42You have to have this intensity of decision-making. And I think that's very, very hard for people. I think it's not natural. How do you maintain a beginner's mindset when you're working at an extremely high level? You've been working at that level for quite a while. I mean, you said you started running this unicorn at 26 years old, and it's a huge company. It's a significant company. Everybody knows what Airbnb is the entire world. You do know a lot about how to do these things. You've got the scars to prove it. What is it that you do to keep yourself humble and keep yourself open-minded to things you don't know because you don't know what you don't know?

24:21Yeah, it's so fascinating. I'll try to think of a good analogy. I have season tickets to the Golden State Warriors, and I'm fortunate enough to sit close to the bench. And so I got to see the right kind of mindset to win a championship. And I also got to watch them when they weren't winning championships. And there's some fine line where you need to have confidence. You can't be so confident that you phone it in, you start becoming complacent. You see like teams that get complacent, they think they're going to win the game, they lose. And then teams that beat themselves off and they don't have confidence, they also lose.

24:53And so there's this really interesting thing where you're like confident, but you're still a beginner. And the way I try to be still a beginner, somebody asked Steph Curry, how do you bring all to every game? And he used to say something I'll never forget. He says, I find the game within every game. There's a game within every game. There's always a way to improve. I am obsessive about not doing, I don't want to just do what I've done before. I want to try to say something I've never said before. And I may not, but like there's a goal to do something I've never done before. The goal of the company is to like reach, to constantly be reaching beyond its comfort zone, to like assume that you're the growing, you're dying.

25:31So I think it's about like continually trying to be in this constant state of self-improvement every minute of every hour of every day. and we're constantly in a state of reinvention. We're trying to constantly push ourselves to become better. So like we're literally doing this right now. And maybe this is part of me just being like self-critical. On the one hand, I could say like Airbnb is this noun that we've used all over the world. We do over$80 billion of sales. Everyone knows Airbnb. Other hand, I'm like, man, we haven't really fundamentally changed who we are in 17 years. We could be doing so much more.

26:03We still have people that aren't having great trips. So I think it really comes down to like staying grounded, talking to your customers, being in the field, being in the community, and continually reaching for that ideal that is always a little bit out of grasp. I feel like we haven't made it yet. And I hope we never quite arrive. You know, there's a study done a million years ago about kids who were in honors classes. Average students in high school actually outperformed the honors kids because the honors kids are always told growing up, you're so wonderful, you're so amazing, you're so fantastic, you're so smart.

26:35And they're on a pedestal and they're very afraid of falling off because of what they've achieved. Whereas your more average student is constantly told, good effort, keep improving, you're doing better, good effort. So they don't perceive a ceiling or a pedestal. I like that. It's funny, my dad raised me like that. And I never realized at the time, but my dad never told me I was talented or smart. And he probably did me a service. He only rewarded effort. And I think there's a lot of studies about the growth mindset that if you reward a child for being intrinsically good, they're going to be afraid to try because they don't want to disprove you.

27:07But if you reward effort, the only way to fail is to not give it your all. And I think there's something about this. Like there's a basketball coach from UCLA named John Wooden. He was the winningest basketball coach in NCAA history. And somebody once asked him like, what is your secret to success? And he said, the secret to success is all I asked my players to do was do their very best. And somebody asked him like, do your very best. That sounds kind of like what parents say about kids who lose. And he goes, well, here's the secret. I saw potential in people that they didn't see in themselves.

27:34And so I was always trying to get people to reach beyond their potential. I think the role of a leader is to just get everyone to do their best, but not participation trophy best. I'm talking about better than you ever think you could. If I tell somebody you could do better, I'm not saying you're not good enough. I'm saying I see potential in you that you may not see in yourself. And I know that we can do more. And I think so much of leadership is believing. I think the biggest gift a leader can give to a person is to believe in them. And that can come in saying, you're great, you're wonderful.

28:08But that can also come to say, I believe we can do more. And it's kind of funny that some of the best coaches in history are ones that didn't even focus on winning. They just focused on doing their best. And I think John Wooden, Bill Walsh, these are numerous coaches espousing the same philosophy, rewarding effort, seeing potential. I'm curious what you've learned about having to adapt your leadership style to get that push, to get that drive, or are you so public with it that it's understood before you walk in the door? I like to think that now it is, not to overuse a military analogy, but I want people to almost think it is like the special forces.

28:43And so it's going to be more difficult, but you're going to know it's more difficult and you can opt in or you can opt out. So I think like when we used to hire people, I think our recruiters are more like salespeople and they were basically trying to sell people on how amazing it is. And they were selling people on the experience of working here. There was this incredible job ad. Have you ever heard the Ernest Shackleton job ad? I've written about it. Oh, you have? Men needed for hazardous journey, long hours, bitter cold, survival doubtful. Yes. Safe return doubtful, honor and recognition in case of success.

29:15And I think that in some ways, that's probably the most famous job ad ever. And it turned out to be a very honest representation of what the journey was. Jackal did want to know a journey of the, was it the North Pole? Yeah. South Pole. They got shipwrecked for like 13 months or something ridiculous. and the stories that no one died. The reason it worked is because he recruited the right people. He recruited people that liked insurmountable odds. That's basically my philosophy. I want to recruit people that like to do the impossible, that want to push themselves beyond their limits. I don't think this is for everyone.

29:48I don't manage the host community this way. I don't think 5 million hosts want to be pushed the extent of our employees, although I do try to hold the host to a higher standard than other websites. I just think it's really important that you're honest. And I do also think it makes a difference, Simon, that people understand your motivations. I may push people harder than they've ever been pushed in their life. Sometimes they won't like that. But I think it's also important they understand where I'm coming from. And where I'm coming from is like, I want Airbnb to reach this potential. And it's only possible if you do too.

30:17And I'll never try to ask you to do something that you can't do. I might get wrong. And I might overestimate what people can do. And my expectations could be unrealistic. But I do think I have not had challenges. But I think it's those two things. It's recruiting the right kind of people with your motivations, not being Pollyannish and selling something that's unrealistic. And then the second thing is just telling people where you come from. Why am I doing this? Yeah. It's very Steve Jobs, right? People talk about those days that it was so hard to work there, but the people who didn't want to be pushed didn't go work there.

30:46I got a tour from the Apple historian. He was telling me they get all these fancy engineers and folks coming in from Google and Facebook and, you know, wherever they came from that they were hiring. and they'd walk around like they're the bee's knees. And, you know, they would say in a meeting, do you know what I've done? And maybe they invented some famous, you know, who knows what at some other company. And invariably somebody would look up and say, we don't care what you've done. We care what you're going to do. And it's so ingrained in the culture. This is being said years after Jobs died.

31:16You know, it's so ingrained in the culture that you come here to be pushed. The people who want to be pushed to do the best work of their lives go work there. Otherwise it's okay if you don't. This is kind of the thing, you know, people ask me about Amazon all the time. So much has been written about what a difficult culture, and even the people who like it there only survive two years kind of thing. And my answer is always the same, which is they didn't lie. It's out in the open. If you kind of like that, then give it a try. And if you don't like that, then don't go there. Like, could they do better?

31:42Of course, every company can do better. But they didn't lie. And I think that's really interesting. Culture and values are really important in a company. But I think when people hear like culture, they often like get a very superficial sense of what culture is. It's the food. it's the yoga classes it's the kind of the amenities i think culture is the unique way that you do things that distinguish you from everyone else i think it's really important that you have a strong culture i mean there are such things as bad cultures but usually there's strong cultures and weak cultures and the weak cultures are where there isn't really a shared way of doing something i think it's really important that like we have our way the arab and we're open we're honest and people that feel like they're part of that tribe opt in and people that feel like it's not for them.

32:26Well, the good thing is like a lot of leaders aren't like me. And so like, if anyone's listening, like, well, I wouldn't want everyone to run their company like you, I say, well, you don't have to worry about that. Because the point is that every person is different. Every leader comes from a different background. And I'm going to run Airbnb one way. And don't worry, probably no one else will run it quite like that. And every leader should run it the way that is best for their company, their market, and what is most natural to them. And I I think it's really important that you're open, but I think a lot of people apologize for how they want to run their companies.

32:56They try to run their company as a midpoint between how they want to run it and how the people want to be led. And what often ends up happening is that midpoint makes nobody happy because it's a compromised way of leading. It's like all these like half measures like don't really appease anyone. That's a brilliant insight. I'm going to say it again. A lot of leaders lead as a combination of the way they want to lead and combining the way other people want to be led versus saying, this is how I lead and attracting the people who want to be led that way. Very good insight. Yeah. And I think it's really important that people like spend a lot of time asking, how do you want to lead?

33:31What's important to you? Being deeply introspective and then being clear with people and then getting their input. Maybe some of your theories are wrong, but really working through that and then getting everyone aligned and saying, we're going this way. Because if you don't do that, if you hire people from 10 companies, they're going to each bring their way. And you're going to basically be the compromise of 10 different ways of doing things. I just had this conversation literally right before I got on with you, where somebody asked me the question, what do I do? I don't think my senior executives believe in the cause.

34:00It seems like either the leader is failing to articulate some sort of higher cause that inspires, or they didn't feel to the people they should be hiring. If that's the question at this point, you know, not everybody's going to believe in Airbnb and your vision, but I hope your senior executives do. Like, that's the minimum standard. The senior executives have to believe, because like somebody once said, leadership is the upper bounds of how much people care. And people generally aren't going to care more than the leaders. And if they do, that's a bad sign. The leaders have to be the standard.

34:30And they have to be the standard for passion, for belief, for why you're doing what you're doing. And if you have a team where you feel like there's a gut feel and you always can feel in your gut that the team doesn't believe in what you're doing, then you're totally right. It's probably two steps. Clearly articulate the vision and seek total buy-in commitment. And the second part is a choice. The second part is people might not be able to totally buy in. But it's really, really important that you don't avoid, I think, those hard conversations. And if I'm honest with you, Simon, I've hired many leaders.

35:01I've hired many execs that didn't believe in what we were doing. It was a little bit of like probably on both of us. I probably at times wasn't clear about what we're doing. You know how it manifests? It's more like you're selling the person and you're trying to convince somebody to do something rather than filtering. Like Ernest Shackleton wasn't trying to sell people to join his mission. Quite the opposite. Quite the opposite. And it's a weird thing. As you sell people too hard, they feel sold to, and they lose their sense of agency. And even if you do convince them, you might convince them to do the right thing for the wrong reasons, which is still the wrong thing.

35:38So I think it's really, really important. I think this is especially problematic for really hot companies because people could join you for the wrong reasons, which is you're cool, you're hot, you're growing. And that might always be true, and then they won't be with you. So yeah, I think this is a really important thing. Like your values should be a filter. Like your values should be things that people disagree with. If you have values and a vision and a culture and everyone agrees with it, it probably doesn't stand for very much. So I do think it should be a filter for the right kinds of people.

36:05The best definition of culture I ever heard was culture equals values plus behavior. Oh, I like that. And so to have a strong culture, you have to have clearly articulated values and you hold people's behavior accountable to those values and you hire to those values, et cetera, et cetera. And if you have a weak culture, it's because you either don't have values or you don't hold people accountable to them. Yes, I think that's exactly right. And so that's kind of like the job of a leader. You asked me like relationships to like weightlifting and like the thing that is consistent is like leadership is presence, not absence.

36:34That leadership is about enforcing the standards of quality and behavior day after day after day after day. And eventually, yes, you can let go and you can trust people. but it's really, really important that those standards are enforced, that the values are consistent. You said Airbnb, you still see it as you haven't succeeded yet. What is the vision that is so big that you feel you still have so much work to do? When people see Airbnb, they see a marketplace for short-term rentals, for stays, but I think that there's something so much bigger. And Simon, you and I have worked on this together.

37:08We've talked about what's our why, why do we exist? I think I go back to the first weekend when Airbnb was started. And Joe and I inflated three air mattresses and we called it air bed and breakfast for a design conference. Three designers stayed with us. And it really wasn't just about a place to stay. It was about connection. It was about the idea that these designers can stay in our house, walk in our shoes. We could have this way of they could experience them to go like a designer. I think at some fundamental level, when Airbnb works, the reason people are emotionally connected to it is because it's really about human connection.

37:43It's about this feeling that you can go to any community and you can feel like you can belong. You can belong anywhere. And that is the basic idea. I think that's a fundamental need that everyone has. And I think post-pandemic, I think people have that need more than ever. I think people feel disconnected. They feel divided. They feel lonelier than ever. And I think we really are seeking genuine connection. I think the most genuine connection is not going to be on the internet. It's going to be in the physical world face-to-face. How has that promise changed? Because in the early days of Airbnb, you literally stayed in someone's house.

38:13Sometimes they were in the other room and sometimes they had left the house for a week, but you were in their house and with their stuff. And to your point, it was a connective experience. And as the business has matured and the market has sort of matured with it, you don't really stay into somebody's real house anymore. I think it's less about connection between the guests and hosts temporarily. It's more group travel and family travel. The house is a vessel for people connecting as groups and our group sides are getting bigger and bigger and bigger. And often people want to connect with each other.

38:40But I don't think Airbnb is doing enough today currently around bringing people together. I think we're on this earth to help bring people together in communities all over the world. And so if we are successful, if we achieve our vision, what we become is a community, not a marketplace, but a community where you can travel, you can live anywhere in the world. And one day you could wake up and you can go to a different city and you could feel like you've been there your entire life. That would be the vision of where we want to go. One of the challenges that you don't have yet, but you will have, is succession.

39:14You've been the only CEO at the company. We've seen it happen time and time again. Visionary CEOs who are not driven by the numbers have to replace themselves. The board tends to push the CFO or the COO to replace the CEO, which is a different skill set. And we see great companies become short-termist and myopic over and over and over again. Maybe it's too soon because you still got a few years left in you. You're very public about rejecting the traditional ways businesses are run, that the people come first, the numbers come second. You're one of the new breeds of CEOs rejecting the old Jack Welch, sort of Milton Friedman ways.

39:51You're one of the guys on the list. So I'm curious how you think about succession and if it's different than the way that it's traditionally or currently done. That's the reason for the question. Yeah, probably. I'll just, yeah, I'll make three points. The first point is, hopefully this is a long time from now. I started this company when I was 26. I'm 43. I hope to be doing this through my 50s, maybe into my 60s. We'll see. So hopefully this becomes a multi-decade question, bearing good health. So bearing good health, I think I'll be doing this for decades. So hopefully this is a theoretical question for a long time.

40:28The second point is Walt Disney. So for example, Walt Disney was a famously difficult succession plan. Walt Disney died in 1966, and the company for a while was paralyzed. They asked, what would Walt do? And it was very difficult, and the company almost got taken over. And then Michael Eisner came, and he kind of helped save the company, and Bob Iger took it to the next level. But that was a really big problem. The one thing I'll say about Disney is I think that Disney has had much more staying power than Paramount or Warner Brothers or MGM. I mean, MGM is now owned by another company. And I think there's something about the longer the founder runs the company, in a weird way, I think it's paradoxical.

41:06I think the easier it is to hand it off because the culture gets very fervent. It gets very ingrained. There becomes a really set way of doing something. Like, so say when Steve Jobs died, the Apple culture, even though they hand it over to a COO, Tim Cook, he's done like a really good job. It's still pretty strong. It's not quite what it is with Steve, but it's a very, very strong culture. So I think you want to like create a very strong institutionalized founder culture where it's almost like muscle memory, like where you don't have to check. And it's almost like you're always there, even when you're not there.

41:36And then the third thing is the actual mechanics of succession planning. And for that, yeah, I haven't gotten there yet, but I hope I have the courage whenever that day comes to appoint someone that is not necessarily a compliment to me. What people end up doing is they're like the visionary founder and they get like the operator or the finance person. And I think that can be quite risky, but that's the safe move because you know what's the awkward thing? There's a little bit of a social taboo to like work for people younger than you, unless you're the founder. So like I'm afforded the ability to hire people older than me because I'm the founder, but there's this kind of notion, like whoever the successor is at Apple, they're not going to give it to somebody in their 40s because these people in their 50s and 60s, you know, there's going to be this like weird dynamic where you're not a big enough company person, but that person who's a little younger, who's a little more visionary might be the person with the vision, the spirit to remake the company.

42:34And I think we're going to need to stay young. We need somebody to remake the company. So I think we're going to need somebody that like you really want somebody who's got 10 to 15 years runway who is visionary because I do not think the vision dies of the founder. I think if the vision dies of the founder, then you become a heritage brand. And if you're a heritage brand in technology, that's a big problem because technology is a synonym for the word change. So that would be what I would think. I would not think that you'd want to hand it over to like a grown-up, you know, safe pair of hands. And if you do, to me, that's a transitional leader.

43:07That leader is transitioning for the visionary. The vision should not die with the founder. It must live on with somebody new, somebody probably with a long runway ahead of them. I wish more companies followed your lead. Brian, always a pleasure. Sure. I always learn something new. Thank you. Thanks for taking the time. I really appreciate it. I love talking to you. And I look forward to seeing where B &B goes. Stay tuned.

43:32If you enjoyed this podcast and would like to hear more, please subscribe wherever you like to listen to podcasts. And if you'd like even more optimism, check out my website, simonsynic.com, for classes, videos, and more. Until then, take care of yourself, take care of each other. A Bit of Optimism is a production of The Optimism Company. It's produced and edited by Lindsay Garbenius, David Jha, and Devin Johnson. Our executive producers are Henrietta Conrad and Greg Rudershan.