Products You May Like
A single piece of advice from an investor helped Airbnb CEO Brian Chesky grow his company from a struggling startup to an industry giant worth roughly $70 billion.
That’s according to Chesky himself, who told attendees at a recent Stanford Graduate School of Business event that it was “the best piece of advice I ever got.”
The advice: “Focus on 100 people that love you, rather than getting a million people to kind of like you,” Chesky said.
It came courtesy of Paul Graham, the co-founder of tech startup accelerator Y Combinator, who advised Airbnb’s co-founders — Chesky, Joe Gebbia and Nathan Blecharczyk — to focus on a tiny audience of potential customers as they built their company.
Such a recommendation “actually runs counterintuitive to almost everything everyone says,” Chesky said.
For early Airbnb, that meant creating experiences for guests that stood out from staying at a hotel or crashing on a couch. The trio took their research seriously, even hiring a Pixar storyboard artist to help them map out what five-star stays would look like from check-in to check-out, Chesky said.
It also meant simultaneously figuring out what would make hosts happy and comfortable. Shortly after launching the company, the trio of co-founders visited a group of Airbnb rentals in New York to personally photograph the listings and get a better understanding of hosts’ perspectives, Chesky told LinkedIn co-founder Reid Hoffman’s “Masters of Scale” podcast in 2017.
The small number of people who deeply appreciated the Airbnb experience, guests and hosts alike, became the company’s “marketing department,” Chesky said at the Stanford event.
By his estimation, the strategy worked. In its first decade, Airbnb became larger than Hilton, which started in 1919 and currently has a market capitalization of $36.43 billion. Much of that early growth was from word-of-mouth marketing, Chesky said.
Unfortunately, Graham also gave Airbnb’s co-founders “the worst piece of advice” they ever received, Chesky added — that they’d need to move to Mountain View, California, where Y Combinator is located, to succeed.
“You don’t need to move [to Silicon Valley],” Chesky said. “You can be anywhere.”
Airbnb is still based in San Francisco today, but Silicon Valley has seen an exodus of tech companies in recent years, with high-profile companies like Oracle and Hewlett-Packard Enterprise relocating their headquarters out of California in 2020.
That year, San Francisco was only the fifth-best city in the U.S. for starting a business, due largely to its high living expenses, according to data compiled by Inc. magazine. Austin, Texas, topped the ranking, followed by Salt Lake City and Raleigh, North Carolina.
Chesky has also more broadly championed the idea of working from home — or, as one might expect from Airbnb’s CEO, working from someone else’s home — since at least the start of the Covid-19 pandemic.
“I guarantee you that many of these CEOs who are calling people back to the office in New York City are going away to the Hamptons for the summer, or going to Europe in August,” Chesky told The Verge’s “Decoder” podcast earlier this month.
DON’T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!
Get CNBC’s free report, 11 Ways to Tell if We’re in a Recession, where Kelly Evans reviews the top indicators that a recession is coming or has already begun.