AirBnb: Heckling from the Cheap Seats
I have a problem. I’m obsessed with podcasts. There are 10+ shows that I listen to once or twice a week – which some might say is too many! But I love it. And this week, my obsession helped me decide what to write about.
Two of my regular podcasts (Decoder and The Prof G Pod) featured interviews with AirBnb CEO Brian Chesky. In them, he laid out his latest vision for the company, talked about new features he was launching, and waxed poetic about how return-to-office and AI would affect the business.
Today, I’ll cover the key points Chesky made, and I’ll share where I agree or disagree with his strategy. In other words… I’ll heckle from the cheap seats.
Let’s dive in.
50 First Fixes
In both interviews, Chesky talks a lot about core improvements AirBnb is making. I haven’t counted, but he says there are 50 of them. Each is designed to address customer complaints like opaque pricing, high cleaning fees, and too many “chores” at checkout! The way he explains it, they took a classic product management approach to these problems – mapping the customer journey, analyzing data from customer support calls, and designing fixes to address the largest pain points. And the contrast he draws to other companies is pretty compelling:
“So I’ve also been getting a lot of feedback on Twitter and social media and millions of customers support calls, and I always wondered, like, imagine if a cable company CEO, like, actually got in the details of their customer service or, or as a CEO of a public company, just went down and just mobilized the entire company to go through every single thing people are complaining about and trying to knock them out one by one.”
This is a CEO that cares about the product, listens to customers, and changes things to make them happy. Good start.
As another major fix, Chesky is revamping “AirBnb Rooms”, where you can rent a single room instead of an entire apartment or house. He’s returning to the roots of the company (it started as just room sharing), and it’s good timing now that the pandemic is officially in the rearview. To make house-sharing more comfortable, his team built a new “passport” feature in the app (image below), so guests and hosts can get to know each other better before booking.
Here’s his two cents on why revamping rooms is a good idea:
“…there’s really two reasons. The first is actually just affordability. It’s pretty obvious that if you stay in a room, you’re not paying for the whole home. You get access to lots of the home. And the average price per night for a room on AirBnb is just $67 a night... And the second is I think that the pandemic has left a lot of people isolated. And I think there’s a lot of people who want to take a trip, they want to go to another city. And I think this has been one of the best ways to experience a new city like a local.”
I think this is a brilliant move for AirBnb. Customers (including yours truly) have complained about higher prices on the platform, and this is another way – fees or no fees – to give lower cost options. AirBnb already has 1 million “rooms” listed, and I expect that will go up.
A New Apple
Comparing your company to Apple and aspiring to be like Steve Jobs are classic tech clichés. But for CEOs of massive companies, I take those comparisons seriously. Several times during these interviews, Chesky compares AirBnb to Apple. It’s not hard to imagine how much Chesky, a design major at the Rhode Island School of Design, would look up to someone like Jobs, a design-focused CEO who shaped Apple into a builder of beautiful products. Among a sea of tech firms led by former engineers, it’s rare to see designers at the helm.
But two of Chesky’s Apple comparisons made me hesitate. Here’s the first one, where he’s elaborating on why AirBnb needed to get back to basics and do the 50 first fixes:
“…we need permission to do new things. So I’ll just use a rewind. It’s the year 2005, maybe 2006, and everyone was hoping that Apple would come out with an iPhone. And in January 2007, Steve Jobs announced it. Now the reason we all wanted Steve Jobs to come out with an iPhone in 2006 and 2007 was because most of us loved our iPods. None of us were asking Gateway computer to come out with a phone because we didn’t love Gateway’s laptops. And so basically I think we need to have permission to do new, innovative things. And we have permission when people love the core thing.”
I don’t disagree with what he’s saying, and I know this would motivate the team. It’s like saying “work on this boring stuff now; we’ll do cool, crazy stuff later!” But I also remember how massive and early AirBnb’s layoffs were compared to other companies.
AirBnb fired 25% of their workforce in May 2020. In his original layoff announcement, Chesky explained that they had strayed too far from the core product. They were building new teams around Transportation (air travel), AirBnb Studios (to mimic Red Bull Studios), Hotels (bought HotelTonight in 2019), and Lux (luxury rentals). At some point, those all seemed like good ideas, but they backfired. With that context, it’s concerning to hear Chesky dangling new, non-core things as early as next year, without articulating how AirBnb will avoid over-reaching again.
As a second comparison to Apple, Chesky mentioned they would be moving to a twice-a-year launch schedule:
“We’re going to ship stuff twice a year. And the reason we’re going to do that is we’re going to embrace constraints. When you ship stuff at the same time, everyone’s on a deadline. Then I meet with every single team every week, every two weeks, or every four weeks. I’m working and editing the work. I’m making sure it all fits together.”
This is a much more top-down approach than AirBnb has had in the past. Maybe this is Chesky’s answer to my criticism above about overreaching – he’s going to meticulously track the new pieces and hold them together himself. But my hesitation with using a hardware release schedule like Apple’s – twice a year – is that AirBnb is a software product. Most apps and websites we use are constantly patching updates. It gives companies the ability to quickly squash software bugs. More importantly though, a dynamic release schedule lets you respond more effectively to competitive pressure. My biggest worry about this change if I’m an AirBnb exec is that it makes us more vulnerable to a disruptive upstart… slower to respond, with our chin stuck out.
No New Grads
There was one last comment Chesky made that I wanted to respond to. And I’ll admit that as a grad school student, I’m bringing some serious bias. Here’s his quote:
“… I think a lot of tech companies have realized they have way too many employees doing way too many things. And I think having people on a single road map, having significantly fewer employees, you know — honestly, I’ll say this — like not having so many new grads… so many people out of school. Some people, but not so many people that you can’t actually train them. ‘Cause even when you have too many first-time managers. It’s a free for all… There were too many people probably in companies doing too many things at a platform that was maturing.”
You know what I’m going to argue against, right? One more quote before I land the plane. In this one, he’s talking about ChatGPT and his AI aspirations for AirBnb:
“…And for many queries getting the same answer is great. But what if you ask, like, “Hey, where should I go on vacation?” Or like, “Who’s a good person to, like, date?” Well, depends. Who are you? What do you want in your life? And so I think that there needs to be a personalization layer on top of AI, and that’s going to come from the data you have and the permission you get from customers. Now, I think our vision is eventually one day, we’re going to be one of the most personalized AI layers on the internet. We’re going to design, hopefully, some of the leading AI interfaces.”
Chesky wants AirBnb to eventually build new, innovative things. He wants to be a leader in AI. Let’s be honest – you’ll need fresh thinking to do it. To build the most personalized AI layer on the internet, you’ll need designers, product managers, and engineers that “grew up” using AI. Designers who start with AI rendered drafts, product managers who consult with AI to prioritize product features, and engineers who use AI tools like Copilot to code 10x faster than before. If history is any guide, these people won’t be the most seasoned in the org – they’ll be the most junior… new grads, even.
One final point on this and I’ll shut up. Chesky started AirBnb in 2007. Was he a seasoned designer and startup founder? No. He graduated from undergrad in 2004.
Recognize in others what you recognized in yourself – potential.
Wrapping Up
Despite the criticisms, I really admire AirBnb and Chesky. The company and its founder have been as disruptive and ubiquitous as Uber, but without the collateral damage and tarnished reputation. I also enjoy how transparent Chesky is about his decision-making and thought process – it gives me ample opportunity to heckle from the cheap seats.
I’ll be watching closely to see when they shift from “50 first fixes” to something new. I have a feeling it will be in a big keynote presentation (just like Apple is famous for) next year. Should be interesting.