Lecture 10 - Culture (Brian Chesky, Alfred Lin)

set the stage with a few slides and some comments but the main stage is going to be with Brian when he comes up and talks about uh how he built the Airbnb culture so uh you're here you I've been following the presentations and so now you know how to get started you've built a team you started to sort of build your product it's off the ground it's growing people love it you figured out how to do that you figured out how to create a very special one in K company with uh Monopoly Powers that's big

and the market that you're chasing after is slightly bigger than the paper airplane business so you're good right so now what so we're here to submit that actually culture is the thing that's going to be very very important for you to be able to scale uh the business as well as your team and hopefully after this talk you'll be able to know what what is culture uh why does it matter how to sort of create your core values and think about elements that sort of fit together for the core values and the culture that create

a high performance team and get some best practices for the culture so what is culture um anybody have a want to take a guess at what how one should Define this a set of values in a team yeah that's good you did you look that up on the uh because you had a computer and internet connection you you just look it up so these are some definitions uh that you'll find uh in in Webster's Dictionary and but that that we're at Stanford this kind of a trick question it's a CS class questions are never straightforward

the real question is what is company culture going to be you know culture that we can generally talk about Society uh about groups about places or things here we're talking about company culture and so how do we want to Define company culture we can take the previous definition and modify it a little bit and so every this is a hint of how we may want to Define company culture every day blank and blank of each member of the team in pursuit of our company blank uh and some people have filled these in with different sort

of things a the first blank could be assumptions beliefs values my favorite is core values the second blank for the b blank people have said behaviors my favorite s answer that is real action how do you act uh and in pursuit of goals that's kind of weak uh in in pursuit of big and hairy audacious goals that's a little stronger but a better definition is in pursuit of the mission so now that sort of we have that definition what do we do with it and why does it matter uh this is a quote from Gandhi

your beliefs become your thoughts your thoughts become your words your words become your actions and your your actions become your habits and your habits becomes your values and your values become your destiny if you don't have a good culture in the company you can't pursue your destiny uh what matters is it it becomes the first principles that you sort of go back to when you make decisions becomes a way to align people on values that matter to the company it provides a certain level of stability to fall back on and it provides a level of

trust that people can sort of trust each other with it also give you a list of things that you should be able to figure out what to do and what not to do and what the more important thing about that is what not to do uh and then finally the other thing that is important is it allows you to retain the right employees there are people in this world that are not going to be a fit for your company but if you have good strong culture and good strong core values you'll know who you want

to retain and who you do not want to retain and if you took the take the first words uh first letter of those it happens to help you move faster another reason you're thinking that's like all mushy stuff this is is actually more scientific stuff uh so here are uh indices for from 1997 to 2003 of stock market index of companies in the S&P 500 in the Russell 3000 and then for the one uh Fortune 100 best companies to work for they survey all these companies out there and they've picked out companies that they believe

are the best companies to work for and the returns the stock market returns of those companies happen to be 11. 8% 11.08% which is almost twice that of the other two indices and so there's real power in companies that treat their employees well where there's a lot of trust and where there's a lot of C uh strong culture so how do you sort of create a a set of values and and sort of Define the culture Etc get asked out a lot you got to start with the leader of the company the founder and uh

s ask yourself what are the personal values that are most important to to you what are those things that are most important to the business who are the types of people you like working with and what are their values and through that you sort of distill together what a set of values are then think about all the people that you've never like working with what values do they have think of that the opposite of that and maybe those should be considered values for for uh your company and finally remember this the values have to support

your mission and if it doesn't support your mission you're missing something and and then the last final checks are they have to be credible and they have to be uniquely tied to your mission so at zapo in terms of uniquely applied to the mission we were focused on creating a culture that was going to provide great customer service so the first core value we had was to deliver while through service we were very specific that we wanted to deliver great customer service and was going to be a wild experience and then below that we want

to sort of had a paragraph support in that talking about exactly what we mean by that want to support them um deliver while through service and support people such as our employees our customers and our brand partners and our investors in terms of the opposite thing we generally didn't like working with arrogant people so one of our core values at zapis was to be humble so those are two examples where we sort of created core values in a way that sort of sort of became uh credible and uniquely tied to our mission so you go

through this process you come up with a few core values these might be some of them whether it's honesty Integrity service teamwork and there might be a list of you might start with three you might end up with a list of 10 you might list list of 30 it's a good start um and when zapus went through this process we start with like we asked all the employees at the time uh what core values they want to identify with we came up with 37 we initi we sort of would that down to about 10 uh

and it took a year to do this that's a long time and you might want to ask why well if you just come up with the word honesty I mean give me a break everybody wants uh the culture to be honest no you nobody's going to say I want to be lied to every day uh service what do you mean by service there's got to be a lot more depth in this than that and nobody everybody talks about teamwork but there's a different in level of teamwork that you see in an intram mural sports team

as versus a baseball team and so how do you sort of dive deeper into teamwork what are the things that don't work on uh for a team a lot of it has to do with Communications a lot of it has to do with things that people have studied and you might want to go deeper into that at zos we thought about well there are a lot of smart people in this room um when they're fighting with each other and trying to figure out who's right and who's not it's probably not the best use of time

and we wanted everybody to sort of Riff Off each other and help each other make any idea better the result is that the company gets a better idea not that any individual person is right so we wanted to instill this idea that it's company first then your department then your team then yourself and how do you do that can go a level deeper in that there's another there's a great sort of um sort of element of high performing teams that I really like which is this pyramid that was created by Patrick Lon um and he

wrote this book the five dysfunctions of a team and the reason this is interesting he talks about the breakdowns of a teams first of all if you don't a lot of teams break down because they don't have any trust then even if you had trust why do you need trust well then if you have trust you can actually have debates and conflict and get to the right answer if you don't have conflict and debate people are just it's the blind leading the blind how do you know you actually got to the right answer before you

sort of commit to something so people are not actually willing to commit they're afraid of committing uh and so let's say you get to the next level and you are actually able to commit well what what goes wrong then it's usually because people are not held accountable to things that they committed to and if people are not held accountable to the things that they've committed to then they can't get results and I would submit to you if you think about the company as a black box and results whether it's Financial whether you produce a great

product or anything like that as the output one of the major inputs is the culture of the company so uh some other best practices we're going to actually talk about during Q&A because I think this is going to blend into the conversation is that you want to incorporate your mission to values we've talked about that performance you got to think harder deeper longer about your values than you might initially think you need to do uh one of the things that I think a lot of companies don't actually do is they interview for technical fit or

skill fit uh or competency in that realm but they don't actually interview for the culture fit and whether someone will actually F believe and follow the mission I think that's a big big no no like I think you can have the smartest engineer in the world but if they don't believe in your mission they're not going to put the pour their heart and soul into it uh and that's one of the things that where if you actually sort of start thinking about from the interview process to performance reviews to making sure that it's a daily

habit you'll get uh a lot further with prod with um making a great culture the final point on making a uh daily habit I think culture just like customer service or Fitness is like motherhood and apple pie everybody wants to provide great customer service every company wants to have a great culture what they fail to do is make it a daily habit you just can't be fit if if you're if you don't do it as a daily habit eventually you get out of shape then you get fat and then you're like oh I got to

go on a crash diet to sort of get back into shape that doesn't quite work uh and the same is true with something like culture so I think we checked all of these off so we can go into Q&A with Brian right cool move the chair right here yeah it's good all right hello everybody it's quiet in here I'll be honest now it's much better now I feel a little less on edge nothing worse than like a room for people really really quiet staring at you but now I feel better oh I did it for

5 10 minutes yeah you could bear for a little yes exactly so Brian could you talk about how the process by which you came to understand the culture was important to Airbnb and in building the company yeah so um I think one of the things we real realizes so just to give you I won't tell the full story of aing being some of you may know it um but the very short version of the story was that um Airbnb wasn't meant to be like the company we were trying to start I had quit my job

I was complete um I was living in La one day I drove to San Francisco became roommates with my uh friend from college I went to R School design Joe gbia and I had $11,000 the bank and the rent was $1,150 so that weekend um this International conference was coming to San Francisco all the hotels are sold out we had this idea let's just turn our house into a bed and breakfast for the conference I didn't have any beds Joe had three air beds we pulled them out of the closet we called it the airbed

and breakfast that's how the company started I probably told that story 10,000 Times by the way some version of that story and I didn't think I'd ever tell that a second time um when I I remember growing up um I I also went to college and um my parents were social workers and they had kind of nervous about me going to art school they kind of worried that maybe I would like not get a job after college which is I'm sure a lot of parents are worried about so she said make sure you promis me

you get a job with health insurance I ended up starting airband breakfast.com was original name and she remember her telling me I guess you never got that job with health insurance the reason I say this though is this Airbnb was never meant to be the big idea it was meant to be the thing to pay the rent so we could think of the big idea and along the way by solving our own problem it became the big idea um so alongside that um and I'm not going to talk about like kind of how we built

the product that's probably another conversation that some other people are talking about you have to build a team and a great company and in the early days we had three co-founders Joe Nate and myself and I kind of think of one of the reasons we're successful was I was really lucky and I don't think I was really lucky because we came up with the idea of Airbnb and I don't think we were really lucky that we became successful once we had the team I think we could have come up with a lot of ideas and

been somewhat successful I think I was lucky cuz I found two great people that I wanted to start a company with people I admire that almost intimidated me how talented how smart they were and I think that's one of the first things you got to build a team that is so talented that they kind of almost make you slightly uncomfortable because they know by being with them you're going to have to raise your game to be with them and then when we were working together in the early days this is like 2008 um the first

thing is we we were like a family if you think about Founders Founders are like parents and the company's a child and the child will manifest in many ways behaviors that parents have between the relationship if parents are dysfunctional they're not working together then the child's going to be frankly pretty up and so you don't want that you want your culture to be awesome and so Jon and I were like total a total family in the beginning we we worked 18 hours a day seven days a week I remember when we were white combinator we

like worked together we like ate food together we like even went to the gym together we may as well have gotten jumpsuits we didn't go that far but we were like it was like we were a mission I felt like we're like a special forces or something and we had this like amazing shared way of doing things amazing accountability and then um we real that was like the DNA of the company and then we started thinking at some point you go from building the product to phase two which is building the company that builds the

product and so a lot of the talk is about how do you build the product how do you get product Market fit once people start doing that now you got to build a company and it doesn't matter how great your original product or idea is if you can't build a great company then your product will not endure and so we thought about this and one of the things we realized is we want to build a company for the long term the last thing I want is to build something I mean think about it this way

if your if if your company's like your child a parent wants this child that will live him or her it would be a tragedy to outlive your child it would also I felt like be a tragedy for us to outlive our company and just watch it rise and fall we didn't want that we wanted a company that would endure and so to do that we started noticing companies have something in common companies that were around for a really long time had a clear Mission and they had a clear sense of values they had a shared

way of doing something that was unique to them and was really really special and so then Joe and and I when we were three people decided to look around companies I noticed Apple you know Steve Jobs talked about his core value was that he believed people with passion could change the world and he said our products changed but our value never had and we learned about Amazon we learned about Nike we learned about companies in the early days you can even use this to talk about organizations you know even like a founding of a nation

has a strong values and a declaration then the country might endure longer and so we started realizing like we need to have intention culture needs to be designed and that's kind of how we got connected is because um you know when we were funded by seoa Alfred ly just joined from zapo seoa and I was told zapo had an amazing culture and we went to Las Vegas and met up with Tony and we learned about it and so what did you learn well you guys are crazy um I the F the thing we learned and

we were three people was you need to have like if culture is a shared way of doing things there's really two parts one is behaviors and those can kind of change and maybe 50 years from now there will be rituals and behaviors that will change be different but there have to be some things that never change some principles some ideas that endure that make you you and I think of core values is integrity honesty those aren't core values because they're values everyone should have they're like Integrity values but there have to be like three five

six things that are unique to you and you could probably think about this in your life what is different about you than every single other person if you could only tell somebody three or four things what do you want them to know about you and we realized that when zapus was 100 employees they wrote down these nine is it nine 10 10 core values and the only thing I learned from Tony is he said I wish I didn't wait till I was 100 employees to write down a core value so I think I was talking

to Sam he says he thinks we're one of the only companies that wrote Our core values down before we hired anyone how long did it take you to hire a first employee so our first employee was our first engineer and I think we looked for him for four or five months and I probably interviewed I probably looked through thousands of people and interviewed hundreds of people and by then when you hired the when did you write it did you write it on day one or did you it was a month three did I think we

started working on it around the time of white commentator which would have been January 2009 it was probably a process that evolved over the course of six to S months we finished white commentator in April 2009 I think we hired a first engineer in July something like that so it's probably like 6 months and the re some people ask like why did you spend so much time on like hiring your first engineer and here's how we thought about it I kind of felt like your first engineer was like bringing in DNA to your company this

person was going to like there were going to be if we were successful there were going to be a thousand people just like him or her in the company and so it wasn't a matter of like getting somebody to build the next three features that we needed to ship for our users there was something much more longterm and much more enduring which was do I want to work with 100 or a thousand more people like this now you want diversity but you don't want you want diversity of like belief you want diversity of like backgrounds

age you don't want diversity of values you want a very very homogeneous beliefs and that's the one thing that shouldn't be diverse so what what what are airbnb's values so we have six core values um I'll maybe talk about three of them okay so our first core value we talk about is Champion the mission and what it really means is that we want to hire people that are here for our mission we don't want people here because they think we've got a great valuation they like office design they need a job or they think it's

hot we want people to be here for the one thing that will never change and that's our mission and just to tell you a quick story about our mission um you know Airbnb you know a lot of people describe it as a way to book a room or book a house and you travel around the world and that's what we do but that's not at all why we do it and to answer the question of like what what our mission is I'll just tell you a quick story and this I think describes it in um

early 2012 I met a host named named Sebastian so we do these meetups around the world where we meet with host and I meet this host named Sebastian he's probably like late 50s he lives in North London and Sebastian looks at me he says Brian there's this word you never use on your website and I said what's that word he said that word is friendship I would love to tell you the story about friendship I said okay tell me the story about friendship he said six months ago the lendon riots broke out outside my home

and I was very scared and the next day my mom called me to make sure I was okay he said yeah Mom I'm okay and she goes what about the house and he says well yeah the house is okay as well he said here's the interesting thing between the time the riots broke out and the time my mom called me was a 24-hour window of time and in that period of time he said seven of my previous arbb guests called me just to make sure I was okay he said think about that seven of my

guests called me before my own mother did I know what that says about our guest's mother more but um but in in this summer on a typical night or a peak night we would have 425,000 PE 25,000 people staying in homes and living together and they were coming from 190 countries on the world which is every country but North Korea Iran s and Cuba so when you hear that story at our core what we're about that's much more than just booking a room or traveling what we are about is we want to help bring the

world together and we want to do that by giving a sense of belonging anywhere you go so our mission is to belong anywhere so 5 years from now 20 years from now maybe we're still selling rooms and homes but maybe we're not but I can guarantee you what we're always going to be about is this sense of belonging and bringing people together and that's the more enduring idea so when we hire people the first thing we need to make sure is if that's our mission you need to Champion that mission you Champion the mission by

living the mission do you believe in it do you have stories about it have you used the product would you bleed for the product I used to ask like crazy questions like one of the the crazy questions Sam reminds me of is I used to interview people so I interviewed the first 300 employees at Airbnb which people think I'm like really neurotic and that may also be true but um and I used to ask him a question which I've now amended I used to ask them if you had a year left to live would you

take this job and actually the people who say yes to that you probably don't want because that's like they should probably spend time with your family so I amended it to 10 years cuz I feel like you should you whatever if you knew you had 10 years left to live whatever you do want you would do in those last 10 years you should just do and and I really wanted people to think about that that was enough time for like you to do something you really cared about and the answer doesn't have to be this

company and I say fine if what you're meant to do is a travel or if you meant to do is start a company you should just do that don't come here go do that and so there's this old kind of parable probably many you've heard of it about like two men are laying bricks somebody comes up to the first man and says what are you doing he says I'm building a wall he ask the other guy what are you doing he says I'm building a cathedral there is a job and then there's a calling and

we want to hire people aren't just looking for jobs or looking for calling and that's that's kind of the first value and that's Champion the mission I'll just maybe because I don't want to take all the time I'll talk about um I'll talk about just one more just so we don't talk the whole thing just about values the second value um relates to being kind of creative and Frugal and I'll tell you a story our company was like by the way all the founding stories of your company end up becoming the things that people repeat

and talk about when you're a thousand people and it kind of embodies right it's kind of like your childhood these things kind of come back later in life same thing with the company so Airbnb I think Mark and Jon actually sent the last talk that was like the worst idea that ever worked and it it it really probably was the worst idea I mean people were thought we were crazy I remember telling people about the idea and I remember actually telling Paul Graham I said we have this in an interview we said we have this

idea it's called Airbnb he goes people actually doing this I go yeah his follow question was what's wrong with them so I knew the interview wasn't going well um and in the interview at the end of the interview Paul Graham I think wasn't going to accept us and but we told him this story of how he funded the company and here's how it goes we were introduced Michael syo who I think is a partner of Y com lot people know introduced me and Joe to like 15 investors in the valley including um some of the

ones that have been here and all of them like said no to the company they could have bought 10% of the company for like1 $150,000 they all said no they thought it was a crazy idea no one would ever stay in someone's home so we ended up just funding the company with credit cards and you know those binders kids used to put baseball cards in so we put credit cards in those cuz we had to put them all somewhere that's how many credit cards we had and we were completely in debt and in the fall

of 2008 we providing housing for the Democratic and Republican National Convention and um we had this weird crazy idea cuz we weren't really selling a lot of homes basically airb be launched and a year after we launched I think we had 100 people A Day visiting our website and we had like two bookings which is generally bad it's kind of like releasing a song and a year later like three people listen to it every day like it's probably not going to be a very popular song so but I believed in it and Joe Nate believed

in it but um and so we're completely in debt we don't know what to do and so we get this idea well we're airing breakfast we're providing housing for the Democratic and Republican national conventions what if we made like a collectible breakfast cereal for like the Democratic National Convention and we came up this Obama Barack Obama theme cial we called it Obama O's the breakfast of change and then we came up with a republican theme serial for John McCain we found out he was a captain the Navy so we came up with Captain McCain's a

Maverick in every bite and we had zero dollars and without any money we were able to we tried to call like General Mills and they told us to like stop calling them or they're getting restraining order so that didn't work but we found a local alumni of Ry he made a thousand boxes of cereal for us and we end up sending him to press and eventually within a week we got on National Television national news we made $40,000 selling breakfast cereal and that the year 2008 we made $5,000 from our website and we made $40,000

selling the breakfast cereal and I remember my mom asking so are you a Serial company now and that wasn't the bad part the bad part was the honest answer which was well 80 technically yes technically yes so but the reason I tell that is our second core value is To Be A Serial entrepreneur I'm sorry for the cheesy pun I'm sorry um but be a seal entrepreneur and we really mean is that we believe constraints bring out creativity and when you raise like $800 million suddenly all that scrappiness it's easy to lose that scrap in

it's easier for people to tell you you know I just need like this $50,000 contract or I need this or I need that and whenever somebody is just being a little bit not like Frugal and not being creative or they tell me they can't do something I'll just take a box of seral and like even just the suggestion of OB knows they need to be Scrappy and Frugal and so again a lot of the founding DNA or company becomes these values these principles and so everyone knows if you don't give a crap you shouldn't be

here and it doesn't mean you have to give a crap it just means you have to be here and you also have to be creative and be like kind of like an entrepreneur it's super Scrappy and these are some of the values we learn cool um so you guys should start list uh sort thinking about questions I'm going to open up to questions from the audience but um I have a few more questions for you so this all sounds nice the stories are great people here are a pretty skeptical group it's a CS Department class

probably left brain focused feels like a softy kind of right brain Focus to softy sorry um but how has uh having a strong culture helped you make important tough decisions well I think that having a so here's here's the thing about culture there's three things they never tell you about culture the first thing is they never tell you anything in other words no one ever talks about culture and no one ever tells you you need to have strong culture and so like there's tons of articles about building a great product there's tons of articles about

like growth and adoption and there's very few things about culture it's this like mystical thing that's like kind of soft and fuzzy that's the first problem the second problem is it's hard to measure and things that get are hard to measure often get discounted and um these are like two really um hard things but the third thing is the biggest problem the biggest problem with culture is it doesn't pay off in the short term in fact if you wanted to in one year build a company and sell it as quickly as possible the number one

piece advice I give you is up the culture forget about it just hire people quickly culture makes you hire really slowly and makes you be deliver about decisions that in the near term can slow progress it's kind of like putting an investment into the company short term and so these are the things people never tell you so it it's really about building a company for the long term and to endure now some of the things about culture the first thing is you need to like be very clear about like what's unique to you that you

stand for once you do that you need to make sure you hire people that believe in that and so we interviewed hundreds of people you need to make sure that you hire and Fire based on the ideas these values and um and you know one of the things we do is we constantly repeat over and over again so we interview like when we interview we want to make sure they're world class and they fit the culture so the first thing I used to ask people I have at the end of an interview sheet is if

you could hire this is a functional question if you could hire anybody in the world would you hire the person sitting across from you and if our V if our if our vision is become like the best in the world of what we do why aren't we hiring the very best in the world so every single person is meant to hire a person better than the previous people you're constantly hiring the raising the bar you're constantly hiring worldclass people then we have separate people called core values interviewers who aren't in the function so if you're

an engineer the core values Engineers value uh interviewers are never Engineers because we don't want them to be biased and say oh I know how good they are and they interview just for values to make sure that people care about the same thing and we've said no to a lot of really great people because we just didn't feel right about them being with us long term so that's one of the things I also think that um maybe some other examples of when we kind of had uh hard decisions I've had a kind of in um

in uh late two mid 2011 we had this um so we were mostly in the United States and we had this internet clone um funded by these guys called The samare Brothers I don't know if has anyone heard about these samare brothers they basically they clone yeah rocket internet they just went public and they basically copy American websites quickly and they try to sell it back to you and if they don't if you don't then they just try to so it's kind of like putting a gun to your head and so and they had they

had they had basically done this to Groupon Groupon at this point was like the fastest growing company in the world ever first company to fastest company to billion dollars in revenue and then they they stopped doing Groupon this is been Groupon's on top of the world and they cloned us and we had 40 employees we had raised $7 million they cloned us and they raised $90 million and in 30 days they hired 400 people and I was and they and they and they wanted to sell the company and if they couldn't they were going to

like destroy us around the world and the problem with Airbnb is if we're not everywhere around the world like a travel site not being in Europe is like your phone not having email it doesn't actually work so we were kind of in trouble and I I we had this conversation and there was the pragmatic decision of should we acquire them and then there was the like kind of values decision the pragmatic one should have probably have said buy them because you can't risk losing International so just guarantee you're going to get International but we ended

up not buying them and the reason we ended up not buying them is I just didn't like the culture I didn't want to bring in this for of people I felt like we were missionaries and they were mercenaries I didn't think they were doing it for the beliefs I thought they were doing it to make a lot of money very quickly and I believed in a war you know missionaries would Outlast and out endure mercenaries and I also felt like the best revenge against an internet startup uh internet clone was just to make them run

the company longterm it's like you had the baby now you got to raise it so that's what we end up doing and that was a very controversial decision a lot of people were telling me you should buy this company we didn't and I think it worked out uh let's see the last board being how what percentage of Revenue comes from Europe um more than 50% I think it worked out yeah all right uh anybody have any questions I can keep going if you have so one other question uh one other statement we had at zapus

was that culture and brand were two sides of the same coin yes uh Airbnb has a great culture and also a great brand you want to talk a little bit about branding since that's it's actually kind of a weak thing in Silicon Valley we don't tend to focus on this on culture brand that's what I actually just said that to Sam mman it's like I think Silicon Valley is not historically really strong or we don't talk about culture and brand very much they are two sides of the same Co so culture are like the the

principles and the beliefs that you have inside the company that you want people to be aligned with longterm and whatever happens inside the company eventually comes out you can't hold it in and brand is really the promise outside the company that everyone identifies with and so I think having a clear Mission and making sure that you know that mission and making sure that mission comes through the company is probably the most important thing you can do for both culture and values and then the second thing you need to know is that your brand the way

people think about you as a company is often decided by your you know I mean your brand evangelist are your employees so you have a weak culture we often think that like companies that hire employees or people that are deeply passionate create companies that customers are really really passionate about and those are the companies that have strong Brands and so you know zapo had a really strong brand because they strong culture and a lot of companies of Google they care deeply about the the culture they actually have a question is this person googly and it's

meant to be like a cat all for do they fit the Google culture Google is a very strong culture it's Unique to Google and by the way there's no such thing as a good or bad culture it's either a strong or weak culture and a good culture for somebody else may not be a good culture for you so I think brand is incredibly important as well and brand is really the connection of you with your customers and so if you have an incredibly strong culture there could be a whole talk on brand but if you

have a incredbly strong cult culture then the brand will come through the final thing to say about brand is a lot of people when they talk about their brand they talk about what they sell so if you're apple one way of doing is say we sell computers and like this new our new screens are like larger and it's faster and they talk about bits and bites and I remember Steve Jobs had this really important talk where he says the way to win this is 1997 when he first came back wasn't to talk about bits and

bites the way to win is to talk about what we value and our core values we believe people of passion can change the world and that was how we introduced the think different campaign and so Apple before they had this huge Renaissance which became the most valuable company in the world they did the think different Campaign which is basically saying this is what we believe in and if you buy an Apple computer you're also saying I believe in this too and there has to be I think a deeper core belief and if that doesn't happen

you're a utility and the utilities get sold at commodity prices go how did you know how to communicate this the beginning how uh the question is how do you uh know how to communicate this to the company the culture or the core value or to employees world to the outside world the culture the values the the brand how to communicate what Airbnb does and how how it's well so the question is how do we communicate what Airbnb does in early in the days well we learned a lot because in the early days we communicate like

a utility we actually said Airbnb is a cheap affordable alternative to hotels and we had a tagline of forget hotels save money with Airbnb and over time we felt like that was I mean you know this is in really early days and we felt like that was way too limiting that undercut the idea and so we we then eventually changed our tagline to travel like a human which we don't we haven't kept um but it was basically meant to say that like we believe in a certain kind of world and we really feel like travel

is mass-produced you feel like isolated you feel like a stranger and we want to bring the world back to the place where it's a little bit like a village again where the service is coming from other people you have this feeling like you belong and you're actually treated like a human you know no matter how successful you are in life often traveling will remind you you're not that successful go through TSA stay in a typical Hotel sometimes you'll have some problems and so we really want to make people feel special and um this was kind

of some of the stuff we did in the early days and we did a lot of Storytelling I mean you know I probably told the story of Airbnb like 10,000 times and this is something it's kind of related to culture but one somebody asked me the other day like what's the job of a CEO and there's a number of things CEO does but what you mostly do is articulate the vision so you like articulate the vision you got to develop a strategy and you got to hire people to fit the culture if you do those

three things you basically have a company and that company will hopefully be successful if you have the right Vision the right strategy and good people so we end up doing is articling the vision over and over and over again whether you're hiring people or recruiting them talking to investors raise money doing PR interviews if you're speaking out of class you're always reinforcing the values you're doing it in email through a customer and so you just do it thousands of times and if you do something thousands of times it will change and get better every time

and so it just kind of evolved yeah so the US interacting with the host so how do Ure that the host are reinforcing the culture of Airbnb very very good question how do we make sure the hosts are rein uh enforcing the culture of Airbnb so when the the answer to that is we do a pretty good job but not yet an amazing job at it um when we first started Airbnb we I kind of took the Craig Newark school of thought Craig newark's the founder of craigus and I said anybody should be able to

use Airbnb you didn't have to apply if you want to rent your place you can rent your place and it turned out that many of the people believed in our values cuz we talked about it and we attracted them but there were people who rented on airb not because they believe in Valu but because they realize they can make a lot of money rening their home and not everyone really was a great culture it and these people actually did cause us a lot of problems so that was actually a bit of a lesson for me

and I didn't think our host had to I didn't really occur to me in the early days the host had to completely fit the values now we met them we trct people like us and so over time we've realized host are partners and so they need to believe in the same values we do and so um you know now we have this program called the superhost program where they have to like demonstrate values to reach this kind of badge which gets them kind of priority customer support and distribution um we are having this host convention

where we bring all the host in we're going to be talking about and reinforcing the values so the answer is like the answer is we were really late but we now do it by reinforcing it every step of the way Goan has made some great contributions to the open source Community do you have any thoughts on how that uh contributes to the culture on your development yeah I mean I think just in general and it may be Rel it may be may be related to two things about Airbnb um we tend to be a pretty

open culture just in general we we communicate a lot and we we generally you know believe in the idea of like a shared world where people are giving back and contributing making communities and industries stronger so um and just my one philosophy on communication is we basically communicate and talk about everything internally except for things that relate to employee or customer privacy so if it doesn't really those two things we'll basically talk about it as far as open source culture and Engineering um we wanted to make sure that um we had a really strong identification

of the team and so we we we really felt like um a lot of source codes shouldn't be you know we felt like every company needs a moat some kind of moat that protects you from your competition we thought some technology would be but we also felt like we wanted to be able to give back from a technology standpoint and we preferred our to be that we provide the very best experience in the world when you use Airbnb we have the biggest Network effects and we thought that kind of took precedent over having like you

know you know having like certain technology that we only we could use and so we decided to try to share some of that out to people and I think it does again it does relate to the values now one other thing is I never Rec I never one day recommended this is hopefully if you have a strong culture like I didn't recommend we we we we do any of that we hired Engineers that we felt like fit the values and it just just independently occurred to them they should do that they felt like that was

the right thing to do all the way in the back you talked about how during the conventions you didn't have any money and you only a couple people visited your site what did you do to increase the number of users that came to your site how did you scale that up so the question was uh Brian had talked about there weren't that many visitors to the site uh when they were trying to sort of get off the ground how did they get users to the site so this is this is actually not about culture um

but I'll answer anyway um so you know a lot of people so the best advice this is not even a culture question but the best advice I ever got was probably from Paul Graham and Paul Graham basically said he I remember he had this line he said it's better he may have even talked about this talking about he said it's better to have a hundred people that love you than to have a million people that just kind of sort of like you it's literally better to have 100 people love you and the reason why is

if you have a million customer customers or a million users and they just kind of don't care about you but they kind of use your app and you're okay to get them to care is a really really hard thing in fact I don't know how to get a million people that all of a sudden care what I do know is if you get a 100 people that love you those people if they feel incredibly passionate each of them will tell a 100 people and in fact all movements typically start or companies or ideas that are

really powerful start with just 100 people so the reason this is so critical is he let gave us another lesson which is if all you need to do is get a 100 people to love you then what you need to do is things that don't scale so you know it's hard to like if you have a million people you can't meet all of them but you can meet a 100 people you can spend time with them and so that's exactly what we did Joanie and I I mean we would go door too in New York

City or in Denver where the Democratic National Convention was literally meeting with staying with and living with our users I used to joke that when you buy an iPhone Steve Jobs didn't come and sleep on your couch but I did and that that was is like really critical like living with your users and by living with our users and spending time with them all we had to do is give them enough time attention and get them to get the point where they were deeply passionate and if you work backwards from a 100 people or even

one person like without even technology imagine what would be an amazing experience for just this one person and walk through the Journey from the time they like whatever your service is right and make it perfect for that one person once you make a service perfect for one person it's actually really easy to make almost anything perfect for a person it's not actually that hard the hard thing is then how do we scale us to millions of people where everyone gets in trouble is they try to solve both at the same time so the first thing

we do is get the perfect experience for one person we went door to door to do this we W over their love then we use a separate kind of part of our brain to imagine now how will we achieve that at scale and I'll give you one example before I stop talking about this right now on Airbnb you can if you put your home on Airbnb you can click a button and a profession it kind of works like uber and we did this before Uber a professional photographer comes to your house and they'll photograph your

homes for free we have 5,000 photographers around the world and we photographed hundreds of thousands of homes so it's probably one of the largest on demand photography networks if there was such a thing I guess probably the only one but um in the world and that started with Joe and I we were living with we were staying not living staying with this one host in New York City and her her house is amazing but our photos were terrible and we said why didn't you just put up better photos and this is before like you know

iPhones had great cameras this 2008 and she said well I can't figure out how to get camera photos from this camera onto this computer she wasn't very technically Savvy and she said well we'll just take photos for you or actually I said what if you could press a button and somebody just showed up at your door and took professional photo photograph that'd be magic so next day I knocked on her door and said I'm here and I photographed her home and then we sent emails to people saying we have this new magical photography service and

if you want you can press this button in a professional photog would show up at your home someone just press this button would just send me alert or Joe an alert and we'd rent a camera in Brooklyn in January of 2009 walking through snow photographing people's homes we did this by hand without any technology we managed it with just spreadsheets I wasn't going to burden Nate with trying to build something we designed before we had photography then we started hiring contract photographers then eventually we got an intern to manage all the contract photographers then we

got an intern to become a full-time employee managing other interns to manage the contractor employees and at some point this is before we built anything and at some point there were too many like people to manage like there were like hundreds of photographers then we finally built all the tools to manage all the photography but we did it only after we knew exactly what the perfect service was one more question one more question so a lot of people say that um when when the hardest part isn't the technology here the marketing and the communication is

the hardest part there going be um and let say it's not compan so do you want to repeat the question so the question uh is uh a lot of people in this particular situation there BNB a lot of people think that this is not necessarily a technology company but it's more of a marketing company good question so um I I'll I'll answer the question with a story um Let me let me let me just let me preface that question by a set of questions do you have do you today have um proprietary Tech te do

you have uh a moe yes do you have Network effects yes do you have pricing power yes uh do you have a good brand I think so are uh are you a monopoly I'm not going to answer that but but I think similar to the question um just forgetting about all of that if companies that have Network effects and sort of get off the ground the flywheel is going people just think that you're lucky and let me let me it's a totally fair question and people have said it so I want to answer it you

uh guy that runs tooy Capital now his name is Doug Leone yeah one day I think it's a year year and a half ago Doug Leone says your job sucks and I was like what the hell is that mean like this is like you've got the worst job of any CEO in my portfolio and I said tell me why and this is what he said he says well let me here's how I think about it first of all you're a technology company thought we were a technology company I would say at our heart in many

ways we are a technology company um and so you have all the challenges of all my other portfolio companies but beyond that you are in 190 countries and so you have to figure out how to be International we have to hire people in countries all over the world we're literally in every country world but North Korea an here in Cuba you're a basically a payments company we handle billions of dollars through our system every year and we had to get money transmission license to the state of California so we actually are a payments company we

have serious fraud and risk to to to warrant and needs to be locked down like Fort Knox he said that's that's usually where companies end but you got to worry about all this other crap and he says trust and safety you know we have 425,000 people staying in other people's under in other people's beds in their sheets think about a woman from Texas staying in the Middle East or vice versa the cultural conflicts that could happen and misunderstandings and you know you have 425,000 people a night it's like being the mayor of Oakland now imagine

if you're the mayor of Oakland all the things happen Oakland tonight so you've got trust and safety now we have regulatory problems you know we are in 34,000 cities every city has a different law different rules and many of them were written in a different Century before he had any of his technology and so you've got to deal with that then you've got issues like search and Discovery so Google's Got a Brand about being really important about search the thing about search though is usually if I have a question you know Google could give me

40,000 results but it's probably clear that there's like one or two best options for everybody so if I want to know a question to an answer there usually one best answer we have 40,000 homes in Paris there is no best home in Paris for anybody in this room so we have to be really really great at matching people and Technology we have to be a company that's just you know another example Facebook for example is a digital product their product is their website our product are these experiences you have in the real world so we're

not just an online product we have to be an offline product and we need to transition from when you're at your app through cities and these are just some of the examples why technology design so basically the long and the short of it is we have to be world class at technology we have to be world class at design we have to be world class at branding because we've got to convince people this isn't crazy you're not going to die when you use it we have to convince governments this is good for your neighborhood what

happens the internet moves into your neighborhood that's what people call it it's a good thing hopefully and you've got to make sure trust and safety is really world class that we handle all these payments not have problems with risk and I could kind of go through and this is not even to do with culture I didn't even mention culture so that's how I describe it as like I think great companies or companies are probably really strong at everything but um you know we H we try to hire the very best engineers and Technical talent in

the world and I definitely don't see as a marketing company thank you thank you thank you guys all right thank you sir awesome