Live: Airbnb Launches "ICONS---Extraordinary experiences" | Airbnb's CEO Brian Chesky EXCL

Hello and welcome to The Global Dialogue. I'm Shirin Ban and joining me on the program today is Airbnb's Brian Chesky. Brian, thanks very much for joining us here. It's wonderful to be here in LA with the Up House, which is up on Airbnb. And I want to understand from you, you know, in the context of your aim now to reinvent Airbnb, you've always spoken about the fact that products must have a soul. Is that the direction that the company is now headed in with the ICONS launch? Yeah, a hundred percent. I think with ICONS, I think it's the beginning of us going beyond just being a place to stay. I also think, like I said on stage, this is not just a house. It's an experience. And I think ultimately at its best, Airbnbs are not just homes, they're experiences. And I think experiences is where we're going. More creativity is where we're going. And I think magic, trying to like take this magic that only exists in our imagination. And there's a lot of brands that like create magic. But to bring that into reality, that's where I think we can uniquely like excel, is to take these things from your imagination. And I mean, Airbnb kind of means to be real, right? To Airbnb something is to like get it in the real world. And so we thought, when we take the craziest things, the biggest brands, the biggest celebrities in the world, but they only exist in our minds or social media. And now you can step inside them, quite literally. Quite literally. But you have this idea of converging creativity with technology, which is really part of what you're attempting to do. And how much of this was sort of a personal journey for you, given the RISD background and what you've been able to do and recreate here? I mean, there's a lot of like, there's a lot of good business reasons to do something like this. Like it keeps you top of mind that you can reach certain audiences that can stretch the brand. But like some of the best ideas don't start with a clear business rationale, including Airbnb. Like we didn't, Joni and I didn't say, you know, we're going to try to come up with this like business model that so happens to be a global network effect. And we have a transaction model and it's like a great business. We were only trying to do something really special for ourselves. And sometimes the best ideas, you start out of a passion. And this started purely as a passion. You know, I told the story of one day we're walking through an Ikea and we thought it'd be funny to put one of the beds on Airbnb. And so it was like a night at the Ikea. And then we got bigger and bigger and bigger. The inflection point was last year at Barbie. The Barbie movie comes out, it becomes a sensation. We create the Barbie Malibu dream house, a real house in Malibu. It also became a sensation. And so we're kind of like, maybe we should like go bigger. Like people, this is clearly tapping into something and it's like creating so much joy in the world. So the main goal I had was to do something fun that would just make people happy. And I trusted that if we do that, you know, like everything else will follow. Everything else will follow, meaning it will become a viable business proposition as well. For now, you're not monetizing it. What's the plan on that front? Remains to be seen. I think this is a stepping stone to the next chapter of Airbnb. I think the next chapter of Airbnb is more than just a place to stay. It's about new products, new services and experiences. It's about, you know, maybe kind of bringing some dream worlds to life. And I think the question is now, how do we bring the magic of icons to millions of people? And that's what we'll be huddling with our team to figure out next. You know, you talked about the next chapter of Airbnb and you've said that the company is at an inflection point and you've gone from adolescence to adulthood. What have been the big lessons for you along this journey and, you know, where you find yourselves today? What is the audacity of ambition from where you find yourself today? That's a great question. You know, every stage has a different lesson. And when we started the company, like the lessons were like, how do you take an idea that's only your mind and bring it to the world? And that's like the first phase. And the goal is to get the product market fit, you know, where like the product fits the market and it gets traction. And if you're lucky enough to do that, and for every thousand entrepreneurs, maybe only a handful get like a true product market fit, then you go on the rocket ship and now you go to hyper growth. That's a whole series of lessons. If the first one's about resilience, the second one is about hanging on and then you go on a rocket ship. And then you have the third step, which is to become a real business, a real company, which means, you know, if you have all these shareholders, do they get an exit? You know, do they have liquid stock, go public? Are you actually profitable like in a net income basis? Are you really profitable? And so now you're a grown-up company, you're here, you're enduring, you're going to last. And the last question is, can you reinvent yourself? Are you only the thing you came up with in your 20s or are you something more? And this is the beginning of us reinventing ourselves. This in and of itself is not the reinvention, but I'm hoping that this gives people a glimpse that if we can make a house float in the sky, we can do You know, what could anything mean? I mean, you've been doing experiences, you're taking experiences to the next level with icons. But what are we talking about in terms of new products and services? You know, there's speculation on TV shows and the movie business and so on and so forth. I'm just trying to understand the scope of extending yourself. I think that the scope of where we could go is unlimited. I also learned a lesson the last eight years, having tried to do a bunch of things. And that's that you can do anything, but not at the same time. And so we try to really focus on doing one or a couple of things at a time. We put all of our energy and we put our energy here and we're working as we speak on this event next year. Exactly 52 weeks from now, we're going to have an event and there's going to be some even bigger ideas. Do we have to wait a year for the next movie? Yes, because you're going to come. And I know some of what we're going to release, but I don't know everything we're going to announce. And the reason I don't know everything is you learn along the way, right? Like, you know, the most, the best ideas we had, they changed and they change as you get into it and you learn, you discover. And you ever notice like cars, like the concept car is really cool and they make the production car. It's kind of lame. That's a bad process, a good process. The idea grows and the production is better than the concept originally. And this concept we came up with in October, you know, we've been doing this for 10 years, but October we mobilized everyone. We said, you know, what if we created a whole category of experience like Barbie and put them right on the homepage? And what if we made them even crazier? What would be crazier than Barbie? And so this is our attempt to do that. So this has only been six or seven months and I think the ideas are just going to grow from here. But I think that's so exciting, right? The thing that's so exciting is where we go from here. And I know somewhat where we're going from here, but the most exciting part is what you discover along the way. Okay, so I know you're not going to tell me where exactly you're headed, but in terms of prioritization, you know, what changes as part of this reinvention? Because if so far the focus has really been on the core business and strengthening the core business and you've come off a great year, record free cash flow at this point in time, do you have, you clearly have the risk appetite to do more, or at least I feel like you have the risk appetite to do more. You have the money and the balance sheet to be able to support that. So, you know, what will be prioritized over the next few months or years? You know, all the work we're doing is in two buckets. Bucket one is no matter how successful we become, we still need the foundation to be strong. And so that means we need to continue. We have a core business that is growing still very healthily. It's, you know, approaching a hundred billion dollars a year in gross buckets. That's really large. And we need to make sure we're providing great service. We have enough homes. The product is still easy to use. The homes are very high quality. So we got to do the foundation, the basis. And that's probably like still half my time is like making sure the company is doing really well. And the other half, if the first half is the foundation, the second half is about dreaming and magic. And that's about going places that no one would ever expect of us. And as we speak, we have four or five, six ideas that we're developing. They may not all ever come out. Sometimes you work an idea and it doesn't ever meet the quality threshold. You don't launch it. But I think a few of these are going to be hits and you'll see them over the next few years. Okay. You know, that's the future. But let's talk about the present time. You talked about the hundred billion in booking. Given the geopolitical climate, given the economic climate, you know, what worries you, what concerns you today? You've come off a really difficult period post the pandemic. And of course, we've seen a significant recovery since then. But, you know, what are the indications from what is going on in the world today in terms of the impact on your business? The one good thing about our business model is it's a pretty resilient business model. So like when the pandemic occurred, we lost a lot of our And a lot of people weren't crossing borders. They weren't going to cities. They weren't traveling for business. But then the business shifted. And actually, a bunch of people got in cars and drove nearby to big homes. And they started staying longer. So the point is that like, you know, we're in nearly every country in the world. I think we're like in probably as many countries as Coca-Cola. We have a global network effect. We do short-term housing. We do long-term housing. We're like really budget. We're really lux. We're families. We're solo travelers. We're like all different demographics. So we're pretty resilient. So I don't worry too much about things I can't control. And I can't control exogenous factors. I don't really worry about them too much. I mean, I'll tell you, if we could get through a pandemic where we lost 80% of our business in eight weeks, we can get through anything. And that's what I've decided. And I've always wanted to build the kind of company that was fortified and strong enough to get there. The thing that keeps me up at night is the stuff I can't control. And the one thing that would kill Airbnb more than anything is if we kind of lost our spirit, if we lost our soul, and if we lost the like desire to do new things. You know, even the big, old, boring companies were at one point exciting. That's probably why they became big in the first place. But, you know, Pablo Caso had a saying, the older you get, the stronger the wind gets. And it's always in your face. And I think that it's so important for us to stay a startup. You know, we're 16 years old or so. But I want us every year to feel smaller and younger than the year before. And that kind of defies... How do you do that though? So we're not technically smaller. We're not technically younger. But what are the characteristics of a young startup? They move fast. They're constantly changing. People are really tight knit. They know what they're doing. You know, you're not having like meetings about meetings. You're actually focused on the real issues at hand. And people have the right motivations. And, you know, it's like the people can have a lot of impact. And you're dreaming. And you're constantly changing. And so long as you retain all those values, then the best is ahead of you, not behind you. And I hope that what today shows is that we are just getting started. And, you know, this is the beginning. And it's only going to get crazier from here. Well, speaking about things getting crazier, let's talk about AI and what you're doing with AI and what AI is doing to the world. And I know that you believe that there's no going back from where we are today. So let's talk first about Airbnb and AI and then about your view on what AI could potentially do to the world and jobs. Yeah. So let's start with Airbnb. I think that AI is going to affect Airbnb more than the hotels in the next five years. And I think it's obvious. And the reason why is AI is primarily changing the digital world. Now, there is AI in self-driving cars and autonomy and robotics. But most of the innovation and development is happening in the digital world. We're much more digital than a hotel. And so the Airbnb experience is going to change and evolve much faster than our competitors. I think it's really exciting. So now the follow-up question is, well, how might we change? I'll give you just two examples. The first is customer service. We have a disadvantage against hotels. A hotel is a front desk. And there's a problem, you can just go to the front desk. We don't have a front desk. And so, or the closest thing we have to a front desk is a host. But sometimes things go wrong. You can have a guest from Japan staying with a host in France. They don't speak the same language and they call us and they need an issue resolved in like an hour. Yeah. And that's a huge tax on customer service, right? They got to like read through all these different policies. And so AI can be like the ultimate 24-7 agent that can augment our agents and help them resolve issues. And if that can happen and we can provide like the best customer service you've ever seen in your life, then a whole bunch of people that are afraid to stay in Airbnb because they don't know what they're going to get and they're worried there's no front desk won't be worried anymore and we'll get a lot more business. So that's kind of... Where are you on that path at this point in time? Are you at the start? Are you somewhere sort of, to the middle? Where do you find yourselves today? That's a great question. I don't know if anyone knows where they are. I think we're all on a journey and I don't know if we know where the mountaintop is. And I think the further we... I don't want to speak for everyone, but the further we all go down this journey, the bigger the potential, but the more work I think we realized it was. It's not just this magical thing that just changed your business overnight. You'll notice something. These models are incredibly powerful and there's new models coming out and there's a lot of innovation at the bottom of the stack, at the GP level and the model level, but at the application level. So you have GPUs, languages, models, applications. Here's a test. Open your phone or have anyone at home open their phone and look at all the apps in your home screen and ask how many of those have fundamentally changed because of generative AI. I bet you cannot discern anything that's changed about most apps in the last 18 months since Chachapiti launched. Maybe the algorithmic changes and some kind of cool demonstrations. So I think all of us are still trying to figure out how to apply it. We are not an infrastructure company. We're not a core research company. So you're not going to get a lot of new research from us. Where we are one of the best in the world is at interface design and really trying to figure out what to do with the technology and apply it. So we might call application layer. So we're I think over the next, I hate to put out a specific time, but I think over the next couple years you're going to see some really big changes. I think like a lot of technology it's going to seem really small at first. You're going to barely notice it and it's going to get bigger and bigger and bigger and one day boom. So it's still a couple of years out you're saying that this sort of big transformation that people are expecting. It's more than a year. I don't know how long. I think we're all wondering like when's the inflection point where AI just fundamentally changes all of our businesses. We all know what's coming. I don't think anybody knows when it's coming. Not even Sam Altman? I think that they know when the next model's coming. But I don't think anyone can tell you what everyone's going to do with the models. And you know there's still a bunch of time between the technology being invented and it getting applied properly. And once you design the product you still got to wait for society to adopt it. And for society to adopt a new technology means they need to change every habit and behavior they have. I think, I guess my summary is, and this leads your second question, I think AI is going to change the world more than people think but it's going to take a lot longer than people think. I think when Chachapiti launched I think people thought the internet is going to be totally different in two years. And this November will be a two-year mark. And the internet will not be that much different this November than two years ago. So it's going to take a while to change. Kind of similar to self-driving cars. Are we overestimating the impact in the short term and underestimating it in the long term? I think we tend to do that about life. We tend to like overestimate what we can do in our lives in the next year, underestimate how much we're going to do in our lifetime. I think we are absolutely overestimating how much the world will change with AI in the next year. And we're probably underestimating how much it's going to change in the next 10 years. Because I think we tend to think linearly. Actually we think asymptotically. You think half the change will happen in the next two years and the rest of the change is going to happen like the next 100 years after that. It's the inverse. Like 0.1% of change will be in the next couple years and 99% of change will be like far out. It will be exponential like the history of technology. I think that people aren't appreciating that it will take time to get the application layer right and then for people to adopt the technology. More technology is not always better. It's only better if it solves a problem for someone and makes it better. I think we need to start with the user and work backwards in technology. You don't want to start with the technology and work towards the user. You can do that but usually the great products start with people and not with technology. Speaking of people, I want to shift focus to India now because Airbnb has been present in India for a while. You haven't been back to India since 2016. When are you coming next and what's the plan for India? What's the aspiration and ambition for India? The plans and aspirations are huge. It's now the most populated country in the planet and the thing about India is, number one, it's got a great culture of hospitality. Number two, it's got a very young population. Why is that important? Because we're generally more popular with younger generations. They're not predisposed to hotels. Three, I think they're very digital and very much online. I think that is a strength for a digital first brand like Airbnb and then say a hotel. I think you're going to have an emerging middle class. What is one of the first things that happens when a middle class emerges in the modern world? They travel and they want to leave their country and they want to see the rest of the world. My prediction is that Airbnb will boom in India. It's an emerging market for us. We have very low awareness, very low penetration, but the enthusiasm is high. I think things like icons are perfect because it allows us to focus on key segments and key geographies. Obviously, we had a relationship with Jhanvi Kapoor, one of the biggest stars in Bollywood. Today, we announced an icon experience with her. I think this is just the beginning of more things to come. As far as me visiting India, it's on my list. I'm absolutely going to be coming back hopefully soon. I don't have any specific dates announced. It's one of my favorite countries. I was there once, but I just cannot believe how rich the country was. It was wonderful. If you could curate an iconic experience for yourself, maybe part of the 11 that you showcased today or something completely different, what would it be? Where does your imagination take you? Where I'd love to take this is assuming it resonates. First of all, let me preface this all by saying I only want to do things that work. We try stuff. If it resonates, we do it again. If it doesn't, we go somewhere else. I want to see how people respond to this, but knowing how they respond to the last one's initial reaction, we'll probably want to go bigger and bigger. Where my imagination takes me is to build entire worlds. For example, last year we did the Barbie house. If you watch the first 10 minutes of Barbie, there's Barbie land. I think there's something really appealing about designing entire worlds where there's not just one house, but you can go into these environments, almost like a distributed theme park. I think that's a really fun place to take this. Another place to take this is to not go bigger, but to go smaller and to pick really interesting people and cultures all over the world and imagine what's their version of an iconic experience. They don't have to be the biggest star in the world. I think going both directions, going even bigger and crazier and then going more smaller and more distributed, they're both interesting directions. Speaking of interesting directions, and I think this would be helpful for a lot of people in India, a lot of the startups who are looking at IPO-ing in India at this point in time, including one of your competitors, OYO. The experience from turning Unicorn in 2011 and then finally IPO-ing in 2020 and reports suggested that you weren't particularly in favor of IPO-ing anyway, but going through that process, what did it teach you in terms of valuation, in terms of what you see as metrics to define who you are and what you stand for and eventually providing the exits that you needed to? Before I went public, I was forewarned by a lot of CEOs, especially CEOs that were public. The number of people who told me, don't go public, wait as long as you can, and these are people that were public. I think that we weren't against going public, but we were cautious and we certainly weren't in a rush to go public. I've been very surprised because since going public, I thought everything was going to be different. It's not changed nearly as much as I thought. Four times a year for an hour, there's an earnings call. You have to prepare for it, but we have to write a shareholder letter. Actually, when we were private, we used to do that. We have an audit committee. We had an audit committee. We were private because we were really big. We have all these journalists that cover us, but they were covering us before. I guess the point is that being a public company is probably really different than having a company in your apartment, but being a public company is not that different than being a late-stage private company. I actually think being a late-stage private company is almost like being a public company with all the downsides and then the upsides. I think it's easier to be a $100 billion public company than a $30 billion private company. Really? It doesn't constrain you, the scrutiny and the expectation management quarter after quarter? I mean, that exists as a private company. Once you raise billions of dollars, you have mutual funds holding your stock, you're mark-to-market, so you have a valuation, but you don't have the benefits. Because you're not public, you're not being public. There's something about being big and private that makes people think there's more that you're not telling them. There's this never-ending desire to dig for more information, to not totally take your word for it. I think once you're public, the playing field is leveled. You put out this S-1. I didn't appreciate it, but the S-1 was basically an ultimate disclosure document. I think going public, it's like the act of increasing trust. You can lose trust by mismanaged expectations, but generally, I think the act of being public is the act of being more trusted because it's the act of being more transparent. I remember you said, I think it was around the time of the IPO, that post the IPO, you thought that it would be the happiest period of your life, but it was actually the opposite. It was the saddest period of your life. This took me back to a conversation that I had with India's first individual gold medalist at the Olympics, and he said exactly what you said, that when you achieve the goal that you've been working towards, and it's done, and then you're left with this vacuum. Explain to me how you feel about that today when you look back, and what have you been able to replace, or what is the next goal that you're working towards that gives you the kind of satisfaction and sense of purpose that would drive you? Well, there's this cliche that it's all about the journey. I'm not sure I truly appreciated it until I got to the top of a mountain and looked down and realized the thing I loved wasn't standing on top of a mountain, it was climbing the mountain. I think that it didn't make it not worth it. Absolutely, the whole journey has been amazing, but the most fun times weren't succeeding. It was the process of trying to be successful. A mountain climber wants to climb, a painter wants to paint, a musician wants to make music, and an entrepreneur wants to be building. We're not designed to just stand at the top of the mountain and celebrate and bask in our glory. We're designed always to be a little dissatisfied to reach, and as long as we're reaching, we're actually happy. I almost fear the day I achieve all my dreams, because then I'll stop dreaming. It's the dreaming that is the fun. The other lesson I've learned about that is you need more in your life than just the company, and you can't just seek external validation to make you happy. It will never fully fill you. People told me that, but I think I had to go through the experience myself to realize, okay, I've achieved more than I ever wanted to. We went public, and I think I was, I wasn't even 40 years old. I guess I was 39. I was 39, and we went public. It was like a $100 billion market cap. I realized, wait, I'm not even halfway through my life, and I have so much more I want to do. I think if me got 10 times the size, I wouldn't be 10 times happier. What would make me even happier was probably two things. One is investing in relationships, because a lot of people describe at the end of their life, the thing that's most important is relationships. Two, just reminding myself that we're just getting started with Airbnb. I've never arrived somewhere, and I'm in a constant state of going somewhere. I'll be happy. You spoke about investing in relationships, and that's what I want to focus on with you, because you've been able to, you and Joe, and three of you have kept Airbnb going and stayed together at it. What's been the big lesson and the big learning in being able to do that? Because you have great partnerships. You have great relationships that sometimes, because of the pressure of building an organization or disagreements over direction, tend to fray. What's kept the three of you together? It's a great question. In the early days the number one thing that kills companies is not that you run out of money. It's that the founders disagree. I'm now involved in Y Combinator. I was part of Y Combinator program. I'm on the board now, and I think according to our data, the number one thing that's killing startups in early stages is really either founders breaking up or just quitting. It's really important that you stay together. Then the question, the answer to the question, how do you stay together? I will give you two tips that we came up with. Number one, we always felt like winning an argument was never more important than preserving the relationship. I think a lot of people break up over arguing over things. Like, I think we should do the up house. No, we should do this. No, we should do that. If you argue about three things a day for a year, that's like a thousand things. You have for 10 years, that's 10,000 things. If you hate each other after the 10th argument, you are sure as hell not getting the 10,000th argument. Ultimately, you have to remember, we're going to be debating like 10,000 things, or we can't debate 10,000 things. We're going to have to trust each other and just make decisions and know we'll figure it out and we'll move on. You have to make sure the relationship's more important than any specific decision you're making, because that's the engine to make all decisions. The next thing is, I think a key to good relationship is a good communication. The key to good communication is that you always have to put in effort. To give you an example, one of the things we did is 14 years ago, 15 years ago now, we entered Y Combinator as an incubation program. Every Sunday, we would huddle together and do a review of everything in the company. For 15 years, almost every week, with just a handful of exceptions, we continued to do check-ins. I think those check-ins have kept us together. The last thing I would say is, I'm just so lucky that I found two people that were so good, they almost intimidated me, but they were also different than me. You need people that are very similar from values. You do not want diversity of values. You want to be very homogenous in what you stand for. If you're exactly the same, you're going to step on each other's toes. We one time did a personality test. It's one of those ones where they plot you on a wheel, different colors. I don't remember what it was. They plotted the three of us. It turned out that it turned into an equilateral triangle, which is basically saying we're imperfect complementary personalities and pretty complementary skill sets. The perfect founding team is one that trusts each other. They preserve the relationship over winning. The personalities are complementary. The skill sets are complementary, but their dreams are singular. Well, let me end by asking you, next 10 years out, I know you're not going to give us specifics, but three attributes that you see could possibly define Airbnb over the next decade? I think creativity would be number one. I think it takes a lot of creativity to conceive of something like this. I think the second one is connection and belonging. I think Airbnb at its best is about stepping into people's worlds and bringing people together. Creativity, connection. I think the third one would probably be service and hospitality. We are a hospitality company. That word is not a super... Not a tech company? I think that we are a tech company. We have the characteristics of a tech company. We don't sell technology. I'd say we're maybe a technology company that sells hospitality. I think that what we're going to do that's unique is we're going to be AI-enabled hospitality. There's a lot of AI. There's a lot of hospitality, but what would AI-enabled hospitality look like that is so magical? You just feel like this app, this company knows you better than anyone. It can anticipate your needs, and it can just completely wow you. Those are probably three attributes. You can think of those as core skill sets and capabilities. We're going to be super creative. We're going to be about human connection, and we're going to hopefully provide the best service you've ever seen. I know we've got a long way to go in all three, but as long as we're just getting started, then it's just the beginning. Well, Brian, we wish you the very best of luck. We're trying to create more magic in the real world. Thanks very much for your time. I look forward to seeing you in India. Thanks so much. With that, it is time for us to wrap up this edition of the Global Dialogue. From all of us here on the team, for now, goodbye, and many thanks for watching.