How I Built This with Guy Raz – Episode: Advice Line with Joe Gebbia of Airbnb

Release Date: January 30, 2025

In this engaging episode of How I Built This with Guy Raz, host Guy Raz reconnects with Joe Gebbia, co-founder of Airbnb, to provide invaluable advice to budding entrepreneurs tackling diverse business challenges. The episode, titled "Advice Line with Joe Gebbia of Airbnb", delves into Joe’s latest venture, Samara, and features insightful conversations with three ambitious callers seeking guidance on scaling their businesses. Here's a comprehensive summary capturing all key discussions, insights, and conclusions.

Introduction to the Advice Line

At the outset ([02:19]), Guy Raz introduces the Advice Line, a segment designed to help entrepreneurs solve their business challenges with the expertise of legendary founders. This week, Joe Gebbia joins as a guest to address callers' queries, drawing from his rich experience building Airbnb.

Joe Gebbia's New Venture: Samara

Shift to Backyard Guest Houses

Joe Gebbia discusses his latest startup, Samara, which focuses on creating high-end accessory dwelling units (ADUs) or backyard guest houses. Originating from an R&D group within Airbnb, Samara aims to address California's housing crisis by offering well-designed, prefab ADUs that are turnkey solutions. As Joe explains ([04:51]):

“We’ve got five different models from the studio, 400 square feet, all the way up to two bed, two bath at 960 square feet.”

Design Philosophy

Highlighting his deep-rooted design background, Joe emphasizes that design extends beyond aesthetics to include functionality and holistic processes ([06:00]):

“Design is actually the way that something works... a very holistic approach to designing a product or a service.”

Sticking to Your Vision vs. Pivoting

A pivotal moment in the conversation occurs around when to adhere to one’s vision versus pivoting in response to criticism. Joe shares his experience with Airbnb ([08:00]):

“You have to nurture the connection with your heart and with your gut... listening to your body, listening to your heart.”

He recounts how, despite widespread skepticism, their firsthand positive experiences with early Airbnb guests fueled their conviction to persist, ultimately leading to Airbnb’s phenomenal success.

Caller 1: Marina Lido – Luffy and Friends

Introduction to Luffy and Friends

Marina Lido, the founder of Luffy and Friends, calls in from Austin, Texas, with a mission to excite children about learning a second language through music-infused board books. Her flagship product, Board Books that Sing, offers books in six languages, each embedded with a computer chip and speaker to play songs that encourage interactive learning.

Business Model and Challenges

Marina operates Luffy and Friends as a side hustle while working as a user experience researcher at Meta. She shares her journey of starting the business to solve the challenge of engaging children with multilingual education without relying on screens. Her main challenge ([14:34]) revolves around balancing sales between her website and Amazon:

“We found that the fee structure at our volume levels just didn't pencil and it was cannibalizing our website sales.”

Advice and Insights

Joe and Guy provide strategic advice on brand building and leveraging various marketing channels. Joe suggests embracing platforms like Amazon to expand reach while simultaneously building a strong, recognizable brand through other channels. He encourages Marina to explore creative marketing strategies, such as appearing on local news channels to boost visibility:

“You can go to every... local news channel talking about this thing... it's going to take a little investment.”

Marina responds enthusiastically to Joe’s suggestions, eager to implement new ideas to strengthen her brand’s market presence.

Notable Quote:

Marina Lido [14:34]: “How can we build a brand to withstand potential Amazon competitors? Or should we embrace Amazon and just focus on finding ways to thrive there?”

Caller 2: Ray Ricky Rivera – Norwalk Brewhouse

Introduction to Norwalk Brewhouse

Ray Ricky Rivera, founder of Norwalk Brewhouse, a self-distributed craft beer brand targeting the Latino market, shares his journey from managing local bands to launching his own beer brand. Operating out of Los Angeles County, Ray emphasizes the unique cultural angle of his beers, such as the BDBD Blond Blonde, a Mexican American blond ale.

Scaling and Funding Challenges

Ray confronts significant hurdles in scaling his business, primarily due to a lack of established credit and limited access to loans. He explains his reliance on crowdfunding and bootstrapping ([26:23]):

“I don't have any established credit, I don't have bad credit, I don't have any established credit. So I can't get a loan.”

Advice and Strategic Guidance

Joe advises Ray to target investors within the food and beverage sector, highlighting the importance of networking and connecting with experienced entrepreneurs who can offer both funding and mentorship. Joe underscores the value of persistence in fundraising, encouraging Ray to embrace the inevitability of rejection as part of the process:

“You just got to keep going, man.”

Guy adds to the conversation by emphasizing the potential of creating distinctive products to attract media attention and facilitate growth, suggesting innovative approaches to marketing and branding.

Notable Quote:

Joe Gebbia [30:18]: “The best time to go raise money is when you don't need it.”

Caller 3: J.L. Thorpe – Game Day Social Apparel

Introduction to Game Day Social Apparel

J.L. Thorpe, CEO of Game Day Social Apparel, calls from Sioux Falls, South Dakota. His company produces trend-forward sports apparel exclusively for women, holding licenses with around 2000 retailers across North America. J.L. highlights the uniqueness of his brand in focusing on fit and silhouette tailored for female fans.

Growth and Scaling Strategy

With annual revenues around $10 million, J.L. seeks advice on assessing growth opportunities as his company transitions from a scrappy startup to a more structured, scalable enterprise. He acknowledges the challenge of maintaining design and quality while expanding.

Advice and Insights

Joe praises J.L. for successfully bootstrapping and building significant revenue without diluting equity, advising him to consider fundraising when the company is strong and profitable. Joe emphasizes leveraging that strength to negotiate better investment terms and to align with strategic investors who understand the apparel and licensing industries.

Guy adds that securing a strategic investor with experience in apparel can facilitate scaling, especially in expanding design and manufacturing processes. He also highlights the importance of diversifying manufacturing to mitigate risks associated with geopolitical changes.

Notable Quote:

Joe Gebbia [48:57]: “The best time to go raise money is when you don't need it.”

Final Insights and Closing Remarks

Towards the end of the episode, Joe reflects on his journey with Airbnb and shares a poignant piece of advice:

Value of Mentorship

“I wish I had found mentors earlier... they really helped me avoid some pitfalls and some landmines on the road of entrepreneurship.”

Joe underscores the importance of seeking guidance from experienced mentors to navigate the complexities of building a successful business.

Notable Quote:

Joe Gebbia [55:18]: “Have more mentors. They can provide advice and perspective, so you're not on your own.”

Guy Raz concludes the episode by encouraging listeners to explore Joe’s original interview on Airbnb for deeper insights and highlights key moments that showcase the transformative journey of Airbnb from a fledgling startup to a global powerhouse.

Key Takeaways

1. Stay True to Your Vision: Despite external skepticism, maintaining conviction and listening to your gut can lead to monumental success, as exemplified by Airbnb’s journey.

2. Strategic Fundraising: Approach fundraising with preparedness and confidence. Seek investors who align with your industry and long-term vision, and consider seeking help even when you don’t immediately need it.

3. Brand Differentiation: Building a distinctive brand that caters to specific market needs can set your business apart in competitive landscapes, whether in educational products, craft beer, or women’s sports apparel.

4. Embrace Mentorship: Having experienced mentors can provide invaluable guidance, helping entrepreneurs navigate challenges and avoid common pitfalls.

5. Adapt and Innovate: Whether expanding product lines or exploring new markets, continuous innovation and adaptation are crucial for sustained growth.

This episode not only offers practical advice from a seasoned entrepreneur but also inspires listeners to persevere, innovate, and seek the right support to build their iconic brands.

Notable Quotes with Attribution:

• Joe Gebbia [06:00]: “Design is actually the way that something works... a very holistic approach to designing a product or a service.”

• Joe Gebbia [08:00]: “You have to nurture the connection with your heart and with your gut... listening to your body, listening to your heart.”

• Marina Lido [14:34]: “How can we build a brand to withstand potential Amazon competitors? Or should we embrace Amazon and just focus on finding ways to thrive there?”

• Joe Gebbia [30:18]: “The best time to go raise money is when you don't need it.”

• Joe Gebbia [55:18]: “Have more mentors. They can provide advice and perspective, so you're not on your own.”

This detailed summary encapsulates the essence of the episode, providing a thorough overview for those who haven't listened while maintaining an engaging and informative narrative flow.