Ed Elson (5:46)

And your relationship with Joe. So Joe Gebia is the other co founder and Brian Chesky is the other co founder as well. He's now the CEO. Talk about your relationship with those two. It sounds from your description that it was three friends who decided to collaborate together and start a company, which I think is actually rarer than one would probably think in entrepreneurship. I don't think usually, I mean, starting it sounds like a fun idea, starting a big company with all your best buds, but oftentimes it doesn't work out. So talk a bit more about your relationship, the fact that you were roommates with Joe, how were you friends with Joe, what was Joe's relationship with Brian, and so on.

Nathan Blecharczyk (6:31)

Yeah, I think the part about being friends, what's important there is, you know, we got to know each other well, you know, before making the decision to start a company together. You know, obviously we all have lots of friends, but we chose each other explicitly. And we did that because while I was living with Joe, I noticed two things. Like, one was that after work and on the weekends, you know, instead of chilling out or socializing or whatnot, you know, we were working on our passion projects. And so, you know, I saw in Joe and he saw in me an incredible work ethic and passion. And then we also started helping each other on our respective projects. You know, I my background am an engineer, so I started doing coding of his websites. He's a designer. He started providing the designs for the things I was building. And we saw how our complementary skill sets allowed us to build products really fast because, you know, you really do need both. Meanwhile, Joe and Brian had gone to Rhode Island School of Design together. So they were friends from college and had really gotten to know each other well then and had worked on a number of projects there together as well. So I think we knew that there was a strong compatibility and that our skill sets were good complements. And I think that's why we were brainstorming ideas together. We didn't know what we wanted to work on, but we knew the team was a strong team, and that was really the basis of Starting the company was first and foremost the team. And then we stumbled into the idea.

Ed Elson (8:01)

Yeah, I think one thing that people find quite inspirational about Airbnb and the story is that it came from a design forward perspective, which is quite rare. And, you know, when I think about what they saw in you, I'd be interested to hear what Joe and Brian saw in you, but I'm sure a lot of it was also your technical expertise. You're working as an engineer and, you know, you knew how to get this off the ground. I'd be interested to hear more about what you saw in them. How did you identify that these designers would have what it took to build this great company? In a way, it makes more sense to me what they're seeing in you, but less sense to me what you see in them.

Nathan Blecharczyk (8:52)

Well, in parallel, around this time in 2007, I was working on a number of other things on the side, and one of them was a, for example, an ad network for Facebook or that plugged into Facebook, creating social ads. And, you know, I did all this technical work to, you know, make an ad server, et cetera, and I launched it and I was so excited. And then I realized that, you know, the tech was, was just a small, small part of building a business. I needed to go out and attract publishers and advertisers, and there's all this other stuff that needs to happen. And I realized that's not my passion, doing those other things, and that really does require a team. So I had come fresh off that kind of learning or reflection of like, wow, I'm a great builder. But to build a real business requires a lot of different skill sets. So that was one, I think, also too, just the camaraderie of it all. It's hard going it alone. It's a lot more fun to go with a team. So the idea of team and a team that kind of complements your skill sets and three, I think in them was just an incredible degree of passion, creativity, boldness. They were not shy about going out and really talking about new things and getting attention in a way that maybe wasn't natural to me, especially at the time. And then there's the fact that we had to live together, and so we were quite comfortable with one another. It wasn't like we were meeting for the first time.

Ed Elson (10:29)

Yeah, I feel like the passion element is almost the most important thing. You could study anything, but. So if you don't have the passion and the energy and the drive, then you're going to go nowhere.

Nathan Blecharczyk (10:41)

I would also Just say that this requires a great deal of evangelism. I mean, we were kind of pioneering a new human behavior. In some ways, that was counterintuitive.

Ed Elson (10:50)

Right.

Nathan Blecharczyk (10:51)

And that story from October 2007, where they rented out the apartment, that took initiative. Evangelism. They did it. And that story continues in the early days where Brian was one of the first guests using the product, and they were going out into the field and meeting all the hosts and taking the photographs themselves. And I would later become a host. But I think, you know, all that is really important. And with their design background, I think they were intensely interested in kind of interviewing all those early adopters and understanding their feedback, gathering feedback as part of the design process. So I think all that was really beneficial.

Ed Elson (11:32)

I feel like all of this was almost perfectly encapsulated in this very famous serial stunt, which I'd love for you to explain the story of, just to set it up. Airbnb, you guys are starting to get going, but you are running out of money and you're trying to think of ways to make money to keep the business alive, and you come up with this idea that has to do with cereal. Could you explain what happened there and the story of the cereal stunt?

Nathan Blecharczyk (12:04)

So, just in terms of the timeline Here, you know, October 2007 is when we rent out Joe and Brian, rent out the extra room. A couple months later, in basically February of 2008, the three of us start building air bed and breakfast, as you kind of start to know it today. We launched that in August of that year, so several months later, and now we have launched it, and that was exciting, but no one's really using it after launch. And it's coming up on a year now, and we haven't made any money, and we've had the expense of the apartment and all this, so we're getting kind of desperate. And I guess I should add that when we launched In August of 2008, it was during the time of the Democratic National Convention and the Republican National Convention, and specifically, this is where Barack Obama received the nomination of his party to be the first African American presidential candidate. And it was a historic event. And it was going to be held in a stadium in Denver that helped 80,000 people. And we looked up that Denver only has 17,000 hotel rooms, so we knew there was going to be a need for extra accommodation. And so we focused on this moment as the right launch opportunity. And it was very successful. We got hundreds of people staying on Airbnb in the span of a couple weeks, and we were on tv, on cnn talking about what. What. What Airbnb was in connection to the. The DMC event and. And Obama. So it's tremendously exciting. But a few weeks later, it was gone. It was, you know, it was a flash and nobody cared anymore. And yet we had all these political reporters that we had met, and we're thinking to ourselves, how do we generate some more attention for the company? We have all these reporters that we met. How do we make ourselves relevant to them again? And somehow Brian and Joe have this crazy idea one night that we should create a presidentially themed breakfast cereal. Again, our name at the time was Airbed and Breakfast. So they're thinking, breakfast, let's do something fun with the breakfast concept and do something that would be relevant to all these reporters we met and somehow basically do a stunt. Okay? So they come up with this concept of creating Obama os in Captain McCain's. These are breakfast cereals. And they come up with a tagline for each Obama owes is hope in every bull. Captain McCain's the maverick in every bite. As he was a kind of a, I think, a Navy captain or something in his past. And they come up with artwork for these physical cereal boxes that they're going to create and a lot of witty humor on it. And they use their contacts from Rhode Island School of Design to get the boxes printed officially at a printing press, free of charge, actually. And they do this whole thing to create it. And I remember, first of all, and they told me about this idea, you know, my response was, if you want to do this, promise me you're not going to spend any money. Because we didn't have any money. And this sounded like a whole effort to create cereal, and it was going to potentially cost money. So I said, do whatever you want to do, just don't spend any money. Meanwhile, I'm going to stay focused on building the website for airbed and breakfast. So they go off and they actually create these really compelling, funny cereal boxes, boxes without spending any money because they're very scrappy. And we send the first 100 boxes of each to those political reporters that we had met. And the idea was we could email them, but they get emails all day long. They'll probably delete them. If they receive this physical box in the mail, they're going to have to call us back and want to know more about it. And so that was the idea, and we did it, and it worked. We sent out these boxes, and soon enough, as soon as they were received, we ended up being on Good Morning America. We were back on CNN talking about the cereal, talking about its connection to the company. And we had extra boxes printed off. So we had 500 boxes of each. So the first 100 we sent to the reporters. The other 400 we numbered and called them like limited edition collector's items. And we created a little website for them where we sold boxes of cereal that you could buy, and we priced them at $40 a box. Anyways, when we were on CNN International, that became the number one political video of the day. I was talking about the cereal. And we sold a $40 box of cereal every three minutes until we sold out. And so we made about $30,000 selling these cereal boxes in the span of that week. And we like to say that that's more money than we made all year on our core business and materially helped us to pay the rent and a few bills. And so that was kind of funny and kind of cool. And we thought to ourselves, maybe we should become a cereal company, except if only there was a presidential election every month that to generate that kind of interest. So we knew that wasn't the answer. But the truth is, also, it didn't really help our core business. Right. It wasn't helping us to rent more rooms in that moment. It was a funny story. It soldier boxes of cereals. It allowed us to earn $30,000, but it wasn't selling more rooms. On airbedandbreakfest.com where this story becomes transformative in terms of what it did for us is a few months later. A few months later. It's now the end of 2008. It's been one year. We're about to give up. And we say before we give up, we have to give it one last chance. We had gotten some advice that we should apply to Y Combinator, that that would be a great way to re energize ourselves and recommit and give it one last chance with some good mentorship. But before you can do Y Combinator, you have to get into Y Combinator. And Y Combinator is incredibly selective, incredibly popular, and has a very low acceptance rate.

Ed Elson (17:55)

Yes, this is the exclusive startup accelerator. Very, very much exclusive at the time, too.

Nathan Blecharczyk (18:01)

Absolutely right. And so we managed to get an interview, which is incredible. So we go into the interview, and the interview typically lasts about five minutes, very quick. And you're in there at least at that time with maybe four other people. One of them was Paul Graham, the founder of the program. And I remember we go in there for the interview. Well, I'll back up before leaving the apartment to go to the interview, I see Joe putting a box of Obama O's into his backpack to bring to the interview. And I said, joe, what are you doing? Why are you bringing the Obamas to the interview? I said, don't do that. That, to me, was an embarrassment that we had spent so much time on Obama's. I mean, it was a funny story, but it had nothing to do with our. This being a likely success, in my mind at least, because to me, it represented distraction. As an engineer, I saw it as having been a distraction because it's a cool story. But it honestly took about two months of time to pull all that off. So Joe says, okay, I won't bring it. So anyways, we're now at the interview. We go into the room. We have five minutes. Within two minutes, Paul Graham says, what? Strangers staying with other strangers in people's homes? I would never do that. That's strange. That's weird. I don't like that idea. He had a really negative reaction. And then he pivoted the conversation towards like, well, you guys are handling money and payments. Maybe you should start a payments company. And he basically went on to describe stripe. So the last few minutes of the interview were basically spent with him pitching us on what we should be doing. And then the interview was over, and we knew that that was not a good outcome. Right. That interview had gone off the rails. And so we're walking out the door, and suddenly Joe pulls out of his backpack a box of the Obama Os. And he says, oh, Paul, before we leave, we wanted to give you this. And Paul looks at it and says, what? You guys bought me a gift? He's just looking at it, mystified. And we said. Joe said, no, we made this as. And he's still looking at it. He says, well, sit back down and tell me how you made this. And so we get five more minutes with him and we tell him the story of Obama owes and Captain McCain's and the whole kind of stunt we pulled off and selling $30,000 worth of cereal. And then we leave the room. And later that day, we get a call. And the call was that we were accepted into Y Combinator. And he later told us that we were accepted into Y Combinator not because he liked air bed and breakfast. The idea that we pitched him on, he actually really did not like that idea at all, which was clear. He accepted us into Y. Com. Er because of the serial story. And what was powerful about the serial story to him was it represented how scrappy we were, and how we would never give up with our backs up against the wall, needing money. We come up with a very creative idea to generate publicity and earn some extra dollars, you know, really quick. And he said, you know, he needs to hire or not hire, but, you know, led into Y. Com. Er, those who can actually build and execute. And so we demonstrated that we could build, that we could execute, that we were scrappy, and that, you know, we. We were not ones to give up even when things were tough. And he said, you know, especially at that time. This was now 2000, end of 2008, the financial recession had begun. He was looking for founders who were really tough, who would have the perseverance and never quit. And so that's what he saw in us when he heard the serial story. And so that's the real power of the story of Obama. O and Captain McCain demonstrated our scrappiness and our perseverance.

Ed Elson (21:41)

It's so interesting because to your point, when you were going off to the interview at Y Combinator, it's true that what you did was maybe a waste of time, maybe it was a distraction. Maybe, you know, you should have been spending more time figuring out the idea. But at the same time, it had this incredible payoff because it demonstrated the grit, the determination, also the creativity, the excitement, the energy. There was clearly just this spark that you decided in that moment, or perhaps maybe Joe decided in that moment that he was gonna follow. And it's interesting to me because both of you were right. You were right in the fact that it's a distraction, but he's also right in the fact that sometimes these things are important. It's important to follow whatever the passion is and whatever the spark is. And so I'd be interested to hear how you view that as you sort of scale a company. Like, how do you balance those two competing narratives, where on the one hand, maybe we should be focusing on what really matters logically, but on the other hand, maybe we should just be spending frivolously on things that excite people and capture their imagination.

Nathan Blecharczyk (23:00)

Well, I think from the beginning, the whole team was formed on a respect for one another's strengths and the value of different perspectives. And this was reinforced by us getting into Y Combinator based on the cereal box experience. And so, you know, we're becoming to really realize that, you know, although we see things differently, that, you know, the different perspectives are super valuable. We have real, real value that we're each bringing, and we want to preserve that going forward. And we've. We've always felt that that Airbnb is kind of like a three legged stool. And you know, if any one of us were not a part of it, you know, the stool would have tipped over. And that Airbnb is also kind of the marriage of art and science. And both those things are equally important. And so I think what that allowed us to do as we went forward was just make sure each of our voices were heard as we made important decisions and respect. And I would say that honestly, it led to a lot of conflict because when you see things differently, you disagree. But because we respected the value of each other based on the experiences we have had thus far and the friendship, we had the patience to listen and find compromise. And compromise was always the best outcome because compromise meant we were taking into account different perspectives and meeting in the middle. And I think that was just a really powerful thing and it's really become a neat part of the company's culture.

Ed Elson (24:42)

We'll be right back.

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Ed Elson (26:07)

We're back with first time founders. Just going back to what what Paul Graham thought about the idea itself. You know, he thought that having strangers live in other other people's homes was not going to work. He didn't want to do it himself. Bad idea.

Nathan Blecharczyk (26:25)

But.

Ed Elson (26:25)

But he was betting on the creativity and the determination of the founding team. Maybe he was right, but I kind of think he was wrong. I think in hindsight, I mean, hindsight's 20 20. I think your idea was correct and you'd proven it. So tell me more about what Paul might have gotten wrong. And I'd be interested to know, if you feel, as I do, that you guys actually were correct from the very beginning that this was something that the market always needed and that you provided.

Nathan Blecharczyk (27:02)

Well, clearly we were ultimately correct. I think the biggest kind of entrepreneurial ideas tend to be ones that are non consensus, where it's not obvious. Right. And so this was obviously not an obvious idea. And that doesn't mean that all non obvious ideas are good ideas. But why was this one a good one and how did we know? Well, I think it's because we, we experienced it firsthand, right? We, Joe and Biden were the first hosts and they viscerally felt the power of the experience. Right. It wasn't just an economic transaction. Like they met people and it was really transformative and like friendships arose out of that. The guy from India who stayed with them two years later invited them to his wedding. It's hard to capture the power of that when you relay it as part of a pitch or whatnot. So there is that. I think as we started building the product and using the product again, we were very close to the experience and the customers. Brian was amongst the first guests using the product and many learnings came out of that. We were interviewing all those first users and, you know, understanding, you know, why they were doing this, what their questions were, what was powerful about the experience? And all that really, I think, gave us conviction that we were onto something special. Maybe most people didn't see it, but those who are brave enough to try it and were actually using it were coming away transformed. And so the only question was, how can you get people over that initial hump, that trust hurdle? How can I trust a stranger? Once they trusted the stranger, once they trusted Airbed and Breakfast or Airbnb, then they were transformed and it was hugely successful and they were huge advocates. So it was just about that initial hurdle on how to get over it. And this is where design comes into play again. It's kind of a design problem. How do you create trust? And I remember one of the things an early host said, and he said, all my friends think I'm crazy allowing strangers in my home. And he said, I see it as a stranger. It's just a friend I haven't met yet. That's a really beautiful thing. We also noticed that when you talk to people about this idea and you framed it as strangers, of course they hated the idea. But if you framed it as, would you like to host a guest who is from your alma mater, who is from your university or in your professional field, or, you know, like, if you added some context to it and demystified who this person was, you know, people would actually get really intellectually interested and be like, yeah, you know, I would like to consider that I would be interested. And so as we started to design the website, you know, the three kind of core pillars to creating trust were just three things. One was rich user profiles. So we are going to show you a picture of the guest and of the host and you know, who they were and, like, where they went to school, what did they do professionally? Like, we try to build out an image in relative to something like Craigslist, where you had no idea who was posting the advertisement. Our whole thing was, let's demystify who the person is and humanize it. Second, when it comes to handling the money, the transaction happens through the platform, so you're protected. You can't really have financial scams on Airbnb because the money is paid to the host only after this day successfully kicks off. And so that addressed that potential problem. And then third was the review system, the fact that at the end of the day, the guest reviews the host, the host also reviews the guest. This creates a powerful incentive for both actors to follow through on what they've committed and be good guests and hosts. And then also, both parties accumulate reputation over time as a result. And so just these three things, I think, were kind of the initial building blocks to creating trust on the platform. Of course, the whole design of the website, too, was very friendly and inspired trust. And again, I think that the design background of Joe and Brian specifically helped us to achieve that.

Ed Elson (31:20)

It's such an interesting problem that you solve. I mean, you think about the kinds of solutions that people are trying to create when they're building companies. I love the way you put that. You're basically the problem you were trying to solve is how do we turn a stranger into a guest? What is the difference between those two things and how do we as a company make that shift? And it's just a fascinating problem to be solving. And I'm sure a lot of people would find that very inspirational. What you just said, what was the point at which you realized that you had something really great? I think a lot of people, a lot of founders, they have their inflection point. They suddenly something happens and they go, oh, my gosh, I'm Actually onto something. What was that moment for you?

Nathan Blecharczyk (32:08)

Well, everything changed over the course of Y Combinator. Okay, we go into Y Combinator and we'd been making basically $200 a week for the last five months, and nothing we did seemed to change that. And our goal over the course of Y Combinator was to achieve $1,000 a week in revenue. And actually at the end of Y Combinator, and it's a 13 week program at that time. So 13 weeks later, we go from $200 a week to actually over $4,000 a week. So vastly outpacing our, what we thought was an ambitious goal. And coming out of Y Combinator with that kind of growth trajectory, we were able to raise our seed round from Sequoia Capital. And so we went from a place at the end of 2008, at the start of Y Combinator, really thinking that we were ready to quit. And Y Combinator was our last effort to give it all we got. But we had a verbal agreement that if by the end of Y Combinator, things weren't in a better place, we would quit. And we would support each other in that decision because nobody wanted to abandon the other two. And so we kind of agreed up front what the parameters were for kind of the go no go at the end of Y Combinator. Well, anyways, at the end of Y Combinator, things are on a vastly different trajectory. And that's because over Y Combinator, we're focused on New York City and photographing the listings in New York and meeting the users. And a whole bunch of things happened, which I can talk about if you like. But coming out of that, we get introduced to Sequoia Capital, one of the top firms in the world for venture funding, someone we never thought would be interested based on where we were just 13 weeks earlier. And they end up funding our seed round. And so that was an incredible validation and gave us a whole injection of confidence. Over the course of the remainder of that year, by August, we're making, I think, $12,000 a week. So it continued to ramp aggressively over those months. At that point in 2008 is primarily a business that was taking place in New York City. And this is 2009. Over the course of 2010, it continued to grow and branch out to maybe five or eight more cities. Most of the business was happening, including places like Paris, but these were top destinations in the world. And then it was really 2011 where just things went bananas. And we started the year 2011 with 40 employees. We ended with 400. We became an international company opening 12 offices around the world and really racing to build a global network. And so I think we were ecstatic in 2009 where that change in trajectory and we had a lot of confidence, but there was always this question of, is this a business that only makes sense in New York City, where hotels are incredibly expensive and where everyone in the world wants to go there, though, or does this generalize and become kind of a global phenomenon? And starting in 2011, we were able to demonstrate this is truly a global business. And by 2013, it was literally everywhere, all around the globe.

Ed Elson (35:19)

What do you think happened in 2011? What took you from 40 employees to 400? Why did it explode in the way that it did?

Nathan Blecharczyk (35:27)

Competition. Competition has a way of accelerating things. Yeah. So up until that point, we had been very quiet about our success. But by 2011, word of our Series A fundraising had gotten out. Series A had happened in April of 2010. It was a $7 million raise at roughly 70 million valuation. Based on that news, there was a number of European serial entrepreneurs who kind of took up the idea and wanted to be the Airbnb of Europe. So by 2011, these two new companies kind of emerged, and we said, well, hey, this is inherently a global idea. Travel is inherently global. We need to be the Airbnb of Europe. We can't have others taking that when we're a travel company. So it kind of set off a race. And these companies were based in Europe, and we said, well, we have to be just as local as they are. So that motivated us to open local offices in each of the most important countries from a travel perspective, places like France and Spain and Italy and Germany, et cetera, and hire local teams who knew the market and, you know, vigorously recruit kind of new hosts to the platform and really take a more active role in building the marketplace and scaling it quickly. So we kind of went from what I call kind of a peacetime mentality to a more wartime mentality where we were leaning in and not letting it just grow organically. We also raised a lot of money that year. We raised $100 million in May of 2011. So that gave us the capital to also really lean in on the investments and grow the business.

Ed Elson (37:24)

The moment that competition comes in is so interesting because, as you say from 2007 to 2011, you're trying to prove to people that you're right. And as you say, you're the evangelist. You're walking into boardrooms and meetings saying, we know you don't think that this makes sense, but Trust us, it makes sense. We really want to prove to you. And suddenly once the competition gets involved, it's like, oh my God, okay, we're right. This is legit. And it's so interesting, that sort of shift in mindset that every entrepreneur who succeeds has to go through where you have to shift from. I'm gonna try to prove to everyone that I'm right. And now I know I'm right. What do I do with that? So I'd be interested to hear it sounds like the wartime mentality beefing up on fundraising. But are there any ways that sort of your management principles changed during that time? Maybe the way that you conduct meetings, maybe the way that you hire, maybe the way that you speak to employees. What were some of the changes that you felt happening from a management perspective around that time?

Nathan Blecharczyk (38:36)

Well, I mean, I think first, I think you're exactly right that this was when was an inflection point from this is still kind of non obvious to this is obvious because In April of 2010, we raised money at roughly $70 million valuation. And when we raised again one year later in May 2011, it was a $1.3 billion valuation. But I'll tell you, leading up to that, there was a lot of skepticism. There were a lot of investors who were excited about how different this was and how it was growing, but they weren't ready to step up and bring the valuation up that high. And then suddenly the round was oversubscribed and the valuation was pushed up even higher than we thought it would be. We were targeting a billion, and it ended up being 1.3. But leading up to that, for months, nobody wanted to go maybe above 500 million. So anyways, the perception really shifted over those months. And it was also because we were buckling down and going from the peacetime to wartime kind of way of operating the company. And what did that mean in practice? I mean, first we had to recruit and hire these country managers. And so there were a dozen countries we were hiring for. And how do you do that in the span of just a couple months? We had to move really fast. And these competitors that we were up against, these were serial entrepreneurs. They were moving very fast. They had existing operations and people whom they could repurpose to this project. So I remember one of the companies was founded by the Samoa brothers, also known as Rocket Internet. They've cloned many Silicon Valley companies successfully. And I remember them reaching out to us and saying, hey, look, you can acquire us now and we can work together or otherwise we're going to be the Airbnb of Europe is pretty much the pitch. And so as part of that, we had to take it seriously, and we had to go meet them. And so we'd fly out to Berlin and we'd go to their office and meet their team. And they had 200 people in that office. And back home, we had maybe 60 people. And so it was clear that the competition had an ability to scale that we just weren't used to. And part of that reason was they had existing people and assets that they could just repurpose and segue into this new company. But we realized we had to move really fast. So we found a few regional partners, investors who were well connected with entrepreneurs across Europe. And in the span of just weeks, Brian and I and Joe, we flew around and interviewed these guys and made decisions quickly and just did things that we wouldn't otherwise be doing. I think we would otherwise have been back in San Francisco looking at mockups of product, and instead, we were meeting in airports across Europe, interviewing country managers and making decisions within a week or two about who we wanted to hire and giving them permission to set up an office and a budget to build a team. So it just was a whole different kind of mentality and definitely outside of our comfort zone. But frankly, we were very worried. We were worried that we weren't going to exist in Europe because this competition had such a track record of successfully cloning Silicon Valley companies.

Ed Elson (42:05)

We'll be right back.

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Ed Elson (43:24)

We're back with first time founders. How many moments? When you look through the history of the company, from it's three of you, basically with just an idea in a dorm room, essentially, to this giant, global, iconic, public company that it is today, how many moments are there in that journey where things could have gone to zero? I mean, the first that comes to mind is you're walking out of that Y Combinator pitch meeting and Joe decides to pull out the cereal box. That was a moment where it was zero versus today. Perhaps this interaction with the competitor in Europe, that might have been another moment. How many of those moments can you identify? And is that something that every founder has to deal with if you're scaling from zero to what you are today?

Nathan Blecharczyk (44:27)

I think there's two others. There was the summer of 2011 where we had our first major trust and safety incident and trust was really violated and it became a very public incident and we had to basically regain the trust of our community. And what I'll say about each of these, the importance is to treat them like a crisis. I talked about peacetime versus wartime, but maybe another way to say it is to recognize that you're in a crisis and not just try to manage the crisis away, but recognize that a crisis is a transformative opportunity that can make a good company great. And so you're not just trying to survive a crisis, you're to trying, you're trying to transform yourself over the course of the crisis. And so with the international competition, it was a threat that could have sent the company to zero, I suppose, over time, but actually it made us so much stronger because it motivated us to grow and become more local in all these countries around the world. And likewise with the trust incident, when that happened, instead of just trying to treat it like a PR incident and minimize it, you know, we leaned in and we said, everybody, stop what you're doing. We want everybody in the company to work on building trust and safety features for at least the next few weeks. And we want in a few weeks to make an announcement about all the innovation that we've done in the space of trust and safety. And so literally, about two weeks later, we were able to announce 40 new features that, you know, were designed to make Airbnb that much more trustworthy. And I think the idea was like, we wanted to go above and beyond what customers expected. And so a lot of those features are still with us today. Like, for example, the idea that with every booking there is protection against Damage included, free of charge. And there's dedicated customer service. There's a dedicated trust and safety team. A lot of this stuff was pioneered in that moment. And at the beginning, there was a lot of doubt about, can we do these things? Well, is this actually a good idea? What if something goes wrong? Are we liable, et cetera, et cetera. But we took the moment, seized the moment, and innovated and led with boldness. And a lot of that lives with us today and made us a stronger company. So you identified two moments. That's the trust and safety one is the third moment. There's a fourth moment, which is the pandemic. In the span of eight weeks, our business dropped 80%. And what was worse was we didn't know how long this was going to last for. And of course, at that point, we have roughly 8,000 employees, so we have a tremendous burn rate, and yet suddenly, there's no revenue coming in, and we don't know how long that's going to last for. And, of course, the whole market is in crisis, and so it's not a good time to raise more capital either. And so that was a moment where we wondered, what's going to happen? Can we adjust fast enough to course? Correct. And ultimately, we went through the pandemic and came out way stronger, way successful, and actually went public that same year quite successfully by the end of 2020. And so that was probably the fourth time where I think it could have gone to zero, but because of decisions we made and kind of leaning into the crisis and coming out stronger, made it not only not go to zero, but become a much more Val company.

Ed Elson (48:00)

I feel like inherent to all of those moments and the way that you dealt with it is this almost respect or fear for your own mortality. It's like a crisis arises, and instead of basically resting on your laurels and saying, we're great, look at our track record, we're great, you're saying, no, we need to really reckon with this. This gets at the heart of who we are. This could be the end of us. And I think that's clear to everyone. When you're just starting out as a company or even when you're raising your early rounds, your A or your B, I think that feeling of mortality is very strong. I think there is a feeling among most people that as you get bigger and bigger and bigger, once you become Airbnb, once you become a massive company, you don't have to worry about that anymore.

Nathan Blecharczyk (48:52)

Anymore.

Ed Elson (48:52)

And I'd like to understand from your perspective, does that Fear ever go away? Do you ever think, is there ever a moment where you think, we're fine now, we'll definitely figure everything out? Or does it always live inside you that there could be a moment where things go to zero?

Nathan Blecharczyk (49:15)

Look, I don't think things are going to go to zero, realistically at this scale, and given how ubiquitous Airbnb is around the globe. So I don't think that's realistic, even in a crisis. But I would say we definitely don't have any complacency, and for a couple reasons. One, I think the opportunity is so much bigger than we've realized at this point. I mean, I think conceptually we realize it, but in terms of the size of the company today, I think it could be so much more. I think there's so much more to be done in travel. I think there's so much more that we can do, leveraging our host community to create really special experiences. And so I think there's an opportunity ahead of us that's so much bigger. And, you know, it's hard to rest or get comfortable when you see such a big gap between where you are today and where you want to be. So the ambition is still so, so much bigger than we've captured or grown into. So I think that keeps us very hungry. You know, I'd also say that, you know, having had those four experiences I mentioned, you know, we. We understand that a crisis is a terrible thing to waste. And so whether it's a crisis or not, these challenges are real opportunities. And I think when we see them, I mean, they are, of course, scary and not fun, and no one would wish a crisis. But at the same time, it immediately gets us thinking, how can we come out stronger? What's the silver lining here? How can we better ourselves? And so, yeah, I think we're just always looking for opportunities to innovate because we know that opportunity is so big, and we know that in difficult times, there are hidden opportunities.

Ed Elson (50:56)

We're going to start to wrap up here, but just as you look back at what you've built and this pretty insane journey that is very unique in terms of lives, a life that you can live, you've had a pretty interesting one. What has the whole journey taught you about humanity? What has it taught you about people? What have you learned about the human experience from building this company?

Nathan Blecharczyk (51:27)

As I mentioned, the real innovation here is around trust. And that was question number one from day one. And we always had a point of view that people are fundamentally good. I think we've proven that the fact that 2 billion people, 2 billion guests have arrived into other people's homes over these last 17 years, that's a huge number. And so we have 2 billion data points. And not every trip is perfect, but the vast majority are very, very positive experiences. You can read the reviews on the website. Most guests leave reviews. So we have numerical data and written prose describing these experiences. And again, the vast majority of people are good. And I think there's a hunger for travel and for seeing the world and understanding different cultures. If you look at the trends for international travel going back to the 60s, it's just been exponential growth and continues to be the first thing people want to do when they have disposable income, including developing parts of the world, places like China, India, whatever, you know, you're just seeing tons of interest in people leaving their own kind of home country, their own experience and seeing the world, seeing what's out there, connecting with others. And so, you know, I think that's, that's really an inspiring thing because I think ultimately it makes the world a smaller place. It fosters understanding. We need that more than ever in these times of everything being politicized. We need to understand that behind the politics and the ideology, there are ordinary people who are much like ourselves, who want to meet people, want to have good times, want to be financially successful and are willing to work hard. And that's true all around the world. And we create a marketplace, a platform where people can do that, where we can make these connections. So I think very much there's a shared mentality out there around entrepreneurship and being a global citizen that we've kind of tapped into and is popular in every country of the world. Especially as people get to experience it themselves. They get a lot of satisfaction out of it.

Ed Elson (54:06)

Nathan Placic is the co founder and chief strategy officer of Airbnb. Nathan, this was really informative and also inspiring. We really appreciate your time.

Nathan Blecharczyk (54:17)

I enjoyed it very much. Thank you so much.

Ed Elson (54:23)

This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our research associate is Dan Shalon. Thank you for listening to first time founders from the Vox Media podcast network. We'll see you next month with another founder story.

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