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Brian Chesky on Launching Airbnb and the Challenges of Scale

These learnings were taken from Brian Chesky’s discussion with Reid Hoffman on scaling Airbnb. He and Joe Gebbia came up with the idea of having people stay with them on “air beds” when hotels were booked for conferences. 

Airbnb is now one of the 100 largest companies in the US by market cap and is valued at slightly above $100B as of March 2022. Chesky has been obsessed with their product and here are 4 lessons on how they scaled.

#1 Start with a dedicated core following that loves your product

“It’s better to have 100 customers that love you than a million customers that sort of like you."

Chesky takes a counterintuitive approach to the blitz-scaling concept. He argues that the most important thing for a company is to get a dedicated following by doing things that don’t scale. Gaining customer loyalty and support needs to be step 1. Once you are able to develop a group of customers that love you, then you can shift your thinking to scaling.

While building Airbnb he noticed that the pictures people had on their listings weren’t high quality. While in NYC, he took a camera and went to these apartments and took high-quality photos for them. This isn’t a process that can scale. A $100B company can’t have it’s CEO take pictures of every listing, but it helped develop a core group of hosts for Airbnb which was the base that grew Airbnb into what it is today.

#2 The Seven Star Principle 

What needs to happen for the customer to leave a 5 star review after staying at an Airbnb? Everything should go as expected. The person should be able to be let into the Airbnb when they get there. The place should be clean and as advertised on the posting. They shouldn’t have any problems during their stay. Even though a 5 star review is the highest you can rate, it’s really the default expectation. 

So Brian and his team started asking, “what would it take for someone to leave a 6 star review?” Instead of the guest finding their own transportation from the airport to the Airbnb, what about if a driver picked them up? That would be a 6 star experience. What about 7 stars? The car might actually be a limousine with all of your favorite snacks and drinks. What about 8 stars? And so on…

It’s an excellent way to continue to push for the ultimate customer experience. Giving a 7 star experience is how you can get your first 100 dedicated customers.

#3 Become your end users

The companies that get disrupted are those who are disconnected from the end customers. He encouraged everyone at Airbnb to become a product expert. He wanted the people working at Airbnb to interact with the product as much as possible. 

#4 Scaling happens in multiple stages

The product that 100 people love doesn't need to scale. The sole focus of launching a new product should be to offer a service that your customers can’t find anywhere else. 

The skills needed to scale are different from what is needed at the start. Chesky interviewed every person that joined Airbnb, but there became a point where that was no longer tenable. He needed to change his skill set from being able to identify talent to teaching others on how to identify talent and managing that group of people. 

Check out the full interview with Brian here.

End Note

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Have a great day,

Nick