So far banks have not been impacted by technological disruption unlike other industries but this is not going to be same. Some posts from FT on it.
Sunday, December 13, 2015
Saturday, December 12, 2015
Great Wisdom from Brian Chesky who earned it from Airbnb
I did know much about the Airbnb until I came across the news that Airbnb topped Glassdoor' s list of the 50 best places to work in 2016, knocking Google from its perch.
While reading and goggling, I found out about a class in Standford that is an interview with Brain Cheskey, founder of Airbnb.
It is good read\inspiration\wisdom and here is the part that I loved most.
Reid Hoffman: Can you share more about the early days after you had launched, how did you hustle to keep the idea going?
Brian Chesky: We actually “launched” multiple times. If you launch and no one noticed — you can just launch again. We had press that wrote about us multiple times for launching.
The first time we launched was with 3 people with air beds and the design conference, we launched a second time and no one noticed, then we launched a 3rd time at SXSW. At the time there wasn’t any payment system in the product and you had to stay in an air bed — we actually made our hosts provide air beds, you couldn’t stay on a real bed.Someone asked to be able to book a real bed — why did it have to be an air bed? We reluctantly decided to list real beds and let guests book rooms without a conference.
In the summer of 2008 we completed the final version of Airbnb which let you book someone’s home — in 3 clicks. We took inspiration from Steve Jobs who created the iPod — designed to always be 3 clicks from a song. We designed Airbnb to be 3 clicks to get to a paid booking. Our initial site had a home page, search, reviews, and payments — most of the core components which are on the site today.
We were still in debt but we got 80 bookings during the DNC. The downside was, after the DNC we had no bookings, we were a year into the business, we were in debt, every investor said no, we launched 3 times, we had national press, and it was unclear if we were going to be around. We were at rock bottom.
In debt and desperate one midnight, we had the idea if the “air beds” in air bed and breakfast wasn’t working — maybe we can sell “breakfast” instead. We started thinking about president themed cereal and we convinced a producer to make cereal for us and since we couldn’t pay them he would get a portion of the sales.
While reading and goggling, I found out about a class in Standford that is an interview with Brain Cheskey, founder of Airbnb.
It is good read\inspiration\wisdom and here is the part that I loved most.
Reid Hoffman: Can you share more about the early days after you had launched, how did you hustle to keep the idea going?
Brian Chesky: We actually “launched” multiple times. If you launch and no one noticed — you can just launch again. We had press that wrote about us multiple times for launching.
The first time we launched was with 3 people with air beds and the design conference, we launched a second time and no one noticed, then we launched a 3rd time at SXSW. At the time there wasn’t any payment system in the product and you had to stay in an air bed — we actually made our hosts provide air beds, you couldn’t stay on a real bed.Someone asked to be able to book a real bed — why did it have to be an air bed? We reluctantly decided to list real beds and let guests book rooms without a conference.
In the summer of 2008 we completed the final version of Airbnb which let you book someone’s home — in 3 clicks. We took inspiration from Steve Jobs who created the iPod — designed to always be 3 clicks from a song. We designed Airbnb to be 3 clicks to get to a paid booking. Our initial site had a home page, search, reviews, and payments — most of the core components which are on the site today.
We were still in debt but we got 80 bookings during the DNC. The downside was, after the DNC we had no bookings, we were a year into the business, we were in debt, every investor said no, we launched 3 times, we had national press, and it was unclear if we were going to be around. We were at rock bottom.
In debt and desperate one midnight, we had the idea if the “air beds” in air bed and breakfast wasn’t working — maybe we can sell “breakfast” instead. We started thinking about president themed cereal and we convinced a producer to make cereal for us and since we couldn’t pay them he would get a portion of the sales.
We hand folded 1,000 boxes of cereal, numbered each one, and sold them at $40 a box — We sold $30,000 worth of cereal and this is how we funded the company and came up with the phrase “be a cereal entrepreneur”.
In November 2008 we were back to being broke and we did not feel successful or talented at this point. A bunch of people had recommended we should go to YCombinator. We said “but we already launched already?” and they responded “but you are dying, you should apply to YC.”
We met with Paul Graham and he thought the idea was terrible, he said “are people really staying on air beds? what’s wrong with them?”. We told him the cereal story and he told us “if you can convince people to buy cereal, you might be able to convince people to rent air beds.” He told us we were the cockroaches of startups, that we could survive anything — this was the best compliment we had ever gotten — we were cockroaches.
Reid Hoffman: But YCombinator didn’t make your numbers change — what did you do that changed the inflection of the company?
Paul Graham gave us a series of advice that changed our trajectory.
We met with Paul Graham and he thought the idea was terrible, he said “are people really staying on air beds? what’s wrong with them?”. We told him the cereal story and he told us “if you can convince people to buy cereal, you might be able to convince people to rent air beds.” He told us we were the cockroaches of startups, that we could survive anything — this was the best compliment we had ever gotten — we were cockroaches.
Reid Hoffman: But YCombinator didn’t make your numbers change — what did you do that changed the inflection of the company?
Paul Graham gave us a series of advice that changed our trajectory.
Life is the enemy of a startup. Paul Graham always says that startups don’t die they just fade away.
The most important of this advice was that it was better to have 100 people who loved us vs. 1M people who liked us. All movements grow this way.
This is when we decided to do things that wouldn’t scale. Getting 100 people to love you is hard — getting people to like you is much easier than getting people to love you. During YC, we would commute from Mountain View to New York City (where most of their hosts were) and we would meet with every single host.
If you can get even 1 person to love you, then you can go person by person — the challenge is how to scale that. It’s much easier to scale something — 100 people love vs. getting 1M who like you to love you.
Reid Hoffman: That was a great warm-up story about the early days of Airbnb, let’s move on to the things Airbnb does which are unique. For example Airbnb is known for attention to design — and the 7 star design principal. Can you share more about this?
If you can get even 1 person to love you, then you can go person by person — the challenge is how to scale that. It’s much easier to scale something — 100 people love vs. getting 1M who like you to love you.
Reid Hoffman: That was a great warm-up story about the early days of Airbnb, let’s move on to the things Airbnb does which are unique. For example Airbnb is known for attention to design — and the 7 star design principal. Can you share more about this?
Brian Chesky: The paradigm with customers today is 5 stars. The problem with 5 stars is you have to be really bad to get 4 stars. Reaching 5 stars is just being nice enough — we wanted to build a product that you loved so much you would tell everyone. Travel has the potential to transform your whole life — I have met people on my own travels who changed my life.
Reid Hoffman: One of the interesting observations is in your thinking of 7 star service, it's not just about the website or mobile app — you are talking about the whole experience.
Reid Hoffman: One of the interesting observations is in your thinking of 7 star service, it's not just about the website or mobile app — you are talking about the whole experience.
Brian Chesky: The product is what your customers are buying. In some cases your product can be the app but for us our customers are buying a house. More than that they are buying a host, the idea of belonging in a new city, the full experience.
Reid Hoffman: Airbnb is also known for applying design thinking to your culture and even your office, how do you apply that?
Reid Hoffman: Airbnb is also known for applying design thinking to your culture and even your office, how do you apply that?
Brian Chesky: I consider myself a designer by trade. There is a quote from Steve Jobs I liked which is: “Design is not just what it looks like and feels like. Design is how it works.”
By using this, you can imagine everything being designed. You can design a product, a company, an organization, a building, anything you want. Once you realize everything can be designed — you don't need to use things straight out of the box — you can reinvent everything.
Reid Hoffman: Outside of being a role model and designing your office — what are other things you have done to design your culture? I’ve seen you spend more time than most entrepreneurs on culture.
Brian Chesky: I believe culture is a shared way of doing things. There isn’t a bad culture or good culture, but there are weak cultures and strong cultures. I wanted to have a strong culture — a shared mission, a way things are done, beliefs we share.
Reid Hoffman: When you hit scale how do you instill culture?
Brian Chesky: I do as many culture activities as I did before — now I just have people do things on my behalf — leverage.
I used to do all of the interviews — now I hand picked all of the interviewers, I spent months with each interviewer, I built an inner circle of people who have trained interviewers, etc.
I used to meet with every single new employee one-on-one — now I do weekly orientation meetings, I have recorded many of these sessions for our international hires, etc.
I also write an email every single night to the whole company. This isn’t a tactical email but something more thought provoking. One of the things with scale is you need to continue to repeat things. Culture at scale is all about repetition — repeating over and over again the things that matter.
I have personally seen and know people who have scaled and people who can’t scale. The two traits I see in common with the people who scaled is:
Intelligence
Curiousness
If you think you know everything, you can’t scale. I am shameless about getting feedback and knowing I don’t know it all.
There is a quote from Pablo Picasso I like: “It took me four years to paint like Raphael, but a lifetime to paint like a child.”
Brian Chesky: The first stage of a startup is survival. Not dying is being able to work on it the next day.
The second stage of a startup is firefighting. There are all of these problems going on and you need to fix them all.
The third stage is now other people can see what you are doing and now other companies try to copy and destroy you. The big existential threats to Airbnb were both competitors and the government.
Brian Chesky: The problem with these challenges is they are a punch in the face while you are casually walking down the street. You have no idea where they are coming from. The Samwer brothers was the first punch and government was the second,
One benefit of being more successful is you have access to talk to more successful people. But even before being successful, you can read about the best people.
Another tip is most people will help you if you ask a question — we are here to share information and knowledge. I was shameless in asking Reid Hoffman questions — I was probably annoying but I didn’t care — I just wanted to learn.
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By using this, you can imagine everything being designed. You can design a product, a company, an organization, a building, anything you want. Once you realize everything can be designed — you don't need to use things straight out of the box — you can reinvent everything.
Reid Hoffman: Outside of being a role model and designing your office — what are other things you have done to design your culture? I’ve seen you spend more time than most entrepreneurs on culture.
Brian Chesky: I believe culture is a shared way of doing things. There isn’t a bad culture or good culture, but there are weak cultures and strong cultures. I wanted to have a strong culture — a shared mission, a way things are done, beliefs we share.
Reid Hoffman: When you hit scale how do you instill culture?
Brian Chesky: I do as many culture activities as I did before — now I just have people do things on my behalf — leverage.
I used to do all of the interviews — now I hand picked all of the interviewers, I spent months with each interviewer, I built an inner circle of people who have trained interviewers, etc.
I used to meet with every single new employee one-on-one — now I do weekly orientation meetings, I have recorded many of these sessions for our international hires, etc.
I also write an email every single night to the whole company. This isn’t a tactical email but something more thought provoking. One of the things with scale is you need to continue to repeat things. Culture at scale is all about repetition — repeating over and over again the things that matter.
I have personally seen and know people who have scaled and people who can’t scale. The two traits I see in common with the people who scaled is:
Intelligence
Curiousness
If you think you know everything, you can’t scale. I am shameless about getting feedback and knowing I don’t know it all.
There is a quote from Pablo Picasso I like: “It took me four years to paint like Raphael, but a lifetime to paint like a child.”
Brian Chesky: The first stage of a startup is survival. Not dying is being able to work on it the next day.
The second stage of a startup is firefighting. There are all of these problems going on and you need to fix them all.
The third stage is now other people can see what you are doing and now other companies try to copy and destroy you. The big existential threats to Airbnb were both competitors and the government.
Brian Chesky: The problem with these challenges is they are a punch in the face while you are casually walking down the street. You have no idea where they are coming from. The Samwer brothers was the first punch and government was the second,
One benefit of being more successful is you have access to talk to more successful people. But even before being successful, you can read about the best people.
Another tip is most people will help you if you ask a question — we are here to share information and knowledge. I was shameless in asking Reid Hoffman questions — I was probably annoying but I didn’t care — I just wanted to learn.
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