Last year, Airbnb CEO and co-founder Brian Chesky listed his San Francisco home on the rental platform.
It’s not the first time he’s opened his home up to strangers. In fact, he was inspired to found the company in 2008 after doing exactly that to help meet his rent. But it’s clear with an estimated net worth of around $10 billion, Chesky doesn’t need to host renters for spare cash.
“I never wanted to be one of those CEOs that's kind of an ivory tower, just looking at data and spreadsheets all day,” he explained in a video interview with Bloomberg.
As a CEO, with a sizable salary and a PA to iron out life’s hassles, it is easy to become far removed from the everyday consumer. So by becoming an Airbnb user himself, Chesky is able to keep his finger on the pulse of his customers.
“People aren't just numbers, they're people and that means that you need to be emotionally connected to what you're doing,” he said, adding that now he can understand when hosts or customers are complaining about something, what exactly it is they mean.
“So that's the main reason I did it,” he added. “But then there was another reason I wasn't expecting, which was fun.”
Clarity from the pandemic
It was one of the many lessons that Chesky said are “seared in his brain” after the pandemic, where the business went from raking in $35 billion in sales to suddenly losing “80% of it in eight weeks” in 2020.
Headlines were predicting the end of Airbnb. But now, Chesky thinks the traumatic period, which he likens to a near-death experience, changed his life and the company for the better.
“You hear people say that they had a near-death experience and they had this moment of clarity. Well, thankfully I've never had that. But I felt like I got that clarity from the business perspective,” he said.
After being tugged in many directions because “employees were worried about their jobs, investors were worried about their investment and guests were worried about if they can get their money back,” Chesky realized that compromise isn’t always the answer.
“I learned to focus the entire company and point every single person to one direction and I learned to stop apologizing about how I wanted to run the company,” he said.
Having hired executives from top tech firms like Google, Apple and Amazon, he was trying to reach a “midpoint” between the direction he wanted Airbnb to go in and what they thought was best from their experience. But instead of feeling like everyone had reached a happy middle, Chesky recalled that it was making “everyone miserable”.
“The crazy thing is, as I took more command, more control, became more decisive, more bossy, so to speak, people were happier because they had clarity and direction.”
In those bleak first six months of the pandemic, Chesky reckons that Airbnb made around five years of progress. “Your culture is often forged in your darkest moments,” he concluded. “The lessons you remember most are during the moments of trials and tribulations are things that forge you.”
Hosting for long-term growth
Many CEOs have spoken philosophically about the progress they've made during the pandemic, but Chesky isn't dramatizing the impact the pandemic has had on Airbnb. The business has literally boomed and for the first time in its 15-year history, the online marketplace for short-and long-term homestays has earned a spot on the Fortune 500 list.
The revenue threshold for making the 2023 Fortune 500 list was $7.2 billion this year, up 13% from a year ago. Airbnb landed at No. 450. The company generated revenue of $8.4 billion, up 40.2% year over year. What's more, the company reported its first-ever profitable year in 2022, with earnings of $1.9 billion.
Echoing what Chesky said, Dave Stephenson, CFO and head of employee experience told Fortune that in order to survive the pandemic, Airbnb had to become more disciplined and focus on critically important areas for long-term growth—namely hosting.
Much like the big boss, Stephenson also said that many Airbnb employees are hosts. "We strongly encourage it,” he said while adding that he practices what he preaches. “I host a cabin, just outside of my home in Seattle... and I host a home in Palm Springs," he revealed. “I understand some of the challenges of onboarding and becoming a host.”
