Pivot - Guest Episode: Decoder with Nilay Patel: Why the future of work is the future of travel, with Airbnb CEO Brian Chesky

Episode Date: December 24, 2021

Airbnb CEO Brian Chesky prides himself on thinking very differently than other CEOs, and his answers to the Decoder questions about how he structures and manages his company were almost always the opposite of what I’m used to hearing on the show. Airbnb is pretty much a single team, focused on a single product, and it all rolls up to Brian. That’s very different from most other big companies, which have lots of divisions and overlapping lines of authority. And Airbnb’s relationship to cities is changing as tourism changes. Airbnb used to be the poster child for a tech company that showed up without permission and fought with regulators, but as the company has grown and the pandemic has changed things, it’s entered what is hopefully a more mature phase — it just came to a deal with New York City after ten years of argument. I asked Brian about that and about what it’s like to run a public company now — the transition from scrappy startup to public company engaged with regulators is a big one. Of course, I also had to ask about cryptocurrency and the metaverse — does Brian think we’re all going to be visiting virtual NFT museums on vacations in the future? You have to listen and find out. Okay, Brian Chesky, CEO of Airbnb, here we go. Transcript: https://www.theverge.com/e/22547463 Credits: Decoder is a production of The Verge, and part of the Vox Media Podcast Network. Today’s episode was produced by Creighton DeSimone, and Andrew Marino, our research was done by Liz Lian. And we are edited by Callie Wright. Our music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Cara Swisher, and today we're sharing a special episode of Decoder with Nilay Patel from our friends over at The Verge. Nilay, The Verge's co-founder and editor-in-chief, interviews CEOs, policymakers, and tech leaders asking them critical questions. In this episode, Nilay interviews Airbnb CEO Brian Chesky about how they're navigating the pandemic, handling the backlash towards big tech, and how they're maturing from their rise as a tech company who showed up to cities without permission and fought with regulators. Take a listen to the episode and follow Decoder with Neelay Patel wherever you find your podcasts. New episodes come out every Tuesday.

Hello and welcome to Decoder. I'm Nilay Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking to Airbnb CEO Brian Chesky, and I have to tell you, this conversation was really surprising. Brian prides himself on thinking very differently than other CEOs, and his answer to the decoder questions about how he structures and manages his company were almost always the opposite of what I'm used to hearing on the show. Airbnb is pretty much a single team focused on a single product, and it all rolls up to Brian. That's very different from most other big companies, which usually have lots of divisions

and overlapping lines of authority. But Airbnb wasn't always like this. In fact, this new structure came about as a result of the pandemic, when the travel business tanked overnight. Bryan talked through how he decided to change what Airbnb was doing, how he redesigned the company to support that, and how he plans to grow from here. We also talked about design and why Brian has Johnny Ive's new firm Love From on retainer. Did you know Johnny Ive helped refine Airbnb's logo? I did not. We also talked about the

fundamental weirdness of being a marketplace company. Airbnb is a travel company that doesn't own any property. I wanted to know who Brian thinks his customers are, how he manages his suppliers, and how he thinks about the future of travel. Since the pandemic, Airbnb has seen a huge uptick in longer stays and lots of weeknight travel, which means that people who can work from home are actually choosing to work from anywhere.

Brian thinks that's a permanent shift, and it has big implications for how Airbnb works in various communities. And Airbnb's relationship to those communities is changing as tourism changes. Airbnb used to be the poster child for a tech company that showed up without permission and fought with regulators. But as the company has grown and the pandemic has changed things, it's entered what is hopefully a more mature phase. For example, it just came to a deal with New York City after 10 years of fighting. I asked Brian about that and about what it's like to run a public company now. The transition from scrappy design startup to public company engaged with regulators is a big one. Of course, I also had to ask about cryptocurrency and the metaverse. I mean, what do you think we're doing here? Does Brian think we're all

going to be visiting virtual NFT museums on vacations in the future? You're gonna have to listen and find out. Okay, Brian Chesky, CEO're the co-founder and CEO of Airbnb. Welcome to Decoder. Thank you very much for having me today. I'm excited to talk to you. There is a litany of things we could talk about. It's almost a year since Airbnb went public. You've made some product announcements. We should talk about all those. There's a pandemic going on. I don't know if you've heard about that. I'm very curious how that's affected the business. But actually, I do want to start there. Airbnb is sort of a paradigmatic company, marketplace, internet company, right?

Uber is a taxi company that doesn't own cars. Airbnb is a travel company that doesn't own hotels. What has that been like during the pandemic? How have you changed the business? How have you had to react to that? It's kind of interesting to take you back to right before the pandemic to kind of take you on a journey of what that's been like. You know, I remember coming back from the holidays after 2019, early 2020, thinking like probably most people in the world that my life was going to go a certain direction, not knowing two months later that everything would be turned upside down. We have a China business. And in late January, we noticed our China business dropped by 80% in a matter of weeks. I'd never seen anything drop by more than 5 5%. So this was like precipitous. I remember saying seemingly innocently at the time, wow, if this spread outside

of China, this would be very bad. Not realizing within a few weeks, it would go to Europe. And then of course, to United States. And by March, our business started dropping precipitously. And we lost 80% of our business in eight weeks. Losing 80% of your business in eight weeks when you're the size of us, it's like driving a Mack truck, 18 wheeler, and then like at 80 miles an hour and slamming on the brakes. You just can't change direction that quickly without really kind of dramatic things happening. There was a lot of panic around me, certainly in the public. There were a lot of predictions of our kind of seemingly imminent demise. There were people asking, will Airbnb exist? Can Brian

Chesky save Airbnb? These are verbatim headlines from last April. And I think that a lot of people thought that we would be more impacted than hotels and other companies. And maybe the reason why is because they just assumed what kind of arrived recently would go away earlier. It's just like, we weren't around for 100 years, so how could we be the thing that endures for the next 100 years? And I understand that line of thinking. But something totally different transpired. If you kind of cut forward, by the end of the year, we suddenly went public and we were stronger than we were before the pandemic. So how did that happen? How do you even explain that?

The way I would explain that, to answer your question, is that we had an adaptable business model. Because we didn't have to pour concrete, we had millions of homes. We had nearly every type of space from small bedrooms and apartments to yurts to tree houses to villas and entire homes in nearly every community in the world. We're in 220 countries and regions. That's every country in the world, but North Korea, Iran, South Sudan, and Crimea in 100,000 towns and cities at every price point from $20, $30 a night to thousands of dollars a night for any length of time. You know, you can only stay in a hotel for usually up to a week.

It gets precipitously expensive for most people. But you can literally live in Airbnbs for months at a time. And quite a few people are doing that. And for every type of traveler, we have solo travelers. We have families. And so because of the fact that we didn't have to hold inventory, we didn't have to pour concrete, we had a distributed network, we were a community. Communities are inherently adaptable and resilient, almost like Mother Nature, right? It just adapts.

So we were able to adapt to the changing patterns of travel better than probably anyone else in the industry. And I think that kind of spoke to what happened. The only other thing I would say is travel is completely changing. I think we're living in a revolution in travel. We can talk about this in a little bit, but I think that also we can go into, I think also explained part of our success. So that adaptability, right? You don't have to pour concrete. You don't hold a lot of inventory. I think of Airbnb as a software product. Is that what you think the core product is,

is marketplace software? I think that's a part of our product. We're not a software company the way Microsoft is software, and they literally sell the software, and there's nothing but the software. But we are, first and foremost, a software company. What we build is software. But what is our product? I wouldn't say like Google and Facebook, our product is our software. I would say our product is the thing you pay for. And the thing you're paying for is the home. It's the experience, is the community. And our application is kind of the gateway to that thing in the real world.

So we are definitely software first. We're very much a software company, but we're more than software because you're buying something more than just a digital product. This is kind of a way of asking, do you think of yourself as a tech company? There's a lot of ways to define what a tech company is. You brought up Microsoft and Google. They have zero marginal cost scale, right? The next Google search page does not cost Google anything to make because the software can just generate that stuff and they have entire business models around that. Do you think of your margin and your growth the same way that a software company like Google would think of it?

Do you think of tech enabling your product in other ways? How would you define tech company in a way that includes Airbnb? There's many definitions of a tech company. But I think that the primary definition of a technology company is it has two characteristics. It's kind of seemingly infinitely scalable, right? So if you have to like pour concrete, there's only so much concrete in the world. It's very expensive. It leads to a lot of capital allocations, but also requires a lot of like permits. It requires decades to do that. So I think the first characteristic of a tech

company is it's seemingly infinitely scalable. And the second is what you said. It's got low marginal cost. I think Windows 95 was the closest thing the world's ever seen to basically close to zero marginal cost. All it was was a CD in a box. Maybe Google's practically zero marginal cost. All they're paying for, I guess, is servers to host the data. I would say Airbnb's pretty low marginal cost.

servers to host the data. I would say it would be pretty low marginal cost. To give you an example, if you look at our financials, our gross margins are approaching 50%. If you look at what our margins were a couple of years ago, they're in the mid-30s. We did over a billion dollars in EBITDA in the third quarter alone at our size, even though we're built to be profitable at a much larger scale. And so in that way, I think we are a tech company because when an investor values a company, they're just looking for how big can it be and how profitable can it be. And those require two characteristics, infinite scale and low or zero marginal costs. That being said, we're not obviously a tech company like Intel or NVIDIA. I think about it as layers of the stack. You've got the micro components, which is like NVIDIA, Intel. Then you've got the companies making devices like

Apple. Then you've got the operating systems, Apple, Android. Then you've got the application layer. And I think we are the application layer. But I think there's even a layer almost above the application layer, which is we're also online, offline, which you mentioned with Uber as well. So we have this offline world that Facebook, Google, and other applications don't have to deal with. For example, we have to collect or emit money, tens of billions of dollars in nearly every country in the world. We have money transmission licenses in most countries.

So we have major financial regulation responsibility. We have millions of people a night. Some nights we had more people staying in an Airbnb than the population of Los Angeles. We had to keep them safe. We've had to make government agreements with thousands of jurisdictions around the world and collect remit $3.4 billion in hotel tax. We have to exist on every application. Uber needs a mobile app. We need a mobile app, a desktop app, an iPad app. I could go kind of down the list of things. We just launched AirCover, which is a million dollars of damage protection for every home on Airbnb for free. If 1 million

homes a night are occupied and each home has a million dollars of protection, that's a trillion dollars of protection that we're working with providing with insurance partners every single night. So we could go down the list. There's a lot of things that go beyond the application. You open your iPhone, you tick the stock app. That's a very two-dimensional experience. Airbnb is truly an application that has a three-dimensional experience, which is the real world. And that creates quite a lot of complexity. The good thing about Airbnb though, is because we're a community, it's inherently scalable. And that's why investors clearly like it. It feels like a tech company because it is. So you brought up a lot of things that I have follow-up questions on. I want to start with the simplest one.

Almost every other tech company exec that's come on the show, I've had to ask about the chip shortage. And there's been, I would say everyone's like, yep, it's a problem. Is the chip shortage a problem for Airbnb? I'm guessing no. I'm just curious. I don't think so. No. Yeah. You're the first one. There's something interesting there, right? You're deeply connected to the physical world, but you've kind of abstracted the phone and the hardware component away. So that's interesting. The second one is you brought up currency transactions. I was not expecting to ask you about cryptocurrency, but I'm curious, is Airbnb thinking about cryptocurrency?

We're definitely looking into it. Absolutely. I think that just like I believe there's a revolution in travel, there's clearly a revolution happening. Crypto feels like a revolution to me. And so we are absolutely looking into it. And I think crypto is like the other side of trust. I think Airbnb and crypto both

have interesting relationships with trust. I think the original white paper on Bitcoin said that Bitcoin does not require trust because there's essentially a public ledger. Airbnb approached trust in a kind of similar way, but not exactly the same way. The reviews is equivalent of a public trust ledger, essentially. That's essentially what it is. You know, The founder of Coinbase was an early employee of ours, and we've been following this space for quite a long time. One thing maybe I can add to the crypto dialogue would be, I remember lots of technologies. There's an excitement and hysteria around technology. The key is going to be once it

becomes very broadly applicable to regular people and regular people understand beyond the initial excitement of technology, how it can apply to and improve their lives. And so I'm really excited about certain applications that regular people could use to just kind of live a better daily life. But you're not thinking of accepting payment in Bitcoin to avoid currency exchanges and the float that you must have to have? This is not something that we have in the near term plans. It's certainly something that we should be looking at. And I think everyone that's handling a lot of money should be looking at this

though. Holding a lot of any coin, you have a lot of volatility. And I think one of the accounting challenges is that if you make a gain, you don't get to realize those gains. But if you have a loss, you have to account for those losses. So there's a bunch of like kind of things you have to think about if you're going to hold a lot of currency. So here's my other buzzword question. You mentioned online, offline, and how Airbnb kind of mediates the two. You and I are speaking in the context of every other tech company in the world just saying the word metaverse and hoping something good happens.

I don't know what they're going to do is that something that you have to think about like how am i going to enable digital experiences that cross over into the real world experiences that we are currently selling let me answer that question if i may in like a kind of broad sense of the word when mark zuckerberg announced the metaverse i think like an abstraction that he said was the internet i I think he's saying will be three-dimensional rather than two-dimensional. And I think he had a very specific vision of what that would look like. I do believe that the internet will get more three-dimensional, more immersive. There's no question.

I think the question number one is, will it replace real life or just replace more two-dimensional screen time? I think, and I hope that a more three-dimensional internet will replace a two-dimensional internet time. I think and I hope that a more three-dimensional internet will replace a two-dimensional internet, not replace real life. I think that would be really unfortunate. Because if that's the case, then we will recreate the movie WALL-E. That movie WALL-E where everyone's on screens and they're disconnected from the real world. And I don't think that's any technologist's vision that I'm aware of, that we never exist in the physical world. I think that these digital

experiences to me are gateways. So we do have online experiences. They're not a giant part of our business, but they are a gateway. There are ways for people from their home for $10, typically $20 to try Airbnb, connect with a host without having to get on a plane and stay in someone's home in another country. It's a lower commitment. But I do think generally, I like to either ride a trend or ride the opposite of a trend. And I think the opposites of trends are always as powerful, essentially counter trends. So I think to zoom out, we're living in a digital revolution. That digital revolution clearly started decades ago. I think that the pandemic accelerated the adoption of lots of digitization. If you look at all the companies that did really

well, they're digital companies that are digitizing the physical world. So the mall became Amazon, money is becoming crypto, hotels are becoming Airbnbs. And so I think digital is benefiting. I think there's a major risk to the digital revolution. And the risk is that we are also living, I think, in one of the loneliest periods in human history. It's this incredibly isolating time. And I think when you take physical communities and you atomize them, digitize them, they're not always as nourishing as the physical world, right? No one's ever changed someone else's mind in a YouTube comment section. When people that are different from one another interact online, they tend to argue and repel each other often and divide further. There's something about the lack of empathy of sitting face to face. The best way to change someone's

mind about someone else that I've ever encountered is to walk in their shoes, to literally walk in their shoes, to stay in their home, go in their community. And when you do that, you'll know, number one, it's pretty hard to hate up close. And you're going to start to realize, you know, those people that I said were the other, they're actually just like me. And so I think in society, we're spending a lot of energy, both good and bad, talking about how different and unique every one of us are. But we're forgetting that we're 99.9% the same. And I think that's a major risk to the world. So I think there's this really exciting digital revolution. It makes everything more ubiquitous, cheaper, freely accessible, but it also is a major risk. And one of the things that I'm thinking about is how my thing that like at the largest level that I'm most focused on a long term is this notion of human connection and this risk of the world being isolated, lonely, and divided. And I think if Airbnb has a reason to exist, a contribution to make in this world, there's many, many, but if I can only pick one, it's the ability for us to bring people together in the physical world

from cultures all over the world. And I think that that will always be relevant so long as people are relevant in this world. I buy that, but let me push you on it a little bit. One of the big trends that you've talked about, you had some tweets about it the other day, people can work from anywhere now, right? Working from home is really just working online. So yeah, you can just like, actually my boss, the VP of the virtual and have like, I never know where she is. Every time I'd see her on a zoom, she's just in a different state. It's been a very entertaining year of talking to her, but the people who are doing that sort of, I can work from anywhere, I'm going to try all 50 states, they're not necessarily plugging into communities, right? You're not selling a Republican, go experience the heart of blue New York City. You're not selling Democrats, go move to a red state for a while and check it out. go move to a red state for a while and check it out. How do you connect the product of Airbnb,

which is you can spend time in someone else's house, to the actual communities those houses are located in? That's a great, great question. I think that there is no doubt more to do. I do think that one of the great benefits of Airbnb is there's a host. And I think that behind every home is a host. You can't stay at home without a host. I think what a great host on Airbnb does is they bring you into the community. And this is beyond the people actually living with hosts where they're inherently plugged in the community. Let's say I get an entire home. Our very best hosts create guidebooks. Millions of them create guidebooks. They connect you to a local community. Sometimes they'll even, if you're going to be there for a long time, introduce you to the local coffee shop or the neighbors, people like that. So I think that

ultimately, first and foremost, it's a job of a great host to bring into the community and assimilate you. But the other thing I just say is this is something that I'm very, very interested in, is how do we continue to connect people to communities? Because there is an unmistakable trend that people are more flexible. We are truly living in a revolution in travel where more and is how do we continue to connect people to communities? Because there is an unmistakable trend that people are more flexible. We are truly living in a revolution in travel where more and more people are going to be flexible. They're not going to be tethered to an office

like your boss, or you're not tethered to an office. You're obviously in upstate New York. This is the world that we're going to be designing for. I think we're going to have a generation of people that are going to be less tethered to the office, more nomadic. 20% of our business by nights booked are for stays over a month or longer. And I think the most important

two criteria is to connect to a community is to stay longer in the community and have people that can connect you to that local community. And so if we can encourage longer stays, and if we can encourage hosts to be really the connectors of the guests to the communities, those are probably two of the biggest things we can do to really make sure we're enriching the communities and people go places. They're not just transient. They're not just invisible kind of shadow members of the community. They actually are physically there. And this is one of the big opportunities for Airbnb. And it's also one of the big challenges that we're going to be focused on in the years to come. You mentioned hosts in the center of the Airbnb experience. Who do you

think your customer is on the platform? Is it the guests who are booking stays? Is it the host? So yeah, we're very clear about this. We have five stakeholders, guests, hosts, employees, shareholders, and obviously the communities we operate in. Some could call it just society writ large. Our hosts are not our customers. And we're very clear about that. Our hosts are our partners. So our guests are our customers. They come to Airbnb for a bunch of reasons. The number one reason a guest user, I mean, typically is they want to live like a local. The number two reason is they want to save money. The third reason is they want to have a real close proximity to something. So they're the customers and our hosts are our partners. The interesting thing about having a

partner is they have a customer-like relationship. We do things for them, but we also have to do things in partnership with them. We have to preview things to them. For example, we announced yesterday verified Wi-Fi speeds. We can't do that without the host actually using the tool. So we have to make a promise to the guest that we have this feature, but we have to educate the host. They have to be bought into it. If we make a promise to the guest and the host don't want to offer it, then everyone's kind of out of luck.

And so what we've had to do is to deepen our connection to our host community. We created a host advisory board. We created a host endowment, kind of like a college endowment. It's worth more than a billion dollars. We do listening tours, talking to hosts every single day. So our hosts are our partners, not our customers, but they have customer-like attributes where we kind of have to continue to deliver stuff and they have to be happy. To just like abstract that out to more basic vocabulary, the hosts are your suppliers and your customers are the demand, right? They're the ones who come to you and you

mediate the demand between multiple sources. Sorry, just one thing about suppliers. I think that's technically true, but when people hear the word supplier, I think what they often think of is suppliers have channels and they have many channels. I think the thing that's unique about our supplier relationship where the word supplier can throw people off, is 90% of our hosts are individuals. Most would not have supplied their inventory had it not been for Airbnb. Very few cross-list. So the supplier relationship with Airbnb, for example, is different than the supplier relationship on Amazon. But you are true.

They are technically either supply and demand. These are obviously basic laws of economics. Yeah, that's my question here. You have a relationship with these hosts, many of whom are individuals. There are other channels. You do have competitors like VRBO and others. Do you think that hosts over time will begin to experience competition? The platforms themselves will compete for hosts? There's only so many houses in America. At some point, you're going to run out of inventory. It doesn't seem like you're interested in pouring concrete yourself. So at what point does the dynamic,

does the leverage shift back to the supplier? The supplier hosts have a lot of leverage. I don't think they're listing on Airbnb per se because we have the leverage. I think they're listing Airbnb because we have the demand, we have the tools, we provide what they want. Let me just give you a couple stats. We have fewer hosts as a percentage of our inventory today that is cross-listed on competitors' websites than before the pandemic began. Our inventory is getting more exclusive over time, not less exclusive. Now, why is this? And so the answer is yes, we have competition like everyone does. Hosts have choices.

answer is yes, we have competition like everyone does. Hosts have choices. But when hosts look at the choices out there, they see that only one platform is custom built for them. Only Airbnb gives, for example, $1 million of damage protection, $1 million liability protection, income loss protection. And that's just one of the things we offer. I could go down the list of many of the custom tools that we have built just for hosts. We provide the vast majority of demand for hosts. If you host an Airbnb, you can host people from 220 countries. Most of our competitors are regional competitors that only have demand in certain locations. Our brand is a noun and a verb used all over the world. We are synonymous with this category.

We've created this category. At least we've modernized this category. It was offline for the most part before Airbnb. So we've really created this category at least at scale. And we're the innovators. We've innovated 150 upgrades and innovations this year alone over Zoom in the midst of a pandemic. And I think we're just getting started. So to answer your question, I try to get out of bed every day knowing that our customers have choices, our hosts have choices, and our employees have a lot of other places to work and our shareholders, a lot of other stocks to buy. And so I think that we've got to always have the humility of knowing that every single day we have to prove ourselves. We have to be better than the day before.

But I will say that I think if you look at what we've done in the last 18 months to lose 80% of our business, to restructure the company, to ride this rebound, to go public on a pandemic, and then make 150 upgrades and improvements, hopefully if anyone's evaluating our work in the last 10 years and especially the last 18 months, I hope they feel really good about the trajectory. But that's partly because we wake up every day knowing these facts and we have to prove ourselves every day. You've mentioned several times you're not interested in pouring concrete, but you obviously need supply. We're talking just about a week after Zillow had to lay off a few thousand people, 25% of the company, because they actually tried to get into the homes business. They were trying to buy and sell homes using some algorithmically derived

pricing structure. I'm just curious for your thoughts on that. Why do you think they charged into that market and why do you think it failed so badly? I want to preface this answer by saying that I did not follow what they did very closely. One of our first investors after Y Combinator was a guy named Keith Reboy. He is a co-founder of Opendoor. I believe Opendoor's core business was the thing that Zillow was trying to do. I know Eric Wu. I think he's the CEO of Opendoor. I know Rich Barton a little bit. He's the CEO of Zillow. I think he's incredibly talented. I don't know exactly when it went down. I'm guessing that when a company moves beyond its core business, it's got to be very careful. We tried to get into flights and transportation. We thought we have a ubiquitous brand. We have so much traffic. Why don't we just add flights?

And the problem is it's really important for a company to understand what its capabilities are, not just what its assets are. You see the difference? Like our asset is a brand and traffic, but do we have a capability to actually fill seats on an airplane? That's a whole different muscle that has nothing to do with filling people in homes. And so I don't know if Zillow made this mistake or not, but a mistake commonly people do is they confuse their assets with their capabilities. Do you know how to do something?

So like Amazon went from retail to AWS. That was not actually a crazy transition because actually retail was just giant fulfillment centers, which are basically massive efficiency machines, which are very similar to server farms. The fulfillment center server farms of AWS were not that different. They were in the efficiency and speed business. When Apple put out the iPad and the iPhone, they were really the same computer platform built on OS X as the computer. So I think it's really important that when you do line extensions, that you either stay within your area of capability

or you acknowledge we don't have this capability, we better build this capability and be expert before we go big into it. And maybe that is a clue of what happened there. Be very careful extending beyond your core capabilities, even if you have the brand, the traffic and the assets. I'm assuming that you were not interested in buying homes and owning a lot of inventory before and you're less interested now? Yes, I think that's a safe assumption. And I can say that if I ever were to get into something like that, a lesson I've learned is that we must become an expert in something. You have to be humble. There's also this risk of it's kind of like the second album problem. Your first app, your first album was successful. You don't really know why it was successful. You kind of forgot all the hard work and all the struggling.

And so you think we're successful. We can now do everything. And I remember a teacher at my college said to me once, Brian, you can do anything you want in your life, just not all at the same time. And I think a lot of tech CEOs experience, and I experienced a little bit of this, the little bit of hubris of thinking because you can do one thing, you can do everything. And maybe you can do a lot of things, but certainly not at the same time. And you always have to have a beginner's mindset and kind of learn from the very beginning. And as long as you stay curious, stay a beginner,

try to tackle really one hard problem at a time and really understand what your capabilities are, then you might be able to stay on track. We're going to take a break, but when we come back, I'm going to talk to Brian about the structure of Airbnb and how he manages that structure. We're back. Let's talk about the structure of the company. I think of these as the decoder questions because I ask everybody. You mentioned you had to restructure the company.

You made, obviously, a bunch of changes when the revenue went away, and then you ended up going public all inside of a year. How was the company structured, and how is it structured now? This is a very fun topic for me because I've studied a lot of organizational structures. So Airbnb started like all companies start. They start as functional organizations. So you have a marketing leader and a design leader and a product leader, engineer leader, finance, HR. And then the Andy Grove law of large organizations, organizations eventually become matrices. And very few companies, when they grow, stay functional. I believe the only large functional organization in the world is Apple. And even Apple is only quasi-functional because they have a whole services group now, which

is a little bit quasi-divisional. But Apple is a functional org, and they're an anomaly. If you take the Fortune 500, every other one is a conglomerate or divisional. We were creeping towards divisional. So before the pandemic, we were divisional and we had subdivisions. We had actually 10 divisions. We had a homes division, which had core host, pro host, business travel, lux, plus. We had China. Then we had experiences. Then we had transportation. Then we had content. And we had a few other things. So we had about 10 or 11 divisions.

We were really scattered. And in hindsight, we were not so focused. Of course, you don't know until after, right? Kind of like those movies where you think your life is great. And then the plot of the movie, something happens. The whole point of the movie is you realize your life wasn't as great as you thought and you grew from the experience. That's kind of what it was for us. We lose 80% of our business. I had to stare into the abyss. I never thought the company wouldn't exist, but a lot of other people did. And I had to stare into making some hard decisions. We had to lay off 25% of our employees. It was the hardest, certainly professional decision I've ever had to make.

But we lost about 40% of the people because we also lost about 10% of people that were contractors. And when you do a layoff, a whole bunch of people after tend to resign because they're like, okay, well, there's not a lot of opportunities. And so we lost almost half of our company. We had to shutter most of those divisions. We only kept the core. We kept homes, we kept experiences.

We put under one group we called host. And the radical thing that we did is we went back to a functional organization. And I studied a number of other companies that were in crisis. And the most dramatic crisis I had encountered was Apple in 1997. They were 90 days from bankruptcy. They were a divisional structure. And Steve comes back. He shutters most of the divisions. But the other thing Steve did is he went back to a functional org. I went to a functional org as well, primarily out of necessity to cut costs, to integrate. But something remarkable happened. When I got to a functional org, suddenly I took the very best people and I put them on one problem. Not only do we save money,

we started growing faster. And the theory of a functional org is that it's supposed to be slower. The whole point of divisional structure, you're supposed to deputize all these lieutenants to be able to make faster decisions. And you're supposed to be able to do many more things. A functional structure is, in theory, a way to slow things down, do fewer things. I found just the opposite. When I became a functional org, suddenly the entire company was on one roadmap. We all had the same exact priorities. There were fewer meetings, decision-making was faster, quality was better. I now do design reviews and marketing reviews every week. The main thing I do now is we keep a two-year roadmap. We're constantly talking about

the things we're going to ship. Most companies in Silicon Valley, as far as I can tell, are basically divisional or product group areas. They're decentralized. They democratize data. And all these people can kind of A-B experiment their way towards various optimizations. To me, there's a limited way of working that way. And the limit is that, let's use an analogy of a car. If I was designing a car and one team was iterating the tires, well, now it has to fit the wheel, but the wheel team is bigger. And then suddenly I now need to create a new car body, but that makes the car heavier. So you need a bigger battery, but a bigger battery means a new factory. And now the finance team, you see these products are all integrated at the end of the day anyway.

And a customer sees one product. They see one app. They don't see 50 little teams. And so I think what I've learned is the functional organization. I am totally functional now. The only group that's not functional is we have a hosting organization. Otherwise, we're run pretty simply. We're functional org with a multi-year roadmap.

Every single thing an engineer ships is on this single roadmap. It keeps priorities really simple. I probably do 15 hours a week of design and marketing reviews. So I try to make sure I can constantly unblock people. And it's inherently, I think, a very creative organization. Again, I went to the Rhode Island School of Design. And there's not a lot of companies our size run by designers and creatives. And the primary thing a creative company wants is to run off a calendar first and foremost,

metrics secondary. Most companies run off metrics and the calendar is secondary. But the way you do work is you have deadlines. So we work off of a calendar. We have two launches a year. One of them was yesterday. And we actually develop software a little bit We have two launches a year. One of them was yesterday. And we actually developed software a little bit like hardware. And I think one of the challenges of software was it was supposed to be much better than hardware because there were like ubiquitous data. When you ship hardware, you don't know how people are using your product software. Everything's trackable. There's ubiquitous data.

You can ship continuously every minute of every day. But I think the problem with software is the lack of constraints means that sometimes the software becomes a free-for-all and you open an app a year later and it looks no different than the year before because it's not a cohesive story. And so the way we run it, it's totally integrated. It's a little more like hardware. We do these releases. We do continuous integration, AV experimentation between, but I try to take the best of hardware and software. Marketing and engineering are totally integrated. At most software companies, marketers are like waiters. They can't go in the kitchen. The chefs yell at them. And so we try to just take a different approach. So that's how we do it. Totally integrated, totally functional, pretty creative.

And a lot of people think this is a slower way to run a company that will stifle innovation. And our experience this year, certainly since the pandemic, is it's been just the opposite. 150 upgrades doing it this way. How big is Airbnb now? We have 4,800 employees and we have a captive call center of 1,200 people. So it depends on how you want to find it, but it's around 5,000. And actually more specifically, how many people report to you?

I think I have nine, eight or nine. I have finance, legal, we're between HR leaders. I have an operations person, a marketing and design person. It's the same person. I have a hosting organization leader, a technology leader, comms and policy. So that's seven. And then I have two co-founders, Joes and policy. So that's seven. And then I have two co-founders, Joe and Nate. And so that'd be nine.

It's a good exercise. Sometimes I can't remember who my direct reports are. So I appreciate that you can do it. Yeah. Yeah. So one of the things about, you know, the verge is effectively a functional organization inside of a larger matrix company, but we ship one product. We ship stories on a website over and over again. We ship some videos on video players. We ship podcasts, I guess. But even inside of my own little org, right? I have editors. One of the ways you keep great people is you give them autonomy, right? You say you are, there's a set of decisions you can make and there's a set of goals you can achieve. And we're just not going to micromanage you. How do you balance that? How do you bring people in? Because at some point with every big tech company and you described a divisional organization, a Google or a Facebook is full

of very powerful executives who desire autonomy. And to retain them, they have to get more and more autonomy. So how do you balance that trade-off? Yeah. I mean, I wonder when people listen to this podcast, if they're going to hear a bunch of unconventional views that I have, and I'm going to give you another one because I'm realizing I'm continually going against the grain. I don't really believe in that principle. I don't believe that the way to empower people is to give them autonomy. I tried that for 10 years. I kept trying to give people more and more autonomy. And what happened was control is not zero sum. There's a way where everyone can be autonomous and no one can be empowered. Because in an autonomous organization, you're only as good as the number of resources you have and the collaboration you have from other teams. So a team could be autonomous, but if they

can't get on the payments roadmap, they can't ship anything. And so what I decided is we are not going to have autonomous leaders. And we're going to be totally integrated and no one's going to succeed at Airbnb without collaborating with other people. There's this age old great leadership is hiring people and just giving them operating room and empowering them. And I'm going to use the word pejoratively empowering them to do their jobs. I don't think that is good leadership at all. I think leadership, number one, you have to do their jobs. I don't think that is good leadership at all. I think leadership, number one, you have to audit the details. If I'm a CEO, my board empowers me, but they still audit me. I have an audit meeting. I'd be like, my God, I audit. How do you know your team is

doing a good job if you're not auditing them? If the board audits you, you should audit their job. And that is, to me, the first expectation of a leader. But more importantly, I think there's another side of the coin than micromanaging because I don't think anyone wants to be micromanaged. I think of myself as partnering with my executives. I think of it as a creative organization where they're not autonomous. They're in conversation with me. I don't push decision-making down the organization. I pull decision-making in. So I try to pull as many decisions into me as possible, like an orchestra conductor. And I try to not have all the ideas, not make all decisions, but be in a constant

conversation with my executive team about the decisions. What I found is that my executives have mostly felt more empowered than when they were more autonomous because they're not as much an island. And now they have the resources of the entire company behind them. There are certain personalities that want to do their own thing, that want to be CEOs, that don't want to be an integrated collaborative organization. And that's fine. And Airbnb in a functional org might not be for them. But the notion that this way of working doesn't empower people and doesn't allow them to do as much is not true because control is not zero sum.

There's a scenario where everyone can have more control. There's also a scenario where everyone can be more powerless. And so I think that's a very important thing to distinguish. You mentioned your design background, but we've also talked about things like cryptocurrency depreciation risk, right? Like CEOs can basically pick a job. You can either be a financial engineering wizard, you can be a product person, you can focus on what color the logo is all day and night. Where's your split? Where do you spend most of your time or where do you want to spend most of your time? That's a great question. Because we're more functional and more integrated, the first thing I'd say is I don't have per se like two or three focus areas. I'm pretty connected to every part of the company. So if we're launching a new product,

I see myself as kind of like maybe the orchestra conductor. I'm not a specialist, but I have to understand every instrument and every part of the sound and how it all works. The areas that I'm particularly focused on are product design, kind of like what you classically call design. If I had a job at a large corporation and it was a functional, I would probably be either a designer, a marketer, or a product marketer. So I spend a lot of time on design. I spend a lot of time on product marketing, product marketing, product management. I use those terms interchangeably.

And marketing communication. So that's kind of probably my big area. I spend quite a lot of time on people, talent, hiring, and that kind of probably my big area. I spend quite a lot of time on people, talent, hiring, and that would be probably the other area. And then maybe the third bucket is just kind of like telling the Airbnb story. And when I say tell the Airbnb story, I don't mean the same old story over and over again. It's a continuous story that evolves every single minute of every single day. I'm probably a little more hands-on and a little more involved in more things than the average CEO because of the way I've chosen

to run a company. When things are functional, they all kind of roll up to you. But I do focus more on product design culture. When you're working out the mechanics of taking payments in 200 plus countries, what kinds of decisions there have to come to you? And what kind of decisions do you let be delegated away? The areas that I'm less involved in, if you think about like, we talked about a technology stack, like application layer to the kind of atomic components or the like processor chips, the same thing is true in a company. I'm kind of more in the top half of the layer. So the financial accounting, I'm not very involved in. The technology infrastructure and the data warehouse, I'm not as involved in. The hardcore underlying payments infrastructure, I'm not as involved in.

I would kind of consider that like below the operating system of the company. That's considered like the microprocessor, the graphics card. That would be like the very bottom of the stack. So I'm involved in payments at the consumer and host level. What do we want to be able to offer in which countries and what are the benefits? And I don't micromanage. I trust the team understands the trade-offs and be able to deliver. So I'm pretty involved in trying to understand what new benefits we want to be able to deliver to guests and hosts from a payment standpoint. But payments is highly, highly technical.

And I try to not go too far into the stack. I would feel the same way. Airbnb rolled out a new logo several years ago. I can imagine you spent a lot of time in the weeds on that logo. Absolutely. Yeah, there's a lot of fun facts about that logo. I spent a lot of time in that logo. We had this great firm called Design Stew that designed it.

But the fun fact about that logo is the last person to pen that logo was actually Johnny Ive, who now works with me. He actually was the one that refined that identity. I spent a lot of time thinking about branding, design. But Nealey, the one thing I say is when I say design, and I'd love to just say this for the viewers, one of my favorite designers or architects is Frank Lloyd Wright. And I like to reference architecture because when I say design, most people think that I'm referring to the color of a button or the logo. In other words,

the way something looks. When you think of architecture, don't most people think that architecture is more than just how a building looks? It's how a building works. And so that's the kind of world I come from. I was an industrial designer. I think design is not just how something looks. It's how something fundamentally works. And so I think of design thinking as something that can be applied to every part of the company. I do care about the aesthetics of things, the story of things. But more than just the aesthetics, I care about how the things work, how they assemble. Like our S1, I wrote 14,000 words of the S1 myself, not because I want to micromanage and write everything, but because I wanted to create like an archetype or a Bible of clear first principle thinking of who we were, right? So I try to be very hands-on in key moments to make sure everything is really organized and designed.

I also intend to let go over time. What I'm trying to do is teach a certain level of design thinking, simplicity, excellence of every detail. And then hopefully over time, the organization learns it and they can take it on and they build that muscle themselves. Next month, it'll be a year since Airbnb is a public company. You've talked a lot about how you think about running the company, how it's organized. How has being a public company CEO changed how you operate Airbnb? It's not changed too much. And the reason why is that a lot of people told me running a public company is really hard. I don't want to diminish how hard it is,

but I got to tell you, running a large private company feels harder. Really? Because when you're large and private, you have to run like a public company. We had a board, we had an audit committee, we had public market investors. They were marking us to market every quarter, but it was actually worse than being a public company because our financials kept leaking, but they leaked without our terms. We couldn't even talk about our financials. And so people were drawing wrong conclusions. When you're big and you're private, I think there's an assumption that you're kind of hiding something. And so there's this never-ending appetite to try to gather more and more information about the company. And I think the moment our S loan was published and we put all the information out, I think suddenly I do think the trust in the company increased

because it was inherently a more institutional transparency. The other thing that changed is, I mean, we already had Fidelity. We already had T. Rowe Price. We already had Morgan Stanley. We had a lot of institutional investors already in the stock. The big change when we went public is suddenly the people could buy the stock. And I believe the day we went public, I think 600,000 people tried to buy our stock. That's probably one of the primary reasons our stock price popped. So the answer to your question, it's not changed very much because I was running

the company like a public company before. I think it's certainly institutionalized a little more discipline, a little more rhythm. But I think the pandemic and staring to the abyss institutionalized even more discipline. And for anyone that says that running a public company is hard, I'd say, yeah, it's hard. What's harder is running a travel company in the middle of pandemic. That was significantly harder. Fair enough. You brought up Johnny Ive. And actually, this was the first question I wanted to ask you. Johnny and his partners just made public love from their new design agency, love from announced that it was going to be working with Airbnb. What is that partnership like? What is Johnny Ive doing at Airbnb? What do you expect to develop and release? It's been an incredible partnership. As you can imagine, let me preface

all this by saying we don't have the same level of secrecy that Apple does, but we're not going to open source the design process to the world to have them follow along. I'm excited to surprise people with what we're doing together. But I'll try to give you something. Most people know Johnny Ive as an industrial designer, meaning most people know Johnny Ive is making physical things made out of aluminum and glass. But I'm an industrial designer. I never got very far. I'm not an industrial designer like Johnny Ive. I got about two years experience and then I moved on. So I wasn't a very good industrial designer, but it's notable that I'm probably one of the only designers running a tech company as large as ours and I'm a designer, but I wasn't a graphic designer. I was an industrial designer.

And I think had I been a graphic designer, I may not have had as many skills to run a tech company as an industrial designer. I don't want to disparage graphic design. It's amazing. But industrial design, it's a very end to end way of thinking. Industrial design, we're one of the only fields. And I'm speaking about Johnny now where if an architect designs a building and the building doesn't get leased, that's not really the architect's fault. Like, they're not really worried if a designer designs a product, it doesn't sell like it's kind of on the designer.

You didn't do a good job. So suddenly industrial design has to worry about cost, manufacturing, marketing, strategy. You have to put yourself in the shoes of the user and understand how they're going to use it. So to answer your question, he and I are working together on really thinking through the entire Airbnb design, the entire ecosystem, the system of trust, the reviews, the profiles, the payments, how the whole thing works together.

Johnny also designed software. He actually ran all software design for the last six, seven years at Apple. So we are looking at designing some updated paradigms, some updated system of trust. Maybe that's the extent of what I should probably talk about with our partnership. But I do think that people will be pretty excited about some of the things we're going to be shipping together. Does that relationship sit over the top of your design organization? Does it sit next to you?

Are they embedded in your design organization? It's integrated. So I would actually say we have four creative groups at Airbnb. Three are inside, one's outside. So we have our design department, and most companies have a design department. And we have two incredible VPs of design and they report to Hiroki who was actually the creative director at Apple reported Steve Jobs so that's one group we basically have our own version of like our own mini Wyden Kennedy inside

of Airbnb we don't use agencies very often so we go our own group and then we have Johnny's group Johnny's group is you know dedicated to Airbnb. They have some other clients, but we're one of their primary clients. They do software design and they do a lot of system thinking. They collaborate with that core design team. And then we have another creative group that's really iterating the offline experience. I hired the former head of Disney Imagineering, Bruce Vaughn, who led the design of California Adventure, the redesign of California Adventure. He worked on Star Wars Land. And so we have these different groups. So to answer your question, Johnny sits outside of Airbnb, and he collaborates with the other three groups that I just mentioned.

When should we expect to see the outcome of some of Johnny's work? Certainly by 2023. And you might see some stuff earlier, but we're thinking some pretty big stuff. So we'll have to see certainly by 2023, and there might be some stuff next year. All right. We'll have you back when that happens with Johnny. I think it'd be a fun conversation. We're going to take another quick break, but when we come back, Brian and I talk about regulation. He's got some interesting ideas on what to do with people or governments that don't like you. Stick around. We're back with Brian Chesky.

There's another group of people who are very interested in how things work and how experiences go, and that's the folks who run cities. Airbnb was a sort of very classic move fast, don't worry about the regulators company for a long time. Now you're a big company, you have a lot of inventory, travel is changing, people are going to places for longer periods of time to work. That is changing cities in like real and meaningful ways. I think our producer Creighton noted to me that the last time he was in Rome and some of the neighborhoods he was in, it was just all tourists. It was all people in Airbnbs and very few locals. Was this recently or before the pandemic? Creighton tells me that was 2016.

So maybe things have changed now. But I've certainly seen that in New York City. Airbnb has changed various neighborhoods in that town. Now where I live in upstate New York, I know a lot of people who are just buying housing stock here and renting it to tourists. How do you see that dynamic playing out as you grow the platform, as more people are resigning or committing to a more nomadic life? What is the push and pull between cities and where people live and how you manage the regulatory relationship? Such a good question. If I may, can you indulge me in just taking you on

kind of my journey for a few minutes? Because it's kind of a fascinating story. So when we started Airbnb, I think we were very host-centric, very guest-centric, but I don't think we were fully cognizant of another stakeholder, which is the communities we operated in. And I think one of the challenges that we had, I wanted to step back for a second. When I came to Silicon Valley, the word technology, and this is 2007. Okay. So I came to Silicon Valley, October, 2007. At that time, Twitter was a way to say you're drinking a milkshake. YouTube was cat videos and Facebook was a way to like keep in touch with your college friends. In other words, technology was seemingly innocent.

The iPhone had just come out. We didn't know the effects of the mobile revolution yet. And so the word technology might as well have been a dictionary definition for the word good. I think we thought the way as well. And so therefore, if what you're doing is good, if you grow, you're making the world, you know, quote unquote, a better place. I think more than a decade later, I think we've all acknowledged that that was a very limited way of thinking. And actually, we have significantly greater responsibility society than we as technology companies probably thought we did in the mid

2000s. There's no way to build a platform, hundreds of millions of people will be on your platform, and only good things happen. That's not even possible. And so the first step is to acknowledge that reality, to acknowledge that good and bad things happen on platforms when you empower people because people are out to make their own decisions. I unfortunately, or fortunately, actually, I should say, got a lesson in this probably earlier than other tech companies. You see, most tech companies don't get scrutiny until they're big. I don't think Amazon ever got scrutiny until they were big. I don't remember them getting scrutiny when they were small. Airbnb, we got scrutiny when we were small because Airbnb meant the internet moving into your neighborhood. And so in 2010, when I was working at a three-bedroom apartment,

was the first time that we had major challenges with regulators in the city of New York. And that really got embedded. I didn't know what to do with cities. I thought when people don't like you, you should avoid them. That was the way I lived my life. And I hired a woman, my first executive, her name's Belinda Johnson. She's now on my board. And she told me a different lesson. She said, when people don't like you, you should meet them. And I said, why would I meet people who don't like me? And she said, because you'll learn from them, you can educate them, you'll understand their issues, and you'll leave the meeting better off than you started. She said, it's hard to hate people up close. And so that's what we started doing. And I think that we chose a slightly different path than some of the tech companies that

we're compared to. And I don't want to say we're perfect. We did have challenges with cities. But I will say this. Even before the pandemic, we had agreements with more than 1,000 jurisdictions. We've collectively emitted $3.4 billion of hotel tax. I think we're soon to be the largest collector of hotel tax in the world. And I hope that most cities say that we are good partners. We're in 100,000 cities. Most of them aren't complaining. That being said,

I want to acknowledge something. If I could have done Airbnb all over again, I would have designed Airbnb with more stakeholders in mind, including communities. I was 26. I didn't really understand some of the things I understand today. And I think that when you're behind, it takes a while to catch up. What the pandemic did, it was a reset relationship with our cities. So let's take Rome, for example. Rome, there were a lot of people going to Rome before the pandemic. Suddenly, business travel gets cut off, borders close, international tourists stop traveling. And we lost 30 to 35 years of international cross-border tourism in a single year of equivalent growth. We went back to like the early 80s or late 70s from international tourism. Suddenly, cities that were experiencing over-tourism were starting

to experience under-tourism. You can look at what was happening with Greece. You can look at what was happening with Italy. And some people liked it, but there were some pretty big economic challenges. So suddenly cities started reaching out to us saying, hey, can you help us with this problem? And we had a bit of a reset with these cities. So we said, yes, of course. We launched this tool called the City Portal, which allows a one-stop shop for cities to get data about Airbnb, make sure hosts are complying with registrations. So we're working really hard to be able to do that kind of stuff. We have partnerships with over 100 destination marketing organizations. And I think the big

trend now is that many cities are seeing Airbnb as more of an inevitable solution to their challenges. But I want to say that we're not perfect. I don't think any techo should ever come on this program and say they're inherently making the world a better place we have to acknowledge that there's unintended consequences the products we're making and that we have to institutionalize our intentions to serve multiple stakeholders so i work really hard with our team to try to make sure we're having positive impacts on communities we'll make hard decisions when we have to and And fundamentally, I think our relationship with cities is going to change because we're going to live in a world where people aren't as tethered to one location. To me, the holy grail solution, Neelay, if I could

just put it out, are two ideas. Number one, I don't think there is such a thing inherently as too much tourism in the world. Over tourism are too many people going to too few places at the exact same time, right? That's bad. So what we should do instead is redistribute people over more days of the week, more times of the year in more cities. That's why on Airbnb with this big button, I'm flexible. What we're trying to do is point demand to where we have supply and not overwhelm any one city. That's been used 500 million times. My vision to travel is suddenly cities that want tourism get it and cities don't want tourism don't get it. And we are able to work with cities to point demand to places that want it.

The second thing is when people do travel on Airbnb, one of the big focuses, and you brought this up early in the conversation, is I want them to feel not like shadow members of the community, but actual members of the community. And that is where I'm really focused on with our product roadmap, integrating people to the community, being good neighbors, being good partners. And if there's ever a problem, you can call our B&B. We have a neighborhood hotline, we've banned party houses. We're trying to just be very, very aggressive with these things. So this is kind of where we are with cities. I think it's going to be a very long journey. And hopefully, each year, cities feel a little better about us than the year before. Do you think, for example, New York City,

you mentioned from the beginning has been sort of a challenge there. Only just recently did Airbnb come to an agreement with the city in the middle of COVID? Do you think the pandemic changed the dynamic of negotiating with these big cities? A hundred percent changed the situation with cities all over the world. Yes. And I think, again, the reason why is because I think when cities used to reach out to us, it was because they had a concern. After the pandemic, cities actually reached out to us for help. I'm not saying every city did,

but the whole nature of the relationship changed. And the other thing is I tried to be proactive. At the depth of the pandemic, when cities were hurting, I tried to deputize as many people as my team to reach out to cities saying, we're here to help. We want to be a solution. We want you to know that we think we've learned from our challenges and tell us how we can be better partners. So I saw the pandemic as kind of like a giant reset button with many cities around the world. And I said, you know, the time to like reestablish relationship with some of these cities is kind of before we need something from them and maybe when they need something from us. And so I do think the relationships are a lot better with cities all over the world. And again, I also think travel is being redistributed, and that is also helping as well. I want to end there, but you mentioned Johnny and his work on reviews and comments. You mentioned

community. I seem to ask every tech CEO about content moderation and policies. You regulate the Airbnb community. There are people you don't want to have staying in the properties that you have hosts for. How do you think about that problem? Because that problem touches every app where lots of people are using it for all kinds of reasons. Do you have a big moderation function? Do you have a big review function? Is that something you spend a lot of time thinking about?

Is that a product solution? How does that work? Yeah, I think that probably before other companies were thinking about this, we were thinking about this. I had the, I think, a different point of view many years ago, before 2011. I took the Pierre Amidiar, he's the founder of eBay, Craig Newmark, founder of Craigslist, view that the internet's like an immune system. And if you just give people the tools, they'll moderate themselves.

I learned the hard way early on that that is a very limited way of thinking about the internet, because in 2011, a woman's home was trashed. I said, well, the host can leave a bad review on the guest. People on the internet, they did not think that was the right answer. And I got an initial kind of outrage on Twitter. This is 2011. And I got an initial like, kind of outrage on Twitter, this is 2011. And I said, this is a wake up call, we need to take much more responsibility. We can't just think of the internet as an immune system, because no one wants to be the experiment. No one wants to be the test subject. And so I think that what happened is, you know, we got significantly more hands onon in 2011. In 2016, two other things happened.

There was a hashtag trending that was extremely concerning to us. The hashtag was hashtag Airbnb while Black. And the trend was that Black people in the United States were experiencing discrimination on the platform. They're trying to book homes and they're being discriminated. Suddenly, this was a existential crisis to Airbnb. So we started working with civil rights leaders and we got really hands-on with that. We created a community commitment.

We said that to use Airbnb, you have to click a button. It's really an honor code saying that you're not going to discriminate people based on race, religion, orientation. Over a million people refused to click that button. We removed them from the platform. Then later, I think it was in 2016, I don't know if my dates are correct, we got noticed that there was going to be a major rally with a lot of white nationalists in a town called Charlottesville, Virginia. And so we banned a number of people that we deemed to be white nationalists. This was a kind of one-off move. But since then, we've actually been fairly prescriptive about doing this. And so after the

January 6th insurrection, we actually banned any reservations during the inauguration week in D.C. and still paid out hosts all their pending reservations. So all of this is just to say that we've been pretty hands-on for a decade and getting increasingly hands-on about what I guess you would deem content moderation. And the reason why is because when it's Airbnb, it's people's personal safety. So we could not screw around with this. And so we've been pretty hands-on, and I think the trend is continually getting more hands-on. Does that team live in your policy shop? Does it live in your product organization?

I ask because Facebook famously lives in its policy shop? Does it live in your product organization? I ask because Facebook famously lives in its policy shop. I had Neil Mon from YouTube. Their content regulation team lives under product, which is really fascinating. Ours lives under trust and safety, which is where we think it belongs. We have a team called the User Knowledge Operations Team. It's part of trust and safety. The trust and safety team is the team that makes sure that people are safe, that they're using the product properly. And that trust safety team, by the way, is a product and operations team. So it's got engineers, product managers, designers, and operations. I'd say it's like half product, half operations. I feel like the conventional wisdom, even for Airbnb, before the pandemic, was that all people wanted from travel was experiences and you would

curate some Instagram moment and you would travel to a place and take the picture and Airbnb was actually selling and curating experience. It was the buzzword of the whole industry. I feel like throughout this conversation, you've been telling me something else is happening, that travel is actually changing in some other deeply meaningful way. What do you think that is? I think that we're living in a revolution in travel, and I'll explain why. I think for centuries, people were tethered to where they worked, whether it was the farm, then the factory, then the office. If you work on a farm in a factory, you're still tethered. But for tens of millions of people in the United States and hundreds of millions of people around the world who work in an office, I think what the pandemic taught us

is that you can get a lot of work done from home. And because of technologies like Zoom, I think we're going to live in a world with permanent flexibility. The CEOs of Ford, PwC, Amazon, Procter & Gamble, these are not small companies, have all announced permanent flexible policies for a significant portion of their workforce. I don't think the majority of the world is going back to the office five days a week because CEOs have learned they can save money, they can hire a more diverse talent pool. And I think after compensation, flexibility is the most important benefit for employees. So I think that remote work is here to stay. And if remote work is here to stay, it means that if Zoom allows you to work from home,

Airbnb allows you to work from any home. So what this means is people now can travel anytime. They can travel anywhere. I don't mean everyone, but all the people that are untethered. And when they do travel, they can stay longer. What I think this is going to lead is to a newfound flexibility where people cannot just travel on Airbnb. They can now live on Airbnb. 20% of our business and our fastest growing segment are for stays longer than a month. And so I think that we're not just in the business of traveling, we're now in the business of living. Traveling and living is part of Airbnb. And so that's why being part of the community is so important. This is all before borders really reopen.

Once borders reopen and people have flexibility, they won't just live anywhere around the country you're going to see more and more people live around the world and i think this is going to create a whole revolution in the travel probably the biggest change of travel since the invention the internet possibly the biggest change of travel since the invention of the airplane it just totally changes the identity of what travel is that being said neilay i do think experiences are really important one challenge we've had is because of the pandemic, it's not been historically safe for strangers to gather and have experiences together. But the more we live on screens, the more I think we also want to live on a counter trend, which is I don't think all of us want to recreate the movie Wall-E,

where we're basically just on these self-driving pods carrying the screens all day. I do think we also want to have real life experience in the real world. You can only watch so many shows on Netflix. Eventually, you got to get out of the house. And I do think that if people don't get out of the house, you're going to have a pretty big mental health crisis and a lot of loneliness, a lot of isolation, a lot of division. So I think the number one thing that we're thinking about is this changing way of traveling. Traveling is boring living and now people can live anywhere. And the longer you're away from home, the more you want to be in a home on Airbnb. But I also am very excited about the experiential opportunities going forward. And I think in the

coming years, you'll see some exciting stuff from us in that front as well. Do you think that that is a trend that lasts forever? Is this a transient sort of post-pandemic, everyone's going to run around and see people and then we're all going to have kids and settle down? Well, I mean, people with kids aren't going to be nomadic year-round because their kids have to go to school. And I do think that schooling will primarily still be in person. I'm not an expert in education, but that seems inevitable. In the United States, the average kid, I think, goes to school like 180 days a year. So that means 185 days a year, the kids aren't in school. Funny enough, in the United States, the fastest growing days

of the week to travel for families are Mondays and Tuesdays. What that means is that when kids don't have to be in school or they have long holidays, parents are going away. I think you're going to see even for families, more and more families going away for summers. If you can work remotely and your kids are out of school, you're going to see summer is going to turn the world upside down because increasingly people aren't going to be around. If people don't have kids, those people are going to be, many of them, significantly more mobile. You're going to see a whole generation of people being nomadic, maybe even at a global level. Just to summarize, I don't think the world's going back to 2019 any more than the world's

going back to 1950. The genie's out of the bottle. We can't undo technological progress. This moment at this conversation right now is the worst technology will ever be in our lifetime. Internet's going to be more ubiquitous, the satellite internet, speeds are going to go up, camera technology improve, screen technology improve. And so it's going to become more immersive. So I don't think this is a temporary thing. All you have to believe is Zoom is here to stay, to believe that many of these trends are here to stay. All right, Brian, that's a great place to end it. Thank you so much for coming on Decoder.

Thank you very much. Thanks again to Brian Chesky for taking the time to talk today. And thank you for listening to Decoder. I hope you enjoyed it. As always, I'd love to hear what you think of Decoder. You can email us at decoder at theverge.com or hit me up directly. I'm at Reckless on Twitter. If you like the show, please share it with your friends.

Subscribe wherever you get your podcasts. If you really like the show, hit us with that five-star review. Decoder is a production of The Verge and part of the Vox Media Podcast Network. Today's episode was produced by Creighton D. Simone and Andrew Marino. Our research was done by Liz Leon. We were edited by Callie Wright. Our music is by Breakmaster Cylinder. We'll see you next time.