This Week in Startups - Airbnb Co-Founder Joe Gebbia on early “a-ha” moments, elite design + his new startup Samara | E1675

Episode Date: February 8, 2023

Joe Gebbia joins Jason to discuss the early days of Airbnb, gaining traction, persevering through the “no’s,” and functional design. (2:09) They also discuss gaining customer trust and Airbnb’s incredible COVID turnaround. (21:17) Joe wraps the show by breaking down his new venture, Samara. (45:05) (0:00) Jason kicks off the show (2:09) Airbnb’s first sign of traction (9:05) Vanta - Get $1000 off your SOC 2 at https://vanta.com/twist (10:04) Persevering through the “no’s,” and functional design (19:48) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/TWIST (21:17) Gaining customer trust (30:46) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist (32:17) Airbnb’s incredible COVID turnaround (45:05) Joe’s new startup Samara Check out: https://www.samara.com/backyard FOLLOW Joe: https://twitter.com/jgebbia FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, we have an incredible, incredible episode of this week in startups for you. This is one you're going to listen to twice. You're going to listen to what your team. You're going to share with your friends because one of the three co-founders of Airbnb is on the program. Today, Joe Jebia is with us to talk about all of the amazing things they learned, building one of the most important companies in the history of capitalism, in the history of hospitality, Airbnb. We all know it. We all love the product. But venture capitalists said no to Airbnb over and over and over again. company struggled, and then they had near-death experiences with COVID, with people trashing

apartments, all of these challenges. Joe goes into all the details about how they overcome all of the obstacles, and they remained resilient, and he's a brilliant designer. So he talks about the power of design and experience, which we all know if you've used Airbnb. It is one of the elite experiences you can have working with any business product or service. Then he talks about his new company, Samara, which is building ADUs, except. accessory dwelling units. Fancy term for what they call nanny units or backyard, small homes. These things are sweeping the nation and he's got one of the best ones in the world delivered to your backyard. We'll talk about the vision for that company as well. Stick with us. It's going to be a legendary top 10

episode of This Week in Startups. This Week in Startups is brought to you by Banta. Compliance and security shouldn't be a deal breaker for startups to win new business. Banta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. Squarespace. Turn your idea into a new website. Go to squarespace.com slash twist for a free trial. When you're ready to launch, use offer code twists to save 10% off your first purchase of a website or domain.

And lemon.io. Need to speed up your product development without draining your budget, hire vetted engineers from Europe at lemon.io. Go to lemon.io slash twist to get 15% off for the first four weeks. All right, everybody, really special guest here today, Joe Jebia, which some people have been saying Gebia for years, but it's actually Jebbya. Including myself. But you found out recently that your last name is instead of a G, more of a J, Jebia.

Yeah, we traced the, I had a genealogists go into the history of the family. they found this village south of Poyam room in Sicily. And along the way, discovered that my ancestors said Jebia, as of with the J. So, hey. Well, there you go. And so we'll start today. Everybody, Joe, you've done this now. You're starting to say your last name correctly.

And we'll start getting everybody to say it with a J as opposed to a G. Everybody knows Joe is the co-founder of Airbnb, which is, I guess, along with Uber and I'm trying to think of other companies from the last 15 years after Facebook, after Google, really defined the category and were the biggest successes. So congratulations on that. But you've also started a new company, Samara. So we wanted to talk to you about that as well. Maybe looking back on Airbnb as we start here, was there a moment in time?

Because a lot of entrepreneurs kind of look back at the history of the company and they have a couple of moments that they're they kind of figured out, yeah, this is going to be big. This is not just a small thing. Everybody knows the history of Airbnb to a certain extent. But maybe you could just tell us like a little bit about those early days. And was there that moment where you were like, huh, this could be bigger than like a normal startup? Well, first of all, thanks for having me on the show. It's great to be on with you.

And to recount some of the lessons and the stories of the early days and then parlay those. into the latest venture Samarum. But really, Airbnb is an impossible idea. It was never meant to happen. There were so many forces against us in the early days that you really look at and you go, how on earth did this idea make its way through the system and actually, you know, achieve escape velocity on the other side to become what it is today? And maybe people look and say, oh, you know, it's inevitable, of course, I got to tell you

being there with Brian and Nate in the thick of it all from the point of inception in our living room. There were thousands of reasons why this should not have worked. There were very smart people along the way who told us this would never work. I have to tell you, there's nothing, probably, you know, nothing more demoralizing than being a first-time enthusiastic entrepreneur with all of the motivation to want to make something great and to have an idea and put it in front of really smart people in Silicon Valley, the ones who backed PayPal and YouTube and Facebook and they had the track records,

right? They knew that they could spot winners. And to go in front of them, pitch your idea and to have them in some cases literally walk out of the room. What was the number one reason given? for like this is a terrible idea. Look, it was 2008 in August when we started pitching investors. And at this time in our young history, we were on the third iteration of our website.

At the time, it was called Air Bed and Breakfast.com. And we had relaunched just in time for the Democratic National Convention in Denver, Colorado. Because it was a marketplace, namely a two-sided marketplace. we had to figure out how to get the flywheel going. And we recognized that summer 2008 that Denver had a problem. And the problem was around housing because Barack Obama going to speak at the Invesco Stadium of 80,000 seats in a city with only 20,000 hotel rooms, most of which were already booked by the delegates.

And so the mayors, I remember the headlines, where will they stay? Housing crisis hits Denver. the mayor actually opened up the city parks to let people pitch tents so they could stay for the DNC. Wow. I'm sure the, you know, the DNC wanted to fill up the Newbesco Stadium to make it feel like a sold-out crowd. And so we said, you know what? This gets getting a lot of press attention. Let's ride the coattails of this and help solve this problem.

And sure enough, we did. You know, I remember as we're redesigning the site for the third time that summer, we finished in early August. and I got on the phone and I call CNN. And I was so excited to tell CNN about a bright, shiny new website. Right. The journalist, you know, politely said no thanks and hung up. So we had to change our tack. Yeah.

And we started reaching out to local bloggers in Denver and they love the story. And so they wrote about it. And then what's interesting is we get a phone call the next day from the NBC affiliate in Denver. They said, hey, we heard about your story on this local blog. we'd love to go film one of your hosts in Denver hosting an Obama supporter. So, of course, we set it up. They run the story next day. We get a phone call from CBS and ABC.

They want to do the story. And then suddenly, it's like, it's just this like a little flywheel of, nobody wants to miss the great story. And then we get regional calls from Boulder and some other towns. And then after a regional story becomes national, we get a call from CNN. We did a live interview in our living room. of Ryan and I. And so this idea escalated very quickly from three guys in our living room with no hosts in Denver to 800 hosts in Denver just in time for all the Obama supporters showing up.

And the reason I'm giving this context is because our numbers started going from zero up into the right. That's a great time to go talk to investors. Right. As you know. Yes, you have a chart. Right. And a chart is like irrefutable. So now you have the proof.

Here's the proof. Right. No problem. Checks are going to flow. Checks are going to, right, just flow. Term sheets are going to be fine. We had, you know, our website was actually working, meaning that people were booking.

They were paying online. We were making fees. And my phone starts ringing because I ended up taking on customer service out of the three founders. And we didn't have a phone number to use except my cell phone. So my cell phone's up on the website. People start calling me. And I'm like, hello.

And they're saying, oh, yeah. So I just booked the. reservation in Denver, I'm having an issue with this or that. And so I'm like, wow, our website's actually working. I remember I called my mom and I'm like, mom, this is it. It's happening. The rocket ship to the moon. It's taken off, mom. It's working. If you're a SaaS or services company that stores customer data in the cloud, you need to be sock to compliant from a third party to close big deals. And you need to use Vanta if you want to do this quickly and easily. Vanta makes it incredibly easy to get and renew.

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Vanta's going to give you $1,000 off. Get $1,000 off at vanta.com slash twist. That's Vanta.com slash twist for $1,000 off your SOC2. We go talk to investors. We actually got introduced by Michael Seibel at YCOMB. Oh, yeah, YC, C. Yeah, so this is like 2008. Now, this is like early days.

He's still at Justin. That's our early list is. He became an informal mentor of ours. And he agreed to introduce us to angels in the valley. And so we got 20 email introductions. 10 of those introductions replied, five met us for coffee, zero invested. Wow.

Brutal. This is with the chart. With the proof points. With the data. Wow. With the documents. And they still won't write the check. My Lord.

I have to tell you, our very first. investor meeting was at University Cafe in Palo Alto, which at the time, as you remember, was the epicenter of fundraising. Yeah. Every cafe table was some guy in a hoodie and some guy in a business suit.

Right. Some guy to blazer with a collar shirt and jeans and a pair of black shoes. Right. Black shiny shoes. She was in a laptop of some deck in front of them. So Brian and I, we hustled down to University Cafe.

We set up the laptop. I'm going to do the live. demo, Brian's going to do the pitch. We're waiting, we're waiting. This unnamed investor shows up late. Gets online. On brand. Yeah.

He gets online. Ordered the smoothie. Okay. With like, you know, the pineapple and the umbrella and the thing. And it was like a giant production. Took him to like 15 minutes. He finally sits down. He plunks the smoothie down right in front of the laptop.

I'm sitting here. Brian's here. and he starts going and Brian's given the pitch I start going to demo he doesn't stop drinking the smoothie until about there's a quarter of the smoothie left

and he picks his head up and he goes okay thanks and he gets up and he walks out the front door of the University Cafe okay Brian is he paying a parking meter is he

what just happened he never came back. Wow. We didn't even finish the pitch. And I look at Brian, I'm like, this is what's like to raise money from investors. Yeah, it's crazy. Well, I mean,

what people don't understand is up until that point in time, all startups, you tell me if I'm right or wrong, were inside of a computer. They didn't exist in the real world. And if you looked at Airbnb, Postmates,

and Uber, these were the first group of companies to actually go do something in the real world, obviously SpaceX and Tesla with Elon, but there were so few startups that actually decided to do anything in the real world to touch consumers in that way. And it was scary for investors, right?

I mean, was that the number one reason they said they didn't want to invest or they didn't understand marketplace dynamics? They were terrified. They understood marketplaces. You know, they just couldn't get over the concept that we've all been taught since for kids that strangers equal danger.

nobody could overcome this bias that, you know, we've all grown up with, that a company could achieve at scale and actually overcome this bias to let people into the most intimate part of their lives, their homes, their bedrooms, and share that with a complete stranger over the internet. Right. That was a fairly crazy proposition. It was pretty radical at the time, but I believe you got the proof point that you had seen people on Craigslist doing it or, you know, other message. boards, Reddit. People were kind of doing this behavior, but there was just no infrastructure around it, right? Correct. Yeah. I mean, look, people have been sharing homes since there have been homes. Right. And I've come across these, you know, there's ancient forms of hospitality in almost every, every country in culture. There's Pashtun Wally in Pakistan and parts of Afghanistan,

which say that, you know, you have to take somebody in, even if they're your enemy. Wow. And this is thousands of years old. interestingly enough, there's that movie with Mark Wahlberg called Lonely Soldier that shows the four Navy SEALs that, you know, gets stranded in Afghanistan, chased by the Taliban. One of them actually survives in real life. And it's because he was taken in by a villager because of this ancient code of hospitality. Fascinating.

I can go on and on. Every country has this going back thousands of years. Greece, India. there's the desert law, which says that you have to let somebody into your tent for a glass of water, even if they're an enemy. The only difference between that and Pashton Wally is you have to give them a three-hour head start when they leave. Oh, okay, before you go, chase them down. Yeah, it's crazy. And the success of it, when you look back on it, if you were to point to, obviously not quitting, and that ability to be

resilient from the outside looks like one of the key reasons you succeeded is that you didn't give up, which is kind of obvious. But what do you think the other things were that made it work? Because I have to say, you know, the design of Airbnb always stood out to me as like, wow, it's so stunning and beautiful. And in Silicon Valley, there was for a long time, like, nah, it doesn't really matter. The design, Craigslist, eBay, Amazon, all these websites look just completely convoluted and frankincites that were just slapped together and they solved a problem.

But you graduated RISD, right? Or did both of you, Brian also go to RISD? Brian and I met at the Rhode Island School of Design. We were studying industrial design and I was doing graphic design as well. And at RISD, they teach you that design is more than how something looks. It's how it works. So it's not just a surface treatment. It's really understanding full stack.

through a product, an interface, a company, really, you know, how that everything is designed from the UI to the UX to the package design, if it's a product. You know, I think there's so many examples in the world of design. Like, I don't know if I think, I'll just take something this nearby. Here's this bottle of water. Design is more than the label. Design is more than the shape of this bottle. Design is thinking about what is somebody's first impression?

when they see this brand. What is the idea that is placed into their mind about what this stands for? What is the sound that it makes when you take the top off the first time? Right. What is the material that this is made out of where does this go once I'm done with it?

How does it turn back into a circular system of some time? So design is actually thinking very holistically about all these things, including how it looks. What did you, was there inspirations for you as you became a world-class designer and then actually made this world-class product that changed the world,

where there design moments that were critical or inspirations? And when you look at the world, what do you look for in design? This holistic approach, yeah, great. How does that manifest itself in a website, in an app, in a service? Like, unpack that for me.

Sure. Well, good design usually incorporates, incorporates two things. It's the needs of a user or a customer along with the imagination of the designer. And so combining those two things, to me, is the formula for something that's new and different that solves a problem,

but also introduces something new, something different. I was asked recently, what's my definition of design for a book? And my answer was, design satisfies the conscious and tickles the subconscious. It has to solve a problem. But if it just solves a problem, it's incomplete. It needs to provide delight. It needs to provide, you know, an emotional reaction

to really be good design. And this is why the Airbnb logo, I think, is so playful and bright and air and sky. I mean, it's inspiring. It kind of gives you that, wanderlust, I would say. Even the website feels like that feeling when you get

to a new location and you're like, wow, I'm in Japan or wow, I'm in Paris. You kind of get a little wanderlust if I was just to pick a word. That's the tingle I get with Airbnb and even browsing it, you know, like just browsing the site gives you that feeling. Was that kind of what you,

what was the dialogue, what were the words you were using? What was the emotion you were using? Fun and fun. Then we'll go, yeah. Yeah. In the early days, in the early days, it was two words. it was fun and friendly. Fun and friendly. Yeah, because the design of the website had to communicate this Olympic-sized trust to get people to feel comfortable to say, yes, I'll stay in their home or yes, I'll let them

in my home. And so we could sit next to people and reassure them, you know, as in the early days, which we did everywhere we went with Starbucks Cafe or sitting next to somebody on a plane, like we were evangelizing our service to everybody. And we learned that through a conversation, people could trust us. Then it was like, well, how do we translate that into the interface? our website to, you know, invoke trust with people who are considering using our service. Okay, everybody, I'm thrilled to announce we're bringing back the show us your space competition

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You keep it. So head to Squarespace.com. Twist for a free trial. And when you're ready to launch, use the offer code Twist to save 10% off your first purchase of a website or a domain. A very fateful moment that happened when we got into Y Combinator. Yes. In January 2009, Paul Graham, in our very first office hours session with him, he looks at us and he goes, he goes, so where's your market? and we go, well, we don't really have a market, Paul,

but New York City is showing a lot of promise. We have about 30 hosts in New York. And Paul goes, so your customers are in New York City, and you're here in Mountain View? What are you still doing here? Go to New York City. He does this thing where he points at you with his finger. It's very influential.

Yeah. It's very convincing. Impactful. Yes. So we get on the website with him in this office hours and looking at these 30 listings and we're like, okay, if we go to New York, like, what are we going to do? And we recognize something. The photos of the listings in New York were trash.

You know, they were miserable. And you have to remember at the time in the internet, 2009, if you displayed a room on a website, it was probably going to be Craigslist. And Craigslist image quality was terrible. Yeah. You know, like four little thumbnails blurry. and so that's what people thought they could do on our website. And we go, you know what?

I've done photography before I took classes at RISD. What if we just go solve this problem for our hosts? What if we take great photos of their place for them for free? And so that weekend, Brian and I hop on a plane, flat in New York. We email all the hosts, hey, we're coming to New York. We'd love to meet you. And we're bringing, I think we said, you know, we'd love to take some professional photos of your place. I think host interpreted that as in we were sending a professional photographer to their place.

Right. So when we knocked on the door, we introduced ourselves, hey, I'm Joe, co-founder. Oh, great to meet you, Joe, and they're looking over my shoulder. So where's the photographer? Here is. I'm right here, too. Take out a camera. Here's my canon, 5D.

Yeah, we rented the nicest camera we can afford. Yeah. I go through the apartment, I take great photos. I show them on the back of the camera. Hey, what do you think? they're like, oh my God, my apartment looks amazing. Why don't you stay for a coffee or tea? Yeah.

And so I'm sitting in their living room, having a tea with them, these early hosts, and they began to tell me all the problems with our website. Wow. They just started to become this stream of issues that they were facing. And I call on my sketchbook, I'm taking, you know, rabid notes, and I'm writing everything down. I come back to California with Brian and Nate. Nate's there coding away and go,

Nate, listen to all these problems that we heard from our hosts. And Nate's like, actually, these aren't hard to fix. I'll code them up tonight. We email the host the next day. It was great to meet you. Here's your professional photos. And the idea that you had to fix the calendar or the review system, it's live.

Tell us what you think. Wow. Wow, it's right. Yeah. Mind-blowing. These early customers, early hosts, they couldn't believe it that a company would fly across the country, take free photos, listen to the problems, and fix them in a matter of days.

And something very interesting happened. A lot of things actually happened because of this moment. We saw revenue the next week, which was flat at $200. It had been flat for months. We were in, as you know, the trough of sorrow. Yeah. Right? The trow of sorrow and pain and suffering, which all founders are in right now.

Welcome to the down market. To some degree. Some people were smart enough to raise a ton of money. Some people didn't get too big, but other people got pretty bloated. Yeah. Pretty crazy in Silicon Valley. Well, we were in it because we didn't have product market fit. Right.

And so it was literally just a flat line of metrics. I call it the Midwest of analytics. It was just as far as you can see, there was no up to the right. Nebraska. Yes, it was Nebraska. The Nebraska stage of your startup. You just could see forever. Cornfields for miles.

Yeah. So it bumps from 200 to $400 in one week. Whoa. Oh, it was right. I go, Nate, there's got to be a bug in the system. Go to make sure there's not an issue. Yeah. There wasn't no bug.

We go to Paul Graham. We show him the numbers. And he goes, what are you still doing here? Go back to New York City. Yeah. And so we get on a plane. We get twice many hosts. Take more pictures.

Rinse and repeat. revenue the next week went from $400 to $800. Wow, what an unlock. Just whatever feedback they gave you on the calendar and the review system. And then plus beautiful photos, built trust and it created that emotional, maybe tickled the unconscious a little bit, built that trust. I mean, so many learnings there. And most founders are afraid to talk to their customers.

But from your experience, talking to the customers is kind of like this incredible shortcut to just solving problems and getting product market fit. I mean, at the end of the day. here's how I sum it up, and this is the advice I give to every founder that I've ever talked to, who's working on a tech company, is that for many, many, many years, we subscribed to this myth of Silicon Valley, which is that you have to code your way through problems. Because what happens when things start to hit and it starts to scale and the servers aren't ready

and the site crashes and the, you know, maybe the Friendster effect back in the day, I can tell you, like, that got us nowhere. We sat dormant in those cornfields in Nebraska for far too long in the comfort of our desks in our living room trying to code our way through problems. And the unlock for us and the piece of advice that I, you know, carried through from PG was go meet your customers. Like, do things that don't scale. It's so obvious in retrospect. But at the time, you know, we were like, well, you know, Mark Zuckerberg probably never went out and talk to people. Or YouTube founders, you know, is like, we just have to stick to the code.

That's how you scale things. Actually, how you scale things in the early days is you go talk to the people that your product is serving. So you can better align it to what their needs actually are. And I have to tell you, an in-person conversation with your early adopters is 10 to 100x more powerful than any online survey or digital communication will ever be. Yeah. Yeah. They're going to just be more honest with you, right? If you're looking them in the eyes, you're going to just build this.

poor and then it's just going to flow out of them, which it seems to have. There were two distinct moments that I think were absurdly challenging for the company. Now that we've talked about all this incredible learnings, the two near death experiences, I think, or at least PR, somebody's going to trash an apartment. We knew that would happen at some point. And of course, it happens. It becomes like the front page of every news story. I witnessed this firsthand as well, happened to Uber as well.

There's going to be a car accident at some point you're operating in the real world. somebody could get hurt in a car accident, obviously, tragically. And then the pandemic, nobody can travel and it's shut down. Maybe you could tell us about those two moments, and then we'll start talking about the new company. Then what it was like to fight through those, because those are distinctly different than nobody even knows what we're doing. Nobody cares about what we're doing. It's Nebraska's horizon as far as you can see.

I mean, these are, everybody's watching what we're doing, and the weight of the world is on our shoulders now. Yeah. Yeah. So in 2011, we had, you know, the first apartment to get trashed in San Francisco. And, you know, it was a wake up moment for us. You know, I think the company had grown a little bit faster at that point. And we caught up, thankfully.

But, you know, it really put trust and safety at the forefront for us. And, you know, ever since then, trust and safety has been, you know, the most important part of Airbnb and our platform. And from that, we implemented a ton of improvements. We implemented, I think, in the course of about two weeks in August of 2011, we shipped about 40 new features to improve trust on our platform. And a lot of those are still around today with major improvements, including our host guarantee.

My house guarantee started back in 2011 for $50,000 if anything ever happened to a host apartment or home. Yeah. It then became a million dollars and it's gone up from there ever since. Yeah. You know, so these are all safeguards that we've put in place to reassure homeowners and and also guests. We had it happen.

I had a, I had an extra, I had moved houses. We still had a house. My wife put it into the Airbnb pool. We had a very strict thing. hey, no parties, no parties. You know, it goes on for a year, no problems. And then one night, the drop cam starts going off in the driveway. Got a bunch of people there.

And somebody threw a party after they had said they weren't. And we, they, you know, like one or two things got damaged. And we just submitted it. And all of a sudden was like, yeah, we have insurance. Yeah, your carpet. We had a really nice carpet that got trashed. And I was like, yeah, carpets replaced. And I was like, oh, okay, great.

This is like easy, breezy. But now this was many years after that. Okay, imagine this. You got a nice. idea for a great tech startup and you think it's going to change the world but you got a problem you just don't have the engineers that you need to make it come true why well it's obvious it's hard to find engineers there's a lot of competition and hey you're trying to keep your burn rate low you need to conserve cash now imagine you had a partner who could provide you with more than one thousand on-demand

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And Uber did a big riff, I think, at that time. Take me back to that and just, what do you do if nobody can rent a home and you don't know how long it's going to last? that's existential. It was an existential moment for us. Oh man, my palms are getting sweaty, just remembering it. It was because that December of 2019, you know, we started the paperwork to go public. So we started, we got the wheels in motion to take the company public in 2020. And, you know, that first or second week in March 2020, we start to get the alerts that everybody started to get of this thing in China and now it's in the U.S.

and I believe it was March 14th, 15th, you know, WHO declares it a pandemic. And suddenly this, you know, massive engine of travel and commerce comes to a screeching halt. And, you know, we, of course, went into crisis mode right away, which I think we were pretty good at. I have to give a lot of credit to our CEO, Brian, Chesky, who did an amazing job, my co-founder, Brian, really organizing the company and organizing our response in a very, very effective way. And when you look back and you do the case study of how did we actually, you know, transcend through the pandemic into, you know,

eventually a successful IPO. A lot of that's through Brian's leadership in a time of crisis. The board was amazing. Leaders in the company were amazing. And we thought through it through a couple of, couple different ways. Actually, through the lenses of our five stakeholders, our guests, our hosts, our employees, our investors, and the communities we operate in.

So we did something across each of those. For our investors, we took out, you know, a rather sizable loan to make sure we had money in the bank. That was very prescient. Yeah. Well, it was nobody knew how long this is going to last. And, you know, we had, of course, we had runway in the bank, but we didn't know how long travel was going to be shut down for.

Some people declared travel was dead. Some people said our company wasn't going to survive through this. Remember that, yeah. And so just as an insurance policy, we took out some sizable debt. On the host front, we provided a payout to hosts that was incredibly sizable. We did everything we could to help get some money in their pockets at a time when they had no income. And so, you know, a lot of many, many people rely on our service to pay the rent, to make ends meet, to pay bills, to pay off their student loans and credit card to card. And so, you know, we did everything we could to help get as much money as we could into the pockets of our hosts. For our guests, we refunded everybody in full. We didn't think it was fair to, for people to feel like they're forced to complete their trips in the middle of a global pandemic, put themselves out of health risk. So we issued full refunds to every guest.

Wild. On the employee side, of course, we had to make a very tough decision. It had a very, very difficult riff, our first in our history. Yeah. But we really wanted to make sure that we did everything we possibly could to... It was incredibly generous. Send people off with, you know, keep your laptop, you know, full health package for a certain amount of time. And kind of a couple of bells and whistles.

including, I was sitting in my home office on a Zoom with a couple of executives talking to this problem. How are we going to go through this process? And the question I always ask is, you know, what more could we do? What can we possibly do to help our people who are going to be let go? And it occurred to me. It was very obvious at the time, let's help people get jobs. Yeah. If we should do one thing to help them, let's help them get reemployed.

And that sparked the idea of the alumni directory, which we created in record time. In about a week, we created a website that if they wanted to, a laid off employee could opt into listing their profile, their contact information. And then we made sure that every article that talked about a RIF also included a link to the directory. Yeah, I remember it trended. And then a lot of startups hired folks. and yeah, people have this incredibly long severance and health care and their laptop, and then everybody found a great landing. It was crazy.

Hundreds of thousands of page views within a matter of days. Wild. Yeah, and it's set the standard, by the way. Now, every time this happens, people put out a Google sheet or an air table or whatever and share it and say, hey, listen, here's incredible people who are available. The bounce back was extraordinary. As crazy as that moment was, I remember in Q3 I have in my notes. you bounce back to $1.3 billion in revenue 4x quarter over quarter from the low point in Q2,

that must have been incredible because then I remember people were like, I can't stay at a hotel, there's too many people walking through the lobby, and Airbnb is the better solution. And I think a lot of people got introduced to Airbnb. Was that what happened? You got a lot more new people who were first timers to Airbnb? It was a number of things, including that. Yeah.

It was people saying, you know, I don't want to be in an, an LB&B. elevator with people. Oh, the elevator, yeah. Traditional accommodations shut down their restaurants and their gyms and their pools. And so a lot of the, you know, the extra amenities weren't even on the table for those days. And I think it did open people's minds to say, you know, maybe I'll try Airbnb for the first time. You get a whole house.

I can stay with my family. We can be safe. But in addition to that, the other trend that happened was people saying, well, international travel is effectively shut down. I've been quarantined with my family for weeks or months. We've got to get the kids out of the house. Yep. Stay-cation time.

Let's get in the car. Let's drive somewhere nearby. And so we saw this trend started happening. So we created a campaign called Go Near. And it actually, we started to see people's behaviors towards booking trips started to change in ways that they haven't gone back. Meaning that people started to say, well, it's more about having a flexible way to look, to search and to book places. It's not, I need to go from this date to this day. It's like, show me any weekend this month.

Oh, I love that feature. My dates are flexible feature. Yeah. That was born out of the pandemic because people started to search that way. And they said, well, now that I don't have to commute to the office, and I am truly flexible from Zoom and my kids are learning on Zoom, honey, where do you want to go? In June. Yeah.

Give us five days in June. Yeah. Or give us the whole month of June. Let's go. Yeah. And we started to see the length of stay go up. And the type of date search that people were making was wildly different. So we introduced flexible dates.

And that has actually changed the interface of Airbnb. If you go to our site today in our app, you'll notice that we present categories at the top. that's more about like choose your experience and then you can think about the dates later it's like sort of people's orientation to travel it's changed during the pandemic and it actually changed the mental model of how people use our site

and so the mental model went from I need to be in this location at these dates what's available to I want to have an experience show me something inspire me I think I want to go to Hokkaido I think I want to go skiing in Japan I think I want to go

you know, you know, to someplace sunny, but, you know, we'll figure it out. You guys did one thing incredibly well. People kept saying, add cars, add boats, add this. I was getting pitched as an angel, Airbnb of boats, Airbnb of cars, Airbnb of experiences, everything. And you've only really added one major category experiences. What was the thinking there in terms of you really said no to almost everything? And there must have been pressure inside the company from board members, investors, hey, why don't we have seven different categories?

Why can't people Airbnb a chainsaw or a bicycle and, you know, if they're, you know, the rental of things in the world, it would seem like all these things were natural. How did you, how did you keep that focus level on just two categories, really, I think? Am I correct? It's just the two right now in terms of major categories? It's only the two and they're both travel related. And for us, it was very simple. Travel is such a big category that we didn't want to get distracted with the other, you know, many verticals that were emerging over the last decade plus.

We just said, you know what? Travel is an insanely big category. We have a ton of market share to grab. Let's just double down and really focus on making great travel experiences. And so between the accommodations. people would tell us, hey, you help me find this amazing place in this cool neighborhood. I've never been to before and I'm here. Now what can I do?

Yeah. And they didn't want to go to the traditional playbook of, you know, kind of the big bus tours of a city, that sort of mass manufactured tourism. They're staying in a local neighborhood. They get an authentic experience. So they want to continue that authentic experience out in the neighborhood. And so that led to the birth of what we call experiences, which are our hosts, can host outside the home.

They can share their local knowledge, their access, their insights. What's the most popular thing that people do? Is it tours? Is it like I'll take you to like on a bar tour or a restaurant tour? What do people do most? It's across the board. I mean, walking tours in cities are wildly popular. Yeah.

I remember in the early days of the product, we had a host in Paris who told me, he says, you know, I make about, you know, $5,000 a month renting my room. out on your website and they make $15,000 a month giving walking tours of the moray. Pershing is bringing down a quarter million a year. Living in Paris, what a life. What I mean, it's amazing what happens when, yeah. It's changed people's lives. If you make people entrepreneurial and you give them that opportunity, the same thing eBay saw,

was like, hey, we're, we're helped or Etsy saw, you help people make a living and you make them independent and they have agency in their life. Like, that's what I'm really. into with that person, like, they get to now whatever amount of free time they have, if they want to be an artist or a writer or start another company, whatever it is, you know, or ski, they unlock all of that from being entrepreneurial. I mean, there's so many entrepreneurs now who have done this. Well, this actually, this speaks to my soul, actually. I have to tell you what I've learned over the years from Airbnb and what has brought me the most

joy is exactly what you just said, which is economically empowering people to free them up, to go do the thing in life that they've always really wanted to do. Start a company, become an artist, write the book, start a nonprofit, and so on. Take the kid skiing, whatever it is. Whatever it might be. And to not only create economic empowerment for them, but also a sense of self-confidence that I've seen hosts build on our platform where they come in sort of timidly to say, well, I'll try this out, you know, we'll see how it goes.

And within, you know, two years, they've, they've conquered the platform, you know, they're running their own operations supported by us. They have a sense of confidence. Wow, I can actually, I'm an entrepreneur now. Yeah. And with that. I'm going to do a second location. A second location.

Or they, I say, graduate from Airbnb and they actually go do the thing that they always really want to do in life. They quit their job. they have the financial capability and the self-confidence to quit their job and go pursue the thing in life that they think they're meant to be doing and that brings them the most joy.

Those stories I never get tired of hearing I love meeting hosts. Incredible, yeah. Well, that brings us to Samara. You decided to spin this out. I think it started inside of Airbnb. Everybody's been talking about ADUs, accessory dwelling units.

They call them nanny units, but basically putting some in your backyard or you can work out if somebody could stay and tell me the origin story here and why you've decided to, you know, basically dedicate yourself to building this next company. Yeah. Well, Samar is a new company with a mission to reimagine and improve the way we live by reimagining the home. And it started with an Airbnb as an R&D unit as an innovation team. It spun out last year with my co-founder Mike McNamara to be an independent company. And in November we launched our first product, which we call Backyard.

And you can think of Backyard as a little house designed for the next chapter of your life. It's a transformational, flexible dwelling that adapts to new ways of living. It allows people to have the space to do more in their life, whether that's an in-law suite to house family, whether that's a home office to be more productive, whether that's a space to, pursue a new passion like start a company or a yoga studio or in many cases to be a rental unit to earn income. We designed backyard so that however life evolves, backyard can evolve with you. And of course, given my design background, it's meticulously designed to be this beautiful light-filled space.

And we decided to choose materials that last a lifetime and also stay, you know, kind of look where the puck is going with regards to energy and sustainability. And so it's an all-electric comb. It comes with solar on the roof. And the space is three times more energy efficient than traditional construction for the same footprint. And as a result, it produces three times more energy than it consumes. So not only is it self-powered, but the extra energy that it makes in your backyard, we send to your main house to lower your utility bill.

Ah, brilliant. So the other thing we've learned along the way is that the building process can be very complex and very cumbersome for the average homeowner. So we decide to provide everything that includes surveying, the permitting, the factory fabrication, the delivery, and the installation. So we decided to bundle everything together, just to make it as simple as possible for a homeowner. to have this extra space in their yard. And you're building them, I assume, in a factory somewhere, which then gives you a massive amount of flexibility, and then you deliver them to the spaces.

I'm actually on the board of a company, and I invest in it called Blockable, which kind of builds these modular units, but they stack them, and they build large, multifamily dwellings, but they did start with, like, a one blockable unit, and then the amazing thing was, when you're in a factory,

you can run it 24 hours a day. You don't have to worry about weather. You don't have to deliver a bunch of stuff into a driveway and then put it together. And because you have all these precision tools and tooling in a factory, it can be, as you said, more energy efficient. You can use materials that you could never use in the field.

So maybe talk a little bit about the construction process here and what the advantages are to building in a factory. If I'm assuming correctly, that it's all built in the factory. It is all built in the factory. And so somebody goes to samara.com. They can go to configure. You can, just like you buy a Tesla online, you buy a backyard online. You can configure, change some of the materials, change some of the configurations and colors to fit your context as a homeowner.

And then it goes into our system and we basically run two processes at the same time. We go start the land prep process. So that's a survey in the backyard, is taking care of the permitting. It's running whatever utilities we need to run. run out to the unit, setting up the foundation. Meanwhile, our factory is in full force, assembling and building your customized unit. And so once it's done, comes off the line, gets shipped on the back of a truck, crane to the backyard.

The connection actually takes less than two hours to actually connect the unit into the foundation. And with a little bit of touch-ups, the unit's ready in a couple days for the host. Yeah. So it's really... nicely in transit because you can get some scuffs on it. I remember when people were transporting the blockable units, the first ones like,

yeah, you got to do it in the middle of the night. It's a certain width. Like there's a lot of stuff that goes into it. But where's the factory? Is it in California only right now? It's on the West Coast. But we're serving right now all of Northern California and Southern California.

And customers can tell us where they want us to launch next. It's on smart.com. They can put in their zip code. We'll see. We'll see. It's booming so much. It's booming so much that you have to be in a... But the other thing that's nice about this is,

maybe you can educate the audience a little bit, these ADUs are, at least in California, I know. Neighborhoods have been very nimbie, not in my backyard. And then there's been a yimbi movement, yes, in my backyard. And it seems like the thing that both of those groups have agreed upon is okay, you can put something in your backyard. You can't be stopped from doing that. And in NIMBY commuters,

I happen to live in a NIMBY community on the peninsula I wouldn't say which one. There's a movement of people who are like, you know what, we're going to get in trouble if we don't build more units because there's now, you've been told all along the peninsula, whether in Atherton, Palo Alto, whatever,

you've got to build more units. They're kind of like this horse training going on. If we can get this many people in our community to put an ADU in, Yes. We don't need to put a skyscraper or a six-story. What people in the peninsula would consider a skyscraper? They're crazy, but there's a little bit of horse trading,

and you can't stop somebody from putting an ADU in in California. Is that correct? That's the law now? It's the law. It's becoming a right to have an ADU in your backyard. And you're absolutely right. Communities love ADUs because they're unnoticeable in backyards, which means that communities can develop hundreds of units of housing

without adversely affecting the visual character of a neighborhood. And, you know, governments see the benefits they use because they create this horizontal density in cities. You know, on top of that, ADUs often provide lower cost options for residents in neighborhoods they otherwise might not be able to afford. Owners benefit because they get rental income and increase property value. Oh, that last one is so important because there are people, firefighters, teachers, a nanny, whatever it happens to be, who may not be able to afford to live in after. 10 or in Palo Alto, whatever it happens to be. Now you've got a unit there and it's got a separate entrance. It's all good.

You know, maybe some folks who couldn't live in the community can now live there. It's just more equitable for the community as well. That's right. I didn't consider that, yeah. Well, you know, states are starting to recognize and then actually following California's lead, eight other states have passed laws to enable ADU growth. And since California passed an ADU law a couple of years ago, permits have increased 17x.

Wow. Just in the state. It's absolutely insane. So I think Samara is well positioned to grow with this consumer demand and actually make it expand the market because we're making even easier for people to acquire dwelling like this. Yeah. There's friction.

And the friction is typically the foundation, buying one of these things, designing it. And it seems like you've extracted the whole process, which is what people want. They just want to drop this thing into their backyard. for a quarter million bucks, $350,000, you easily make that money back if it's an Airbnb in rent or in the increased value of your home, right?

I mean, the amount that these are what, like a thousand square feet or something, 800 square feet? That one bedroom's 550 square feet in the studio is about 450 square feet. I mean, California's 1,000 to 3,000 a square foot. I mean, these things are going to eventually

just immediately, or almost immediately pay for themselves, right? I mean, It's a no-brainer. And then you have the wind in your back as well from people working from home. And most people's homes, if you've ever worked from home, you've got kids in the house, dogs in the house, a nanny in the house, whatever it happens to be. Kind of being able to walk across the backyard to an ADU is the ideal situation because you get a little bit of space and distance, yeah? That's right.

That's right. I think. And look, California did a study when they discovered the, there's room for one and a half million ADUs throughout the state. it's a lot 80s. That's just California. And there are people who also, you tell me if anybody's asked you to do this or if you've actually fulfilled an order yet,

has anybody said, I want to take these four acres I have just outside of Austin and dripping springs or one of those communities and say, can I just put 10 of these? Once in a while when I'm like on Redfin looking at stuff in Austin

and dreaming about moving to Austin, I find like some ranch. And then I see people have like eight tiny homes on it. Now, they're not as buttery as yours are, but it's kind of like, oh, wow, this person put eight of them there and they're running like an event center or maybe like, you know, an Airbnb kind of at scale. I know Texas allows that have people started to do that kind of thing? A hundred percent. A little airship community. Oh, yeah.

We've had many, many people reach out from all across the country, actually, with that use case. We call it community development. So we actually have now a whole part of the team that's just focused on serving. this kind of customer around building the multi-unit developments. Yeah, that's going to be incredible because did you ever go to Tony Shea's

installation and rest in peace in downtown LA? I was right downtown in Vegas. Saw the pictures, yeah. Incredible. I mean, I used to go to Vegas. I'd be playing in some poker tournament or speaking at something.

And I'd be like, you know what? I want to stay with Tony. I want to hang out with my guy. And I'd go down there and there would be llamas and he had like maybe a half dozen air streams. And then he just bought any tiny home that anybody ever showed him. So he had this collection of, I kid you or not, like 20 homes in what used to be the backyard or a parking lot of a motel, which he also then renovated and made until like, you know, 10 units. So he's got like 25

units there, a pool. And the best part of it was they set up one unit to be a commissary where they put food and everything. And somebody would make breakfast. breakfast, somebody would prepare lunch, somebody would prepare dinner in the community, and then they'd sit around a fire pit and, you know, play cards or liars dice or scrabble and just chill and talk. I mean, it really is the future, I think, for young people and then also people who maybe, you know, want to retire and they want to have some flexibility like this. So it's just awesome when you think of that possibility. For entrepreneurs or developers who are watching this, you know, we have a plug and play solution for them to show us what's possible.

All right. Listen, everybody goes to Samara right now. Now.com. Use the promo code, Jason. You get 10% off a home. It does no promo code. But just go there and buy a home and plop it in your backyard and help housing. I mean, it's kind of like if you have a big lot, I kind of think you're morally, you should feel morally compelled to add one of these because all units help, whether

it's a high rise of expensive units or it's an ADU, everything in between. We're not going to solve the housing crisis by fighting over which units are in which communities. just all units all the time, as many as you can put in there without destroying the character of the neighborhood. Yeah, all form factors. All form factors were. And like just great success with this, brother.

I think it's like a great thing for you to do. And I can just tell how engaged you are because you get to design these things and they're so beautiful. Like looking at them, thank you. They're so buttery and gorgeous. And it's also great for the environment. The stuff you're doing with like making it,

I know when we were working on Blockable, they were like, this thing is like so perfectly sealed. And I was like, how do you get it perfectly sealed? Well, you know when they're building something in your backyard and they're using an exact own knife and putting stuff up? It's not precision like this water cutter over here. And they had like a high pressure water cutter cutting these new materials and then putting the rivets in.

And it's like, yeah, that's done with a computer. And it goes from the CAD to the high pressure water cutter. It's perfect, right? Everything is perfect and just snaps on in the factory. Yeah, it's incredible. All right, listen, this has been a great hour or more. Thanks for taking the time. I know you're, wow, even more.

Thanks for taking the time. Appreciate it. And continue to success. You're hiring, right? For the company, what are you hiring for? We are. You go to smart.com. Look at the jobs page.

There you go. Hiring a couple of those. Anything that's hard to hire for right now that you need, particularly? You know, we're always interested in talking to smart people across architecture, design, sales, you name it. Oh, and a freelance graphic designer. There you go. manufacturing slash jobs everybody samara s a M-A-R-A-A-com slash jobs

it's going to be a big company dude it's going to be a great company all right continue success and we'll see you all next time bye bye