Interview with Brian Chesky

It’s not everyday you hear a startup story that begins with art school, moves through $30,000 in credit card debt, and features a pivotal moment involving presidential-themed breakfast cereal. Yet, this is precisely the journey Brian Chesky, CEO and co-founder of Airbnb, shared during his engaging "Blitzscaling" interview with Greylock. His candid recounting offers invaluable lessons on entrepreneurship, design, and the relentless pursuit of an idea initially deemed by many as "the worst idea that ever worked."

The "Worst Idea That Ever Worked": A Designer's Genesis

Brian Chesky’s path to becoming a tech titan was anything but conventional. Unlike many Silicon Valley founders, Chesky was an industrial designer by training, a graduate of the Rhode Island School of Design (RISD). His parents, both social workers, simply hoped he'd find a job with health insurance, and as he humorously recalls, "I didn't even know that existed. I don't even know if I ever even heard the word entrepreneur." This artistic background proved crucial, as RISD taught him a powerful truth: "You're a designer, you can redesign everything around you," essentially, "you can change the world."

The genesis of Airbnb was born of necessity and a flash of creative problem-solving. In October 2007, fresh off quitting his industrial design job and driving to San Francisco with just $1,000, Chesky and his co-founder Joe Gebbia found themselves unable to afford their $1,150 rent. A major design conference was in town, and all hotels were sold out. The "creative solution" they landed on? Inflate three air beds, call it "The Air Bed and Breakfast," and host designers. These first three guests—from Boston, Utah, and India—unexpectedly forged connections that transcended a simple transaction. As Chesky describes, "It contracted this year long friendship into a couple days. And so these people came as strangers, they literally left as friends." This profound human connection sparked the realization that their "crazy little idea" had far more potential than just paying rent. For a brief period, they even explored a "roommate matching website" until they discovered it already existed, realizing, as Chesky puts it, "The original idea was airbeds for conferences... Of course it turned out that the crazy little idea that we thought no one else would do, became the big idea."

Key Insights:

• An unconventional background can provide a unique lens for problem-solving.
• Solving a personal problem (like paying rent) can be the spark for a world-changing idea.
• "Stupid" or dismissed ideas often hold significant potential because others overlook them.
• Deep personal connections with early users can reveal the true value of a nascent product.

The Hustle and The Cereal Entrepreneur

The road from a "crazy little idea" to a burgeoning business was paved with relentless hustle and repeated rejection. Airbnb "launched" multiple times, constantly iterating their product, moving from air beds to real beds, and finally building an integrated payment system. Traditional investors, however, were unconvinced. Chesky recounts pitching 15 angel investors for a mere $150,000, with many not even replying, others deeming the market "not big enough," or simply "not excited about travel as a category." The low point? An embarrassing meeting where their live website failed, leaving Chesky with nothing but an awkward explanation. He remembers a mentor telling him, "Brian, I hope that's not the only idea you're working on."

With tens of thousands of dollars in credit card debt and a co-founder contemplating leaving, Chesky and Gebbia hit rock bottom. Desperate, they concocted an audacious plan: sell breakfast cereal. They designed custom boxes for "Obama Oh's, The Breakfast of Change" and "Capt'n McCain's, A Maverick in Every Bite," hand-folding 1,000 cardboard boxes themselves. These limited-edition cereals, sold at $40 a box, famously raised $30,000 – enough to keep the company afloat. This legendary "cereal entrepreneur" stunt not only generated much-needed funds but also garnered significant press attention, proving, as Paul Graham of Y Combinator later observed, that "If you can convince people to pay $40 for a $4 box of cereal, maybe you can get strangers to stay in other strangers homes."

Key Changes:

• Evolved the product beyond niche events and air beds to a global home-sharing platform with integrated payments.
• Shifted from direct press outreach to a "grassroots" PR strategy, starting with bloggers.
• Embraced unconventional and even "absurd" tactics (like selling cereal) to generate buzz and funding.

Key Learnings:

• Persistence is paramount when facing investor skepticism and financial hardship.
• "If you launch and no one notices, you can actually just keep launching."
• Desperation can be a powerful catalyst for creative problem-solving and unique fundraising.
• "The difference between unemployed and being an entrepreneur is in your head, It's usually a mind set."

Scaling Through Deep Love: Y Combinator & "Things That Don't Scale"

After the cereal venture, Airbnb found itself back to being nearly broke, but the Y Combinator interview with Paul Graham was a turning point. Graham, initially skeptical ("People are actually doing this? What's wrong with them?"), was swayed by the sheer resourcefulness demonstrated by the Obama O's. He called the founders "cockroaches," a compliment in the startup world, signifying their ability to survive anything.

Y Combinator provided structure and, crucially, a shift in philosophy. Graham imparted perhaps the most important advice Chesky ever received: "It's better to have 100 people that love you, than a million customers that just sort of like you." This liberated the founders from the pressure of mass appeal, allowing them to focus on deep customer satisfaction. They literally adopted a strategy of "doing things that don't scale": flying from Mountain View to New York weekly, going door-to-door, living with their hosts, taking professional photos of listings, writing initial reviews, and even handing out checks personally. This intense, intimate engagement allowed them to understand hosts' pain points and build a product that genuinely resonated. Chesky recognized, "It's a totally different intellectual problem to scale something that 100 people love than figure out what that is." By April 2009, they were "Ramen profitable" (meaning they could sustain themselves on cheap noodles) and had hundreds of passionate users. This dedication ultimately led to a $600,000 investment from Sequoia Capital, legitimizing their vision.

Key Practices:

• Cultivated intense focus and dedication (working 8 AM - midnight, 7 days a week) during critical periods.
• Prioritized creating a product that 100 people deeply loved, rather than millions who passively liked it.
• Implemented "unscalable" personal touches like in-person visits, photography, and direct support.
• Focused on achieving profitability (even "Ramen profitable") as a buffer against market uncertainty.

Beyond Five Stars: The Philosophy of Seven-Star Design & The Real-World Product

Once they found product-market fit, Airbnb's network effect began to spread organically, with guests becoming hosts and word-of-mouth driving growth. But Chesky’s design philosophy continued to push boundaries. He introduced the concept of "seven-star design," challenging his team to think beyond the typical five-star rating system. He argued that a five-star experience is merely what customers expect; a truly loved product must do more.

To illustrate, Chesky playfully outlines the escalating possibilities of a check-in experience: a five-star is a host simply opening the door. A six-star? Airport pickup. Seven-star? A limousine stocked with your favorite snacks and magazines. Eight-star? An elephant parade in your honor. Nine-star? A "Beatles in 1964" reception with screaming fans. And a ten-star? Elon Musk picking you up and taking you to space. While exaggerated, this exercise forces teams to envision extraordinary experiences, enabling them to find practical, slightly-beyond-expected solutions.

Crucially, Chesky emphasizes that for Airbnb, the "product" isn't just the website or app. "The product is whatever the customer's buying," he explains, "The customers are not buying our website, and they're not buying our application. That's just a storefront of communication. What they're buying is a house. And frankly, what they're buying more than a house is the host. Experience of hospitality. This idea of belonging." This understanding of Airbnb as an "online-to-offline" business necessitated storyboarding every moment of the guest and host journey, ensuring responsibility for both the digital and real-world elements of the experience.

Key Insights:

• Network effects in marketplace businesses can spread organically when guests convert to hosts.
• The "seven-star design" approach encourages teams to envision and deliver experiences far beyond baseline customer expectations.
• For online-to-offline businesses, the "product" is the tangible real-world experience, not just the digital interface.
• "Every moment is an opportunity to do something slightly more than people expect."

Designing the Company: Culture, Office, and Immersive Experience

Brian Chesky's design ethos extends to every facet of Airbnb, including its organizational structure and physical office spaces. Inspired by Steve Jobs’s mantra, "Design isn't how something looks, it's how something works," Chesky believes that "everything needs thought and design," from the website to the entire company. This led him to reinvent common corporate elements, starting with the office.

Recognizing that employees spend more time at work than at home, Chesky sought to create an inspiring, comfortable environment that reinforced Airbnb's mission. He transformed their meeting rooms into faithful recreations of actual Airbnb listings from around the world. As he notes, "It's so critical that there's no dissonance between what's inside the building and what's outside the building." This immersive approach not only provides a unique competitive advantage for hiring but also ensures that employees are constantly immersed in the very product they are building. This tangible connection to the mission fosters a deeper sense of purpose and belonging, reminding everyone that they are, in his words, "working in the center of the universe" of their business. This holistic application of design thinking underscores Chesky's belief that every detail, however small, can be an opportunity for creative reinvention and a competitive differentiator.

Key Practices:

• Applied design thinking beyond the product to organizational structure, culture, and physical office space.
• Transformed the office environment into an immersive, branded experience that mirrors the product.
• Eliminated "dissonance" between the company's internal working environment and its external product.
• Used immersive office design as a powerful tool for talent attraction and cultural reinforcement.

"It's better to have 100 people that love you, than a million customers that just sort of like you." - Brian Chesky