Tuesday, June 9, 2020

Out of the Crisis #7, Brian Chesky Part 1: running Airbnb in crisis mode, being multi-stakeholder, and re-founding the company

I've known Brian Chesky, Co-Founder, CEO and Head of Community at Airbnb for a long time. We’ve been allies and comrades-in-arms in trying to lay out what it means to be a 21st century company. What does it look like to truly share power and opportunity with multiple stakeholders? What can organizations do to remain true to their vision for generations to come? He has a unique business philosophy: broadly shared prosperity achieved by making promises that stakeholders can believe. He also has strongly held ideas about structuring a company to institutionalize these intentions to make sure the next leader, future employees, and the next board will be true to that philosophy.

This was supposed to be Airbnb's biggest year by many measures, including its IPO, which was one of the most anticipated since the 2008 financial crisis. Instead, the global pandemic has turned 2020 into its most harrowing year. I was lucky enough to be one of the first people to speak to Brian in-depth since the pandemic began. As we talked, I could really hear the impact these last nine weeks have had on him both personally and professionally. He shared his experiences in the eye of entrepreneurial storm, trying to put the pieces back together and not just survive but essentially found the company all over again. 

In the first part of our conversation, we talk about the chronology of what has happened to Airbnb, the impacts the pandemic has had on their business and the emergency measures the company was required to take. We also speak about Brian's personal transformation over the course of these events, and his belief in the power of compassion, intuition and creativity.

You can listen to our conversation on Apple podcasts, Google podcasts, or wherever you like to download.


In addition, a transcript of this first part of the conversation is below.

Show-related resources

Highlights from the show

  • Brian on his life since the pandemic began. (5:01)
  • Brian's thoughts on the human dimension to his approach and how that sets him apart in Silicon Valley. (6:06)
  • Resilience and adaptability in people and companies. (8:22)
  • On how crisis reveals character. (9:11)
  • How companies are defined in moments of crisis. (9:41)
  • What Brian has learned about himself in the pandemic. (10:44)
  • The moment the company went below 1x growth for the first time since it was founded as the pandemic hit China and then Europe. (11:50)
  • When Brian realized the scale of the pandemic's effect. (13:26)
  • How the experience of founding Airbnb in a recession came into play. (15:06)
  • The 6 Principles that guided the company's pandemic response. (16:17)
  • On the feeling of founding the company a second time. (18:21)
  • What it means to truly be a multi-stakeholder company and how the crisis has revealed who's serious about it. (19:36)
  •  Brian on his background as a RISD-trained industrial designer. (20:32)
  • On believing in the internet as an immune system, then learning it's not and taking responsibility.(22:55)
  • Airbnb's core principles and how Brian knew he had to create them early on. (24:51) and (27:49)
  • Keeping all stakeholders in mind. (26:51)
  • The difference between 20th century and 21st century companies. (28:54)
  • The value of the public trust. (29:38)
  • On having a long-term perspective and how it has affected Airbnb. (30:52)
  • The defining decision to give $250 million to hosts and how it reverberated.  (33:07)
  • The decision to be useful by offering housing to essential workers. (35:32)
  • The painful decision to make layoffs. (37:30)
  • Compassion in layoffs. (39:37)
  • The paradox of raising money and laying people off simultaneously. (40:20)
  • Brian's 5 principles for the layoff process. (43:40)
  • The provisions the company made for those laid off, including healthcare and job placement help. (45:38)
  • How taking care of people is a long-term decision. (47:49)
  • Brian on the letter he wrote to employees to announce the layoffs and the response to it. (50:17)
  • The Heroes Journey, Joseph Campbell (55:03)
  • The need for human connection in leadership and what Brian hopes former employees will take with them into the world. (56:46)
  • Using the phrase "I love you" in the layoff letter and in business. (58:13)
  • Brian's personal transformation in the early weeks of the pandemic. (59:03)
  • The need for creativity, intuition and compassion in Silicon Valley and business. (1:00:23)
  • What's coming up in the second half of the conversation. (1:01:42)

Transcript of Out of the Crisis #7, Brian Chesky, part 1

Eric Ries: This is Out of the Crisis. I am Eric Ries. So you want to be an entrepreneur, huh? Me too. And although it looks fun and exciting in the movies and in the fawning business profiles, there are these moments when it's excruciatingly difficult. I've had plenty of companies fail, that's part of the entrepreneurial condition. What if it works? What if you get product market fit beyond your wildest dreams? You become a global company. 6,000, 7,000 employees. You're on track to have maybe the most anticipated public offering ever, certainly since the financial crisis. You're one of the largest private companies in the world and then the walls come crashing down. First the news out of China, then Europe, then here in the U.S. One by one the markets in which you operate shut down. And it's not just a financial panic or crisis when capital is difficult to raise or mass unemployment makes the economy shutter. If you're in the travel business, a global pandemic is an existential threat. A complete collapse of revenue that simultaneously affects your employees and your customers, your partners, your investors, everyone all at once and all the news is bad. So then what?

I have known Brian Chesky for a long time. We have been allies and comrades in arms trying to define what it means to be a company in the 21 century. He has a unique business philosophy. Broadly shared prosperity. Decades, not quarters. All stakeholders, not just short term investors. People, not just metrics. Because these principles can seem abstract I asked Brian to take us on a journey behind the scenes. What it was really like running a company as large as Airbnb through this crisis. These are ideas about what the structure of a company has to be to institutionalize its intentions so that the next leaders, the next employees, the next board will be true to that philosophy. Being long term, having a multi stakeholder approach, doesn't mean you'll never have to make tough choices. Actions speak louder than words. This is when it matters most. It's not just about what you do, but how you do it and the broader philosophy that those actions represent. The acid test is not that you'll never do layoffs. The test is, if times are difficult, how do you treat people? Do you treat your employees like stakeholders? Your customers and your investors like partners? Do you show people compassion? Do you help employees who are laid off find their next job? Those are the actions that define a company in a crisis.

You'll hear the paradox of all crisis response. Which is that, although you must take action urgently, decisively, and immediately, the actions you take will resonate for a very long time, and that is the challenge of running a 21st century company. And some companies are really showing us what that means. Some companies talked a big game before and have gone right back to the old way, while others have set a whole new bar for how to handle these kinds of challenges. One of the clear takeaways for me has been that a crisis reveals actions that should have been taken all along. I think everyone listening knows Airbnb. It is one of the most iconic 21st century brands and almost all of us have been customers. Many of us have been hosts on the platform. And until a few weeks ago it was indeed the most successful private company in the world.

I have been working with Brian to define what a 21st century company looks like. This conversation is one of his first since the crisis struck and in the conversation you can really hear the impact these weeks have had on him. It's a wide ranging discussion. So much so that we had to split it into two parts. In this first part we talk about the chronology of what has happened to Airbnb. The impacts the pandemic has had on their business and the steps, the emergency measures the company was required to take. I think every founder, every CEO, every leader, could learn something, could take heart from Brian's example and I hope they will. I hope you will. So you wanted to be an entrepreneur, huh? Here's what it actually looks like. Here's what it actually feels like in the eye of the storm. Here's my conversation with Brian Chesky.

Brian Chesky: I am Brian Chesky, co-founder, CEO, and head of community at Airbnb.

Eric Ries: Hey man. How you doing?

Brian Chesky: I'm doing all right. I'm doing better. It's been a harrowing eight weeks or so, culminating last week but I'm doing well now.

Eric Ries: I'm glad to hear it. Before we get into the stuff that's stressful for work, just how are you? How's your family? Parents hanging in okay?

Brian Chesky: Yeah. I would say, never in my life have I been around so few other humans.

Eric Ries: For sure.

Brian Chesky: And I've lived in cities for much of my life and when you're around people a lot, they kind of become ubiquitous and you kind of take it for granted and you don't really want to deal with people. I'm from New York, upstate New York. But you go to New York City and people just kind of ... They don't really look at people. They don't really smile. And I try to do my best to stay connected with my parents. My mom actually is out here-

Eric Ries: Oh that's great.

Brian Chesky: So she's been kind of visiting me and so she's around. So that's been really cool. And just try to stay connected as much as I can.

Eric Ries: You're not like a lot of other tech folks ... Not to caricature, but are a little more head centered, a little more hype rational.

Brian Chesky: Yeah. I mean I think Silicon Valley historically ... So everyone's got a head, everyone's got a heart. I think most people in Silicon Valley exercise their heads and sometimes the heart and the compassion. It's the other part of us. I really rely on human contact and I get energy from other people. And so I think it can be hard to derive energy when you're not physically around people. So you really have to have a clear sense of purpose and you got to work to stay connected. You don't just bump into people. You've got to make an effort. I think that's been hard. And the other thing that's been really hard for me ... I mean these last eight weeks, I went from ... I mean first of all, I've gone through just so ... We've gone through a lot. Starting with our guests. And so we had to adjudicate billions of dollars worth of cancellations. But then that meant that we had to override cancellation policies for hosts. These are hosts that depend on Airbnb for their livelihood. And so I'd have to read hundreds and hundreds of emails of the pain and suffering they're going through.

And then you've got to deal with the anxieties of other people. Just worrying about the livelihood of a company and is it going to endure and thrive in the way we always thought it would? And if that's not enough, then the people you're kind of most directly responsible for, your own employees. And last week I had to say goodbye to 1,900 people. And these are people that we spent so much time to hire. We went through hundreds of thousands of resumes to hire those 1,900 people and we do so much to bring them in and to have to say goodbye to them, I'd say that was the hardest part. It's not just the deprivation of human contact in my physical environment, it's just the pain, the suffering that so many people go through in this harrowing of times and to be kind of on that journey with them and to try to do everything you can to support them. That's been really hard. So in that sense, it's been certainly one of the most emotional eight or nine weeks of my life. What could go wrong? You're just running a travel company that was preparing to go public in the middle of a pandemic. The wealthiest ones survive. The most resilient will survive.

I think this is actually a law of mother nature. Those that are resilient survive and that is a basic principle of evolution. I think it's also true of companies in crisis. And so it's been really important that we are resilient, adaptable. We don't fight reality, we just deal with it. And those that are nimble, those that can let go of the past and the things that are immutably changed I think are going to survive. And that's what I've been trying to do. Just have compassion. Remember that there are decades nothing happens, there are weeks decades happen. And these weeks I will probably remember for decades, so I better think of them as defining periods and be really, really thoughtful about the decisions I make, the impact I have. And the same time, you got to move quickly. You can't spend weeks making the decision. So that's what this has been for me, the last nine weeks.

Eric Ries: One of the things my parents would always say to me is that a crisis doesn't form character, a crisis reveals character. So in some ways, when you're tested in this way ... We've talked about this a bunch. This is the moment that people are going to remember. How you responded, how you reacted. They're going to remember that for the rest of your corporate life.

Brian Chesky: Forever.

Eric Ries: Yeah, forever.

Brian Chesky: Yeah.

Eric Ries: An indelible part of your reputation and this is laying the foundation for whatever the future of this company is going to be.

Brian Chesky: Andy Grove, you obviously know him and people listening probably remember him. He was the co-founder of Intel and he probably wrote some of the very best books on modern management. He wrote a book called High Output Management. And he had a saying. I think the saying went something like ... I won't quote it exactly. Bad companies are destroyed by a crisis, good companies survive a crisis, but great companies are defined by a crisis. And I think this is a very defining hour for all of us really. And the other thing I'd say is, a crisis can really give you clarity like nothing else. Doesn't it feel like in a crisis suddenly the world flashes before your eyes and you see what is truly important? And the other thing you learn Eric that I've noticed is you learn who people really are. And I've learned more about who people really are around me now in the last eight, nine weeks, than I probably have in the last handful of years. And the other thing is, if you could learn a lot about a person in a crisis, then maybe it's true, you learn a lot about yourself in a crisis.

And I've got to tell you, I probably learned more about myself in these eight or nine weeks than I ever have. Because if you would have told me I would be facing this predicament, how I'd respond, what I would do, I couldn't tell you. And I've learned a lot about myself. I guess what I've learned is, first of all, first thing I've learned is I can handle a lot of pain. I didn't know I could and honestly, this has been crazy. Honestly, I could probably handle more. And the other thing I learned is, I have deep care for people and I think it's sometimes easy to take people around you and the things you have for granted. Nine, 10 weeks ago I thought I had everything. And it's kind of weird because now I suddenly feel like I have more than I ever did. And you know what? It's just a perspective. I feel more love and support than I ever have. I think when you're going through a crisis and people know, they reveal themselves. And we kind of saw this coming. But the problem is, it's super hard to grapple in your mind exponential growth.

Eric Ries: Yeah. Humans are not good at this.

Brian Chesky: And also humans are not good at forecasting or creating a mental model around something that's never happened before. Because we tend to apply our past life experiences towards things that are happening. We say, oh this, this is like that thing. Well what happens if this thing is not like anything ever before? Then suddenly it takes your legs out from you and you can't see it? And so we started seeing this thing sweep China. Our China business was really affected. So we kind of knew at this point if it spread, it would be really bad. And then we see it hit Europe. And then suddenly for the first time, this is even before it went to the United States, our growth rate went below 1X. That basically means you're, on a year over year basis, shrinking. And for a company in Silicon Valley to be lower than you were the year before, that's like, just never happens.

Eric Ries: Unheard of.

Brian Chesky: Companies that are smaller the year before, don't usually ever get bigger again. It's a bad situation.

Eric Ries: That was the first time you had ever had that experience.

Brian Chesky: Never. I remember texting a couple of my board members and I was saying, "I'm now sending you a text because it's the first time in 11 years, we are now smaller than we were the year before." And that hadn't happened since 2009 and we launched in late 2008. And so we were literally never down and suddenly ... It was that week. It was the first or second week in March. And it really hit me that day the NBA season was canceled. And then that led to a flurry of other sports cancellations and establishments being canceled. It just felt like that week was a domino effect.

Eric Ries: Yeah. Everything just came apart after that day.

Brian Chesky: And Europe was already being locked down.

Eric Ries: Were you watching? Did you see that clip of Mark Cuban, his face as they gave him the news? He was sitting courtside?

Brian Chesky: Yeah, his face and they sent all the players home. I actually remember that on TV. And I don't watch a lot of TV, but I somehow was there when that happened. And that was the moment it dawned on me. And it certainly occurred to me that it would affect every industry. It occurred to me, my mental model was that it would affect every industry, but it also occurred to me that it would affect travel first. I'm not sure it's so much that travel would be most affected as it would be first affected. And I think there's a downstream effects that are going to have consequences on industries that are like ripples in water for years to come. But we all kind of knew we were the tip of the spear because the moment people stop moving, travel stops. And it was amazing how global travel was halted.

Maybe the only other wake up call is I had a ... I remember having a phone call. I have kind of regular check ins. I was talking about some plans I had for a launch in June and he was ... I think is early March and it was going to be a big press event in like a theater. And he's said, "Brian, I don't think you're going to have your event in June." And he kind of gave me a little bit of a reality check. I think he was a little closer to the situation and that was maybe the second moment that it dawned on me and I was like, oh man.

Eric Ries: That was going to be pretty cool event we had.

Brian Chesky: Yeah. We had all sorts of cool stuff that is now all going to hopefully come out and you and I were talking about some cool stuff and it was going to be June 4th. Actually, it's kind of crazy to think because it's like ... What is it now? Like, three weeks.

Eric Ries: We're almost there.

Brian Chesky: Yeah.

Eric Ries: I can't believe it.

Brian Chesky: And honestly, I kind of thought the second half of my year was going to be crazy. We were going to do this launch in June and we're going to go public and all this crazy stuff. And I never thought it would hit me much sooner. I was not prepared for a March and an April unlike any I've ever experienced.

Eric Ries: So, what were some of the first things that you had to do? You talked about how important it is to act decisively and immediately even though it's painful. Walk us through kind of the stuff that unfolded once you realized the severity this was going to have.

Brian Chesky: I have been through a handful of crises before. Airbnb-

Eric Ries: Airbnb was founded during a global recession.

Brian Chesky: Airbnb was founded during the global recession. We were founded because of a crisis. And I remember when the crisis first started I said it didn't kill us then, and it's not going to kill us now. And so when the crisis ... When it first appeared to be a crisis, the first thing you do in crisis is you increase your communication by two or three times. You've got to be very present, very decisive. You have to communicate. And so the first thing I did is I set up a daily war room for my executive team. We used to meet every week, we now met every day. And our board, we used to me every quarter, now we met every Sunday. So we did a Sunday meeting. And in my first board meeting I basically established a bunch of principles. I learned that in a crisis you need to establish principles. What is most important to you? What are you optimizing for? Because a lot of times people argue because they're arguing about different underlying motivations. And so it's really important that before you argue points, you argue principles.

Eric Ries: Give an example.

Brian Chesky: Actually I'll give you six. I wrote six of them. The first principle was be decisive. That was the number one thing you could do in a crisis is be decisive. The worst decision in a crisis is no decision. It's almost always. And in a crisis if you make the wrong decision, you can correct it with a different decision. Now sometimes they're one way doors. Be decisive. The second was preserve cash. We knew cash was oxygen and altitude was losing quickly and so we needed to preserve cash. That meant of course initially raising money and cutting costs. The third principle was act with all stakeholders in mind. You know, when people usually make bad decisions ... And when I say bad, like not good decisions or kind of like ... Whatever the word is for like, didn't do the right thing. Usually you made a decision for one stakeholder at the expense of the other. Maybe at the egregious detriment of the other without having thought about them. Just think about all your stakeholders. It doesn't mean you're always going to be balanced. The next was, let's emerge on the right side of history. Don't emerge as villains, emerge as people that help do the right thing. So I said, people are going to remember this period for years, decades. There's going to be all sort of things written about this.

It's not to say the world's going to remember us, but for anyone who does, I want them to remember that we did the right thing. And I said, that's really important to me. That's number four. Number five, I said, play to win the next travel season. I said travel is going to come back and when it does, we need to be back first. Play to win the next travel season. And finally, don't trade in the future. I know in a crisis you have to make ... In a weird way in a crisis, you have to be more short term than ever. You're more present than ever. You can only think a few days ahead in some ways. You can't even predict the world next week. And on the other hand, you have to be almost more long term than ever because you're about to make a series of decisions that are going to define your legacy for years that are going to kind of leave marks. These indelible marks for a really, really long time.

Eric Ries: Did it feel like you were founding the company all over again?

Brian Chesky: Yeah. I literally had a meeting today because we did a layoff of 1,900 people last week. This was the first team meeting I had after everyone left, or most of them left. And I said, "This is almost like a second founding. It's a new chapter. And if you ever felt" ... This is what I told people. I said, "If you ever felt like you joined something that was built before you, now you're going to feel like you're building it with us. Because we are in rebuilding phase and we're going to need to come back and you're going to help us write this story." And so those were my principles. And then I even wrote who our priority audiences were. I said, we need to prioritize the company's viability. Our best hosts, our very best employees. And then every meeting I have with the board, I said, "We have to do four things. We have to manage our stakeholders, raise money, diversify our business, and cut costs." Every single meeting I had I started with, we're here today because we have to manage the stakeholders, we have to raise money, we have to diversify our business and cut costs. Sometimes in a crisis you just have to write down what's truly important, repeat it and be unwavering about it. And you have to have really clear simple thinking.

Eric Ries: One of the things that I think is interesting about that is, I don't want it to sound like you just discovered being multi stakeholder in this crisis. That's a topic that you and I have been talking about, gosh, for several years now. And I wonder before this crisis hit, all of the sudden being multi- stakeholder was really in vogue and people were talking about it at Davos and all of a sudden signing pledges and all this stuff.

Brian Chesky: It was the Davos thing this year was like, multi-stakeholder company.

Eric Ries: Yeah. And the crisis has made extremely clear who was serious about that and who just thought it would be a fun thing to help improve management's power over their investors or whatever other reason they had.

Brian Chesky: Or like a branding event. A lot of people are literally doing if for their brand reputation but they didn't ... You know. You'd see who really means it.

Eric Ries: Yeah. So find out who really means it. So just talk about why that was important to you before the crisis and maybe how your understanding of what it means to be a multi stakeholder has evolved because of it.

Brian Chesky: Yeah. Let me just tell you a little bit of a background. I'm perhaps an oddity of Silicon Valley because I'm not an engineer by training. I'm not a business person. I didn't go to business school. I'm a designer. I went to Rhode Island School of Design.

Eric Ries: Shout out to RISD.

Brian Chesky: RISD. People know it as RISD too. And I was an industrial designer. And I loved industrial design because somebody once said, "Industrial design is the design of everything from a toothbrush to a spaceship and everything in between." And I said, that's what I want to do. And so suddenly I became industrial designer at RISD. And industrial design in some ways is one of the most holistic design educations you can get. They're among the most holistic thinkers. I mean think about it. You have to know how to design a toothbrush and a spaceship. And literally, we worked on both in our classes. There was an internship with NASA and things like that. And when you do industrial design, you have to think about not just the product you're designing, but its impact on the user. You have to think about the user journeys, but its impact on the broader world. And when I got to RISD, there was this new movement happening. At the time it was called the green movement. Now we would consider it sustainability and global warming, climate change. And of course, this is 2000. Year 2000. So 20 years ago. So this is before a lot of the ... It was just emerging on college campuses. A lot of movements start on college campuses. This one really started getting legs in the late '90s, early 2000s.

And suddenly, a good product was no longer a product that sold. No longer even in the era of internet, a product customers actually liked. It was a product that was healthy for the environment. And so at the time, it was all about products that were healthy for the environment. Now when I came to Silicon Valley, something occurred to Joe and I. There were more than one way to define a product being healthy. If I had a food company, I just didn't want to know what the carbon footprint of the greenhouse gas offsets of the food I was making was. I wanted to know, how healthy the food actually is of the person eating it. Well the same could be viewed as a community, a marketplace, social media company, anything. Are these products not just engaging users, but are they actually good for users? And not only are they good for users, are they good for the other stakeholders involved? And the reason this was important was, I both brought this lesson to Silicon Valley, but I need to admit that I also learned this lesson the hard way.

Because I also learned another lesson at Silicon Valley which was that ... And it was a lesson I gleaned from Pierre Omidyar. He was the founder of Ebay. From Craig Newmark, he was the founder of Craigslist. And they believed ... And this was mid '90s internet kind of philosophy. That the internet is an immune system. It was a very libertarian view. The internet's an immune system and your job is to build an immune system right tool so the community can moderate themselves. And that it would be viewed as not right for you to have a heavy hand and adjudicate things and decide what's right and what's wrong. And so then we all became platforms. And that was the culture. We're platforms, we're hands off, and we don't take responsibility. And in fact, it wouldn't be right to take responsibility. But we'll build tools, we'll build reputation systems, we'll build flags, and the community will moderate itself. And that was the vision. And that's what I believed and we tried that experiment. And I learned the hard way that that is not enough. And I probably learned the hard way sooner than other internet companies because Airbnb is like the internet moving into your neighborhood.

And so, you kind of feel it a lot sooner. And so most companies, Facebook, Amazon, they kind of got scrutiny when they're big. Most of their scrutiny involved them being big and the implications of them being big. We got scrutiny within weeks of going into markets when we were little. And so we had to learn the lessons the hard way. And a person I hired named Belinda Johnson, she was my general counsel, then she became my COO, now my board member. I always thought growing up, when people don't like you, you should avoid them. And Belinda said, "No. When people don't like ... You should meet with them. You should look across the aisle from them. Look them in the eye. And nine times out of 10, they're going to hate you a little less after you meet with them because it's pretty hard to hate up close." And as we started meeting everyone we started realizing our product is having impacts, good and bad, on communities and on people. We need to move very, very quickly. And I think that we ended up playing a lot of catch up.

And I thought ... I started thinking about this in 2016, 2017. I started thinking about, our company's like wet cement. It's kind of still moldable. You can still shape it. But it's kind of like ... I don't know. Or maybe it's a weird analogy. But it's like taking ... You're baking. You're putting dough and you put it in the oven. Once you bake it, it's kind of hard to add ingredients. And so the oven is like being an IPO. Once you go public everything gets kind of baked. You can't really change everything after you go public. I thought to myself, we better bake in what we care about. And so we wrote down all the things that we cared about and we said ... And we kind of wrote down a bunch of principles. Kind of like, we will always do this. These are the things we care about. Even more than core values. Core values are like your shared behaviors. Like we embrace simplicity. That's a core value, it's a behavior.

But a principle is a way you're going to live your life. A kind of decision you're going to make. Like a principle as an example would be like, we are going to keep our guests safe no matter what we do as a first priority. We're going to treat our hosts like partners. We're going to diversify the communities that welcome guests so we can create more economic opportunity. These are kind of principles.

Eric Ries: And pretty unusual among tech platforms, if we're being honest.

Brian Chesky: Pretty unusual.

Eric Ries: The idea that your hosts are almost like the citizens of your nation state. That's not usually the way that tech companies have thought about people they derisively call users.

Brian Chesky: Well first of all, isn't is so funny, they call them users? As if it's like your product's addictive. Because don't you call a user somebody who is addicted to something?

Eric Ries: Yeah.

Brian Chesky: Like they're a user, a drug user. So I never really liked the word user. You're not like a user. I also think ... As an aside, one challenge of Silicon Valley is not how reliant it is on data. But how sometimes over reliant it can be on data. And what I mean by that is, almost every metric, every graph, every number, is a person.

Eric Ries: Metrics are people too.

Brian Chesky: Metrics are people. And suddenly you can get very unintentionally sociopathic. No average person would just not care about a person suffering. But when they're reduced to graphs, they don't become people. And then suddenly there is almost no empathy of the decisions you're making. And so I think that that becomes the problem. And so suddenly, your master are your metrics. Your metrics are your master. Which is really just saying your shareholders are you master. Not even you longterm shareholders. Your short term shareholders. And that's not necessarily who most people start companies for. And so what I thought was ... Went to my founders and said, "Why don't we just write out who are stakeholders even are?" Well, who are they? They're our shareholders, they're our employees, they're our hosts, they're our guests, and they're also the communities we operate in. And in a larger sense, the public. And then I wrote, well, what do I want to do to serve these? And I wrote down 15 to 20 principles. I ended up refining it to a list of 13. And I wrote these. They're kind of like-

Eric Ries: It was too many.

Brian Chesky: Yeah. Yeah. Exactly. I iterated it down to about 13. So it's kind of like two to three each. And so one would be, we'll create more entrepreneurs in the world. We'll treat our hosts like partners. We'll make sure our guests belong. One by one. And then the most important thing was the next thing. How do you actually measure your impact on each of these stakeholders? And that was the really critical thing. I always felt like, the most important thing you need to do is just have the information. If you know the impact you're having on somebody then you're going to really think more differently about how to make decisions. And the final thing, and this is the thing that you and I worked a lot on, this is something you've talked about. You created the longterm stock exchange. I said, the real challenge isn't that people aren't just serving their stakeholders, but the time horizon's wrong. And the time horizon becomes quarter to quarter rather than year to year. And it's really really easy over the course of many years to understand what the right thing is. But it can be very hard quarter to quarter.

And so I felt like, the basic principles of a company in the 21st century were going to be different than the basic principles of a company exiting in the last century. These would be companies that'd be multi stakeholder, not singularly stakeholder. And they'd be multi year or even multi generational. Longt-erm. Infinite horizon. It doesn't expire. And that was the opposite of serving shareholders singularly on a short term basis. And the other thing I said Eric, wat the best thing you can do for shareholders is for the public to want your company to exist. The best thing for shareholder value is for the world to want you to exist. And more and more, the public is having the power to decide which companies exist, which ones don't, which ones get regulated out of existence. And there's I think a new generation-

Eric Ries: You called it winning the public's trust.

Brian Chesky: Yeah. That means the public's trust matters. And honestly, it's going to matter now more than ever. Trust is like trees, it can take generations to build and seconds to cut down. And so, you got to be really, really careful about that. And honestly, the world moves at the speed of trust. Trust is your ultimate currency and if you don't have that, you don't really have very much. You can't really operate.

Eric Ries: But take that back now to this crisis because I think that the obvious thing people would assume ... I mean, I heard this from may people. We were just reading it in the Wall Street Journal the other day. That aha, now that there's a crisis the company has to be more short term. You can't be multi stakeholder if you're laying people off. Because ha ha, gotcha, employees are one of your stakeholders. So I think it's actually really a key moment. You talked about how this is a defining moment for the company. So explain how these 21st century principles that we've been working on ... How do they apply or resonate in this new world?

Brian Chesky: Well, you know Eric, they kinda only matter in times like this, don't they?

Eric Ries: Right.

Brian Chesky: It's almost like having an emergency plan but it doesn't work in times of emergency.

Eric Ries: Then what is it for?

Brian Chesky: Yeah, what is it for?

Eric Ries: Because it's easy when everyone's making bank and everything's easy. And all the stakeholders are thrilled with your performance. Of course it's easy to say we want to support all stakeholders.

Brian Chesky: I guess the way I thought about it was, a crisis would tell you who really means it and who doesn't. And it was really for times like this that you would have those kinds of crisis. And this is a really interesting paradox and you've talked about this. At times of crisis you become both more short term and more long term. In one hand, you have a new sense of urgency and decisiveness. Instead of thinking week to week and month to month, you think day to day and hour to hour. You because very present and focus the task at hand. On the other hand, you also become very long term oriented. Suddenly you realize you can feel the decisions you're making are going to have imprints for a very, very long period of time.

Eric Ries: So give an example of something that you've decided or had to do during this period that you might have done differently if you didn't have that long term perspective?

Brian Chesky: Let me give you three or four examples. Okay. The first and one of the hardest decisions I ever made was this thing, it's going to have a very anodyne name, but it's a very serious topic called an extenuating circumstance policy. Doesn't sound so dynamic, but it's crazy. We handle money. So people pay Airbnb. They prepay Airbnb. We hold onto money. And then once you check into your Airbnb home, we pay the host and then we hold the commission. So we're in the process of holding billions of dollars at any one time. And when the crisis occurred we were literally holding billions of dollars of guests money. And all of a sudden we had guests wanting to cancel more than a billion dollars of bookings at once. All at once. We got like a billion dollars of cancellations. Now the problem is, they actually couldn't cancel because for a percentage or our hosts, they do not have a flexible cancellation policy. And that makes sense because these are regular people and they need to count on this money to pay rent. And so, what do you do when you have millions of customers who say that you owe them billions of dollars and they say, "I feel unsafe. I can't travel. I need my money back."

And then all of a sudden you have on the other hand, over a million hosts saying, "I need you to pay me the money I'm due because if you don't I may not be able to make my mortgage or my rent."

Eric Ries: It's an impossible situation.

Brian Chesky: And we don't have enough money-

Eric Ries: You can't win.

Brian Chesky: We don't have enough money to cover it and we are burning money quickly now because travel is plummeting. What do you do? I mean literally, it's the most perfect example. Guests want their money, hosts want their money, and shareholders want to make sure that you have enough cash to survive. It was the ultimate predicament. And so what I ended up doing was make one of the hardest decisions I ever made. Instead of choosing between guests and hosts, I chose a principle. I said in a pandemic, the number one principle is health and safety. Be on the side of health and safety. If you choose health and safety, you're not wrong. And obviously there's nuances to that. And so I chose health and safety and I said, I don't want a situation where guests feel like they're going to have to travel because they can't get their money back and they're going to make unwise decisions. So we ended up overriding host strict cancellation policies and instituting an extenuating circumstance to allow guests to get their money back. Suddenly hosts are livid. Not all hosts, but a bunch of hosts were livid. Especially the more professional ones. And we knew that they were really hurting. So then I made a second defining decision. And the second defining decision was we decided to take $250 million of our own money and give it to hosts. Not advance to the hosts, give it to them.

Now a cynical host would say, "Well that was my money that was due to me." And it wasn't even all their money. We were only able to give them 25% of their money that was owed to them. But that was $250 million of money on our own balance sheet.

Eric Ries: At a time when you were struggling to raise money yourself.

Brian Chesky: For a travel company in a pandemic, I can tell you that no matter how many billions of dollars you raise, every single dollar starts to count, especially in a pandemic. You start to value money like you haven't in a decade. And so suddenly every dollar counted and $250 million ... I mean, in the middle of a pandemic, you don't know if that's the last 250 million you're going to need. And by the way, people aren't looking necessarily to give money to travel companies in pandemics. That's not an easy total adjustable market. So that was a very important decision. I would say that was a defining decision maybe too. I feel that we made the right call. I think I maybe messed up a little bit of the communication to hosts. I wish we communicated more to them. But that was a defining decision. And by the way, we ended up raising $2 billion and the lead investor, Silver Lake ... The guy, Egon said, one of the reasons he decided to invest in us was because of the decision we made to support our hosts and use our own money. Wasn't that just ironic? There was concern that if we give money to hosts, our own money, investors may not want to invest in us. And in fact, that was one of the reasons they decided to invest in us.

So I'd say that was a fairly defining decision. That's number one. I'll give you maybe two more. Maybe the second one was, I said, we may not be at this moment as relevant as we used to be. If we're not as big as we were, we're not as relevant. But we can be useful in this crisis. And so another guiding principle I had was, let's be useful. And I started reading articles about all the companies, General Motors, and others that were trying to re-appropriate their assembly lines to produce ventilators and I said, well Airbnb, we're not manufacturers. We can't help with ventilators. But you know what, all these healthcare workers who have to put people on ventilators, they need places to stay. And a lot of nurses, a lot of doctors, a lot of EMTs, firemen, others, they are often going to other towns that have outbreaks. Places where they don't live. Where they're living with their family or with an elderly-

Eric Ries: Yeah. They're afraid of infecting their own family.

Brian Chesky: Yeah. Especially if their parents live with them and they're older. And so we had all these people that needed housing. And so we basically worked with our hosts and made a bold pronouncement that we're going to provide housing for 100,000 people in need. And something amazing happened. Thousands of hosts volunteered to offer their homes for free or for a discount. And we said, we'll subsidize every home by basically 15% by waving our fees. And then I said, we need to put our own skin in the game. So I ended up putting in five and a half million dollars of my own money to cities. I put two million into the city of New York, to be able to house workers on the front line through a union called SEIU and put in like ... I think a million, a million and a half to Los Angeles. 500,000 to Detroit. 500,000 to New Orleans. I started putting my own money in because I really wanted people to see we had skin in the game and it wasn't just the corporate cash we were using. I was putting in my own money. We had to be useful. And we really wanted to inspire and I think that really made a difference. So that was maybe a second one. Call that opportunistic.

And the third one was I would say the layoff that we had to do. It can feel very paradoxical. How does a company that serves its stakeholders, including its employees, confront a layoff? And more even difficult than that, how does a company whose mission is centered around belonging, have to tell thousands of people they can't be at the company anymore? It was a very, very difficult thing to face. Not nearly as difficult as the people who had to face leaving Airbnb. And I think the way you deal with this is you have to look at when you have to reduce the size of your company, you have to look at all the stakeholders and know that you aren't just there serving employees, but you also have millions of hosts depending on you and depending on your survivability so that they can pay rent. That every one of our employees are also shareholders. I'm proud of that fact.

Eric Ries: And you made sure that everyone walking out the door remained a shareholder.

Brian Chesky: 100% of employees remain shareholders because we waived their one year cliff. We didn't want people not having their equity. We got everyone to their next vest. And so we wanted to make sure that we were thinking of all stakeholders as we made the cut. I wanted to exhaust all other options but ultimately we had to face a couple of really hard truths. Even after we cut a lot of money, even after we raised $2 billion, there were two hard truths. We did not know how long the storm would go on. Nobody does. We don't know if this is going go on months or years and we don't know how long it's going to take until travel rebounds. And we know travel will rebound, but even when it does rebound, it's going to look really different. Decades of change are happening in years. And so suddenly, the shape of our company needs to look fundamentally different than it was before. And we couldn't afford to do everything we used to. So we had to get really back to basics. And the crisis confronted a lot of clarity to us. That we're going to go back to basics, back to our roots, back to what makes Airbnb most special. The everyday hosts that offer experiences and homes.

And that meant that we had to confront a lot of difficult decisions. We had to pause transportation. Pause our content efforts. We had to reduce our investment in hotels and lux and other things. And that meant that we had to be confronted with the very, very painful decision to reduce the size of our company. But you know what, that doesn't mean because you're confronted with a layoff that you can't do it in a thoughtful and compassionate way. There's no excuse not to do that. And it doesn't cost significantly more. And what I thought was, whatever it costs us to take care of people leaving, it costs us less than it costs them not to get it. They'll feel it more than us.

Eric Ries: One of the criticisms I've seen floating around about Silicon Valley is you have companies that are simultaneously raising money and laying people off at the same time. So talk about how you kind of handled that paradox because I think some people would naively say, "Well, you're raising more money, does that mean you don't have to lay people off?" So what was that like to be simultaneously dealing with both ends of the business and those two different stakeholder communities at the same time?

Brian Chesky: Well again, when I first started this crisis, I said that we have to do four things. We have to manage our stakeholders, we have to diversify our business, and we have to cut costs and raise money.

Eric Ries: It was a painful fundraise, compared to things you've had to do in the past.

Brian Chesky: Yeah. I could say it was incredible. Let me put it this way. It was different than certain rounds where we're growing two or three X year to year. That being said, I will tell you, I think we had 30 or 35 investors proactively reach out to us. So now the terms were going to not be the terms you'd get a few months earlier. But we actually had quite a lot of interest. And the good thing is, was it included people that were already in our cap table. So people with the most information were looking to double down. But I've got to tell you, it was not easy. It was just stressful. Very, very stressful. And it kind of feels like the house is burning and you've got to rebuild the house but you're in the house and it's still on fire. And so it's this really challenging thing that you're doing. And so going back, we forecasted that even after raising this money, that we were going to have revenue approximately half of what we had last year and that we didn't know what next year would look like. And my guiding principle was, remember, the number one principle is be decisive, but the next one was, we needed to make sure that we preserve cash and that we-

Eric Ries: Because you can't help any of your stakeholders if the company-

Brian Chesky: Yeah. When so many people depend on Airbnb, Airbnb must endure. And when you're faced with a crisis, suddenly enduring you realize the value of that.

Eric Ries: It's an accomplishment in its own way.

Brian Chesky: And so ... Yeah, you're right. Surviving a crisis is succeeding. If you're a travel company and it's a pandemic. I'll say that. So that certainly is true.

Eric Ries: Do you wish you'd been public already so you could have tapped public markets for that funding?

Brian Chesky: I don't think the outcome would have changed much. I think the interest rate would have been marginally lower. I could have given you a different parade of horribles had I been a public company. I think it was going to but hard no matter what. There's good times and there's bad times and there's right now. I think you could Monday morning quarterback that all day long. It is just too hard to know for sure. It's really upsides and downsides. Anyway, just to go back to where we were, once you confront this reality that your business is going to fundamentally look different ... I mean listen, we thought about things like furloughs. We thought about things like pay cuts. The problem is furloughs and pay cuts work when you're going through a crisis or an unknown period that's temporary. The problem is, if you don't know how long it's going on for, people can't take pay cuts indefinitely and you can't furlough people just indefinitely. Because then they're kind of holding out and they can't move on with their lives and it can be very unfair. And more importantly, we knew the shape of the company would be really different on the other side so we had to reshape the company quickly.

And remember, in a crisis those that are most resilient survive and so resilience and adaptability means you have to adapt quickly. You got to be willing to adapt. So once we did that, I basically wrote down a series of principles. Again, you'll notice I do this a lot. And I wrote down five principles for the layoff. I said the number one ... And I said, these are going to be principles guided by our core values. Principle number one, we're going to map all reductions to our future business strategy and the capabilities we need. Need to have some fair and logical kind of order to it. Number two, we are going to do as much as we can for those who are impacted. Number three, we're going to be unwavering in our commitment to diversity. Number four, we're going to optimize for one on one communication for those impacted. And number five, we're going to wait to communicate any decisions until all details are landed. And I did my very, very best to stay true to those principles and it's really, really hard but we really pushed as far as we can go. I didn't want to go to bed at night knowing I could have gone further and didn't and regretted it.

I think in a crisis, what you often regret is not going far enough. Whatever it is. You often regret half measures in a crisis and I didn't want to be viewed as somebody who did half measures. I really wanted to do everything we could. There were a lot of things we did. As you mentioned, we waived the one year cliff. We didn't want people not having equity out the door.

Eric Ries: You were very generous with severance too.

Brian Chesky: Yeah. We gave everyone a baseline of 14 weeks of severance. Plus in the United States, one week per yeah of service. Other countries that was the baseline. Some countries it varied. Healthcare is more of a US thing obviously.

Eric Ries: Unfortunately.

Brian Chesky: Unfortunately it's a US thing. But we thought, in the midst of a global health crisis, it's unknown duration. We wanted to minimize the burden of healthcare costs. So we gave everyone one year, 12 months of health insurance through Cobra. And then the last thing we did ... A lot of this was Joe's idea. Joe's my co-founder. Was job support. We said, the thing people need even more than money is a job, because if you get money and you don't have a job, all the money's going to be gone so you need a job. So we thought, we could actually do a lot of job support. What if we helped everyone get their next job? And so we kind of ... Joe led some brainstorms and we came up with a few ideas. The first idea was to create an alumni talent directory. Basically everyone leaving could opt in, it's optional, to put their basically profiles on a website we'd build. Basically just like a talent directory of those leaving and they would have their contact info, their LinkedIn. And we built this. A thousand employees opted in and 350,000 people visited their profiles. So hopefully that will yield some helpful results for people.

The next thing we did is we wanted to create our own internal placement firm. Alumni recruiting firm. And so we said, we're going to dedicate a significant percentage of our recruiters, not to hiring people to work for Airbnb, but to assign to every employee that wants to be assigned a recruiter. And 875 people opted in leaving to have a recruiter assigned to them and as of today we've assigned every single one of them to a recruiter. And additionally, our executives and employees rose up and said, "We want to also personally help people find their next job." Now this can also seem counterintuitive. It's like, why would you spend your energy to help them not work for you and work for someone else? Well, it's kind of the same reason why in the long run, it pays not to be a jerk. Because if you were kind of a jerk you can win a transaction, you win the battle, but you lose the war. And I always felt like we will be successful if people want us to exist and they're rooting for us. And if we're viewed as doing the right thing, just trust that everything will sort itself out.

Brian Chesky: So I guess this is an example of a long-term decision. There's no near-term benefit to us helping people leaving.

Eric Ries: It's a significant near-term cost.

Brian Chesky: It's a near-term cost. But it just feels like the right thing to do. And again, if you want to be remembered for how you handled it, what is the right thing? Well, they need it more than we do.

Eric Ries: Take care of your people.

Brian Chesky: Take care of your people. And they need help. It cost us a bit, but the cost to not helping is so much greater to them. And so-

Eric Ries: Did you have any pushback internally on wanting to do all this stuff? This is unusual for a company of your size.

Brian Chesky: I'm pretty proud that there was not a ton of pushback on a lot of the time-based things. There were definitely debates on the financial stuff and I understand why. Money's like oxygen and when you're a travel company it feels like you're losing oxygen so every dollar counts and it can seem kind of crazy. Like what do you mean you're going to give hosts $250 million? You're going to give employees what? Like that's very expensive. But ultimately, I think when you look with the fullness of time, I think people realize like, this is fundamentally the right thing to do. Maybe if there's one thing that's even more important in the company than ensuring its survivability, it's making sure it helps the world through this most harrowing of crisis. That is actually way more important than us enduring. I want us to endure, but most importantly, hundreds of thousands of people are dying. We all have to rise up to a challenge greater than ourselves and as companies we're afforded the right by society to exist and so it's important in times like this that we all contribute and we all help out. And so, I think very few people went out of business doing the right thing. I mean there are limits and you can be foolish. You got to be smart and thoughtful. But a lot more people went out of business because they didn't do the right thing.

Eric Ries: And that to me seems like ... To have answered this criticism that has come up that what it means to be multi stakeholder is not that you guarantee people a job for life. It's still a business and so you have an obligation to make sure that people's businesses are aligned with the longterm vision of the company. That's actually humane, not cruel. But the way you treat people is what matters if you have to do something like this.

Brian Chesky: Exactly. I think that what people really ... It's less they begrudge you for hard decisions and it's really about how did you make the decision and did you do everything you could and did you have compassion?

Eric Ries: Talk about the letter you wrote. Because that was also very unusual and very heart centered for a letter announcing bad news. And talk a little bit about the response that you've had to it.

Brian Chesky: Oh my god, I was not expecting that. Basically, I remember somebody saying, "You have to write the email of your life." And I was like, "Oh god, that's never a good setup." And to be very clear, the letter I wrote was actually a script. Because every Thursday at 4:00 pacific time, I basically host a all hands, like a Q&A, from my house. I used to do it in the office, now we do it in the house. I think I did it six Thursdays in a row. And this was a Tuesday so I had to draft it and I ended up writing out ... And I had to write this thing out. And I basically wanted to write out every single thing I wanted to say and I used it as kind of a script that I would talk through. I kind of made it more human when I read it. But I also wrote it as an email. So I didn't write it to be an open letter. I wrote it as an email to send after. And I read it on video. I was very emotional when I was reading it. And then I sent it as an email.

And my comms team made the decision to publish it online. Not to promote it, but because I was about to send it to 7,000 people.

Eric Ries: And it was obviously going to leak.

Brian Chesky: It was going to leak and we knew a reporter was going to get it and they were going to get sections. And they were going to start reporting on sections. And we said, we don't want to get in the back and forth of what I really said and what I meant, so we said we're just going to put it on the website so that reporters kind of have to report on it very accurately because there's a record of it. And that was only thing it was meant to be is just to be a source of truth so there's no misunderstandings.

Eric Ries: And we'll obviously link to it so people can read it for themselves.

Brian Chesky: Yeah. Something super unexpected happened. It kind of started getting passed around a lot. Here's the good news. Had I known it would have been so public, I would have written a worse letter. Because I would have been so self conscious. I would not have-

Eric Ries: You didn't realize you were addressing the whole world.

Brian Chesky: I wouldn't have said I love all of you. I literally said that in a letter. But I was so emotional and I felt that. I wrote a letter that was so honest. A letter that you could only be so honest about if you didn't really think the whole world would judge it and evaluate it because then suddenly you'd be self conscious. And little did I know, now it feels like the whole world's reading it. 1.2 million people ended up going to our website and reading an email about a layoff and it was-

Eric Ries: It's mostly about severance policy and jurisdictions and HR rules.

Brian Chesky: It's severance policy details. 1.2 million people. It turned into probably one of the most defining things we ever did. And to be really clear, when I say I wrote it, I have a great team that helps me and they edit it and they kind of push back. I have this woman on my team, Kylie, she's unbelievable. I have people-

Eric Ries: She's great.

Brian Chesky: Yeah. That help me.

Eric Ries: But there was stuff in there that obviously no HR consultant would ever have advised you to say and that was so obviously personal that it couldn't have come anywhere else.

Brian Chesky: It was only internal. It was me with one or two people. It was me with one or two people that were editing it and helping me. And we didn't share it super broadly. I made sure my executive team saw it because I had to be very careful about making sure I was giving the right information. But I didn't have any professionals so to speak, or any paid ... I didn't-

Eric Ries: It doesn't read like a speech.

Brian Chesky: I didn't hire a crisis communications firm because I think that people kind of protect you from yourself, but who you are is what people really want to hear. They want to just know you're human and you're real. When you're talking, you're not full of shit. So we wrote that and it kind of ended up spreading a bit. And I think it was just the end of a chapter. And I look back and I say I didn't get everything perfect. I'm human. Humans make mistakes. But I am, in aggregate, really proud, not just of the decisions we made, but of how everyone acted. A crisis reveals a lot and you learn a lot about people as we said. And it kind of is a truth serum. And what I learned through this harrowing of experiences, especially this past week ... I don't know. I'm just thinking about this. There's a deep love that people have for one another. And they're incredibly loving. It's incredibly caring. I was reading hundreds of people saying goodbye on LinkedIn. LinkedIn's got a news feed and they were ...

And people were using the word love on LinkedIn. When's the last time you saw the word love on LinkedIn? Love and LinkedIn do not go together. Well, they suddenly did. And I was so proud because I got so many thank you letters from people leaving, and I'm like, "The wrong person is thanking the other person. I deserve the thank you to you because you've given so much of your life to Airbnb." I am a big fan of Joseph Campbell. Joseph Campbell's a mythologist who created this thing called The Hero's Journey. The Hero's Journey, basically he wrote a book. It's called Hero with a Thousand Faces. And Joseph Campbell's a mythologist and he said every movie you've ever seen, from The Wizard of Oz to, I don't know, Star Wars, is the same story. It's basically same hero, different face. They start in the ordinary world. They cross the threshold to the new, magical world where they have to battle dragons or slay all the stuff. And the person they are dies and a new better version of themself is reborn. This is the plot, the conflict. And they go back to the world they came from with new special powers.

And that's basically every movie you've ever seen. It's just basic mythology. And I study this, because when we wanted to build Airbnb, I wanted us to build end to end trips. And I thought, what if a great trip is like The Hero's Journey? Because doesn't that sound like travel? You start in your ordinary world, you go to the new magical world where you learn, you grow, and you come back to the world you came from a slightly elevated version of yourself. So I ended up studying Joseph Campbell. And one of the things that Joseph Campbell said is he said, "A hero is somebody who serves something bigger than themselves." And I thought to myself when I was saying goodbye to 2,000 people, or 1,900 people, that they gave so much of themself to something bigger than themselves and that thing was Airbnb and to me they're heroes. And I told them, "Like The Hero's Journey, you went to this new world, you got these superpowers, and now you're going back to the world you came from, but with these new powers, ready for your next adventure. And-"

Eric Ries: What do you hope they're going to take away from Airbnb and do out in the world now that you've set them loose?

Brian Chesky: I hope they bring our deep sense of care and our values around belonging and love. It sounds weird for a business leader to say that. Into anything they do. You and I were talking about this. There was this article written that I read over this past holidays and it was called The Decade of Disconnection. And it was writing about the 2010s, that decade, that the most digitally connected era in history was an era that was seemingly more disconnected than ever before. That people were just being disconnected from one another and feeling lonely. And that was before the pandemic. So suddenly, I think what we're yearning for suddenly feels it was taken away from us. Human connection. And I think that you start to realize the things that are essential. And there's something that's more essential than even money. It's really love. And it's the feeling like others care about you. I guess that's what love is right? The feeling that someone else has a deep, deep care for you. And that's what we need from leaders. The sense that we care about each other. And if people can leave Airbnb and they go out in the world and whatever they do they bring that basic idea of love and care and belonging to whatever they do, sounds a little weird, can sound a little corny, but I don't know, at times like now I'm sure we wish more people had that.

And it doesn't come at a cost. It doesn't cost very much and every single person can do it. And by the way it's human nature to do it.

Eric Ries: It was so bracing and strange when you said that I love you in that letter. I remember when I read it. And my first reaction was like, what? Oh my god. It was like a taboo. You can't say that. But I got to say, every founder I have spoken to about this, and many have called me about it, every one of us so relates to that. That's exactly the relationship we have the people you carefully and painstakingly assemble to go on the hero's journey with you, to be part of your raiding party, to be part of your building party. It's like an extension of your family. And so, to have to help them through this crisis is so painful precisely because we have that bond.

Brian Chesky: You know what, I'll be honest to you, I don't think I could have mustered myself up to use that word nine weeks ago. I think there's something about this time that-

Eric Ries: It's a personal transformation.

Brian Chesky: It's such a personal transformation. I've been through my own transformation. I'm like 38 going on 58 or something right now. The last nine weeks. God knows.

Eric Ries: I think a lot of us have felt like a decade has passed in a month.

Brian Chesky: Oh, that's what it feels like. Doesn't it feel like that?

Eric Ries: It absolutely does.

Brian Chesky: It's like suddenly the moment you see people that you have to care for are vulnerable. And it's that moment that you just feel this deep sense of care and this deep sense of love. And maybe when times were good and you walked down the hallway and you're like that's whomever and their name badge hanging off their leg, the last thing you think about is loving that person. But when they're in a crisis and they seem vulnerable and they're looking to you to protect them, there's some deeper primordial bond. And it's a love that connects all. That's the reason that our species is still around because we have this bond that keeps us together and caring for each other and we call that love I think. And I think it's the thing that provides us the ultimate protection. I don't know. I think now's the time to strip away the armor and just to be real man. And I think that's where it is. There's a saying, the most authentic is to come from the heart, not from the head. Well, why do we say that? It's your brain making those decisions.

But it's just something deeper. And I think what's happened, sometimes in Silicon Valley, is think of it as you have a head and a heart and you have two hemispheres of your brain and we tend to not use our heart, just our head, and sometimes just one side of our head. I think the creativity, the intuition, the compassion, these things exist in every single one of us. There is no type person that has that. But those muscles, just some of those get exercised a lot in business and I think the creative side, the intuitive side, the compassionate side, these exist in everyone, but they're kind of suppressed. Or maybe that we're educated out of them. When's the last MBA case study that talked about creativity, intuition, and compassion? But if your life was in someone's hands, what quality do you want that leader to have? Just think about that for a second. If somebody's responsible for you, what qualities do you want to have? Them have? Or maybe, those are qualities you should have when you have responsibility for people.

Eric Ries: At this point in the conversation Brian and I turned our focus to the future, and how companies can use an emergency like this as a defining moment. In part two, we talk about what he hopes other founders and leaders will learn from Airbnb's experience. His philosophy of building and designing both products and organizations. And how to use 21st century principles to earn the public's trust. How we can build more resilient institutions on the other side based on trust and love. And finally, how we get out of the crisis.

This has been Out of the Crisis. I'm Eric Ries. Out of the Crisis is produced by Ben Ehrlich, edited by Jacob Tender and Sean McGuire. Music composed and performed by Cody Martin. Hosting by Breaker. For more information on the COVID-19 crisis and ways you can help, visit helpwithcovid.com. If you are working on a project related to the pandemic, please reach out to me on Twitter. I'm @ericries. Thanks for listening.

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