Airbnb

“So fast forward to today, and Y Combinator has funded 632 startups that now have a combined valuation of over twenty billion dollars, including Dropbox, Airbnb, Weebly, and Stripe.”

“In fact, sometimes I wonder if we funded them because I was so impressed by the fact that they, like, hand glue gunned their cereals, the Obama O's and the Captain, you know, campaign. Skills. I was like, whoa, these guys are scrappy. They're selling cereal on…”

“I remember specifically during YC, Airbnb said to themselves and I think, ah, to investors, we plan to become the eBay of space. Like, they were nowhere near the eBay of space at that point, but they had that vision, and they were working toward that.”

“I have to admit it was more of a bet on the three founders. They seemed really good. I did sort of like the idea of being able to stay in people's homes, but I have to admit I was not thinking it was going to be huge.”

“During the interview, ah, Paul tried to change their idea. We thought this idea of, like, renting out airbeds was a little weird.”

“So first of all, I'd say they're both lightly technical, both of those guys. They both know a little bit. Brian is a great designer and was able to design the first version.”

“He used to ask people before he hired them at Airbnb if they would take the job if they got a medical diagnosis that they had one year left to live.”

“Airbnb spent five months interviewing their first employee before they hired someone. And in their first year they only hired two people.”

“In Airbnb's case, it was a thousand days before the graph started taking upward.”

“I can't, I'm not a hundred percent sure who told me this. I think it was Brian Chesky. he used to spend, or still does spend, like, 20 of his 30 nights a month taking key Airbnb employees that don't report him out to dinner. And is just like, let's talk, I…”

“There are not that many countries in my experience that are dramatically different. There are maybe five or 10 that are quite different than the US, but most countries are not that different.”

“At Airbnb, really the entire product team is now a growth team, and the goal of the data team that have built these tools is to get everybody to use them. Like, they're, Literally measured by how many people using experimentation frameworks.”

“Every two weeks, the growth team gets into a room, and we show experiments that we've shipped and gotten significant results on in the last, last month, say. And the engineer will go on stage, show the experiments, show the control and the experiment. Before t…”

“Ed joined Uber to start the growth team when it was five people, and then over the three and a half years became kind of VP of both product and growth for kind of all of Uber, and Gustav joined, and the Airbnb growth team was him and two other people when he g…”

“So we do this thing called Airbnb on boarding, which when we hire folks within the first month, we actually do like to have them spend a week in person out here in the Bay area. So we'll, we'll rent an Airbnb. We'll bring their manager out here, them out here …”

“The seed rounds today, Are bigger than, like, the Series A that Dropbox and Airbnb did with Sequoia, which I think was roughly a mil each.”

“Like say Dropbox and Airbnb, they took like over a year to go from Demo Day to their Series A. So you don't have to actually rush into things at Demo Day. There's a lot of room in the post seed world where you can kind of invest like maybe at a slightly higher…”

“There's a lot of people who live in San Francisco for little to no rent just through special arrangements, like they're friends with somebody who has a space or they're trading services for rent or they own a place and then Airbnb out the rest of it or whateve…”

“If you look at a founder who comes to meet you for a seed round and compare that founder to Brian Chesky, you'll be disappointed a hundred percent of the time. That is the wrong comparison. You will never write a check. However just like startups, you look at …”

“The best companies will create a market. So if you look at sort of what Weebly's done, if you look at what Airbnb's done, if you look at what Dropbox has done, all, all companies have created their own market. I say this because by definition here, market rese…”

“My feeling is that that's extremely rare and that, again, this is a really dangerous place to be because you can stay in this iterative mode for years. And it is unlikely that the iterations are going to get you to a good place. So I remember very clearly earl…”

“Interestingly, the very best investors want to get you before you have all that stuff, because you're expensive by then. The greatest, best investors are Airbnb before they're Airbnb, before they have traction.”

“We actually made the mistake of going all focusing on the onboarding for the homepage, because they're like, well, that has the biggest scale by a long shot, but it turned out that only like, 10% of the people that come to the homepage actually have a booking …”

“In the early days of Airbnb, we used to automatically log you out after, like, I think two days. And we were like, why we do that? Well, security reasons. That makes sense. So then we would run an experiment. We set the kind of expiration date of that cookie t…”

“If you look at the evolution of the online marketing team at Airbnb, it went from like one or two engineers to when I left, I think we were a 15 or 20 engineers on online marketing. And they were building everything from attribution system to automated bidding…”

“The thing you want to decide early on is who, sort of like, what is the thing that you're controlling the experiment on, and I would recommend that it's going to be user accounts. If you're doing it on visitors or something like that, it's going to be typicall…”

“The early wins are often in the high intent flows. So like where people actually thinking about booking or actually about to book. So search conversion is important one. Signup conversion is important one. Sort of like online marketing traffic was an important…”

“But if you look at the composition of growth of Airbnb word of mouth is by far the biggest driver. So I think it was, like, way over 50% on the guest side, and way over, like, 70% on the host side of people that heard about me for the first time through a frie…”

“In many cases, actually the majority of cases in the early days the request was not confirmed. So you wanted to book something, and sorry, it didn't work out.”

“Like, had we not done online marketing early on we were certainly not being as big as we are today. So that was critical.”

“So I would say that the story of Airbnb was basically we had probably one of the best market fits that I've seen but not necessarily thanks to, like, an amazing user flow, an amazing onboarding, or even an amazing acquisition channel. It's just, like, a really…”

“Well, you pick a value that actually represents them both getting value. So in Airbnb's case, it would be nights booked, right?”

“This is in fact what the Airbnb founders did in the beginning. And if they hit the numbers, great. Ah, if they did not, then that's all they would talk about.”

“First, who's the sender of the email? If it's just Airbnb, I probably have never heard of Airbnb the first time I get this email. If it's Gustav that sent the email, and I sent it to my friends, they have heard of me, that's the reason to open the email.”

“They claimed to be hired photographers for Airbnb, Airbnb and breakfast. So when they met with all the hosts, they said, we want to come by your home and take photos. They didn't say that they were the founders because that made the company sound much smaller.”

“So at Airbnb, we launched, ah, a new sharing sheet for the mobile app. And this was the old version, which was the native share sheet that you've seen on iOS. Ah, you click on share, and then you see a bunch of sharing options. And then we just tried this new …”

“Look at the best websites in the world. Look at Pinterest. Look at Airbnb. Look at some of those sites. They have teams optimizing these flows the authentication flow. Copy what they do. They probably figure it out. They spend a lot of time optimizing.”

“Well, I could sign up, which is a undefined thing that you can do sometime in the future, or I can do what we did here, was accept my invitation. This sounds more exclusive. It sounds like something that is just for me. It doesn't sound like something I can do…”

“We got 2.6% more bookings from iOS by making people sign up through a sign-up wall in the app.”

“So when we were measuring retention at Airbnb, we're looking at annual.”

“In the case of Airbnb, we call the homepage P-one. The search results page, P two, and then the booking page, and the listing page, P three, and then the booking page was P four. Four pages. That was the entire website. Now what's the funnel? What percent of p…”

“Another famous one was Airbnb where customer service was one of the co-founders Joe's cell phone number.”

“If you think about the core insight of this market, it's that hosts are the game. If you can get the most hosts, you win. You have the best inventory. But if you charge them up front to be on your site like you're probably doing it wrong.”

“For each of these companies, there was a pre-existing product. Pre-existing competitor, dominant, you might say, but there was an opportunity to make something that was 10 X better than what existed.”

“Most people, founders and investors thought these ideas were horrible, either because they were too hard to execute or because they just were bad ideas.”

“Airbnb didn't realize the insight around facilitating payments, around accepting payment, when they launched. They didn't have that insight when they launched.”

“Some of the best companies we've ever funded happened when either there was a full downturn or at least a blip.”

“Still today, Brian and Joe gets calls from hosts on their personal cell phone numbers. I remember them telling me that on the first day I worked at Airbnb, Why do they do that? Well, it's the number that they put on the website and share with all of their host…”

“Brian is the co-founder and CEO of Airbnb. On the left side of the photo is Amol. Amol was the very first guest on Airbnb. They actually spent a weekend together in San Francisco when Airbnb kind of launched.”

“The key thing, if you're doing this tactic, is to not tell them what to do. Do not tell them what to do. Just watch them play around with it. You can tell them a specific goal, like try to make a booking at Airbnb, or try to do a search with dates on Airbnb, o…”

“We used to do this at Airbnb all the time. We'd go downstairs in our office, and we'd find some people that were waiting for an interview or waiting for getting a coffee or something, and we'd just show them the latest version of the app. This would be an InVi…”

“In early Airbnb, a lot of guests wanted to have the phone numbers of the host, so they can call them. And we were like, why do you need that? It just turned out that they didn't fully trust the platform. Like, we had not displayed enough trust in Airbnb, so th…”

“They didn't start by running Google SEM or Google SEO. The referral program did not bring in the first 2000 customers. They did things that didn't scale, and they look different than what they do at scale.”

“Airbnb launched three times before they really started to get users.”

“Here's the actual description Airbnb used on their YC application. We built the first online marketplace that lets travelers book rooms with locals instead of hotels.”

“But I think if you just look at the facts of the companies we funded, like literally DoorDash or literally Airbnb or any of these folks, they lived and died by their speed of shipping software. And if they, what they did was buy white label software or have so…”

“Airbnb launched three times before anyone started to pay attention, but each time they launched, they learned something new, improved the product, and kept going.”

“If you treat OpenAI as the Google of the next 20 years, you want to invest in Google and all the things that Google enabled, like Airbnb. Google could do Airbnb, it probably won't. Just from, like, I don't know, Coase's theorem of the firm, probably. It's just…”

“I think Airbnb revenue dropped like 95% the week he left, which was, you know, quite a change for the company.”

“There was like, there was a need for change, right? And like a need for like creating conflict within the company to actually ask the hard questions and say, Hey, do we need these folks or are, or, you know, are we actually doing this project because somebody …”

“I think I was the, if I remember, I was like the 30th or something product manager. And then when I left almost three years later, two and a half years later, there were like a hundred something product managers.”

“At Airbnb we had this metric, which was percent of technical people that work at the company, and the reason we had the metric is, at some point you have too many non-technical people all they do is request things from the technical people, and then you can't …”