CEO Diaries: Airbnb’s Founder Brian Chesky on Brutal Rejection, Great Leadership, and The Biggest Mistake Founders Make!

Steven Bartlett (0:00)

This was one of my favorite business conversations that I've ever had on The Diary Of A CEO podcast, and it's frankly set the bar for every CEO or co-founder that I ever interview. Brian taught me, more so than any other guest I've ever had on the show, how important hiring, culture and team building is. The reality of running a small business is that switching off is never really an option. Even when you try, the ideas, the excitement and all the responsibility is always there. And because you're always switched on, it's only fair that your hiring partner should be too. LinkedIn jobs who are the sponsor of this moments episode has been that hiring partner for me and for years, because it's always working away in the background. My team can post our jobs for free, share them with our networks and reach top talent all in the same place. So let's get into today's conversation. At the very beginning, I saw this email, which I think is really important because maybe it's the most important thing because there are going to be people starting companies now that are getting a lot of emails like that.

Brian Chesky (1:00)

This is from August 1st, 2008 We were, by the way, so let me give the context of this email. So Joni and I were trying to raise money. For everyone trying to raise money, I want you to know that Airbnb was trying to raise $150,000 at a $1.5 million, I think, post-money valuation.

Steven Bartlett (1:19)

I'll give you that right now.

Brian Chesky (1:20)

Exactly.

And here's one of many rejection letters. Hi Brian, apologies for the delayed response. We've had a chance to discuss internally and unfortunately don't think that it's right for fill in the blank investment firm from an investment perspective. The potential market opportunity do not seem large enough for a required model. Now, I want you to just put in perspective, Airbnb handles nearly as much money as the entire GDP of the country of Croatia today. One in about every $1,500 spent in the world, about $1 spent on Airbnb. That's a pretty large market and our business is pretty much the same idea as the idea that we propose that person who said our market opportunity wasn't large enough. So there's probably a myriad of lessons in that, aren't there? And I think that it's a reminder that the world doesn't just change, or at least it doesn't just transform towards our dreams, ideals and ambitions.

That requires certain types of people. We might call them entrepreneurs, inventors, all sorts of people in different domains, that believe the world could be a little different than the one that they live in. They have the audacity to believe that they can do it. And they have the ability to convince other people to go on that journey with them. But along that journey, everything's going to be different. You're going to get lost. You're going to be cold. You're going to have like obstacles. Things are going to attack you. You're going to fall down pits. And the question is, when people are cold and they're shivering and they're not sure what to do and you're running out of resources and rations, can you find your way up that mountain? Do you know why you're going? Can you invent all these different apparatus? Like there's a stream you can't figure out. You can build a bridge to cross the stream with the limited resources you have. Can you recruit people along the way? And can you beat the drum? And when people are tired and they say, I want to sleep, you say, yes, we're going to rest, but we got to go. Just 500 more steps. I know it's right over the edge. I think we can do a little bit better. And can you push people outside their comfort zone? Not enough to hate you, but enough to feel like a trainer. You're like three more reps and you don't want to do it. And then that very moment, they're not your friend, but at the end of the workout, you're like, thank you for pushing me that hard. This is that kind of person. And can you take divergent ideas that no one's ever seen before and just continue to reformulate them? Could you store these ideas in your head, a thousand competing ideas and just reformulate them in your mind? It turns out this stuff is difficult, but you can work your way up there. Most people watching this have the skill set to be an entrepreneur. Not everyone has a skill set or the desire to run a giant company. I don't think everyone needs to do that, but a lot of people have the skill set to do something, to start something. This is what you need to get up the mountain. And the problem is, imagine we got up the mountain, and then somebody was dropped from a helicopter, having never walked up the mountain, and you tell them, okay, now you lead this group up the next mountain. Can you imagine how hard it would be for that person to drop from the sky? Or maybe they joined a third of the way up the mountain, but they weren't there at the very beginning? You see, a founder brings three things that a professional manager doesn't have. The first thing a founder has is they're the biological parent. So you can love something, but when you're the biological parent of something, like it came from you, it is you. There is a deep passion in love. The second thing a founder has is they have the permission. Right, like I can't tell another child what to do, but if they were my child, I probably could. I have the permission. And so you have a permission. And I could re-name the, I could re-brand the company and a professional manager would probably come and say, I can't do that, but I know how we named it. I know how we branded it. So you know what you can change. And the third thing that a founder brings is you built it. So you know how to re-build it. You know the freezing temperature of a company. You know what temperature it melts. You know like what this looked like before it was tooled, where it came from, the alloys, where they were sourced from. You're not just managing it, you're building it. And the problem is professional managers typically don't have any of those three, at least not in the abundance of founders. But the problem with founders, there's two problems. The first is most of them cannot scale to run a giant company. And even if they do, the last problem is they don't live forever. And companies, great companies, usually want to live longer than humans do. And so therefore you end up with the inevitable challenge that Disney and Steve Jobs had, which is succession planning. Actually, both of them died prematurely and didn't maybe Steve prepared more than than Walt did. And that's the last step of the journey. But I think there's something really special about founders and founder led companies. And I think that if you want the world to change, we need more entrepreneurs. We need more founders. If you want to empower more women, you should make more women entrepreneurs. If you want to lift up more economies around the world, you should lift up entrepreneurs in those economies. It's one of the greatest ways to create wealth, to change the world and to just change the trajectory of society.