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Introduction
Brian Chesky and I were sitting across from each other in the velvet, high-backed, regal-feeling chairs of the lobby bar of the Fairmont San Francisco hotel.
It was early November 2015, and we were there so that I could talk to him about the idea of writing a book about his company, the “home-sharing” platform Airbnb, to use the phrase the company has been so successful at popularizing. There was some irony in the fact that we were at a hotel, and not just any hotel: this was the exact venue that hosted the Industrial Designers Society of America international conference in 2007, the very gathering that had maxed out San Francisco’s hotel supply and had given Chesky and his cofounder Joe Gebbia, their goofy idea to rent out air mattresses on the floor of their three-bedroom apartment in the South of Market district.
Indeed, it was fewer than thirty feet from where we were sitting where Chesky had walked up to one of the designers he’d most revered to tell him about this new business idea, only to have him immediately dismiss it as ridiculous (“I hope you have another idea” were his words). That comment would mark the start of a long stretch of painful rejection and ridicule. But it also marked the start of Airbnb, the company that Chesky now commands, a juggernaut today with a $30 billion valuation, some one hundred million “guest arrivals,” to use the company’s term for tracking the travelers who book on its platform, and an inventory that is three million listings strong. (A note on metrics: the phrase “guest arrivals” refers to the number of people who have arrived at an Airbnb listing for a new trip, a term the company uses to be consistent with international tourism standards; I will henceforth refer to this number as “guests.”) At this point, Chesky frequents hotels only really for speaking engagements, and he had come to this one to address the Fortune Global Forum, my place of employ’s biannual gathering of CEOs from around the world. Chesky’s speaking slot was in between former secretary of defense Leon Panetta and Jamie Dimon, CEO of JPMorgan Chase.
Chesky and I had regrouped afterward in the lounge to talk about the project I was proposing. I thought Chesky would be open to my idea, and he was — but not without some reservations. “The problem with a book,” he says, clearly having given it some thought, “is that it’s a fixed imprint of a company at a particular moment in time.” I wasn’t sure where he was going, so I asked him to elaborate. “I’m thirty-four,” he continued. “Our company is young. We’re going to go on to do many more things from here.” His point was that it was still early in the game. Whatever I would publish in 2017 about Airbnb, he said, would very quickly be outdated, yet that’s what readers would remember. The media, he pointed out, were already behind: “Where everyone thinks Airbnb is today,” he said, “is where we were two years ago.”
The thought reflected Chesky’s ambition as much as it reflected his pragmatism. But he said he was open to my interviewing him for the book, and he trusted me to get it right. The meeting was ten minutes long. It was a good day: the night before, after a protracted fight, Airbnb had successfully beat back a ballot initiative in San Francisco to dramatically curb its operations. Chesky was soon leaving for Paris for the Airbnb Open, the company’s annual celebration of its “hosts” — those people who deliver the product upon which the Airbnb platform is based. As we left the lounge, he talked excitedly about what the company had planned: on one single evening, hundreds of Parisian hosts were scheduled to open their homes to the entire group for a series of coordinated dinners all across the City of Lights. “It’s going to be one of the world’s largest simultaneous dinner parties,” he said excitedly.
And with that, the thirty-four-year-old billionaire left the room.
The first time I heard about Airbnb was in 2008. At the time, I was in charge of the section of Fortune magazine that covered the quirkier side of business, and we’d gotten word about a couple of scrappy entrepreneurs who were gaining some attention during the 2008 presidential election season for hawking collectors’-edition boxes of fictitious breakfast cereals Obama O’s and Cap’n McCain’s. These entrepreneurs were recent Rhode Island School of Design grads trying to build word of mouth for their newly formed start-up, Airbedandbreakfast.com, which let people rent out sleeping quarters in their homes to other people who needed a place to stay. I thought the business idea itself was nothing new, but the cereal gimmick was plucky and had gotten some national attention, so we ginned up a short piece on it to run in Fortune. I didn’t give it more than a passing thought.
Over the next year or two, though, the company started to gain buzz, edging onto the radar of our tech-reporting team. Someone brought it up internally as a company to watch. Wait a minute, I thought. Those guys? I was not involved with Fortune’s tech coverage, which meant that I didn’t always know what I was talking about when it came to the companies coming out of Silicon Valley. But I also felt that distance gave me a healthy arms’-length perspective on the self-important euphoria that seemed to waft out of the region. As the keeper of Fortune’s “40 under 40” list, I was also used to breathless pitches from companies claiming they would change the world in one year’s time, only to be significantly humbled the next. I sometimes took a certain amount of pleasure in pointing out when I thought certain ideas were overblown and overhyped. This new company, I thought, was one of them.
I made a mental list of all the other companies that already existed that offered the ability to rent someone’s home or space in it: HomeAway.com, VRBO.com, Couchsurfing.com, BedandBreakfast.com. I wondered how this new start-up could be so different. What is it about these tech start-ups, I remember grousing to a colleague, that think they can take an old, unoriginal idea, gloss it up with a slick, minimalist, design-friendly website, and re-release it back onto the marketplace as something new?
But this company was going to be different from all those others, and in a short time that would become clear. Soon, Airbnb had become a “thing.” You could rent someone’s home for a night, but people had also started to upload quirkier spaces: a treehouse, a houseboat, an igloo, a tepee. Millennials in particular were drawn to this new way to travel that was both affordable and adventurous; you could stay in people’s homes in neighborhoods off the conventional tourism grid, connecting with like-minded souls, for almost nothing. Listings and bookings started to catch fire. As early as 2011, Airbnb raised a mega $112 million from backers, was valued by investors at more than a billion dollars, and had booked one million overnight stays on its platform. Over the next few years, it would leave those figures in the dust: one million bookings turned into five, ten, fifty, and then eighty million “guest arrivals” by the spring of 2016 — it would double again to the figure today — and its valuation jumped to $10 billion, to $25 billion, and to $30 billion, where it sits as of this writing. All those numbers will grow again in 2017. Yet the company still has low awareness and low penetration in the housing market. Analysts predict it will get many times larger than it is today.
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