Airbnb's Joe Gebbia At The HIBT Summit

Next in our series of episodes from the How I Built This Summit: Joe Gebbia, co-founder of Airbnb. Joe sat down with Guy Raz in front of a live audience in San Francisco, and talked about why he and his co-founders pursued their idea despite overwhelming feedback that it would never work. We're publishing another two episodes from the Summit – so keep checking your podcast feed every Thursday. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:06Guy Raz?

  Hey, it's Guy here. Today, we've got another brand-new episode from the How I Built This Summit in San Francisco that happened this past October. And this one is from my live interview with Joe Gebbia, the co-founder of Airbnb. Now, I first talked with Joe back in October of 2016 for one of our very first episodes. And if you haven't heard about the wild roller coaster ride of starting Airbnb, you should definitely go back and give that episode a listen. Because Joe and his co-founders, they really went through major changes, and pivots, and disappointments, and failures before they hit on the idea that, today, we all recognize as one of the most iconic travel brands in the world.

• 0:48Guy Raz?

  So when I sat down with Joe back in October, I wanted to spend time talking with him about why they never gave up, even when lots of people were saying, "That idea was never gonna work."

• 1:03Guy Raz?

  Joe.

• 1:05Speaker 01

  Guy.

• 1:06Guy Raz?

  It is... It is absolutely amazing that 10 years ago, no one in this room, no one listening, no one in the world could have imagined that people would be sleeping at the homes of random strangers. So, let's start with the idea. The beginnings of Airbnb, go back to 2008. Really, at this point, nobody wants to invest in this business. You go-- if you remember the podcast, they emailed 20 investors, 10 replied, 5 agreed to have coffee with them, none invested. I mean, I'm not surprised that at the time, people were telling you, "This is a stupid idea, and it's not gonna work." Right? Because that's what you were hearing.

• 1:46Speaker 01

  We got that-- I can tell you all the times and show you all the emails from really credible investors, like people that-- they're investors that picked Google, and PayPal, and YouTube, and Facebook, and all of the kind of internet greats that came before us. And so, sitting in their offices, you know, it was just demoralizing to be sitting across from somebody who has a good instinct for a good idea, apparently, based on their portfolio, and to look at you and just say, "This is never gonna work." Or, there was one investor that, we'll go unnamed, who said, "You should really focus on church groups." And then he said, "But you know what? Church groups aren't a big-- it's not a big market, so I'm gonna pass on this."

• 2:28Speaker 01

  Because he couldn't get over the hump of how could you possibly build a company that's based on strangers posting pictures of the most intimate parts of their home, their bedroom, their kitchen, their bathroom, on the internet, and people are going to pay to come stay in their home.

• 2:44Guy Raz?

  Yeah.

• 2:45Speaker 01

  Yeah, that's going to be big.

• 2:46Guy Raz?

  But in their defense, Joe, like, I think most of us in this room probably would have agreed with them 10 years ago. I mean, I think that it was a weird idea. It was so weird that it was kind of a dumb idea. All right, 40, 50 billion dollar company today, but let's put that aside. I mean, people were probably saying that to you over and over again, like, this is just, like, move on, do, try something else. Is that, was that happening?

• 3:14Speaker 01

  That was absolutely happening. And, you know, the truth is, if you made decisions based on what a spreadsheet tells you, our spreadsheet said, this is not going to work, get a job or start something else. Like, it was highly irrational to keep going with our product. And I'll never forget, when we went home, Brian, my co-founder and I, he went back to upstate New York, I went back to Georgia. So the holiday, we went home for Christmas, 2007. And you go home for the holidays, and what do people ask? What are you up to?

• 3:42Guy Raz?

  What are you doing?

• 3:43Speaker 01

  How's the year been going for you? And so, you know, neither of us really had a lot to say about the year, except this one time when people stayed in our apartment during a design conference. And one of two things happened, like, people were either like, oh my God, tell me more, this is really interesting, or people went, oh my God, you're insane.

• 4:01Guy Raz?

  Yeah.

• 4:02Speaker 01

  And they would leave the conversation. And there was something about that visceral reaction that it got out of people, where Brian and I were like, maybe there's something here, maybe this is, there's more to this than we think. And there were enough people that wanted to hear more about it that said, yeah, I'd travel like that, or, you know, when I was in college, I was through Europe, traveling through Europe, and, you know, I'd get off the train station, and a woman would be standing there, said, "Penshine" with a sign, we'd go and stay in her place. So like, people started to tell us stories about actually, you know, people are already traveling this way, it's just not formalized, it's not easy.

• 4:32Guy Raz?

  Yeah. But when so many smart people that you respect tell you you're wrong, tell you your idea is bad. When do you know that they're wrong? Did you think they were wrong? Or did a part of you think, maybe they're right?

• 4:48Speaker 01

  This is the part where in your head as an entrepreneur, you go a little bit crazy. Because you bounce back and forth between like, wow, that's a really smart person. And they said this idea sucks. Are they right? And then you go home and you're like, no, I'm sticking with this. I'm gonna make this happen. Like, they can't tell me this is wrong. And I think, maybe it's a personality trait. For me, you know, that kind of stuff actually fuels me. You know, there were times at studying design at RISD where professors would tell me something couldn't get done. And that was all I needed, actually.

• 5:19Guy Raz?

  I mean, I'm interested in this because not everyone's wired that way. And maybe you aren't either. Maybe sometimes, you were, you did kind of give up.

• 5:29Speaker 01

  Well, here's something that's very important to know about our story. Is that if you look at Airbnb from 2008 onward, you're missing a big chunk that took place before Airbnb. Because I've worked on a lot of ideas that were really bad. You just haven't heard of them because they never went anywhere. And so, I think it really takes, you know, being, what I would say, in the gym of entrepreneurship, where you're just trying things. And it doesn't matter if it pans out or not. It's just about going through the process. I'll give you an example. I was working down the street here at Chronicle Books as a book designer when I first moved out to San Francisco. And every day I'd leave and in the room, right where the exit was, there was this giant, industrial-sized trash can,

• 6:13Speaker 01

  one of those gray, big trash cans overflowing with these white books. And one day I went up and picked up the books and discovered they're completely blank. And I went to my manager at the time. I said, hey, what's going on with these books? He goes, oh, those are the proof books they do before they make, you know, a big run of a book. And I said, are they trash? He goes, yeah, they throw them away. And I go, can I have them? And he goes, sure. He looked at me really weird, like, why do you want trash? I was like, well, these are perfect. These are like sketchbooks or journals or other things. And so I actually co-opted these books. I'd throw them in my bag. And for like, a year and a half, I just gathered these books. I had 2,000 of these books in my garage down the street that I collected. And the cool thing is, everyone was different. No two were exactly the same. And then I came up with a rubber stamp. I gave it a brand. And I sold them online.

• 6:58Speaker 01

  I sold them at design fairs. And, you know, kind of a silly idea-ish. Didn't go anywhere. But it was just like getting in the habit. You see something and you do something about it.

• 7:09Guy Raz?

  Yeah. I mean, so we've done an episode about Slack, Stuart Butterfield, who's actually here in the audience. And really, the story of Slack is a story of a completely different idea. It was supposed to be a game company called Glitch. And that didn't work. That didn't work out. It was a beautifully designed... They kept at it. They kept going. They kept pushing forward. But eventually, they had to give it up. And that was it. That was going to be the sort of the end of the story. And Slack was kind of an accident, because it was this internal messaging system that they created, just so the engineers could talk to the marketing people. And it was this amazing serendipitous pivot.

• 7:51Guy Raz?

  How did you guys know that you should just keep pushing forward? Were you talking about this? Was Brian saying, "Let's, we gotta keep pushing forward"? Were you saying it?

• 8:01Speaker 01

  Here's where I go to when I think of that question. We had an experience that those investors didn't. We had three people stay in our home for five days. We knew exactly what that felt like. It was magical. I mean, getting to show them San Francisco, getting to really go from strangers to friends, but in such a short arc of time, for us was really inspiring. And one thing you just reminded me of is a piece of advice that Paul Graham, who started Y Combinator, gave us and gives all the startups, which is very simple. In a startup, do one thing: don't die. Keep going. Just figure out a way to keep going. I think your story about Stuart is so on point, because it's just like, keep going.

• 8:44Speaker 01

  You don't know what you'll uncover, or what other idea you'll stumble onto. You'll never get to idea C if you haven't tried A and B first. And if you give up on A, forget about it.

• 8:55Guy Raz?

  But, and being mindful of folks in this audience who are early-stage entrepreneurs, there are times when it's better to kind of pack it in, or pivot, or give up on that idea and accept the failure and move on, right?

• 9:11Speaker 01

  Yes, probably.

• 9:16Speaker 01

  I think it's also worth remembering that the way that our service started, we thought the big, grand idea was airbeds for conferences. And we actually started, it was, it's very laughable, thank you. We thought that we were gonna be an event website where conferences that sold out, people could inflate an airbed in their living room, and that was the big idea. So, our next iteration for South by Southwest in 2008 was literally a conference website. After the dud of that launch, we regrouped and listened to people's feedback, and then we launched again for the DNC, and that flopped. And then we launched the fourth time a year after that, and that's where the numbers finally started to click, the product and market actually had a fit.

• 10:00Speaker 01

  And so, I think the important part there is that we were constantly listening and iterating. We got it wrong four times in a row. And the good news, though, is that if you launch and it's a dud, you can launch again because nobody knew about the first one. So, being an entrepreneur is not easy, that's why, if it was easy, more people would do it. So, like, there takes this, like, kind of psychological strength to stick with it, even when there's no hope in sight and when spreadsheets tell you to do something else.

• 10:34Guy Raz?

  But is that an inherent quality, or is that something that can be learned?

• 10:38Speaker 01

  I think it can absolutely be learned. From my own experience, I've looked back on my life and I've seen, I've recognized a pattern, that whenever I've been uncomfortable with something, I tend, not all the time, but I tend to see that as an invitation to engage in it. So, for example, I was reminded recently, I was back on RISD's campus a couple of weeks ago for Alumni Weekend, and I was walking around campus and I remembered that how uncomfortable I was public speaking at that time in my life. I could not get in front of an audience, I was terrified, sweaty palms, I'd be nervous, shaking.

• 11:15Guy Raz?

  Which is a common feeling.

• 11:16Speaker 01

  Totally, right? And I knew that about myself, and so I purposefully signed up to be a tour guide on campus. Because I knew it would force me to be in front of people and to have to like...

• 11:26Guy Raz?

  It's exposure therapy.

• 11:27Speaker 01

  Some, is that what it's called?

• 11:28Guy Raz?

  Yeah, that's what it's called, yes.

• 11:31Speaker 01

  I didn't know this.

• 11:31Guy Raz?

  Yeah.

• 11:32Speaker 01

  Okay.

• 11:32Guy Raz?

  Yeah.

• 11:33Speaker 01

  So that's one of a few examples.

• 11:35Guy Raz?

  So you would force yourself to confront things that you were uncomfortable with? And that's sort of how you practiced this kind of...

• 11:42Speaker 01

  Yeah, and I don't always do that. But there are times where there's something in front of me and I'm like, "I don't want to do that. I don't want to talk to that person. I'm nervous. I'm intimidated. They're more important to me, blah, blah." Like, whatever the excuse is that goes on in your brain.

• 11:54Guy Raz?

  Yeah.

• 11:56Speaker 01

  Like, I think an entrepreneur can reframe those things and say, "Ooh, opportunity."

• 12:01Guy Raz?

  Yeah. You really described the emotional roller coaster of doing this and something that so many founders experience and just kind of grind through it, even if it's difficult.

• 12:13Speaker 01

  Let's put this in context for everybody. So, over the years, so many start, you do everything. So you literally do every role in the company. I remember in the earliest days, we realized, "Oh, wait. People are using our service now. We probably need a number for them to call if there's a problem." In a last-minute decision, I threw my number up on the website as customer service. And my phone almost immediately started ringing. And from that point, for the next probably, gosh, I don't know, year and a half, I was very closely associated with customer service. Eventually, we hired a team. And they took it over and I got to get out of that a little bit.

• 12:57Speaker 01

  But people would call, like, in the middle of the night. "Hey, I'm trying to check into my place in Berlin and I can't find the host. How do I get the keys?" And I have to, like, go scramble, get to my laptop, look up their account. Like, it's like 3:00 in the morning in San Francisco. I'm just reminded of another story where I'm about to go to bed. It's 11 o'clock at night. I am just so tired. And we're still working out of our apartment at this point. And I'm about to turn the computer off. And I go, "I'll just check the Gmail inbox one more time." I'm about to close it out. I hit refresh and sure enough, right at the top, there's a big, bold, black email subject line that says, like, "Help with, like, 12 exclamation points." Oh, boy. So I click on it. Sure enough, it's this couple, a young couple in their twenties,

• 13:41Speaker 01

  checking into the marina here in San Francisco. They're somewhere in the marina. They're lost. Their host isn't answering the phone. Their phone doesn't work. They found wifi at a cafe nearby. They said, "We're standing at this intersection of Laguna and something." And so I just jump in my Jeep. And I drive to the intersection, and it's at night. It's 11 o'clock. It's dark. There's not a lot of streetlights. And I'm driving slow with the headlights on. And sure enough, on the corner, I see a couple with the big roller bags and a hat, a scarf. And I'm just like, "Oh, that's them." And so I pull up and I wave in the window. And I had emailed them that I was coming,

• 14:25Speaker 01

  so it wasn't like this random guy in a car. I say, "Hey, it's Joe. I'm here. I made it." And at this point, I'm like, "Why don't you get in the car and we'll find a place for you?" But I had no option to take them to. I'm just like, "We're gonna make this up as we go here." And so we start driving back to our apartment. And I'm talking to them, "How was your trip? I'm really sorry about this. We'll get to the bottom of it. Don't worry." And as I'm driving back, I realize our friends had an apartment below us, and they had an extra bedroom, because the room hadn't moved in yet. The only thing is, it wasn't furnished. I'm thinking to myself, "Okay, I've got a room. How do I get it furnished?" The clock is ticking here. We're almost back to the apartment. They think I have a solution for them, but I don't.

• 15:09Speaker 01

  And I get them in the apartment. I bring them up to the living room. I'm like, "I'll get a beverage of some kind." And I said, "Just hang here for a minute. We're gonna get the room ready for you." Meanwhile, I blitz down the hall. And I rip the bed sheets off my bed. And I grab my mattress. And I drag it through the hallway. Thank God, they couldn't see this part. And I bring it downstairs. I had been corresponding with my friend in the apartment. And I get in the room. I go to make this bed quick. They make the bed. I run back upstairs to the couple. I say, "Your room will be ready in just a minute."

• 15:49Speaker 01

  And they end up staying in the room. And their stay in San Francisco went just fine.

• 15:52Guy Raz?

  Amazing. Joe Gabby, a co-founder of Airbnb. Joe, thank you so much.

• 16:01Guy Raz?

  Joe Gebbia joined me live onstage at the How I Built This summit in San Francisco, which happened this past October at Yerba Buena Center for the Arts. We've got two more episodes from the summit coming up, so keep an eye on your podcast feed. And check out our Facebook page for a new bonus video from another summit speaker, Maura Aronsmealy. She's the author of the book "Hiding in the Bathroom," and she spoke at the summit about networking for introverts. And thanks for listening to today's episode. It was produced by Casey Herman with music composed by Ramtin Arablouei. I'm Guy Raz, and you've been listening to How I Built This from NPR.