Many folks once scoffed at the idea that people would rent their homes to strangers — including Airbnb co-founder and CEO Brian Chesky’s own mother.
That’s according to Chesky, who told the story at a recent Stanford Graduate School of Business event. As he recounted, he was a 20-something industrial designer, struggling to pay rent. He moved to San Francisco to live with his college friend Joe Gebbia, and they realized they had a business idea after renting out their home and its three air mattresses during a design conference.
“At that point, my mom said, ‘So I guess you don’t have that job with health insurance anymore.'” Chesky said. “And I said, ‘No, mom, I’m an entrepreneur.’ And she said, ‘No, you’re unemployed.'”
Joined by a third co-founder Nathan Blecharczyk, the trio officially launched their website in 2008. Their timing wasn’t ideal: The co-founders spent much of the Great Recession visiting NYC hosts to photograph rentals for their website and better understand the guest experience, Chesky told LinkedIn co-founder Reid Hoffman’s “Masters of Scale” podcast in 2017.
Business started taking off in April 2009, after the company landed a $585,000 investment from Sequoia Capital. In February 2011, Airbnb announced that guests had booked one million nights in its rentals.
The company was reportedly valued at $31 billion in 2017, before they went back to the drawing board in March 2020. Months before Airbnb’s scheduled initial public offering, business dropped 80% in eight weeks during Covid-19 lockdowns, Chesky told Stanford students.
“When you’re our size … that is like being an 18-wheeler going 80 mph then you slam on the breaks,” he said. “Nothing good happens. Within weeks, journalists were predicting, ‘Is this the end of Airbnb?'”
To combat a company-wide collapse, Airbnb’s executive team conducted layoffs, took personal pay cuts and slashed the marketing budget from “$1 billion to … zero,” Chesky said. Divisions like design, finance and marketing were condensed into one department, encouraging collaboration across teams, he added.
The company turned a 40% profit in 2022, Chesky said. Today, Airbnb’s market cap is $75.49 billion, and Chesky’s net worth is $9.3 billion, according to Forbes.
“I never focused on trying to make a lot of money,” Chesky said. “I just focused on being efficient as possible [and] obsessing over the experience.”
Looking back, Chesky said his mother’s discomfort may have been warranted. Both of his parents were social workers, and his mother wanted him to pursue work that “pays you a lot of money” instead, he said.
“When you’re starting [a company], it’s mostly in your head,” Chesky added with a laugh.
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