The Tim Ferriss Show – Reid Hoffman of LinkedIn, Brian Chesky of Airbnb, and How to Scale to 100M+ Users

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Intro
  • Check out the Masters of Scale Podcast by Reid Hoffman, most well know as the co-founder of LinkedIn
    • This episode is an excerpt/conversation from Season 1 of Masters of Scale, between Reid and Brian Chesky (co-founder of Airbnb)
    • There are also a few cameos from Airbnb co-founder Joe Gebbia
  • “If you want to learn how to scale your company, paradoxically, you can increase the likelihood of success by doing things that do not scale”
  • Note from Podcast Notes -Listen to Tim’s interview with Joe Gebbia, it’s an excellent conversation
  • Check out 1,000 True Fans by Kevin Kelly – a great article  how to build a fan base
The History of Airbnb
  • Today, Airbnb is valued at $30 billion, 8 years ago it was a much different story
    • In 2008 – Only 10-20 bookings were made per day, after Joe and Brian had been working on it for about a year and a half
    • In a cash crunch, Joe and Brian, at one point, sold presidential breakfast cereals around the time of the 2008 Democratic National Convention
      • They sold each box for $40, and only made about 1,000 boxes
      • The Barack Obama themed breakfast cereal was called Obama O’s, while the John McCain cereal was called Cap’n McCain’s
“In order to scale, you have to do things that don’t scale”
  • You don’t start with 100 million users, you start with a few
  • Stop thinking big, think small – hand serve your customers, win them over, one by one
    • Hand craft the user experience before you start to scale – think empathy, put yourself in the shoes of the person using your product
    • “Design with empathy for a single user”
  • In the early days of Airbnb, Brian was encouraged by Paul Graham to go visit his users
    • “It’s the only time you’ll ever be small enough, where you can meet all your customers, get to know them, and make something directly for them” – Paul
    • So, Brian and Joe would go to NYC in the early days, and knock on the doors of people who hosted their homes on Airbnb
      • The incentive – Brian and Joe would offer to photograph their homes, so they could have better pictures for their user listing
      • This is how Brian and Joe learned what their users loved (and didn’t love) about the process of hosting a home
      • From going to visit/talk with users, a hand crafted guest/host experience was formed
  • Passionate feedback is a clue that your product really matters to someone
    • It’s important to get this feedback early – it’s equivalent to setting the foundation of the business
      • You don’t build a home on a shitty foundation
    • “One passionate user can turn into many, if you listen to them carefully”
    • Don’t ask about the product you’ve already built – ask about the product of the user’s dreams
      • Ask: “What could we do to make you tell everyone about our product?” 
      • “If you want to build something truly viral, you have to create a mind fucking experience, that someone will want to tell everyone about
  • Going above and beyond
    • Ask yourself – “What would an 11 (out of 5) star experience look like?”
      • Maybe 9,10, and 11 (out of 5 stars) isn’t feasible but there’s a sweet spot you can find
The Evolution of the Product
  • There are two stages of a startup’s product:
    • Designing the perfect experience
      • This requires a more intuitive, human based, and empathetic mindset
      • (The equivalent to writing)
    • Scaling that experience
      • This requires a highly analytical, operations oriented mindset
      • (The equivalent of editing)
  • Do everything by hand, until it’s painful
    • Joe and Brian photographed people’s homes until it was painful – then they hired a photographer
    • At first, they managed the scheduling/uploading/editing of the photographs with spreadsheets etc. – then they got an intern to do it
  • Then automate, where possible
    • Eventually a system does everything for you
  • Things evolve over time
    • Gradually work out a solution – don’t guess what users want, react to what users ask for
    • For example – The founder of Kayak, Paul English, at one point had his cell phone as the customer service number
  • It starts as hand crafted, and over time becomes massively scaled
    • “The sharpest founders never fully abandon the hand crafted mindset, no matter how big the company gets” – Reid
Reinventing an Industry
  • “To reinvent an industry, don’t look at that industry, look at orthogonal industries”
    • For Airbnb, the orthogonal industry to travel, was cinema – the best trips you’ve ever seen, are the trips characters in movies take
    • At this point, Joe and Brian realized that most of the “trip”, is not in the home – there’s lots of leading up to the trip, going to the airport, going to dinner etc.
      • Joe and Brian realized they needed to be in the “end to end” business of travel
  • Brian and Joe asked themselves – “What does the perfect trip look like?” and “What are the ingredients that make a vacation truly memorable?”
    • So – to answer this, they followed one of their users around, while that user stayed in an Airbnb in San Francisco
    • What did they learn? – They needed to design an end to end experience for someone, just like they’re in a movie
      • Create a trip for someone, that deeply moves them, and is better than anything they’ve ever experienced – then scale it
      • To help make a trip memorable:
        • You need a welcome event, within 24-48 hours of arriving, where you’re around people
        • By day two or three, you need a challenge to bring you out of your comfort zone – “If you do not leave your comfort zone, you do not remember the trip”
          • “If you can belong out of you comfort zone, and something new happens to you, then there’s a moment of transformation, where the person you were, in a small way dies, and a new, better version of yourself is born”
          • This is the narrative of just about every movie
          • This led to Airbnb Trips – they now have 500 trip packages in 12 cities (as of November 2016)
“The biggest leaps you get, are when you’re small”
  • Your product changes less, the bigger you get
  • The most innovative leaps, are going to be when you’re small – you can change the product entirely in one week
    • Take advantage of this
    • Now is the time that you can take the most daring leaps
  • “Dream big, and act small. Pay passionate attention to your users, and hand craft the core service for them. Create a magical experience, and then figure out what part of that magical, hand crafted thing, can scale” – Reid
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