Highflyer. Financially selfsufficient at 14, able to make his own way through harvard, nathan blecharcyzyk always knew he wanted to be an entrepreneur. The company he started in 2008 is now valued at more than 30 billion. A chief Strategy Officer at airbnb, nate overseas operations from the companys San Francisco headquarters, the company which through the sharing economy could further shape our lives. Hasalinda nathan blecharcyzyk, welcome to high flyers. Good to have you with us today. Thanks. Hasalinda you know, airbnb, it was a model that was never meant to take off. It was a model against everything your parents taught you. Never bring strangers into your house. Here you are, one of three cofounders. Take us through the early days. Nathan thats right. This doesnt start with business ambitions. We were solving our own problem, how to pay the rent. Hasalinda broke. Nathan we were roommates in San Francisco. Suddenly, in the summer of 2007, the rent an apartment was raised 25 . I said that is too expensive, im out of here. The two other guys wanted to say. They just quit their jobs to become entrepreneurs, also known as unemployed. [laughter] nathan they were broke as well. They were both designers. They saw the International Design conference in San Francisco. All the hotels were sold out. They thought, why not rent out my vacant bedroom to designers i wanted to stay. The room was empty with no bed, but joe, my cofounder set up an air bed. He called it an air bead and breakfast. He managed to get three designers to stay there, pay them a thousand dollars over the course of the conference. It was meant to be just that. That was the end of the story, except a couple months later, the three of us had quit our jobs. We were living in San Francisco. In San Francisco, everybody wants to be an entrepreneur and start their own business, so we were racking our brains, brain, what can we do together . Maybe there were other people in other situations where we could do the same thing. Maybe we could make it just as easy to book someones home as a hotel. That is what we set out to do in 2008. Hasalinda it wasnt so easy though, right . There were two designers and you are the geek, the engineer. You were the one who coded the original airbnb website. It must have been difficult. They had the dream. You had to bring it to reality. How do you do it . Nathan they can often dream faster than i can code it. [laughter] nathan frankly that is also why we wanted to work together. There were two things we notice. One is we have the same work ethic. Hasalinda which was what . Nathan when we did have jobs, on nights and weekends, we had our own projects. We would be in the living room cranking away on all kinds of things we were passionate about. We noticed that about each other. The second thing is we had complementary skill sets. So i was helping they are designers. I was helping them create websites for their projects. They were helping create marketing material for my project. Well, between the three of us, we can do anything. Hasalinda airbnb wasnt your first start up. You had experience in two or three other startups before that. What did you learn from that . How does it help your journey to and airbnb . Nathan well, actually, i got started as an engineer, well, Computer Programmer at the age of 12. Nathan a real job. Hasalinda a real job. Nathan yeah. Hasalinda you are making money back then. Nathan what happened was, it started with me as a young person really liking computer games, like so many young people do. But then, i wanted to modify the games. My dad is an engineer. He has a lot of books on computers. One day i was home sick from school, i guess i was bored, and started looking through of his one books. This began a hobby i had. I was posting my work on the internet. I said if you like my work send me five dollars. Nobody ever sent me any money until at the age of 14, i got a phone call. Somebody said i saw your work on internet. I want to pay you 1000 to make something similar. I told my that somebody from the internet wants to pay me 1000. He just laughed. I said, whatever. This is my hobby. Ill do it. I got paid. I got introduced to other people, and began a business i ran throughout high school. I made almost 1 million. Hasalinda paid for college. Nathan i used that to pay for college, yes. But more important than the money was the lesson that taught me. One, i could teach myself all the necessary skills to build these products. Two, i could build things that other people valued. Out of that i knew i wanted to be a lifelong entrepreneur. Hasalinda what made you think airbnb was going to work . Nathan i think it is literally because we had seen it firsthand. We had seen the Value Proposition of those designers from out of town having a place to stay when there were no other options. Also, how much they enjoyed the local experience and the friendships that were formed. That was hard for people to understand. The only thing they could possibly think about or the first thing that came to mind was, how can you trust strangers . Thats what they were thinking. On the other hand, we had overcome that mental barrier, and seen what good can result once you get over that. And so the question was, how can we convince everyone of this . Our major innovation in 2008 has been around trust, creating an environment where people can have trust so all the good stuff can flourish thereafter. Its really come down to three things at the beginning, user profiles that were very descriptive, very much about the person. Second was how we handle the money so that theres no risk of financial loss. You pay through airbnb as an intermediary. The third is, at the end of every transaction, the host guest reviews the host and the host reviews the guest, so literally people build up a reputation so you know who youre dealing with. Hasalinda have you been surprised by the listings you have . It is not just about homes. It is about castles, treehouses, villas, private islands. Nathan it has evolved incredibly. We literally offered an air bed , the accommodation ever on first airbnb. Then it became entire apartments, and then it branched out from there. Suddenly one day someone put a treehouse up, an island, a boat. At first, we didnt support it. We set that is interesting. Out of that, literally thousands of boats have materialized. Well over 1000 tree houses. So what is interesting about the internet in general is the internet has the ability to connect people to so much of the information that was previously lost and not discoverable. The same thing for the offline world. These tree houses and castles always existed for hundreds of years, but you as an individual never had access until now. It is all on the airbnb platform. In a couple of clicks, you can click it and stay there. Nathan we went to a lot of investors and they said things like, this is not a product i would use. By the time we got to the end of the first year, we were having a conversation about, when do know that its time to quit . s success wase never certain. For the first one at a half years airbnb was looking along. Take us through the challenging times. Hasalinda it wasnt obvious. At the time, it was only us that really believed in the vision. We went to a lot of investors, and they said things like, this is not a product i would use. I guess they werent the target market at that time. They couldnt believe that there was a large market. They said, how could you trust a stranger in someone elses home . They would repeatedly say that. The entire first year, we were unsuccessful raising money. Even approaching our mentors, somebody we really respect. I remember him saying, i hope thats not the only thing you are working on. It was very discouraging. By the time we got to the end of the first year, we were having a conversation about, when you know that its time to quit . We had been without a job for an entire year not making money. We still have to pay rent. We had expenses. Hasalinda you guys were broke apparently. You had bills amounting to tens of thousands of dollars. Nathan thats how we were paying for things, on credit cards. We had Credit Card Debt at that investors were uninterested. Point. We had conversations, when do you know that its time to quit . We had a realization over the course of that conversation that although over the last year we had been working really hard, we had actually been a little bit distracted, too. We had side projects going on. Actually at the time i was in boston, and they were in San Francisco. We werent together as a team completely focused. So we made a commitment to each other and said, lets give it three more months where we will live together and not have anything else in our lives except for this. We will work six to seven days a week. If in three months we are not in a better place, we will quit. Hasalinda talking about distraction, you bought dozens of dozens of cereal boxes and converted them, something to do mccain. Ma and what happened . Nathan we had to be creative with publicity. Frankly, we were thinking, how can we make ourselves relevant and get the word out . And at the time, it was leading up to the election. We got this idea to create a president ially themed breakfast cereal. Airbnb, butme is then we were called air bed and breakfast. We said, ok, lets do a play on the breakfast idea, president themed. We came up with obamaos, and captain mccains. We actually designed original artwork for each box. We got it printed onto cardboard. We put the boxes together. The first 100 of these we mailed to reporters like yourself. We thought if we emailing to her, she will not take it seriously. If she gets this very hilarious box of cereal, she will be very curious enough to call us back. Thats what we did. That week we ended up on Good Morning America and on cnn telling our story. The day we were on cnn, it became number one political video of the day. The other 400 boxes of cereal we created we sold on a website for 40 a box. We sold that day a 40 box of cereal every three minutes. We made 30,000 that week. We like to joke that that is how we financed the company in the early days. 30,000 was far more than we had made in the course of our business activity. Hasalinda what helped also was the funding from sequoia capital, 600,000. That was a game changer. Nathan right, so at the end of the three months, our business was growing for the first time. We started the three months making 200 a week, having no growth. And by the end, we were making 4500 a week, all in the span of three months. Sequoia capital we got introduced to. They were impressed with what they saw and gave us that 600,000 dollars in funding for 20 of the company, which ended up being a good investment. 20 of the company. The company is now worth quite a lot, 30 billion valuation. Going back to what i said earlier, we were on the verge of quitting. We said just three more months. At the end of that three months, we never had to have that difficult conversation about should we keep doing this. Haslinda whats interesting is the involvement of actor ashton kutcher. How did he get involved . Who approached who . I forget the specifics. Most people know him as an actor, but hes a savvy and prolific investor as well. He has invested in a lot of technology companies. I forget exactly how the introduction was made, but he loved the model, and we thought it would be great to have him involved. Hes obviously a part of mainstream pop culture. We thought, this is a concept that requires a bit of explaining and trust. Maybe he can help us build the brand. Nate, younow, nate are cto officer, chief technology officer, now chief Strategy Officer, how are you positioning the company . Three largee are directions in which we are growing. One is geographic expansion, and early on we set our sights on being a global company. Travel is inherently global. It was a question in the early days. It is a question born out of new york. We said in the early days, will this work only in new york, united states, western cultures, will it work in asia, china . It wasnt known. Over the last several years we have proven that airbnb is hugely popular all over the world. We are in 191 countries. We are focused on china. We see that as a huge emerging market. There are 400 million millennials in china part of the middle class and eager to explore the world. Haslinda the thing is that although there is great potential, there is great competition. Companies starting up wanting to be the next airbnb. What do you make of the competition . Its a complicated market. Nathan complicated market and for the fierce competition it is famous for. Our approach for china is to focus on our unique strengths. One of our unique strengths is that we have homes in over 191 countries. None of our domestic competitors have that global network. So we have really positioned ourselves as the only way for chinese millennials to travel abroad and authentically experience culture. So that is our Value Proposition. And no one else has that. It has allowed us to become popular and experience a lot of growth. Haslinda how does it feel to be a billionaire . Nathan its not something i expected. Its easy to give money away, but to do that in a way that has maximum benefit requires a great deal of thinking. I want to talk about how you grew up. Moms a homemaker, dads an engineer, and he had a huge influence on you growing up. That is why you talked about picking up an engineering book. That helped change everything for you. Nathan it really started before then. My dad taught me a few things. One, he was always trying to help us understand how things work. And so as an engineer he was always bringing things home from work that i could take apart. Haslinda like a xerox copy machine. Nathan in one famous case a xerox cut machine, which was large back then. It literally sat in the backyard for half a year. He would do things like loose in the screws for me, but then let me do the rest of the discovery. It was a curiosity to understand how things work. The second thing, he was very much that kind of doityourself dad. Hes always fixing things himself. No project was too big or too small for him. He really taught that spirit of you can do this. Ok, you dont know how to do this, but you can learn how to do this and take it on, which is something as an entrepreneur, you have to have that mentality. You were also once blacklisted, named in the registry for known spammers. What happened there . Nathan i had this business in high school about internet marketing, specifically stuff around email marketing, of which can border on the line of spam, and this was back in the 1990s. Haslinda it was legal back then . Nathan back then, this was a new way of promoting oneself on the internet. The internet was brandnew. There were not really any rules around what you could or could not do. This is a space that i explored. Perhaps it aggravated some folks, but it was an emerging space. Out of that has been born a whole industry that now is more tightly regulated, but also is still very important for companies and how they promote themselves online and maintain relationships with customers, but these were the early days. Haslinda would you have done anything differently . Nathan i dont know if i would have done anything differently, but the advice i would give to any young person is that any setback you experience along the way, put that in perspective, which is to say theres a lot ahead of you. See that setback as a learning opportunity. We talked a lot about my Success Stories in high school and now with airbnb, but there were plenty of things and worked on that were disappointing. Haslinda such as . Nathan programs i created, put a lot of work into that didnt take off. Actually when i started airbnb, there were two other projects i was working on simultaneously that werent successful. That was disappointing at the time. But when i look back on those, each of those experiences was a learning opportunity that made me more successful once i started airbnb because i had the benefit from that experience. I would just encourage people to see failure as learning opportunity. As long as you dont give up and you keep getting back up to bat. These are all things that make you stronger. Haslinda you were broke when you started out, and now you are worth about 3. 5 billion. Probably more. How does it feel to be a billionaire . Did you ever envision do you still can shoot yourself to see if it is real or not . Nathan it does seem rather unreal. Its not something i tend to think about. I have a lot going on workwise. In my personal life, i have a family. It is not something i dwell on. That being said, obviously, incredibly fortunate. And i think it is a real challenge thinking about given this fortunate position, what do you do with that in a way that bottom line, what do you do with that . Its not something i expected. I feel a responsibility. What excites me most is having a positive impact on people. I think we do that through airbnb, through business. But now that i am in this incredibly fortunate position, the question i ask myself is, what can i do with my newfound wealth that will be beneficial to others and do that in a way that is maximally effective . Its easy to give money away, but to do that in a way that has maximum benefit requires a great deal of thinking. Haslinda you are a disruptor. Pretty much a part of the future economy. People now are already sharing rides. They are sharing homes. 10, 20, 30 years down the road, how does the future economy look like . What kind of other disruption do you see happening . I think there are a lot of changes in the broader economy, and it is going to create challenges and opportunities. One big challenge is with Artificial Intelligence and self driving cars, there is going to be a lot of traditional work that happens automatically and does not require people. I think there are a lot of changes in the broaderthen t, what will these people do . Work is important. That is also going to create new opportunities for people to, well, you need to ask the question, what can people uniquely do . One thing people uniquely have is passion. I think things around education and healthy living, bringing people together to create special moments. Those are things that cannot be easily changed or eliminated through technology and with , and i think an interesting opportunity for the future is how Tech Knowledge he can bring people together, and with these changes will there be enough scale through time for new markets to be created in these areas of teaching and connecting people with similar passions . Haslinda do you airbnb every time you travel . And come is your home listed on airbnb . Yes and yes. Nathan yes and yes. Ive literally stayed in hundreds of homes. Yes, i am a host in San Francisco. Haslinda do they know that its you . Nathan sometimes, generally not. It is discrete. Sometimes it will come out. Sometimes i will have a conversation with them on the sidewalk. It will come out, and they are often very shocked. Haslinda thank you so much for joining us on high flyers. Nathan thank you. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Announcer from our studios in new york city, this is charlie rose. Host Forbes Magazine was founded 100 years ago this september. A scottish immigrant and business journalist begin the magazine to chronicle and celebrate the world of American Business and it has become more than just a magazine, growing into a media and Technology Company as well. To celebrate the magazines centennial, forbes amassed an az of the greatest living business minds. Originalhich penned an essay for the occasion