So i have done it seems like i have known you for at least 20 years. But it doesnt feel old. Feel like we are in our living room. Yes it does. Leigh gallagher his life closest friend. Full disclosure. He asked me tough questions. It is not edgy or challenging. It is up to you to ask for challenging questions, the really tough questions. I was very flattered when i was in the middle of the airbnb story when she asked if i would do this tonight. The book is great. We expect you all to read it. I was a big fan of leigh gallaghers first book, the end of the suburb or end of the suburb. The. The end of the suburb. About the movement from the suburbs to the citys of people, companies and money. So this airbnb story was kind of a natural for you as a followup. How natural was it . How did it come along . A lot of people ask me that. Thank you for having me in this lovely room, this lovely setting, thank you for saying that. The way i came to this idea, a big seismic trend in the consumer zeitgeist rooted in economic data, that led me to we are moving away from the suburbs which is a giant idea because suburbs were america for so long on so many levels. Many years ago in 2009 one of my jobs we are always getting restless pitches from these companies, they will be the next big thing so you get a little bit used to these companies that sound like something and the next year they are nothing so somebody came to me, everybody talks of this Company Airbnb and i rolled my eyes and said i homeaway. Com for years. This is Tech Companies think they can take an old idea and reissue it to the marketplace. I dismissed them. Very quickly after that it became clear that they were growing incredibly fast, clearly struck a chord and shortly after that our colleagues asked me to interview the ceo, brian chesky, at one of our conferences. That was when i dug into the numbers to get ready for the interview and i was pretty shocked by what i saw and i learned about the back story and when i met him and interviewed him i was struck by him and the journey he had been on and this was in 2012 being an Art School Student not knowing anything about business to now running a company that was controversial, disruptive, successful, beloved by consumers, hated by regulators and all this stuff. I was struck by that and it continued, exponentially, three more hockey sticks from there companies doubled every year including last year for nine years and i saw the way the consumer had seized on what they offered and it was this sort of cultural touchstone and i thought all of that plus all the things the cannons have gone wrong on the platform. All the drama. There was so much of their and these total outsiders had accidentally stumbled the business tale for the ages and there had not been a book on it before. My editor rick wilson really wanted it so that always helps. So i met rick, your editor and was in a matter of rick coming to you or you going to rick . A combination, i cant really remember. I knew i had access to brian chesky. He trusted me a lot and there was a book to be written about this company. I also thought it was a natural followon to my last book and these are the things i like to write about but is not a Silicon Valley reporter, i am not one of the people, there are many people who cover these Companies Day in and day out and they know every wrinkle and move and venture capitalist and i am not one of those people so i was coming added from a 30,000 foot angle, more of a cultural and change angle i guess. Who here has used airbnb . Who hasnt . Not many. Get with it. Who has had a great experience with airbnb . Who has had a bad experience . Interesting. Interesting. When i came in here earlier tonight, through the concept of home sharing and airbnb the one person, jennifer, selling the book of her next trip. It is everywhere. You bring it up at a Cocktail Party and everyone has a thought about it or has used it and it goes to show it was a millennial thing and now it is everyone. They have luxury, they have everything. You went into the snook about the company, knowing brian chesky, getting his trust. Once you got in deep, what is the what surprise you . I thought i knew the company but i have a running start, i did a big teacher feature on him but i got into the process, i dont know anything. A couple things surprised me. One is how incredibly hard it was for them to get it off the ground and i sort of knew that but didnt really know the full extent. The company many times came close to dying and not getting off the ground, nobody thought this was a good idea. People thought it was crazy. Are you kidding . Strangers will stay with other strangers . One of Brian Cheskys biggest mentors who told him about it said i hope that is not all you are working on. A very well known investor, many famous investors said no to this and missed out on hundreds of millions of dollars, put them aside one day, you guys, somebodys going to get murdered and you will have blood on your hands. Im not going years this. This is the reaction of everyone. They had no money, they couldnt make it, they launched three times. If you launch, no one notices, lunch again. They kept launching. No one was using this service. They hustled. Had a pitched deck at one point and before the presentation an investor agreed to meet with them. They had a conversation with them altman, another entrepreneur in Silicon Valley, he said he put dont want to hear all their investors were millions, investors want to see billions so they changed the numbers to billions and the cofounders, brian chesky, joe gebbia, Nathan Blecharczyk was very serious and more by the book, he took one look, it said to billion dollars, they are going to know that is not true. They said okay and the next day they were in the presentation and got to that slide and changed it to 20 billion. We were like renegades and they hustled and it worked. What is the difference between airbnb at homeaway and other companies that came along first . That is really good question and there are important differences i wasnt aware of when i dismissed them summarily. One is a lot of discussion is made over the fact the two out of two group cofounders our designers. Three cofounders, brian chesky, joe gebbia and Nathan Blecharczyk. Brian and joe graduated from a school of design, they were design people part part of the reason they couldnt get funded is that didnt fit the mold of what Silicon Valley was looking for, two phd drop outs from stanford in the google mold. The way they designed the site really did make a difference, very userfriendly. They made the photography a very big deal so that when you look through the pages it is like looking at magazines, real estate and they offer free photography for everybody so that was different, they set up a review system meant to be natural checks and balances to keep everybody honest. Everyone review the travelers, people in their homes, that was something. And it was urban. A lot of other sites where almost exclusively vacation, second home rentals in beach towns and mountain towns and functioned like classified ad marketplaces where airbnb is substantive community and took a cut of the bookend. Those differences were very important. The inventory made a difference as well, didnt totally pioneer but the other sites didnt do sharing where you are into space at the same time so that was a disruptive thing. What do you mean by that . You rent a room, you might stay in someones house, their second bedroom. Truly the sharing economy but not exactly sharing but sharing the space was new and disruptive but all those things made it really appealing to millennials which at the time was unclaimed by the Hospitality Industry and an enormous market, they seized on the idea the number one thing when you are sharing a property like that the price is better and say like that it was sort of countercultural or anticorporate, adventurous, authentic. Every property different. All these things are a new way to travel among millennials and plays into culture, local that we all crave. Millennials not to treat them with a broad brush, there is a distrust and dislike for anything too corporate at a time the Hospitality Industry would say things were so commoditized and that is what they strived for for so long but that wasnt exactly what millennials were looking for. One more question and open up to you, i have more questions to make this a group interview. My favorite chapter in your book is the chapter about what brian and the others learned from his mentors and i think it was john donohoe, former ceo of ebay who said brian is a learning machine, learning animal, learning animal. So talk about some of the people, the iconic Business Builders who brian asked for help. They had no experience running a company of this size. Joe and nate try to get businesses off the brown but brian chesky didnt know what a slide deck was or what Angel Investors were, you got to meet with these angels and he said these people are crazy, they believe in angels. That is how outside he was. He didnt know what the word entrepreneur was, he grew up in upstate new york, entrepreneur was like a pizza shop. He just didnt know anything about anything and he knew that. He knew he didnt know anything and there was no time because as soon as they were off, as soon as they started to turn the numbers around and got there first investment, the growth took off, from there until today it hasnt slowed down so there was no time to learn in the traditional ways, night classes or going to executive mba or sitting down and getting some tutoring so basically he came up with a strategy called going to the store and he told me about this. If you had to learn everything about a topic and didnt have much time what would you do . I would Read Everything i could but what if you only had one hour . His point was spend most of your time identifying the best person for whatever the topic is and go right to that person and ask them. By that point he also had access to Silicon Valley so he was able to go to people like johnny ives from apple or marks october. What did he learn and why . From reid hoffman, the founder of linkedin, one of the early investors, he learned about growing a marketplace business, linkedin is very much a marketplace and airbnb is not a core marketplace business. A lot of venture capitalists, he learned everything but he went for example to george tenet who used to run the cia to talk about culture because he thought who better to talk about culture, an organization where everyone were spies, he took a lot from george tenet, told him the importance of Walking Around the office saying you did a good job writing notes to people and things like that. He learned a lot from john donohoe from the day and they learn from each other, had a rivers mentoring sing going on. He went to omaha. And talked to Warren Buffett. And he learned he learned it is important to remove your self from all the noise. He was struck that Warren Buffett sits in his office in omaha and reads all day long. He doesnt get wrapped up in things. He thinks big picture. That was an incredible meeting. He wrote a 4000 word memo to send to his executive team about this. Even to sunday night emails for the whole company that are always on a different theme and he wrote one about his philosophy of going to sources versus mentors. At one point i asked one of their investors who was telling me how special this was and he is in a pretty privileged spot. If i could pick up the phone and call mark lederberg i would have a lot of good ideas too. He has got this privilege of calling all these a lists in Silicon Valley. It is true but a lot of entrepreneurs have the same privilege and dont make the most of it and dont use it and they use it but they dont necessarily see the results of scaling, do you scale with the company, that was the goal for the founders. Could they scale with the company . Could they grow with it . I dont think there is any doubt brian chesky is a great example how to scale as ceo, Going Forward where he is now the journey i dont think we have seen before in business because it wasnt until the current wave of Silicon Valley that someone like that could be in a position to start a company. In the old days you go through traditional channels. Who has a question . If youre comfortable please identify yourself, wait for the mike. We should go over here, correct . If you wouldnt mind. Here we go. So glad you are here. What was the moment after the three times, what was the moment of traction . What were the elements that turned around . The third time they launched was at the 2008 Democratic National convention in denver. There was a housing shortage. It was a big deal and they saw their moment and got a lot of press, they got 800 listings out there and got some business but after that it flatlined again and they realized if there is a convention every week we are great but there isnt so than they had this idea wears a had a marketing gimmick where they had different brands of cereal, air, bed and breakfast, the name of the company, they named two serials captain mccain after john mccain and obama ohs for obama. They were cheeky and quirky and sold them for 40 a box and fed them to the press and they thought the press would like it and they were right, the press aided up. They made 30,000 from serial. Brian cheskys mother called him and said i dont get it, are you a Cereal Company now . He didnt know how to answer that question. Technically they were making a lot more money on cereal and business but ultimately, one of their advisors that you have to apply for an Accelerator Program in Silicon Valley, very highly regarded and the founders said but we launched, we dont need to go there. He looks at them and said you guys are dying. That gave them paul graham, very tough critic, didnt think it was a good idea, what is wrong with people . They stay in peoples homes, that is crazy. On the way out they mentioned they sold all the serial and he said what . If you can convince people to buy serial for 40 a box you can convince people to sleep in other peoples homes. Then it was the advice he gave them once they were in which was go to your users and shower them with love. They didnt have many users but the ones they had were in new york. They didnt think of that, they sat with them for hours on end and watch them use their products and realized they didnt know how to post photos very well, didnt know how to write listings in a way that made them appealing so helped the merchandise there listing in a better way. Doing that they saw their numbers after a few weeks double to the low base. It is a very long journey but that is what sort of that is when the turning point hit and again when they had a check for 185,000 but everyone said no. Right over here. You point out home away and other competitors, more vacation oriented where airbnb has kicked cities, it is more challenging, you have the Hotel Industry happy with airbnb, people who live in apartments dont like some random person across the hall and a random person are they going in your opinion, knowing the leaders, are they going to be able to whether those challenges. Great question. Anyone who reads the headlines know there has been a tremendous pushback against airbnb all over the world, particularly in new york city and san francisco, the two toughest market in the state and not it is illegal to rent out your home s than 30 days when you are not there. They came in any way and they grew and grew and grew. That had a lot of people they did a bunch of activities so this is something they were not prepared for. A little bit naive to everything, the bigger airbnb got the more pushback, the stronger it has gotten and every city has different issues. In new york, a big center for the Hotel Industry and the union is a powerful force, unions in general, a lot says they are on the decline for the hotel union is not in new york city so there has been a lot of pushback and i think that the consumer wantss airbnb. Even the Hotel Industry knows that, that the company has touched on something that is working but the Hotel Industry says you are able to get away with making so much money because you dont have to outfit the ada compliant, dont need sprinklers or adhere to any of the rules, they dont think it is a level Playing Field and there has been criticism that people use it to operate illegal hotels. There is some of that onsite. They say they dont want it. Theres less then there used to be but in the beginning there was a lot of that activity. It has been an ongoing drama and it continues. Everyone recognizes airbnb is here to stay. The other sites are getting into cities as well but it has been a huge head wind for them. We will go to the back, yes, sir . Come on down. Brad. Didnt recognize you. Im the ceo and founder of zeitgeist and i have been following instagram, social and twitter, he has been talking a lot about this United Airlines debacle and he keeps asking questions, if you were to disrupt the Airline Industry, what would you do or if you had the perfect flying experience what would you do . Just because you cover so Many Industries because of what you do, do you think the Airline Industry is disrupt the label . He wantss to do it. Absolutely i think it is. It is a horrible experience. The united crisis that we all saw, the top story every day this week. Airbnb last november did a big launch of expanding to new businesses including on the ground experiences, restaurant reservations, concert tickets, now we have been hinting at this a while, looking at this the same way he looks at anything, denying can be a solution for any problem. Even the regulation stuff, designing our way out of this. He is looking