Airbnb co-founder Brian Chesky recounts how the company bounced back after losing 80% of its business in eight weeks.
When the Covid-19 pandemic hit, Airbnb’s core business all but ground to a halt. In just eight weeks, the company lost 80 percent of its business.
“Suddenly, it was like a house, and it was burning,” Airbnb co-founder and CEO Brian Chesky told Inc.’s What I Know podcast. “We had to rebuild the house.”
It wasn’t just the pandemic that inspired what would become a massive reorganization of Airbnb’s internal structure, strategic planning, and product-launch schedule. It was also a flash of a vision Chesky had for the future, should the company continue on the path it was on. He described a stodgy company that had strayed from its original vision.
“That was the moment I realized, ‘Okay, I’m gonna run the company totally differently–the way I’ve always wanted,'” Chesky said. He restructured teams, which had been divisional, to be based more on their function, similar to how Steve Jobs famously restructured Apple to help foster innovation when he returned to the company.
Chesky set to work cutting down on the company’s strategic goal-setting to help everyone, across teams focus on two major product releases each year: pre-summer and pre-winter. He explained the strategy on the eve of the company’s 2022 winter release of a slate of tools for Airbnb hosts, including a product called Airbnb Setup, designed to make it easier for new hosts to begin the process of listing a property or even a bedroom. The company also released additional insurance of up to $3 million for hosts. The uncertain economy made the timing of a product launch focused on hosts potentially strategic.
“We’re either in a recession or approaching a recession, so I think that’s going to also be an opportunity for people to start putting their homes on Airbnb,” Chesky said. “It’s a great way to make extra money.”
As the original owner of the air mattresses that inspired him to co-found Airbnb in 2008, during a recession, Chesky should know. He says founding the company during tight financial times built some scrappiness into Airbnb’s DNA. “We had no access to capital,” Chesky says. “It created a sense of survival.”
To hear my full interview with Chesky, click on the player above, or find What I Know on Apple Podcasts, or anywhere you listen to audio.
