Focusing too much on business scaling may not be the best idea for entrepreneurs, according to Airbnb founder and CEO Brian Chesky.
In 2008, when Chesky and Airbnb co-founders Nathan Blitcharczek and Joe Gebbia were seeking to raise money for their startup, they approached more than a dozen Silicon Valley investors — all of whom declined their offer.
One of those investors told Chesky that the potential market for Airbnb — which later moved to Airbed & Breakfast — “doesn’t look big enough” for their desired model.
“You can imagine they didn’t see travel, they saw strangers sleeping in other people’s homes,” Chesky told an audience at the Stanford Graduate School of Business. “The first investor Joe and I met was in a coffee shop, [he] He goes in, goes to get a smoothie, sits down, drinks a smoothie, and we show it. In the middle of the presentation, he gets up because he has to move his car. We haven’t seen him since then.”
“The best advice I’ve ever received”
Airbnb was eventually accepted into the popular Y Combinator startup accelerator pioneered by venture capitalist Paul Graham, despite skepticism from Graham himself.
“The first question Paul Graham asked me was, Do people really do this? And I said yes, so the second question was Well, what’s wrong with them?” Chesky told the crowd.
But at a Y Combinator event, Chesky said Graham gave him the best advice he’d ever received.
“He said… focus on 100 people who love you, instead of having a million of those kind of people,” Chesky revealed. “And I think that was profound advice, probably the best advice I’ve ever received.”
This does not mean that many people would consider such an approach, according to the head of Airbnb.
“It actually contradicts almost everything everyone says,” he added. “Everyone is focused on scale, but scale requires people to have a deep passion [for your product]. “
When you focus on perfecting your offer to a small group of people, Chesky said, “they become your marketing department, telling others.” It’s an approach that has helped Airbnb grow rapidly in the decade since its founding.
“It probably can’t make an eight, nine or ten star experience, but most people try to design something good enough,” Chesky continued. “But if you can add that sixth or seventh star, if you can design something really amazing and use the part of your brain, the artisanal part of your brain, to create that perfect experience, then you can reverse engineer how this is manufactured millions of times over. And what happens is people They love your product and tell everyone about your product.”
Graham’s advice helped the founding team of Airbnb scale their business to what it is today – a platform with 6.6 million active listings worldwide that has facilitated the stays of 1.4 billion guests since its inception.
“Hilton started in 1919, which is over 100 years ago,” Chesky said. “And we were able to achieve the full growth of Hilton in 10 years. We had some marketing, but it wasn’t much in the beginning.”