Brian Chesky on The Importance of Design: How Airbnb Scaled a Business and Created a Culture
Photo: Airbnb via Wikimedia commons, CC BY 4.0
Brian Chesky co-founded Airbnb, a global company that went public at a $100 billion valuation in December 2020. Interestingly enough, he’s not a kind-of-typical founder of a tech company, he doesn’t come from a technical background, in fact, he has an artistic education. Chesky attended Rhode Island School of Design, where he received a BA in industrial design, but what’s more important, he heard there the words that changed his life:
“You can live in a world of your own design, you can change the world, you can redesign it.”
What these words made is they brought out a kind of uniqueness of Brain, which can be easily noticed, mainly, in the approach of design or running a company.
In his approach to design, Brian is primarily oriented towards functionality, product, and user experience, he recognizes the Steve Jobs principle that design is not what something looks like, but how something works. Airbnb is also an example of how a good understanding of design thinking can build and scale a business.
Innovation, which consists in combining art and technology, allows Airbnb to break old and create new paradigms of design, culture, and business scaling.
Therefore, I would like to share some concepts and rules I learned from Brian that I find brilliant and simple at the same time. I wish you a pleasant reading!
1. The Seven-Star Design Principle
In an interview with the brilliant venture capitalist and co-founder of LinkedIn and PayPal, Reid Hoffman, he described this concept as follows:
“On the internet, especially most marketplace businesses, the paradigm is five stars. So a YouTube video, Airbnb or Uber it’s five stars. And the problem with five stars is the only reason you would leave less than five stars is because it was horrible. If you rate an Uber ride four stars, your life might have been in danger. In other words, the bar to do five stars is really low. ”
For Brian, five stars meant that someone liked the product enough to book it. But for him, it was not enough. He wanted to build a product so good that customers would start talking about it to other people because it had a meaningful impact on their lives. In other words, Brian was so focused on perfecting his product that he wanted to receive an email from customers asking for a sixth, seven, or even more star rating.
Next time you work on a project, for example, designing a product, building a website, or offering some services, ask yourself the intellectual question and imagine what the customers expect. What is the baseline experience level they can rate five stars and what can you do additionally to get customers rating it 6 or 7 stars. Brian gives a good example here, offering some kind of intellectual game:
“What’s a five-star-check-in expererience in Airbnb? The five-star-check-in experience is they give you the adress, you get to the house, you know on the door and they’re there and they open the door and let you in the house. So that’s a really low bar. So we asked “Well, what’a six-star? Well, a six-star is, they probably pick you up at the airport, so you don’t knock on the door. So what’s a seven-star review? Well, the seven-star review is they don’t pick you up at the airport, they send a limusine and they know that you like Pringles. So there’s Pringles there and there’s coconut water and they know you are into surfing and there’s some surfing magazine.
The five-star is what people expect, but to build what people love you have to build more than they expect. Every moment is an opportunity to do something slightly more than people expect. This principle applies to almost everything, from hiring people to assigning meetings and so on.
2. Design For Trust
One of the main obstacles that Airbnb had to overcome was deeply rooted biases, especially stranger-danger bias. Even a decade ago, when Airbnb was established, people were less open to the sharing economy, especially when it comes to one of the most personal things - our homes.
The idea of building a website where people publicly post pictures of their most intimate spaces, including their bedrooms and bathrooms to invite and allow strangers to rent was unthinkable. No one wanted to invest in a service that allows strangers to sleep in people’s homes. Why? Because we’ve all been taught as kids, strangers equal danger.
Joe Gebbia, co-founder of Airbnb is also a designer by trade, so he was wondering if a design can build trust and overcome deeply rooted beliefs. Once he said:
“In art school, you learn that design is much more than the look and feel of something — it’s the whole experience. We learned to do that for objects, but here, we were aiming to build Olympic trust between people who had never met.”
Stanford research, which tested our willingness to trust based on similarity, came to the rescue. They found - not surprisingly - that we trust more those people that we like, the crucial information is that this happens with a small number of reviews.
When the number of positive reviews increases, our willingness to trust someone based on similarity decreases. In short, a high reputation beats similarity and it’s a way to overcome deeply rooted biases. They found the main ingredient to building trust, it’s a well-designed reputation system.
The second factor in building trust, in addition to reputation, is the right amount of disclosure.
They found if the message was too short and didn't talk too much about us, the host's acceptance decreased so did when we exposed and talked too much about ourselves. Host acceptance increased with the appropriate amount of message length directly related to the host's apartment. The key was to find a "sweet spot”.
Therefore, they decided to create a form suggesting the appropriate length of the message and what crucial information should be entered. In other words, the form has been designed to intuitively build a connection and increase the rate of host acceptance.
Joe Gebbia and Brian Chesky took the components of trust and started to design for that supporting themselves with data and researches. They designed guidelines to encourage people to build a sharing economy.
They didn’t invent something new - hospitality has been around forever - they started to design for that.
3. Unique Definition of Product
As I mentioned before, Brian’s attitude towards products is consumers-oriented and highly unique, mainly because of broad definition, he looks at products holistic and states that is what most companies lack.
Reid Hoffman praised Chesky for his product perspective that goes beyond the product itself. Airbnb is not just a mobile app or website, it's a whole process, including customers’ experiences and having a clarity of mission. Brian developed the meaning of product in the conversation with Hoffman:
"Technically speaking is whatever the customer's buying. Customers are not buying our website, and they're not buying our application. That's just a storefront of communication. What they're buying is house. And frankly what they're buying more than house is the host. Experience of hospitality. The idea of belonging."
Brian once said he is obsessed with "a better way to design communities." And his ability to adapt to changing circumstances proves that design is not a permanent thing that has been done and given back, it is a continuous process in progress.
He noticed that the line between traveling and living is going to start blurring. For younger generations and most people is more important to seek experiences than accumulate material things. That’s why this idea of hospitality and a sense of belonging play a crucial role because he’s not designing a company for simply visitors, but for people who live in communities, where acceptance and connection are key factors to build a happy environment.
Design is primarily by core value a way to solve problems holistically, taking into consideration trends and data.
“The role of the designer is that of a very good thoughtful host anticipating the needs of their guests.” – Charles Eames
The product is much more than the end result. It could be compared to a life cycle that goes beyond its consumption. Product is a sequential process, consisting of steps and touchpoints of how people experience things, starting even before the decision-making process. It’s a holistic experience that leads you to the moment of consuming the product, including what happens afterward.
4. Embodying Culture Through Design
Chesky received groundbreaking advice from Peter Thiel, co-founder of PayPal and famous venture capitalist - "Dont Fuck Up The Culture". Also with the same title, Brian wrote an article on medium.com. What Brian Chesky means by culture is simply a shared way of doing things.
“People need to be in a mindset of your product. And so you have to put your product in the building. People need to be immersed in the world because they’re working in that world. It’s like the working in the center of universe. The center of the universe of your business needs to be most potent.”
I found an interesting thought in Chesky about the interpenetration of culture and design. Culture is reflected in design and design is reflected in culture. There is a mutual relationship between them. If Airbnb shows cool space around the world, they have to have an interesting space inside.
Chesky has a rule that everything can be designed and reinvented. And the space in which employees are located can also be reinvented and designed with a holistic culture in mind where employees share the same values.
One of the more interesting examples is the redesign of the company office. He came up with the idea to design meeting rooms identically to the apartments of Airbnb users. All of their meeting rooms were modeled piece by piece after apartments of their website, they recreated the room. So the meetings rooms are homes you walk into. Sometimes they even write e-mails to users if they can design one of the meeting rooms identically to the client's apartment.
It is a tiny example of how designing a culture can make a huge difference and build a competitive advantage which translates into hiring and many other things.
A strong culture is built by people who are deeply passionate and shared ways of doing things, they believe in what they’re doing. Brian Chesky thinks that a strong culture is about repetition, constantly showing the same values that can’t be changed under any technological circumstances.
One of the examples is when you check your key card at Airbnb it says “Champion the Mission”. This is one of the values that remind you every day what’s important. A strong culture can be designed by subtle things that are like touchpoints. It’s a sequence consisting of each moment that can be designed to reinforce how you want people to value things.
Having a strong culture is an effective way to hold each other accountable, not through hierarchy, but the community. By creating a culture you can set a norm of what are all focused on, so there's no dissonance - everyone is on their missions.
5. The Magic of Hiring
“When you start a company, the most important cultural decisions you make are the people you surround yourself with. Hiring is the most important thing to culture because you’re bringing people in and so the culture becomes the people around you.”
Chesky used to interview the first hundreds of employees himself until it became impossible due to the company's growth. For him, hiring the right people is a fundamental thing that can be leveraged for scaling the business and creating culture.
In addition to technical interviews, there are also cultural interviews. They need to be sure if people who are applying for employment are passionate about being the host and the whole idea of hospitality.
Joe Gebbia said that they developed “core values interviewers”. Co-founders were spending days with people showing them how to interview, creating a self-reinforcing circle of the hiring process. They've institutionalized the whole onboarding week, they carry all the videos and stories. Every Sunday night Chesky writes a cultural email to the company.
The strong culture built by hiring valuable people scaled phenomenally well for co-founders who used to do interviews. Now other people get to successfully sit in interviews on their behalf.
Summary:
The brand is trust, be clear about your mission. It’s better to have 100 people that love you than a million who kinda like you.
Set the bare minimum that defines the “five-star experience” and do slightly more than people expect. Every moment is an opportunity to get a "seven-star review”
Every biased can be overcome by trust, which can be built by a well-designed reputation system. Design is a self-reinforcing, purpose-driven process.
Product is a sequential process and whole experience the goes beyond consumption.
Culture is a shared way of doing things, that is built by repetition and common values. A strong culture is also an effective way to manage people, not through conventional, hierarchical ways, but the community.
Hire people who shared your vision, because companies are most people, they are the main ingredient that builds the spirit of a successful company.
That’s why Airbnb is a: