Airbnb just redesigned its website to change the way users search for listings on the platform. Category search allows users to explore travel without having a specific destination in mind. Rather, they can look for A-frames or countryside homes or places near great golfing experiences.
The company also introduced split stays (where users can book two different listings for a long-term stay in a single user flow) and launched AirCover for guests, which guarantees they’ll be covered if a host cancels, the place isn’t up to snuff, or they can’t check in to their Airbnb.
All of this is meant to inspire people to get out of their houses and get traveling again. We sat down with founder and CEO Brian Chesky to discuss the release, where Airbnb is headed and how he’s planning for the future.
TechCrunch’s interview with Chesky follows. It has been lightly edited for clarity and length.
TechCrunch: How would you describe the ultimate goal of this release? What are you ultimately trying to do with these features?
Brian Chesky: The goal of this release is to inspire possibilities for people when they travel and live around the world. The basic idea is that last year, the world became more flexible. People weren’t tethered to an office, but they weren’t comfortable getting on planes. So we really tried to focus on people traveling nearby a little longer. Now, we’re basically saying, “Hey, you don’t need to go to the same 100 cities and you don’t need to be limited to the same search box.”
The goal is to show you a world of possibilities you never thought to type into a search box. That’s basically the idea. Because we think people are ready to dream again. A lot of people have been sequestered at home for two years. Many people haven’t taken that big trip for the first time since the pandemic. We want to encourage people to get out of their house and go venture this big world.
Travel is one of the most aspirational things in the world. You travel when you graduate, you travel when you get married, you travel when you retire. It’s kind of sold like the online casino on a lot of websites. We want to bring the magic back to this category and show people a whole world of possibilities they’d never thought to search for.
So that’s really what Categories is. With Split Stays, the goal is to give you more options if you’re looking for a stay longer than the week. And AirCover is really about understanding that a lot of people haven’t done a big trip in two years. So it’s kind of like if you used to ski, but haven’t skied in five years, you may be a little tepid the first time you got on the mountain again. It’s kind of the same thing with travel. Maybe you’re going across the border or going to another country for the first time in a long time. AirCover will make you feel a little more comfortable. But it all comes back to this idea that there’s this new world of travel, and so we’re creating a new Airbnb to give you more possibilities.
The last time that we talked, the focus of the company was on individual hosts. For the end user, this latest update can certainly inspire and get people imagining their next trip, but there also seems to be a big benefit for individual hosts. They should have a lot more visibility with the new search. But professional hosting has become this very glitzy, Pinterest-esque career path. There are even HGTV shows about fixing up a space to turn it into a rental. How do you think about the tension between professional and individual hosts moving forward?
If a regular person wants to upgrade their home or they have one or two homes, I would still kind of put them in an individual host bucket. I think that if somebody has like 50 or 100 homes, they have people wearing company T-shirts with a logo and they’ve got 25-year-olds checking you in, which often happens, then that’s a little more professional. This product definitely benefits individuals a lot. I think it also benefits people that aren’t in the top 100 cities.
At the same time, it’s not meant to only benefit individuals or only benefit people outside of cities. We have very urban categories. What we’re trying to do is move beyond just being a commodity. Think about how travel is usually shown.
(Chesky then shared his screen via Zoom and pulled up Booking.com.)
The next biggest travel site in the world after Airbnb would probably be maybe Booking.com. They’re a similar market cap and similar size. So here’s Booking.com. This is the world of travel.
It’s kind of like a casino, right? It’s all about free cancellation, no prepayment, you can cancel later, lock in a great price today. Here it says “only three rooms left at this price.” It’s very commodity oriented. These are commodities. We just want to show you that these are not just commodities. And when you show something like a commodity, things tend to become commodities. It’s all about price and WiFi. Yeah, that stuff matters, but it is really limited and it’s kind of depressing.
Yes, and that can give you a certain level of urgency and anxiety rather than calm, collected excitement. But there has to be tension there. When you go to Airbnb, you see something unique, and it can be very exciting. But there is also so much variability in that. It feels like AirCover for hosts is moving in the direction of providing the safety and infrastructure that is built into a hotel with all the charm of Airbnb’s unique listings.
You’re totally right. What we’re trying to do is embrace the one-of-a-kindness of our community. The great thing about one-of-a-kind is that people are different; they’re unique. The problem is people are different and unique. The more one-of-a-kind it is, the more variability. We’re trying to think about how we can provide some protection for you, and we’re the only ones that offer this.
So, is this as consistent as a Hilton? Probably not. But with these protections, you get pretty close to what a hotel can provide, and you go far beyond what Booking.com and VRBO and Expedia can do. You’re on your own when you book with those sites.
And AirCover is meant to be a franchise, meaning we want to make upgrades to it each year. Next year it’s going to be even better, and the next year it will be even better. So my hope is that AirCover just makes everyone super comfortable booking.
The last time we talked, I asked you to grade Airbnb’s customer service. You said it wasn’t an A+ yet, but that it would improve and it would be better by the end of the year. What grade would you give customer service now?
I think AirCover marks a big inflection point for customer service. I definitely don’t want to call it an A+ because we’re going to make some pretty big upgrades in the future. Let me just say this: If adding Categories is the biggest change to our app and website in 10 years, AirCover is the biggest change in our customer service in 10 years. AirCover provides the best customer service of any online travel company.
I would not say that we’re better than the Four Seasons at this point. That’s a smaller hotel. Over time, I think we may even go beyond that but that will take some time. But it’s also a really high bar, right? They’re on-premise, and there is a desk that can help you within minutes.
We’re trying to almost have the feeling of a front desk in every home in the world without having people on the ground in every market. AirCover is that turning point.
Seems like a complicated problem to solve for, but it also feels like since streamlining the company at the beginning of the pandemic, Airbnb has seemed much quicker and more focused in product releases.
If I can just take a sidebar on tech, I think everything I’m gonna say will resonate with you. I feel like the bigger these companies get, the less the products actually change. They stopped changing and they stopped taking risks. What ends up happening is that these companies are not one company. They end up being like 50 little companies, little product group areas, and they all go in different directions. They kind of A/B test their way toward various optimizations that work in the short term. But then it just all starts to feel the same.
During the pandemic, we just got back to a functional organization. We don’t have moonshots. We don’t do bets. We don’t use the word “bets” inside the company. We make one bet, we put everything behind it and we live or die by that. But nothing’s a big leap. Everything is built on the thing before.
It’s an attempt at being similar to the Apple model between 2001 and 2011 under Steve. It’s not exactly the same model, but it’s really what we’re trying to do. This sounds kind of crazy, but we’re trying to bring some hardware development into software. Because I think the classical wisdom is that hardware development was limiting and constraining. Software allows you to ship everything. You have ubiquitous data. But what happened with software development is that the lack of constraints meant that everything became a micro-optimization and everything became an experiment. When everything’s an experiment, you don’t have to think about what you’re building. You can just throw shit against the wall.
When everything’s organized, the product and the marketing has to be clean. I’m the editor-in-chief. So, we’re not actually developing software like hardware. We’re not trying to be clunky. We’re not doing waterfall development. We do continuous integration, every minute of every day.
But the release schedule is an attempt at getting the best of hardware and the best of software. Take Tesla. Elon doesn’t stand on stage and announce a new wheel. Elon doesn’t announce a new dashboard. He doesn’t announce a new steering wheel. He announced his new car. And that’s the metaphor.
We’re not shipping a new steering wheel. We’re shipping a new car, so to speak. It’s a top-to-bottom upgrade. And what Silicon Valley internet companies tend to do is they tend to ship windshields, windshield wipers, and tires and there’s not really a cohesive product story. We think that if you want to do really big things, the whole company has to grow together. And it’s not a popular thing initially. People want to be on their own schedules, their own road maps, their own release cycles. And to be on one integrated road map is an adjustment. But once you get on it, you can do a lot.
Well, you might have just answered this question, but I was speaking to an early-stage founder for the Found podcast and he was listing all the companies he looks up to. Patagonia was on there, and Airbnb came up as a company that really seems to stand by its principles and stay focused. I was wondering if you have a company like that or a founder that you model yourself after.
My favorite two founders were Walt Disney and Steve Jobs. It’s easy to go to them because it was like two of the most iconic founders of the last 50 years. But the reason, in particular, is because they were basically creative people that essentially ran technology companies.
People don’t remember that Disney was more of a technology company in the ’50s and ’60s. You remember Tomorrowland? Walt invented the multiplane camera. He invented feature-length animation. Disney popularized color television. He was a radical revolutionary. And Steve was also, obviously.
I liked them because they were in the details. There’s this model of leadership where CEOs are capital allocators, and they’re quote strategists. And they have all these general managers who actually do all the work. Walt Disney used to walk the theme park every day, and he would inspect every trash can and would look at every detail. Steve Jobs would look at every pixel of every screen. I think that the CEO of a company that’s a product-led company should really be the chief product officer and they should be in the details of everything. They should also be the chief storyteller.
I’m not an engineer. I’m an industrial designer by training. To me, they are role models. So I’d say Disney in the ’50s and ’60s and Apple in the 2000s. Not necessarily Apple and Disney today. They’re both great, but they’re not as creative as they were when the founders were at the helm.
Last question. It feels like public markets are in a big downturn and we may be at risk of a recession. How are you planning for it, and how do you make Airbnb recession-proof?
The good news is we already planned for it. I mean, think about what we’ve gone through the last two years. We lost 80% of our business in eight weeks in 2020. We had to do a layoff of 25% of our employees. We cut a huge amount of cost. With all the changes I made in 2020, I was presuming we’d be in a multiyear storm.
This might be a really bad secular and market issue, but this is not like an existential crisis for Airbnb or most of the tech companies. Existential is when journalists are predicting your demise. And that happened in 2020. There were articles like, “Is this the end of Airbnb?” and “Can Brian Chesky save Airbnb?” That was existential. And so we already prepared for it. Because of that, we’re lean. We have 5,000 people, not including some of the call centers here. We generated $1.2 billion of free cash flow in the first quarter. That’s $1.2 billion of free cash flow during our low season. So we’re already prepared no matter what happens.
In fact, in a recession, people will probably turn to Airbnb because they can save money while traveling. And they can list their homes. We were founded in 2008. We entered Y Combinator in January 2009. If there was ever a bad time to join Y Combinator, it was January 2009. It was so bad that Paul Graham said there might be no investors at Demo Day so we better be “ramen profitable.” We call it ramen-profitable or profitable if you eat ramen.
So we got to ramen profitable by Demo Day. And for years, we never really raised a lot of money. Then, like every like high-growing startup, we then raise billions of dollars and frankly, we probably spent too much and proved too many strategies at once. There was a growing-up experience during the pandemic when we had to actually shutter so many things.
So for us, we’re already prepared. We’ve already been through all this. So we’re actually in aggressive mode. The price for every company is going to be down but doesn’t change the financial performance. We have $9 billion of cash in the bank and we’ve been accumulating a billion dollars of cash per quarter in some quarters. We think this is going to be the travel rebound of the century. Tons of people are gonna be traveling, and we’re stepping on the gas. We’re not pulling back.
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