Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: My guest today is Brian Chesky, the co-founder and CEO of Airbnb. Our conversation traces the path from his early training as an industrial designer at RISD through the pandemic moment that forced him into founder mode. He explains what he calls AI founder mode, and why it will demand even more attention to the details. He walks through his eleven-star exercise, which I've used personally many times over the years, which is his way of imagining the most absurd version of a customer experience as a path to product-market fit. We talk about why founders are rarely good early CEOs and what changed him when he stopped chasing adulation and started making things for the love of making them. Please enjoy this great conversation with Brian Chesky. Before we hit go here, we were talking about industrial design, which you studied at RISD, and I have this weird affinity for the history of this topic, just because Raymond Loewy, one of the famous industrial designers, helped me a lot in my career indirectly. I'd love to hear you just riff on the influence that guys like him had in your early studies, and why you studied that in the first place. It's such an interesting background.
· Brian Chesky
[00:00:00] S1: I was an artist growing up, but I didn't know what to do with my life, and I went to the Rhode Island School of Design. And at RISD, when you're a freshman, you have to pick a major. I'm 17 years old, and I'm like, okay, in three months, I have to decide what I'm gonna do with the rest of my life. And I remember the department head for industrial design came. I'd never even heard of the term industrial design. I don't know what it was, and they said industrial design is the design of everything from a toothbrush to a spaceship and everything in between. I immediately said, that's what I want to do with my life, because I was thinking of maybe being an architect or something like that. And so I started learning about industrial design, and I learned about Charles and Ray Eames, and Raymond Loewy. Raymond Loewy was probably the most important industrial designer of the 20th century, designed so many incredible products. The first designer of Air Force One. He designed a lot of consumer products, very beautiful consumer products. He designed a lot of automotive devices, cars, and he had a profound impact, I think, on society. And as I was studying the history of industrial design, it was so incredible, because the industrial design field is a deeply technical field. If you think about architecture, it's fairly technical, but it's a more known boundary. There's buildings, and there's commercial, there's residential, there's retail. There's only so much variation. It's a multi-thousand-year-old field. Industrial design, for the most part, really started with Josiah Wedgwood. It was like, it's really the mass industrial products, so industrial design is really new from the industrial revolution. And it used to be analog things. The first industrial design was chairs and tabletop dishes and bowls. But as technology grows, suddenly industrial design becomes cars and airplanes, and now you have microwaves and refrigerators, and you have all these things in the 20th century, radios. And then eventually, it becomes medical equipment, like ventilators, and then with computers. A lot of people – the most famous industrial design product in the world is the iPhone, and the vastness of industrial design is unbelievable. The intimate relationship you have with a product is incredible. I remember when I grew up in the 1980s, I loved video games.
· Brian Chesky
I played with a Game Boy, a Game Gear, Super Nintendo. Or I remember Nike in the 80s and 90s, those sneakers, there were the Reebok pumps. These products captured kids' imaginations, and they had a very intimate relationship with you. They really had a sense of personality, and computers in particular were something I was really, really interested in. And then of course, you get to the golden age of Apple, starting probably in 1998 with the iMac. And to Jony Ive, who was my hero. So I went to RISD, and when I was at RISD, Apple was the golden age of industrial design. They really educated the public about design. Once they were educated, they couldn't unsee great products. And that captured my imagination. What I loved about industrial design was A, it was very technical. You work with mechanical engineers, you work with electrical engineers. B, here's the thing about industrial design – it's almost different than any other design. This is also true of fashion design. A design is only successful if it sells. So if we design an office building, an architect can win awards in their office building, and it can never get leased. You can design a house, but no one looks at, what was the retail value of the house. So the awards are detached from the commercial success. If you design a product and no one buys it, it's considered a failure. And so because the commercial success matters, you have to think about marketing, manufacturing, distribution, solving problems. It's not just about winning awards. It's about being viable to a customer. The other thing is, it's very much a problem-solving field. It's got so many different boundaries. And it's very much about empathy, about user journeys. More than, I think, any other design field, I think industrial design always seemed like it was the kind of field where you put yourself in the shoes of the user, and you design these user journeys. And I think they really teach industrial design through user journeys. It's a very specific type of field. And I think that really prepared me for designing – I'll just give you one example. One of the projects I designed when I graduated RISD was a child's ventilator, a child's breathing machine. And instead of just thinking about the design of the ventilator, one of the projects I had to do was imagine being the child in a hospital. And so I had to imagine being a child.
· Brian Chesky
It's hard to do, but you're six years old. Imagine you're six, and you're scared, and you're looking up at a breathing machine. And imagine the parents. The parents go in, and the parents are like, is my child going to be okay? If this breathing machine seems ominous, and it's keeping you alive, the parents are going to freak out. Like, what's wrong with my child? The other thing I learned is that – one of the interesting things that happened was the nurse technicians, the really technical nurses. It was a weird thing, they had no problem that these things were complicated. But the hospital wanted a breathing machine that was so simple that everyone can learn how to use it. Except the nurse technicians had pride that only they knew how to use it. So you had to weigh the stakeholders. How do you design something from the vantage point of a child, consider how it imbues to the parents, how could it be universally useful for everyone, without threatening people's jobs? You see, there's so many dimensions. That just, I think, really prepared me for this field. There's no product managers in industrial design. You are the PM. There's industrial designers and there's engineers, and there's program managers. So the industrial designer is the product manager. A design product is one function.
· Patrick O'Shaughnessy
[00:00:00] S0: Do you think the world's going to go that way now? You're obviously famous for helping usher in this founder mode idea. That was kind of pre-Opus 4.6 or whatever. There's another layer to that now, I'm curious what we would call it. But it seems like for the first time again, someone even like you running a very large company with lots of people, can disintermediate lots of the steps between idea and outcome. And this design stuff may be even more applicable than ever. What is the new mode like? Because everyone's trying to figure out, how do I run a company in this era? So how would you describe the new capabilities and the mode through the lens of this?
· Brian Chesky, Patrick O'Shaughnessy
[00:00:00] S1: You know, founder mode was something that Paul Graham coined, but based on experience I had. I think people are basically born good founders. Or said differently, it's innate. You don't have to learn how to be a good founder. It's like you jump in the pool, you learn how to swim. No one is born a good CEO. And the job of CEO is completely counterintuitive. And almost all of your intuition about what to do is wrong. And so the problem is we founders never were really prepared to be great CEOs. We founders were taught to learn by doing, and that's great for a founder. It's not good as a CEO. You do not want to learn on the job how to be a CEO. In other words, trial and error is bad for a CEO. You know why trial and error is really bad? Because you hire somebody, they build an empire, they leave, and now you've got to unwind their empire. And it takes like four years. So you've wasted years. So actually learning how to be CEO is something you should learn. And so I learned the hard way. And I basically learned that what happened was founders were over-delegating their companies to these professional managers. I'm not disparaging them, but they were detaching themselves, and they were being managed rather than managing the company. And it was really about not apologizing about how you run the company, being in the details. That was founder mode. [00:00:00] S0: Was there a moment that it clicked for you that you had to change the mode?