Invest Like the Best with Patrick O'Shaughnessy
· 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?
· Brian Chesky
[00:00:00] S1: Yes. The pandemic. Two things happened. Actually, speaking of Jony Ive and Apple, and another person named Hiroki here. I spent the 2010s riding a rocket ship. Airbnb, Uber, a few of us, we went on these crazy rocket ships that OpenAI and Anthropic are doing now. It was awesome. It was amazing. But by the end of the last decade, around 2019, I remember waking up one day and it was completely unrecognizable, the company I was running. I had like 7,000 employees, I didn't know what anyone was doing. I felt like I was in a car without a steering wheel and I just could not turn the company. I was like, "Turn left!". And the company would go right. Actually, not only did I feel like I was not in control, I don't think anyone felt like they were in control. It was just a free for all. Thousands of decisions being made for me, me overly deferring, not listening to my intuition. And I got to this point where I remember having this dream, and I told my co-founders, I had a dream in late 2019 where I felt like I'd left the company for 10 years and I'd come back and I was like, somebody had been running the company for 10 years. And they turned it into this giant political bureaucracy. And I didn't even recognize the company. And then I realized, oh my God, it was me the whole time. And so it was my fault. I had actually enabled all this to happen. And then I started talking to people and they all had the same experience. And all these founders felt like we were all made to feel crazy because we had this instinct. So around the same time as the pandemic, I hired a guy named Hiroki Asai. He was from Apple, and he told me about how Steve Jobs ran Apple. And Steve Jobs, when he came back to Apple in 1997, in July of 1997, they were nine days from bankruptcy. And he basically just went into founder mode, what you'd call founder mode. He got into the details of every little detail. And I wanted to do that, but initially the company braced against it. It was almost like it repelled against it. And then the pandemic happened. And we lost 80% of our business in eight weeks. We were in total crisis mode. At that moment, I went from peacetime to wartime. And then I just totally took control of the entire company, and I just never let go. Over time, basically what I did is I reviewed every single thing for two, three years.
· Brian Chesky, Patrick O'Shaughnessy
I worked like 100 hours a week, reviewed every little detail of the company. My vision wasn't do this forever. My vision wasn't to micromanage forever. My vision was, before I empower people, I need to know what's going on. This notion that great leadership is hiring great people and trusting them to know what to do. Well, how do you know they're great if you're not auditing what they're doing? And you actually want to start hands on, under control, and give ground grudgingly. Everyone does the opposite. They let go, they hire someone, they go in the wrong direction. And by the way, that's bad for the leader. You're not training them. So to bring it back to your question, that's founder mode. We need AI founder mode. AI founder mode is going to be even more intense than founder mode. [00:00:00] S0: What are the principles that you're thinking about as you go into it? [00:00:00] S1: I think AI founder mode, you're in significantly more details. Because you have almost everything on demand. The mechanism of founder mode was I had a lot of meetings, because that was the only way I could get information. So I would probably do 35 hours of meetings, which is very similar to the way Steve ran Apple. I wouldn't do one-on-ones. I'd only do group meetings. I'd do a recurring thing where I review every single thing in the company, either on a weekly basis, bi-weekly, monthly or quarterly. [00:00:00] S0: In person?