Invest Like the Best with Patrick O'Shaughnessy
· Brian Chesky, Patrick O'Shaughnessy
But if you're risk averse, you want to be incremental, those types of people are not going to survive the age of AI. So I think there was an old Albert Einstein quote, he said, the best way to keep your balance on a bicycle is to keep moving. You're going to have to keep moving. Founders are going to be really well primed or really well set up for this age of AI, because we kind of have to redesign our whole company from scratch again. [00:00:00] S0: Was there anything else that Hiroki taught you? Because Steve was perhaps the literal ultimate example of everything you just said. Focused on the details, in the weeds forever, reinvention of the company.
· Brian Chesky
[00:00:00] S1: Before I say, just to say who Hiroki is, everyone knows Jony Ive – Hiroki is a bit of an unsung hero. I always heard about him, he's like this legendary mythical figure that was elusive. There's almost no photos of him online, there's no videos of him. He was never out in front. But he was Steve Jobs' creative director. It was a function under marketing. He did the ads, he did the graphic design. He was really responsible for, you know that black type with a gray font, and the product in front of white. That was really his aesthetic. He taught me two principles of Apple that I brought. One was simplicity. I think startups are like – when you start a company, because you have no money and you're so constrained, you're naturally simple. Lack of abundance creates natural constraints. And so simplicity is thrust upon you. And that is good for you. And then once you raise a bunch of money and hire a bunch of people, you go in a lot of directions, then you lose your sense of focus. How many startups can we think of today who have struggled from lack of focus? Can probably name a few. So you start to lose your muscle for simplicity. Hiroki taught me simplicity. And he taught me that simplicity is not removing things. Simplicity is distilling something so fundamentally that you understand its essence. I know Steve used to say, design is the fundamental soul of a man-made creation that reveals itself through subsequent layers. In other words, great design is about distilling something to its essence. It's kind of what Elon does with SpaceX where he talks about first principles. And first principles is kind of a physics term, but it's also a design term. It's about understanding, if I'm going to reinvent this product, I have to understand the properties of glass. I have to understand everything about it, to distill it to its essence. So I got obsessed with simplicity, simplicity of our products, simplicity of our organization, simplicity of everything. The other one was a sense of craft and details. How you do anything is how you do everything. And I said, everything must be perfect. It comes from – there's a book that a lot of people in Silicon Valley recommend, The Score Takes Care of Itself. Bill Walsh, the coach of the San Francisco 49ers. John Wooden, winningest coach in college basketball history, UCLA. Same principle.
· Brian Chesky, Patrick O'Shaughnessy
First day at UCLA, so John Wooden won 10 NCAA champions over 12 years. First day, first hour with his team, he spends an hour teaching how to put your socks on. One hour, and he said, put your socks on this way. [00:00:00] S0: Very Mr. Miyagi.
· Brian Chesky
[00:00:00] S1: Yeah. One hour teaching you how to put your socks on. It's a metaphor. Everything was that rigorous. Bill Walsh said the way you tuck your jersey into your pants was one of 10,000 details that determine whether you won or not. Basically, don't focus on winning. Focus on getting all the inputs perfect. And if you get everything perfect, then you will win. And you don't focus on the scorecard. We do focus on growth, but we kind of stopped focusing on growth. We started focusing on making everything perfect. And if everything is perfect, and you don't grow, then you focused on the wrong inputs. But if you have the right inputs, and you make them perfect, then you'll grow really fast. And so that's really what I learned from him. He really taught me founder mode. Because I had never met Steve, so I only knew through Hiroki. And I said, well, I love this. I'm an artist, I'm a designer. I get to have more control of the product. I get to make everything perfect. The initial attempt at founder mode created giant revolts. Everyone hated it, because everyone thought I was micromanaging. And I learned something fundamental. Initially, everyone hated it. And by the end, everyone loved it. The people who hated it left, so maybe there's like selection bias. The people who liked it stayed. But even the people that thought they wanted autonomy and independence and empowerment – what they didn't realize was control and power is not zero-sum. It's not like if I have all the power, you don't. There's a scenario where we're all powerless, and there's also a scenario where if I have power, I can therefore give you power. It's not zero-sum. This is the problem people don't understand. If I have more power and control, I can give you more power and control, and I can hand it off to you. It's about the idea that the car has a steering wheel. You turn it left, and it actually goes left. I do think it's all about the company rowing in one direction. That's it.
· Patrick O'Shaughnessy
[00:00:00] S0: The thing that you've said historically that had the largest impact on me was this notion of the eleven-star experience, the exercise of going from not a five-star, but a six-star, and actually forcing yourself to write it. And I have this idea in mind because of this idea of simplicity and distillation. And it's a beautiful thing, right? It's ultimately empathetic with the customer. But why is that idea in practice so powerful? What happens as you go up the star count to eleven stars?
· Brian Chesky
[00:00:00] S1: Let me do a one-minute on what it is. Basically, when you book an Airbnb, most people leave a five-star. And if you leave a four-star, it's a bad experience. Five-star, everything went as planned. So it's called review compression, similar to Uber. You always leave a five-star. And if you leave anything other than a five-star, something really went wrong. But what if the driver was really amazing? You can only leave a five-star. So I started imagining, what if we could give a six-star? And I did this exercise from six to like ten or eleven stars. So a five-star, let's say take one moment, checking into an Airbnb. Five-star check-in is you get there and the host greets you, or there's a door code and it works. In other words, nothing went wrong and you give a five-star. Anything went wrong, you give a four-star or less. That's review compression. What if you went above and beyond? So what would a six-star look like? A six-star would look like, you basically get to the Airbnb and there's your favorite wine on the table and there's fruit and there's snacks there and there's a handwritten card. Okay, that's better than just letting me in the house. So what's a seven-star experience? Seven-star experience, there's like a limousine or something waiting for me at the airport. They know I like surfing. There's a surfboard waiting for me and they're like showing me around the city, there's all this stuff. So what's an eight-star experience? An eight-star experience, I get to the airport, there's an elephant. I go on the elephant. I go on a parade in my honor. I'm like, wow, I feel really special. What's a nine-star experience? I call it the Beatles check-in. I get off the plane, and like the 1964 Beatles, there's 5,000 teenage girls screaming my name with cards, making me feel like I'm a pop star. I get to the front lawn of the Airbnb and there's a press conference in my name. So what's a ten-star experience? Ten-star experience, Elon Musk greets me and takes me to space. It's an exercise, it's an exercise in the absurd. You keep pushing to go so absurd – to ten stars – that suddenly six or seven stars doesn't seem crazy at all. And the way to get to product market fit is to just create a six or seven-star experience. But you can't create a six or seven-star experience without going beyond.