Invest Like the Best with Patrick O'Shaughnessy
· Brian Chesky
[00:00:00] S1: I think when I started Airbnb, I don't think we were totally trying to be successful. I like to joke that if I was trying to make money, I would have come up with a better idea than air bed and breakfast. I truly did it for the love and the fun. And somewhere along the way, I got really successful. And that almost became a curse because the success became a scorecard. And then I wanted to get even more successful. It stopped being intrinsic, and it started being a version of status and people-pleasing. It took me a little while to realize what I was doing. What I really wanted was love. I think that I learned growing up as a child, the way to get love is to be special. The way to be special is to do special things. And if I do special things, I get praise and I feel love. And I think that translated into – if I'm really successful, I will get adulation. And if I get adulation, I'll feel that feeling that I'm always seeking. But I didn't do this consciously. I'm not just saying this. It took me many years to realize this is what I was doing. By the way, adulation is kind of like seeking status. So many people seek status. Anyone who's on social media and posting all the time is probably somewhat seeking status. There's nothing wrong with it. But the problem is that's not where great products and great companies come from. See, adulation is like a cup with a hole at the bottom. And you keep filling it in, thinking it's love, except it just keeps coming out the bottom. And at some point, you have to confront, who am I doing this for? Am I doing it for other people, for them to briefly love me and commend me to then move on? And either way, that's a drug. And it's a drug that, like real drugs, you need a greater hit to get the high. And eventually, it stops working. Eventually, you reach a peak, and it gets really meaningless and empty. And that happened to me. And at some point around the pandemic, we go public. We have a $100 billion valuation. It's one of the best days of my life. And the next day, I wake up, I put on sweatpants, I go on a Zoom meeting. It was like it never happened. And it became the saddest day of my life, because I realized, OK, what now? I got all this adulation, and I don't feel any different. And that made me reevaluate what I'm doing this for.
· Brian Chesky
I had to just come to terms with – I want to do things for pure intrinsic reasons. So I had to basically just detach myself from people's approval. From status. From worrying about how hot Airbnb is or how successful I am, which I never gave a shit about when we started. You start getting accolades, and you want more of them. And you've got to let go of that, because it's a losing game. And I just really started focusing on just being heads down. Do the work like you used to do, like when you were a kid. There was light. Just make stuff. Make it for yourself. That great book Rick Rubin, he says an artist is an artist when they make it for themselves and they don't try to make something successful. And I stopped trying to be successful, and I just went back to the basics. And I realized a person doesn't know you will never love you. That's OK. The people who love you are the people that know you. And the most important person to love you is yourself. And what you love is the thing you're doing. So this became a whole thing. It became about doing it because you love it, putting your heart and soul in it. It's like The Score Takes Care of Itself, it goes back to that. Don't try to be successful. Try to do something wonderful that you love for yourself. Maybe you'll be successful, maybe you won't. But don't focus on who you want to be, focus on what you want to do. That was the advice President Obama once told me. He said, if I focus on who I wanted to be, and I focused on being president of the United States and I wasn't, my life would have been a failure. But if I focus on what I wanted to do – I want to help people, I want to be a community organizer – then I don't need to be president. I think so many entrepreneurs focus on what they want to be. "I want to be a giant tech founder. I want to run a billion-dollar company. I want to do this. I want to do that." Instead of focusing on, "What do I want to make." And then suddenly, there's no way to fail if you're making what you love.
· Patrick O'Shaughnessy, Brian Chesky
[00:00:00] S0: It's an incredible set of ideas. I'm curious what most fell away in your life in this recent period as a result of this shift in mindset? What do you do less of that you used to do a lot of when you stopped chasing adulation? [00:00:00] S1: Mostly ruminating. [00:00:00] S0: You ruminate less? [00:00:00] S1: Yeah. Just less worrying about people's opinions of me. By the way, somebody kept saying, there's something mildly narcissistic about worrying about everyone's opinions as if they're all thinking about you. The reality is, even people watching this – I'm going to be self-conscious, except for a moment they're going to think about me, but then they're going to be mostly thinking about themselves, and that's okay. And all of us are thinking, everyone's thinking about us. And they're thinking about themselves, or the people in their life. They're not thinking about some guy on a podcast except for maybe an hour, and then it's over. Letting go of what people think about you, because that's a prison. Suddenly you're making things for approval, and then you lose your courage. That's the main thing. It's just the mental energy. But I really try to do things that are meaningful. Meaningful things are really two buckets. It's making, it's spending time with people I care about. Those are the two things.
· Patrick O'Shaughnessy
[00:00:00] S0: There are two very different ideas I'm curious for you to react to. The first was made famous by Warren Buffett, who said you want to buy, as an investor, businesses that a ham sandwich could run, because eventually one will. Not to pick on anyone, but think about the card payment processors like Visa or MasterCard – just extremely elegant business models. Actually, network-effect businesses like Airbnb tend to be in this category. And then you've got this opposite end of the spectrum which is, one of my favorite early-stage investors said, he tells every founder that they should think about the company as a platform or a vehicle for their own personal growth. And their ability to grow will set the ceiling for the company. These are sort of opposite ideas. And we've been talking a lot more about leadership in this second bucket. I'm curious how you think about whether or not you'd care if eventually a ham sandwich ran Airbnb, like the business model would be so perfected that it wouldn't matter in the Warren Buffett sense. And just like in general, how you think about if that's true, that your ceiling is the company's ceiling as its leader.
· Brian Chesky
[00:00:00] S1: I think they're both true. Let me try to square those with one example. I agree with both sentiments. Okay, here's an example. Walt Disney. People watching, I want them to try to name a Paramount Pictures film. I want you to name a Warner Brothers film. Maybe you'll think of Batman. I want you to name a Universal Pictures film. I want you to name something from the MGM library. Pretty hard, right? I bet you can name a lot of Disney films, and probably Pixar during their golden age. There's a big difference between those two. One is that Disney was very founder led, and that Disney was all about a personal expression of one man. The irony is the longer a company is run by founders in the founder mode, the more I think it can let go and anyone can run it. I think Disney – not to take away from the CEO of Disney – this new guy Josh is really great. I've met him, he's great, and I think they've had a lot of good CEOs. But I generally think the CEO of Disney has the bases loaded. You've got this incredible theme park that people are going to visit no matter how well it's run. It's like a city – as many people visit Disneyland every year as San Francisco. It's crazy. They've got this incredible IP. It's not that it's an easy job, but Walt left so much. I remember I was speaking to the former CFO of Disney once. This was like 10 years ago. And he said, Disney hasn't really done anything new since Walt died. Walt died in 1966. Since 1966, we still make feature and animated films, TV and magic kingdoms. And of course, yeah, they do new things, but fundamentally that's the same playbook. So I do think that that's an example where the founder reinventing the company and their expression created such a reservoir of IP, of momentum. He died 50 years ago. 50 years later, Walt Disney's spirit seems very omnipresent. Whereas Louis B. Mayer, I don't know if most people can tell you which studio he was. See what I'm saying? There's a huge difference. So I generally think this is a paradox. The ham sandwich, you have a business so good anybody can run it because sooner or later they will. The best businesses are ones that founders run and they reinvent, and they create so much equity in such a great moat, that then when they hand it off, they will endure and grow after them. I think Apple is very similar.
· Brian Chesky
They've had not had to invent new products for the most part. They're still running the iPhone. I mean, what a gift Steve left them. They were a few hundred-billion-dollar company when he died. They're a multi-trillion dollar company now. I think the one caveat is I think tech companies are different. Warren Buffett generally didn't invest in tech companies, with the exception of Apple. Coca-Cola was a big investment of his, or like See's Candies. These are things that don't get disrupted. I think technology is a synonym for change. If we're in the change industry, you kind of need to be more in founder mode more time. But I think that's how I square it. The company is the upper bound of the founder's potential. The longer you're in founder mode, the more it will endure. I remember one founder told me, I want this company to last a hundred years, so therefore I can't be in all the details. And so therefore I need to empower people. And I remember saying, if you want this to be around for a hundred years, you want to control it as long as possible, and keep it in founder mode as long as possible. Like Disney. I think that's counterintuitive. And I think people say, oh, but the company is gonna get very dependent on you. Well, yeah, but the alternative is you're going to have so institutionalized this magic it can endure after you.