Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: Edwin Land, the founder of Polaroid, was very famous for using Ansel Adams as his ultimate tester of his equipment. And so he cared about – the most important, maybe best photographer of all time – what he thought of his device. It comes to mind when you talk about Disney, because I have this visual of Walt just continuing to drill down to some sort of bedrock or something. And that's the mission that you're on as a founder, it's like bedrock. What is that for you from this point forward? As you keep drilling, what do you think you're still after? Where is there still room for your ceiling to raise so that the business's can?
· Brian Chesky
[00:00:00] S1: A few things come to mind. When people think of Airbnb, if you close your eyes and say, I want you to think of a picture of Airbnb, you probably think of a house. We're a noun and a verb like Kleenex, which is amazing and not amazing. It's amazing in that we're kind of the category leader. It's also tough because when you're Kleenex and you want to sell shampoo, they're like, wait a second, I'm not putting Kleenex on my head. So it's a double edged sword, our brand. The bedrock for me is, how do I change the atomic unit of Airbnb from a home to a person? I do not want Airbnb to be about homes. I want it to be about people. And I want the people to be the atomic unit. And on Airbnb, you get a home, you get an experience, you get a service, eventually a flight. Imagine a person in the center with a ring with like 50 things around, these are the things you can get. That is the thing. The bedrock of Airbnb is going to be identity, profile, the person's preferences. I want to develop the most authenticated identity on the internet. Proof of personhood is going to be really, really important in the age of AI – artificial. I want to develop the most robust profile on the internet. I mean, it used to be Facebook. They've kind of abandoned that strategy. I want to build one of the richest preference libraries of you as a person, because that would be useful to have. I want to build a social graph, but in the real world. And I want to eventually have a membership program where you get all these different benefits. So the bedrock is the person. I want to basically figure out how we can launch, like Amazon – Amazon went from books to like a hundred things. I don't want us to just have homes. I want us to have a hundred things. So we need to develop this industrialized machine of understanding, what are the atomic units or the primitives that are consistent across all these different businesses? And then the last one is AI. We have a bit of the innovator's dilemma. Plus or minus a hundred billion dollars goes through our app. I have all these visions that are, totally change it. But you're a public company, you know, and you're like giving guidance. And the difference like missing and hitting earnings is you really, But it's not just being public company, people's livelihood depends on Airbnb.
· Brian Chesky
If we mess with something, somebody could go from making a living to not making a living. So you've got to be very careful. That is not an environment for mass innovation, when you're being really careful. So I'm also exploring little sandboxes, maybe almost like a separate app. What are radically different Airbnbs? What's after Airbnb? Airbnc. What's that? What's the next? So those are the three things I'm thinking about. Number one, how do we take the atomic unit from a home to a person? Number two, how do we basically industrialize what Airbnb offers, to do 50 things, not three things. And then how do we like disrupt ourselves before someone else does with AI, without screwing over our investors and our hosts who depend on us. And so those are the kind of things I'm doing. Maybe the last thing I'm thinking – just as a CEO, I think I've reached a certain level of mastery. I've reached the mastery of product-market fit, hyper growth, profitability. I'm beginning level four. Level four is reinvent yourself, product extension. I think there's something potentially even beyond that in the age of AI, which is like – one of my strengths is all my experience. And that's also my weakness now. I'm 44 – I'm not old, but I'm not young. I'm not AI native in the same way a 22 year old is. Here's a bad example. When I started Airbnb, I was 25, 26, and we were competing against Expedia. They were on Outlook and we used Google Docs. And we were iPhone. It all seems anachronistic now, but back then that was innovative. And we were on the coolest new tools, and we just moved faster. And so also just staying young. Pablo Picasso, another quote, he said the older you get, the stronger the wind gets. And it's always in your face. You've got to stay light on your feet. You got to stay young. You got to keep reinventing yourself. You got to have curiosity. And so I don't want to become like this old school person in their groove. I've got to reinvent myself.
· Patrick O'Shaughnessy
[00:00:00] S0: One of the things that as I've been building stuff myself – really for the first time – I'm not an engineer. I used to build stuff, but I'd tell people and the feedback loop was like painfully slow and lossy. Now it's like five to fifteen minutes and pretty high fidelity. And soon it'll be five seconds and perfect fidelity. I've always loved Bret Victor's idea of wanting the input and the output being as linked as possible. And we're getting to that stage. The anxiety I have having this experience is that it feels like nothing will last. Historically there's been these ways to have enduring moats, people would always call them. You have 200 million people that you know a lot about already. You've got hundreds of millions of reviews, then lots of information on places. You have these embedded things that, I can't just get that from you. But it just seems as I build this stuff, like, oh, it's going to be really hard to have something enduring and lasting. Do you share that anxiety? How does that make you feel, that as the frictions fall, it also feels like the pot of gold at the end of the rainbow is disappearing into the distance or something?
· Brian Chesky, Patrick O'Shaughnessy
[00:00:00] S1: Here's an analogy. Take a fashion brand like Hermès, I think the most valuable single fashion brand in the world. The Birkin bag and the Kelly bag, it's like they have a new product every decade or something. They're these really multi-decade old things and they appreciate and they resell. And then you've got Zara, fast fashion. And I feel like we all want to make these things that endure, but we're living the hyper fast fashion of software. If you look at software from 10 years ago, no matter how great it was at the time, it looks really old and dated. You look at hardware from 10 years ago, it looks pretty decent. You look at interior design, it looks pretty good. [00:00:00] S0: Or better.
· Brian Chesky
[00:00:00] S1: You look at buildings, and after a certain period of time, they've got this patina and they're wonderful. You go to Paris and old endures. Environments and physical worlds have got huge endurance, hardware and physical things have medium endurance. Software is extremely ephemeral. Opinions are like that, but some ideas permeate. This is something that I'm, that I'm, I'm wrestling with myself because I want to make things that endure. I don't know how I've reconciled it except to say this. I obsess over our app, Airbnb's app, its design, its interface. And yet no matter how great it is, 10 years from now, I'm going to look at it and think it looks like crap. Because I look at the interface from 10 years ago and think it looks like crap no matter how good it was. Dated software never looks good, even if it was good back then. So then you've got to ask, what endures? I do think there are things that endure. Airbnb the community endures. I started realizing the software won't endure, and the network effect will decently endure, but the ideas of Airbnb – its principles, its mission, the organization, the company, the brand, the identity, the logo, the voice, the community, what it stands for. Those things will endure. Most importantly, the community. I realized, at some point I told the company, we're not building an app. We're not building a service. We're building a community. And that's the only thing that will last. I don't think there will be apps in the future. I think there'll be agents. So if we're attached to apps, I don't think there will be apps. So we'd better let go of that.