Invest Like the Best with Patrick O'Shaughnessy
· 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.
· Patrick O'Shaughnessy
[00:00:00] S0: So many of the themes that we've talked about is this steady progress and learning through time applied in service of others. What did bodybuilding when you were young teach you about steady progress over time?
· Brian Chesky
[00:00:00] S1: Weirdly, bodybuilding taught me so much that I could apply to Silicon Valley. It taught me two important principles. My dad was really into ice hockey, wanted me to be an ice hockey player. Unfortunately, I was very skinny. I hit puberty really late, and I went to a sports Academy for hockey. When I was 13, I thought I could be a really good hockey player, but by the time I was 14 – I didn't hit puberty till I was like 15 or 16, and that's a death sentence in hockey. Because suddenly, I went from like first or second line to third or fourth line. I went from thinking I'd be a division one athlete to a division three athlete, and I'm like, okay, it's not really going to work out for me. And so I started weightlifting. I was 135 pounds, and I told my friends, I'm going to be one of the top bodybuilders in the country by the time I'm 19. And they thought I was out of my mind. I ended up, by 19, competing at the national level. I competed at teenage nationals. The first lesson I learned from bodybuilding was, if you can change your body, you can change your life. It was actually the most fundamental thing to change. Everyone wants to change things around them, but what if you changed you first physically? And I even think, if you could start somewhere – a lot of people say change your thoughts. I would change your body first. Change your physical biology. If you can change your body, you can change your life. It was the ultimate expression of empowerment. Okay, now I changed my body, what else can I change? It's a metaphor for eventually you can design the world around you. I can change my body, I can change my environment. Eventually I can change the world. It's like, you just go inside-out. But the other thing it taught me, which might be even more helpful, is that you can't get in shape in one day. And if you go to the gym and work out for 20 hours, you're not going to get in better shape. In fact, you're going to overtrain. And the way you get stronger is through an adaptation from progressive overload. You basically stress the body – the body doesn't get stronger during exercise, it actually breaks the muscles down. And it's an adaptive response, like an immune system, it gets stronger. You just keep doing it. The basic idea is that you can't get in shape in one day, and it's about 1% better every single day.
· Brian Chesky, Patrick O'Shaughnessy
And if you compound 1% a day, you can actually have massive gains. And so it's really about discipline. And it's also very analytical. Bodybuilding is this wonderful thing where it's judged. It's a subjective sport that you judge visually, but you measure it scientifically. You weigh your food, you have to put yourself in the right caloric deficit. You have to write down your training. You have to write down your weights. It's extremely analytical. It taught me to be very analytical, metrics driven, and that it's really about discipline and consistency. And I think that's important because I think a lot of founders just give up too early. It's about discipline. And it's about – if you train for a month, you take a month off, you're starting over. And that's the key. You never quit. You just keep going. [00:00:00] S0: One of the nice things about it is the visual feedback. It's judged visually, you can literally see it. You can look in the mirror. Other people can look at you and say you've been working out. Probably some of the skills that you would want to apply the same progressive overload thing to as a leader are very invisible. How do you figure out the objective function? How do you apply that same thing to something else that other people can't see?
· Brian Chesky
[00:00:00] S1: I've stopped trying to focus on how good of a company Airbnb is and I take it to projects. So I'll give you one example of a project I focus on. One is I want to build the best team possible. Twice a year we do this like giant thing we call roadmap review and there's the top hundred people in the room and I see the quality of people in the room. And we did one in the last two days. And then one of my most important jobs – the most important job I do at Airbnb is hiring. That's a whole separate topic. And the visual feedback is, every twice a year I get the top hundred people in the room and I can see the quality of the people in the conversation. So in other words, there's many metrics that you use and I obsess over it. Maybe it's the app and I just look at the design of the app. Maybe it's how well the company operates and I look at decision-making. So I try to break the problem down to something that's observable, that I can observe either measure with data or even subjectively look at and observe. So it's always about breaking the problem down to something that's observable and measurable. By the way, just on this, because this is a really important point. Basically as a leader, you can choose if you want to spend time hiring or managing. One or the other. The better the people, the less they need to be managed. The more time you spend on recruiting, the less time you have to spend on management. It's one-to-one. I remember when I was starting Airbnb, Sam Altman – who obviously everyone knows now from OpenAI – I was like one of the first Sequoia-funded companies. Before me were two people that had ever been funded by Sequoia from Y Combinator. Drew Houston from Dropbox. But the first one was Sam Altman and his company called Loopt. It was like a kind of like a way to see your friends on a phone before the iPhone. I remember him telling me – I was like 27 or 28, Sequoia had just funded us, $600,000 at a $3 million post-money valuation. Highest valuation in Y Combinator, now the average valuation is 30 million. And he said, you're gonna spend 50% of your time on hiring. I never did, by the way. It was my death blow, not spending more time on hiring. The less time I spent on hiring, the more time I spent managing. And I started learning my number one job was hiring. Every day I wake up, the first person I call is my recruiter.