Page 71 - Forbes Magazine-October 31, 2018

FORBES BRIAN CHESKY AIRBNB

or a full 32 seconds, the noto- is the prospect of an IPO, said to be on track for as early as
riously fidgety Brian Chesky mid-2019.
sits still. Planted under a fake It’s particularly difficult for Airbnb, because unlike, say
tree in a bespoke confer- Google, which has revolutionized everything from search
ence room at Airbnb’s head- to phones to cars, up to now Airbnb has largely been a one-
quarters in San Francisco, the trick pony. It connects people who have vacant homes and
37-year-old CEO is intent- apartments with people wanting to rent them. That’s it.
ly focused on the iPhone in Hence Airbnb’s newfound interest in selling guided tours
his hands. It’s playing a mar- with Experiences or helping with restaurant reservations
keting video showing goats through its partnership with Resy.
mingling with guests dur- Compounding matters is a weak executive team that lacks
ing an Airbnb Experience at a chief financial officer and a chief marketing officer less than
a Northern California ani- a year from its goal of being IPO-ready. Then there’s Chesky, a
mal sanctuary, offered as part CEO who—despite accepting billions from investors—is not
of the company’s two-year old tour guide business. A sheltie putting their interests at the front of the line.
named Osso (short for Ossobuco) sits under the conference “The scorecard for companies has changed,” Chesky says.
table licking the billionaire’s black sneakers. As the sound of “Before, it was really about financial metrics, and I think
the last bleat fades, Chesky seems moved. “Wow,” he says to now companies are realizing we have a greater responsibility
the eight employees closely watching his reaction. He releas- to society to make sure life is great.”
es a deep breath. “I feel something.”
Maybe this is progress, a return to the magical feeling
Chesky wants Airbnb guests to feel. Airbnb became great by AIRBNB HAS JOINED THE
offering unique, affordable accommodations in a cookie-cut- RAREFIED GROUP OF
ter world. And in the decade since its founding, it has ridden
a generational change in social attitudes—with digital na- COMPANIES—GOOGLE, XEROX,
tives suddenly becoming comfortable accepting rides from UBER—WHOSE NAMES HAVE
strangers, swiping right for hookups and sleeping in spare
bedrooms—to a $31 billion valuation, raising over $3 billion BECOME VERBS.
in outside money. Along the way Brian Chesky and his two
cofounders, Joe Gebbia and Nathan Blecharczyk, have each The plan, such as it is: Drawing loosely on Amazon for
accumulated a $3.7 billion fortune from their Airbnb shares, inspiration, Chesky wants Airbnb to be an everything store,
and the startup they built has joined the rarefied group of but for travelers. Chesky hopes a billion people a year will
companies—Google, Xerox, Uber—whose names have be- use Airbnb by 2028, a giant leap up from the total of 400
come verbs. million who have used the service during its first ten years
But with all that money comes a unique challenge. Call (roughly 100 million people have stayed in an Airbnb so far
it the curse of the unicorn: How can Airbnb justify a valu- this year). Following the Bezos blueprint, he’s rewiring Air-
ation that is higher than Expedia, Hilton or American Air- bnb’s technology so that it can quickly scale up hundreds of
lines? Although Airbnb has a $3 billion war chest, it earned businesses and categories faster than ever before.
just $100 million last year on a cash flow basis from $2.6 bil- “At some point, the law of large numbers means that you
lion in revenues, or about 4%. (Its larger, publicly traded just need to plant more seeds,” Chesky says.
competitors have margins of about 27%). How can Airbnb But Chesky also worries that runaway growth could imperil
keep growing—amid sharpening competition and increas- Airbnb’s uniqueness. As a result, he is trying to position Air bnb
ing regulatory scrutiny—and deliver the 10x return their as what he likes to call a “21st Century Company,” one that’s
venture capitalists demand? Making it all the more pressing beholden not only to financial results but also to other stake-

42 | FORBES OCTOBER 31, 2018