Focusing too much on scaling a business may not be the best idea for entrepreneurs, according to Airbnb cofounder and CEO Brian Chesky.
In 2008, when Chesky and his Airbnb Cofounders Nathan Blecharczyk and Joe Gebbia wanted to raise money for their new startup, they approached more than a dozen Silicon Valley investors—all of whom turned them down.
One of the investors told Chesky the market potential for Airbnb—which went by Airbed & Breakfast—”didn’t seem big enough” for their required model.
“You can imagine they’re not seeing travel, they’re seeing strangers sleeping in other people’s houses,” Chesky said. told an audience at the Stanford Graduate School of Business. “The first investor Joe and I met in a cafe, [he] he came in, got a smoothie, he sat down, he drank a smoothie, we pitched him. In the middle of the presentation he got up because he had to move his car. We haven’t seen him since.”
‘The best piece of advice I ever got’
Airbnb was eventually accepted by venture capitalist Paul Graham’s famous start-up accelerator Y Combinator, despite skepticism from Graham himself.
“The first question Paul Graham asked me was, are people actually doing this? And I said yes, so the second question is well, what’s wrong with them?” Chesky told the crowd.
At a Y Combinator event, however, Chesky said Graham gave him the best advice he’s ever received.
“He said … focus on the 100 people who love you, rather than getting a million people like you,” Chesky revealed. “And I think that’s a profound piece of advice, and probably the best piece of advice I’ve ever gotten.”
That’s not to say that many people would consider taking such a step, according to Airbnb’s chief.
“It actually runs counter to pretty much everything everyone is saying,” he added. “Everyone focuses on scale, but scale requires people with deep passion [for your product].”
Chesky says that if you focus on perfecting your offering for a small group of people, “they become the sales department, they’re telling other people.” It’s an approach that helped Airbnb grow rapidly in the decade after it was founded.
“Maybe not creating an eight-, nine- or ten-star experience, but most people try to design something that’s good enough,” Chesky continued. “But if you can add that sixth or seventh star, if you can design something really unique and you use that part of your brain, the handmade part of your brain, to make that perfect experience, then you can reverse engineer how to industrialize it. millions of times. And what happens is people love your product and they tell everyone about your product.
Graham’s advice helped Airbnb’s founding team grow their business to what it is today—a platform with 6.6 million active listings worldwide that has facilitated 1.4 billion guest stays since its inception.
“Hilton started in 1919, more than 100 years ago,” said Chesky. “And we got the whole Hilton growth in 10 years. We had some sales, but initially not much.”