Focusing too heavily 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 were seeking to raise money for their fledgling startup, they approached more than a dozen Silicon Valley investors—all of whom turned their pitch down.
One of those investors told Chesky the market potential for Airbnb—which then went by Airbed & Breakfast—“did not seem large enough” for their required model.
“You can imagine they didn’t see travel, they saw strangers sleeping in other people’s homes,” Chesky told an audience at the Stanford Graduate School of Business. “The first investor Joe and I ever met was in a café: [He] walks in, goes to get a smoothie, he sits down, he’s drinking a smoothie, we’re pitching him. Halfway through the presentation he gets up because he has to move his car. We still haven’t seen him since.”
‘The best piece of advice I’ve ever gotten’
Airbnb was eventually accepted into venture capitalist Paul Graham’s famed startup accelerator Y Combinator, despite skepticism from Graham himself.
“The first question Paul Graham asked me was, ‘People are actually doing this?’ And I said yes. So the second question was, ‘Well, what’s wrong with them?’” Chesky told the crowd.
At a Y Combinator event, however, Chesky said Graham gave him the best piece of advice he’s ever received.
“He said…‘Focus on 100 people that love you, rather than getting a million people that kind of like you,’” Chesky revealed. “And I think that was a profound piece of advice, and may have been the best piece of advice I’ve ever gotten.”
That’s not to say that many people would think to take such an approach, according to the Airbnb chief.
“It actually runs counterintuitive to almost everything that everyone says,” he added. “Everyone focuses on scale, but scale requires people to have a deep passion [for your product].”
Chesky said that when you focus on perfecting your offering for a small pool of people, “they become your marketing department; they tell other people.” It’s an approach that helped Airbnb grow rapidly in the decade after it was founded.
“Maybe [you] can’t make an eight-, nine- or 10-star experience, but most people try to design something that’s just good enough,” Chesky continued. “But if you can add that sixth or seventh star, if you can design something really amazing, and you use the part of your brain, the handcrafted part of your brain, to create that perfect experience, then you can reverse engineer how to industrialize this millions of times over. And what happens is people love your product, and they tell everyone else about your product.”
Graham’s advice helped Airbnb’s founding team scale 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 was started in 1919, over 100 years ago,” Chesky said. “And we were able to have the entire growth of Hilton in 10 years. We had some marketing, but initially not a lot.”