Airbnb CEO: Why AI is the best thing to happen to us

(upbeat music) - All right, welcome to a new episode of Powerplayers. And I am so excited to welcome back on Airbnb co-founder and CEO Brian Chesky. And this will happen to be the company's earnings day. Brian, thanks for squeezing me in somehow. I appreciate it. - Oh, you're welcome. Happy to be here. - And I just wanna say too off the top. We did not plan to look alike. Like two Brian's, like two fit guys on the box. Like we didn't plan this out beforehand. Like, you know, definitely not. But good to see you. This is earnings day. Numbers look to be good. Like, what do I, what do I need to know? This is the fastest we've been growing in years. I mean, I think a really simple way to think about it is last year our revenue grew 10%. This quarter alone was 17%. It's really, really hard for a big company to accelerate growth. It's like gravity, growth rates wanna go down. The bigger a company gets, I've learned this the hard way. And so I just wanted to just call out our incredible team. It's very, very hard to do what they pulled off. And the way we did it is we have this innovation model that we really kind of built a few years ago that I modeled off the original part of Airbnb where I got these small little elite teams focused on problems. And then I kind of, we brought it throughout the entire company. The second thing is AI is the best thing that ever happened Airbnb. You know, I think there's, there's gonna be some winners and losers. I think mostly AI is gonna be good for most companies. And we are one of those comes out really benefits. We're shipping more things we ever have. We hire the CTO to be in the year. I'm a dolly who led and created the Lama model. So he is absolutely on the frontier of AI research and he's become a great CTO for Airbnb. We are putting AI features throughout the product. And I think Airbnb is the kind of company that would really benefit. You know, I do not think it's Shapa is the way people are gonna book travel. It might be the way to discover destinations. And I think we're just getting a lot of great benefits from AI. So that's what I would say. Great team execution, lot of innovation, AI is leading to acceleration. And therefore we believe we're taking market share. No, I'm excited to talk to you about the innovation. You mentioned, it was mentioned in the earnings release that I mean the business accelerated sequentially. And I don't want that to get lost and all the focus on the numbers because at your scale like you just mentioned, that is not easy to do. What do you attribute that to? And it's especially hard for marketplaces, right? If you're like a company that releases a product, you can release a hit product. Marketplaces are very, very difficult. They kind of have a little bit of a mind their own. I think I attribute it to a few things. Number one, a lot of people thought our core business was mature, our homes, the United States that we've saturated it. It turns out our US business is accelerating. Our business of Canada and Australia, UK, France, these really so-called mature markets are not mature. We have a huge amount of room to grow. That's number one. Number two, again, this innovation model means that we are shipping nearly twice the features that we were a couple years ago. And there are significantly better quality. AI has really, really helped us be able to do this so much more effective. Everyone has access to AI, but that everyone's using it equally. And I think our team is really in the leading edge. I also think there's so many new opportunities we're developing, hotel service experiences, not only generating incremental revenue, but they're making our core business stronger. I'll give you an example. We're going pretty big on hotels now. But one of the things that surprised me was when somebody books a hotel in Airbnb, 55% of time, when they come back to me, they book a home. So there's a whole bunch of people that are being introduced to me the first time via hotels. So we're getting all that business, but then they're also coming, we're getting homes. So it's a bit like a flywheel, which is actually how Amazon grew. If Amazon was just a bookseller, it would have been a small company. But what Amazon learned the early days is every time they add something, not only they add more revenue, but it makes the other categories stronger. So you might call it a flywheel. But I think that's what's happening. Is there an older consumer that is now coming in contact with Airbnb? And I think we've all thought the Airbnb is that young consumer. It's that under 35 year old. But the way I'm hearing you talk about it, it might just be now be those folks who just don't want to stay in a hotel. They appreciate the convenience of what Airbnb is giving them. There's two things happening. You're totally right. The first thing happening is that older customers are starting to flock to Airbnb. And I think you might call them late adopters, right? Not early adopters. Early adopters were the young people. The later adopters were wealthier, a little bit further along, used to staying in hotels. And I think that is one of the dynamics. I think part of that's adding hotels. Part of that's just a product getting higher quality. Part of it is just late adopters, finally trying Airbnb. Part of it is a lot of families are realizing a home is much better than a hotel when you want to travel to the entire family. You want to sit around a kitchen and you don't want to all stay in one bedroom and they have to go to bed at the same time. So I think that's one of the things. The other thing, and this is almost kind of funny. It's so obvious. But the great thing about young people is more than every year. And so when you are in the business of really having young demographics every year, like, entire new cohort comes on. So like, this has taken me. I was 26. I started Airbnb. I was a young person. And I created it with my two friends for people like me, meaning other 26-year-olds. Those 26-year-olds are now 44-year-olds, and many of them have families have more money. So a lot of the young people are becoming older. They're having more money. They're getting their parents to use us. But then we're also getting the new cohorts. And so there's not like this Facebook versus Snap or TikTok where we're the old cohort, but we're losing the new cohort. We're still getting the young audiences. So it's really both sides. We're growing on Gen X, we're growing baby boomers, but also with Gen Z. - Right, I've really been following your, I can't believe it, 26 years. But like grizzled veterans are respective fields. - I know. - I feel, I'm like, I used to be the youngest person in every room, and now I'm the middle-aged guy in every room, and have me on a few years, I'm gonna be the oldest guy in every room. - I don't feel, we'll take that off-line as they say. But I've followed really so many different chapters of your career. I mean, maybe over the past decade, I remember letters you've written, product updates on Airbnb. What chapter do you think you're going into right now with Airbnb? - Oh my, that's such a good question. I would answer the question by just telling you the chapters I think that existed. I think the first chapter was having this crazy idea in it working. I think we went on this crazy rocket ship. And I'd say that was chapter one, product market hypergrowth. I think chapter two was the pandemic, staring into the abyss, losing 80% of our business, having to rebuild the comfort of the ground up, going public, realizing, oh my God, we're like a 90, 100 billion dollar company, we have to grow into that valuation, rebuilding the foundation, and beginning to really be a grown-up company. That was chapter two. I think this is the third chapter, and I think this is us reinventing ourselves. And I think we're reinventing ourselves by becoming a marketplace for short-term rentals, really a one-hit wonder, to much more of a community, a global community that's built on trust where you can travel and live anywhere, meaning there's homes, there's hotels, there's services, there's experiences, and there's so many more line expansions. And I think that's the new chapter we're in, essentially the chapter of reinvention. It might be similar to when Amazon went from books to everything, or adding AWS, or when Apple went from the Mac to the iPod, that next wave of growth. And I think that's the new chapter we're in. And I think that explains the re-exceleration that we're now investing in growth. You were really, I think, one of the first people, talk about this concept of a super app, at least that I can recall. Where are you at in that journey? As you look at the app today, the experience today, have you achieved super app status or are you only just getting started? - No, we're just getting started. We haven't achieved it. And I think we're a year or two out from achieving it. If it's even achievable. First of all, it's unclear if a super app in the United States is possible. There exists in China, we chat most notably. Maybe the Apple's App Store is the super app and the question is, can there be another? But I do think that we're about a year or two away from, you know, probably a year or 18 months if I put a timeline away from Airbnb becoming a fundamentally bigger surface area, you know, like, and I don't know if it ever deserves a title super app, that's a very, very tall mountain. I don't know if it's ever happened in the United States. But I think that like a year or a half from now, we're gonna say, wow, remember when Airbnb was, you know, providing mostly just homes and then we had this little service and experiences business. I hope that's what we say, you know, in the next 12, 18 months because I think you're gonna see some really, really big things happening over the next 18 months, you know. We're literally just getting started. For every business you see, there's two, three, four businesses being incubated that we haven't talked about that are launching. What completes or gets you closer to that vision? No, I think super app, I think payments, I think I'm gonna get to be able to get my book appointment to get my car fixing the platform. I think you can see what Elon's doing, you know, with X and SpaceX and Groch, I, what does it exist? What does it even look like for you? I think there's two things, two ways to answer the question. The first is, what are all the things that a gas store or a customer can get on Airbnb? And, you know, there's short-term rentals that people know for us for. There's the experience that we launched. There's some of the service that we've announced. But there's about 50 to 100 things. And there's a me, we're gonna do all 50 to 100. I'm not gonna sit here and list 'em all. But there's a lot of things. Now, what they all have in common is traveling and living. You know, we're not gonna, we're not gonna go into broady commerce. We have no intention necessarily of doing that. But within traveling or living, There's. so many things that we can offer. So that's kind of one way to answer the question. The other is just to think about capabilities. We're gonna go way deeper on identity. We have more than 200 million verified identities on the internet. In the age of AI, you're gonna want to know if people are real or not on the internet. That's a solvable problem in a useful solution. We're gonna get much deeper with preferences, understanding people's preferences. I think people now with AI, with chatbots, are used to the chatbot remembering things about them. Well, we can also remember things about them. That technology is not proprietary. So having preferences stored, more robust profiles. We built the payments platform before Stripe existed. There are so many more things we can strategically do with payments. Will all of these capabilities have uncommon is ever be coming more of a platform? Not just being a platform for short-term rentals, but more of an extensive platform where you can do a lot more. And so I think that's what these things have in common. Are you a big believer in AI agents? - Yeah, yeah, it's, yes, I am. I mean, I think there's a lot of nuance and I am a huge believer in the agents. I want to caveat by saying I'm not a huge believer that chatbots in their current construction or even a gentle coding agents are the solution for everything. I think that we are in like, game, listen, if you were to double something for 10 years, it's a thousand X, right? So that's a good metaphor. I think we're in the beginning of a thousand year journey, AI, so to speak, is that makes sense? So I think like quad codes, amazing. Most people are working in terminal. I think chatbots is like very useful, but it's kind of still being used for most people as an interactive search product. And I think we've barely scratched a surface for what's possible with AI. And as I spend more time with AI, I've been shocked that everything people say about AI is an understatement about its possibility. Because I think everything we're saying with AI is limited to the current form factors of large language models and coding agents. We've made very little progress in video. We've made very little progress in photo in Dekibal's daily life. We've made very little progress on completely new native AI interfaces. We've made very little progress with voice command. Most people talk and yet they're entirely typing on their computer. So I still think this is really early. Maybe a simple way of saying it is we're getting really, really deep on enterprise. But there's been very little progress on consumer AI. I think chatbots about what we've seen. And I think that's the beginning. So I'm a huge proponent in agents, but I think the current construction of agents has been pretty limited. And I think that's why daily life hasn't really changed, right? As big as AI is, very few people's lives are that different than when chatbots are long, or before chatbots are long. So the real question is, the internet has changed our daily life. The iPhone has changed our daily life. When does AI change our daily life? And I can't say for sure, because we're not going to be necessarily the ones to do that. We'll participate. But my prediction is the next two, three years, you're going to see Renaissance around consumer AI that is going to begin to change daily life. That's my prediction. And so that's my answer to agents, which is they have to be useful to consumers to do regular, daily things. It sounds like you are shipping a lot more products and updates inside of Airbnb. And that is-- I guess driving that flywheel, you were just talking about it, drives better results, talking about online, et cetera, et cetera. What is the prize you about AI inside of your own company? And where do you think it will take the company for the rest of this year in terms of new products and services? It's such a great question. What is surprising me about AI is how it's like this giant pool-- actually, here's a metaphor. It's like this giant pool in the water looks really, really cold. And there's a metaphor for like cloud codes, for example. And I think a lot of people are really intimidated and they don't really want to jump in. And the moment you jump in, it's like 85 degree water. And it's not that big of a deal. And it's like really hard to get into it. It's really hard for people to get into cloud code or to get into these tooling agents. But the moment you get in, if you're ever confused, the AI can actually help you figure things out. And I think in the beginning of the year, I feel like we were kind of behind an AI. I certainly don't think we were ahead. I think a turn-in point happened when we hired Amadal Dali, our CTO, and also a lot of our teams stepped up. And we started creating AI tutors inside the company. And I basically said, I want to be the most AI piled CEO on the valley. And whether I am or not, I just want to be so ingrained. And I'm trying to get my entire executive team to run so much of the company with AI and just really push to the frontier what's possible. And what I've been surprised by is just how powerful it is and how much time I've gotten back and how much more effective I am. And I never-- it's amazing how much you can ship with all these tooling with these agents. It's unbelievable. And I wildly underestimated the power of these tools. I think they're really, really hard culturally, though, for big companies to change their workflows. I think startups are at a massive advantage over large companies because any large companies have this inertia. They have this like tepidness to change. And I think the thing about AI is it's so disruptive that you have to change everything about how you operate. Big companies don't really want to change. And so-- but if you can change, it's not that-- actually turns out to be less difficult than I thought. Then you're the best of both worlds. You've got the speed of AI, but you've got the robustness of being a big company. So that's what surprised me is how difficult it is to get people to adapt it. But once you get over that hump, it's actually like just swimming in warm water. Brian, you're a generational founder. If you were starting a business today, how would you go about founding a business in this age of AI, where, look, I mean, you could essentially set up in your house. You have yourself, and you can create 50 agents and have added. But it's also more competitive. It almost seems like the Wild West out there right now. It is. I mean, I think there probably been maybe for really special periods in the history of computing. Probably one special period was the late '70s, early '80s. That was the Steve Jobs Bill Gates era. I think another era that was really special, and I was in middle school. And this happened was the internet. When the internet came out in the mid '90s, that was another special era. I think the third special era was when I started Airbnb. And that was when Facebook had just launched. The iPhone had just come out. The internet was going global and AWS meant you didn't need to have your own servers. And I think that was like this very special window. And I think this is the fourth window, and this is bigger than the other three combined. I mean, this feels like not only the most important moment in tech, but hate to be so hyperbolic. But it seems like one of those things that a thousand years from now, like, you know, you're going to, or at least certainly a hundred years from now, you're going to look back and say this was like a very seminal moment in human history. And so it's wild, it's hard to predict. I like to tell people like, I have no idea what's going to happen to anyone who tells you they do, doesn't know. And none of us can predict it. But now that I sell you, I can't predict. Let me attempt to make a few predictions that will probably be wrong, but I'll do them anyway. I'm all ears. Number one. Yeah. So number one, it's never been easier to start a company. And I do think a one person company could be a billion dollar company. I think we might have already seen that. I never considered myself a technical founder. Today I would be. Today I'd be coding. In fact, I am coding. I'm called code. And so back then, I was really inhibited. And today, you know, you can code. Coding is a language. And English to code is like a very doable thing. And I think the agents even kind of teach you to code because you can watch them code. You can expand and see the commands and just develop an intuition for what's possible. So that's the first thing. The second thing is, and this is a weird one, people seem afraid to do consumer. When I started Airbnb, the 90% of companies were consumer. Maybe it's because the iPhone had just launched. But every idea was an idea to improve someone's regular life. Almost all AI is enterprise. For example, the last batch of Y-commonator, I'm the board of YC, 175 companies, 159 enterprise, 159 or 175. They're almost entirely enterprise. I think enterprise is getting really, really crowded. I think consumer is a huge gap. And by the way, it's in Silicon Valley's interest for us to develop consumer applications that improve people's lives. You know why? Because regular people in the United States do not like AI. I'm making a generalization. But if you look at polling of AI, the concept of AI is not popular outside of Silicon Valley. And yet, this is a technology that can help so many people's lives. I think part of it's a narrative issue. They were not talking about AI correctly. But part of it is we need to actually be developing more products to just regular people can use and say, I love AI because AI allows me to have a doctor on demand. And I can't have that. I can't afford that. And so I think we need more regular things. The third thing I would say is there's this really weird bifurcation where on the one hand, it's never been cheaper and easier to start a company. On the other hand, it's never been more expensive to start a company. Does that make sense? So like if you want to create an agent, anyone can create an agent for almost no money to do anything, and yet it's also getting prohibitively expensive. If you want to do something really interesting at AI, you probably need a few thousand, maybe up to 10,000 blackwell GPUs. You could cost you a billion dollars, more than a billion dollars. The researchers are quite expensive. It's a tale of two companies. You can never be cheaper a critic company. The big question is, can the why-commoner methodology of a bunch of 25-year-olds, not that they're all 25, but people like me with no money and no experience? Can those people compete with Google and Thropic at OpenAI and build trillion-dollar generational companies? Or do you need to be a later stage second-time founder with a lot of money and access GPUs? That I don't know. I'm rooting for the former. I'm rooting for anyone to be able to build a generational company, but this is the debate. We don't know. Brian, what comes out of a Brian Chesky-led AI lab? Is it an app, consumer app? Is it a piece of hardware? Is it all of it? I've never actually probably even confirmed that this exists. I can confirm it exists, but I'm going to not say anything more about it right now. But I'd love to invite it back on when I'm ready. Fair enough. I would appreciate that. That'd be very cool. Lastly, on the travel front, if we're having this conversation a year from now, how will travel look differently? You mentioned your chatbots will probably be out there. You'll have a big presence on AI. But what changes in the travel industry? I think chatbots continue to grow and become important for destination discovery. And maybe like a generation, I do not see a near term path or chatbots to be a place where people are reserving travel. I think people are aware that, for example, chatbots created third party apps and then they shut that shutter them earlier this year. I think Expedia and booking were launch partners. We chose not to be a launch partner, but they shuttered it anyway. I think that an Airbnb is, I think, ahead of the curve, but even Airbnb, our app is not completely different paradigm than it was when we started Airbnb. I think a year from now, you're going to see it be very AI native and Airbnb is going to be a completely different search paradigm. I think you'll see AI search coming. I think we'll be moving up final to destination discovery. I can't speak for the rest of the industry, but I would assume that they're all going to have to fall. That'll be my prediction. I think that's what you're going to see. I think you're going to see a lot more AI native search. A lot more. I think there's going to be a huge, okay, so three things. AI search, destination discovery, and then customer service. I think those are the three major shifts you're going to see in the next 12 months with AI in travel. Are you still traveling around working from different locations? No. I go through these first twice in my life. I've lived on Airbnb for nearly a year at a time, but right now I am so heads down for a travel guy. I'm not traveling that much. Actually, I am traveling a bit this summer, but we're really, really heads down right now. I'm pretty staying put in San Francisco. The only other thing I'll just say is San Francisco has never felt more vibrant. It's insane. I've been here. It ever me with one of the first tech companies in San Francisco. When I came to San Francisco, I remember like Salesforce was the biggest company in San Francisco. Maybe they had like 100 people. Yelp in Twitter had like 10 employees, and that was a taxi in San Francisco. I think during the pandemic, it looked like everything was going to be, there was going to be this like tech diaspora. I think AI has cemented San Francisco. Because that I've been kind of locked down here, working really hard on reinventing the company in the age of AI. Brian, good to see you. It's been a while. It's always a treat to get some time with you. I appreciate it. I'll talk to you soon. Thank you. I hope to talk to you very soon. Bye. That's it for the last episode of Power Players.