(2023-11-16) Cutler TBM-255 The New Airbnb (Lenny's Podcast)
John Cutler: TBM 255: The New Airbnb (Lenny's Podcast) w/Melissa Perri. You've probably already listened to (or are about to listen to) Lenny's Podcast with Brian Chesky. (2023-11-14-BrianCheskysNewPlaybook)
We have limited knowledge of what was going on at Airbnb (some friends, etc.), and we don't know Chesky.
It's always important to understand the context behind what you hear in podcasts, and here are the questions we would ask to uncover if this would work in other situations.
Backgrounds of the Leaders
In our experience working with founders, we've found that they can be magicians at running the "zero to one" playbook. However, they start to get uncomfortable when the scale kicks in. It becomes very difficult for them to figure out what is happening, who to trust, where to "lean in," when to delegate, and when to "go deep."
They go on kicks, persuaded that X is the problem, only to discover that it is Y (and Y isn't something you can solve in a day
It can be very hard to transition to thinking of your company as a product vs. just the product as the product and addressing the known unknowns regarding competence, leadership style, etc.
(NOTE: Neither of us has been given $9 billion to build anything, so just getting that out there. This is incredibly difficult—even if you've done this many times.)
Frequently, founders don't get the mentorship they need in Product Management leadership and CEO leadership to transition from startup to growth to enterprise. Or they don't hire the leadership expertise in Product Management, thinking this is an innate playbook that founders should possess. Or they get caught hiring people who, on paper, "have done it before," only to find that the "it" wasn't well defined.
Was this a problem at Airbnb? Or something else? Or something in between? The interview didn't go in this direction, but hearing more about these struggles would be amazing.
State of the Company
What was the company's strategy when it decided to pursue these changes? AirBnB was disrupting a travel industry that had already settled into being in the arbitrage business (Booking, etc.) At the time, other companies in the valley were doing similar things in different domains and hitting the arbitrage vs. differentiation challenge. Chesky mentions in the podcast that they did not want to be "in the arbitrage business."
What was the effect of the low-interest rate "peacetime" happening in Silicon Valley before they had an existential moment? (ZIRP)
During "wartime," more control is usually warranted when a company is going down the wrong path to set it right. Airbnb's business declined by 80% during COVID-19, which is about as existential as possible. It was a "wartime" shift for sure.
Do wartime practices work in peacetime
What we're seeing at Airbnb today is a function of decisions in the last two years AND decisions since they were founded in 2007. If you're a startup, go back to see how Airbnb behaved as a startup (in context at that time). If you're a scaleup, do the same thing.
Structure of the Company
Don't underestimate the impact of the macro environment on this. When money was cheap, investors were more optimistic, and "landing" really qualified senior leaders often required granting them "ownership" (at least on paper)...this made more sense. This is no knock on the GM model.
Sometimes they are facing ridiculous pressure to grow, and lots of available money to make that happen—the answer is growth at the expense of fragmentation.
Companies frequently take inspiration from other successful companies, but they don't consider if that's the right model for their context. At the end of the day, Airbnb is a tightly connected platform. Did it create silos through the GM model, and did that affect their approach to strategy and decision-making?
Product Management Team and Empowerment
Is there an alternate explanation for the loop Chesky describes whereby when he tried to empower people, they would go slower (velocity), but things happened when he got into the details?
Chesky mentions that they made the Product Managers more commercial instead of purely technical. It sounds like many of them were order takers or local optimizers rather than strategic thinkers. (A-player)
There are a bunch of different product management philosophies out there; what philosophy did they ascribe to? Who set the tone? Who was providing the strategy to lead the product management team?
We've also seen a misinterpretation of the word "empowered." (cough high agency)
Are people asking you as a leader for more empowerment? If so, what do you suspect is behind that?
Learning how his view on empowerment changed over the years would also be amazing.
these questions aren't meant to imply that the decisions Chesky made were wrong for his company. Rather, we wanted to give you a sense of what questions went through our minds and what questions you might want to explore before adopting some of these practices and ideas...