30 THE MA­CALLAN

Sto­ries of Grat­i­tude from Ex­cep­tional Busi­ness Lead­ers

Forbes - - PROMOTION - Com­piled by Heather L. Whit­ley

Be­hind the suc­cess of each young en­tre­pre­neur, founder and ex­ec­u­tive is the of­ten un­told story of an in­stru­men­tal per­son who helped them reach new heights. In part­ner­ship with The Ma­callan, we asked Forbes Un­der 30 list­mak­ers to ex­press their grat­i­tude to those who have in­spired and guided them in their ca­reers.

18 years at Ama­zon be­fore join­ing Airbnb in March to run its Homes di­vi­sion, which over­sees its core rental busi­ness. When he joined Ama­zon, peo­ple won­dered if it could sell any­thing more than books. Now Gree­ley is at Airbnb when it needs to ex­e­cute a sim­i­lar ex­pan­sion. “The anal­ogy to 20 years ago and an­other ‘A’ com­pany is not lost on me,” he says. “There’s this Ama­zon-size op­por­tu­nity of travel out there.”

But in many ways the Ama­zon com­par­i­son is a stretch. Re­tail is a $5.8 tril­lion mar­ket in the U.S.; much larger than travel, even in its broad­est sense. Ama­zon sells things like books, clothes and gar­den tools—all mass-pro­duced com­modi­ties. Airbnb wants to be the ex­act op­po­site. “One of the most pop­u­lar list­ings on Airbnb is a mush­room dome,” Chesky says, re­fer­ring to a tiny, ge­o­desic-dome-topped cabin that rents for $130 a night along the Cal­i­for­nia coast. “And un­for­tu­nately, no mat­ter how suc­cess­ful it is, we can’t just make a mil­lion more of them. So we’re the kind of busi­ness that has to get into a lot of things, be­cause ev­ery­thing we do can’t get so big, just by def­i­ni­tion, it’s fi­nite.”

Airbnb’s first big ex­pan­sion at­tempt is Ex­pe­ri­ences, its take on the highly frag­mented guided-tour mar­ket. Just as Etsy turned crafts into e-com­merce and Uber turned any­one with a car into a pri­vate driver, Ex­pe­ri­ences wants to let any­one from a sous chef to a yogi run an on­line tour busi­ness. Still, how big is that mar­ket? “The lim­i­ta­tion is not in space,” says Joe Zadeh, who runs Ex­pe­ri­ences for Airbnb. “It’s time.”

Launched in Novem­ber 2016, Ex­pe­ri­ences has been a slow burn. The orig­i­nal idea of three-day, fully planned-out itin­er­ar­ies was too ex­pen­sive and time-con­sum­ing for Airbnb’s bud­get-travel au­di­ence. It switched to shorter op­tions but quickly ran into a qual­ity prob­lem. While homes aren’t vet­ted be­fore they’re listed on Airbnb, that doesn’t work for hosted tours. Homes have ba­sic ar­chi­tec­tural stan­dards, in­clud­ing be­ing liv­able in the first place. Ran­dom tours don’t, and Airbnb hosts went wild. One of the first Ex­pe­ri­ences, rolled out when the prod­uct was still in beta, turned out to be a woman who would yell at guests as they picked up trash on a San Fran­cisco beach for an hour. An ex­pe­ri­ence, for sure, but not the kind Airbnb was look­ing for.

The need to vet tour guides slowed Ex­pe­ri­ences down, but growth has ac­cel­er­ated in 2018. Af­ter launch­ing with 500 Ex­pe­ri­ences in 12 cities two years ago, there are now 15,000 Ex­pe­ri­ences in 800 cities around the globe. The com­pany takes 20% of each reser­va­tion, which added about $2 mil­lion in rev­enue last year. That’s not noth­ing, but it’s a round­ing er­ror for a com­pany the size of Airbnb. Ac­cord­ing to sources, Airbnb spent more than $100 mil­lion to de­velop the prod­uct. Still, things might be look­ing up: Forbes es­ti­mates Ex­pe­ri­ences could hit $90 mil­lion in sales this year, leav­ing Airbnb an es­ti­mated $18 mil­lion cut. Airbnb dis­putes both the rev­enue and the loss fig­ures but won’t give specifics.

in de­cem­ber, chesKy gath­ered his co­founders to brain­storm guide­lines that he says will help fu­ture de­ci­sion-mak­ing as the com­pany seeks to fol­low met­rics be­yond fi­nan­cials. “If you have a greater re­spon­si­bil­ity,” Chesky says, “the ques­tion is, well, who do have re­spon­si­bil­ity to?”

For most CEOs, par­tic­u­larly ones look­ing to go pub­lic in the near term, in­vestors would be the ob­vi­ous choice. But Chesky is not most CEOs. In ad­di­tion to look­ing af­ter in­vestors, Airbnb will also mea­sure progress with re­gard to four ad­di­tional stake­hold­ers: em­ploy­ees, guests, hosts and cities. Airbnb hopes this will ease ac­cep­tance of some un­usual cor­po­rate ini­tia­tives, like ask­ing the SEC to al­low Airbnb to grant its hosts stock as if they were em­ploy­ees and to of­fer them low-cost home im­prove­ment loans. But it also re­flects a de­sire to re­main true to its com­mu­nal roots.

“We es­sen­tially have the Airbnb com­mu­nity as a vir­tual seat at the table, chan­neled through the founders, to say what are the right things to be do­ing to be grow­ing,” says Reid Hoff­man, the LinkedIn co­founder and Airbnb in­vestor.

But that sort of in­clu­sion will only be­come more dif­fi­cult af­ter an IPO. Airbnb had been search­ing for a way to re­main pri­vate for­ever, but af­ter talk­ing with Mor­gan Stan­ley in the fall of 2017, the com­pany re­al­ized there isn’t a pri­vate path for­ward. In­stead, it is eye­ing go­ing pub­lic in mid-2019 at the ear­li­est. The win­dow will be short: In 2020, a large chunk of em­ployee stock op­tions will ex­pire, va­por­iz­ing their eq­uity overnight.

Chesky is vis­i­bly squea­mish when asked about go­ing pub­lic. Too of­ten, he says, com­pa­nies lose track of the big­ger pic­ture and set­tle into a quar­terly ca­dence. “The prob­lem is some peo­ple for­get they’re climb­ing the moun­tain in the first place,” he says.

“I’ve met a lot of CEOs that say, ‘I’m very long-term-ori­ented’ or ‘I want to be long-term-ori­ented,’ but they just have so many pres­sures and so many things that are in con­flict,” Chesky says. “They say, ‘I want to serve the pub­lic in­ter­est,’ ‘I want to make sure our prod­ucts are great for the world,’ but the only met­rics they re­view at a board meet­ing are the met­rics about the sales of the prod­uct es­sen­tially”

Un­ortho­dox words from the CEO of a com­pany that might soon go pub­lic. Airbnb wants to write the rules to the game, but it will be up to in­vestors to de­cide whether they are ready to play.

“IF YOU HAVE A GREATER RE­SPON­SI­BIL­ITY, THE QUES­TION IS, WELL, WHO DO YOU HAVE RE­SPON­SI­BIL­ITY TO?” FOR MOST CEOS, IN­VESTORS WOULD BE THE OB­VI­OUS CHOICE. BUT CHESKY IS NOT MOST CEOS.

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