When it comes to corporate management, conventional wisdom has it that high-performing organizations offer employees autonomy in spades. Airbnb CEO Brian Chesky vehemently rejects that assertion. “If you want to be autonomous, start your own company,” he told me.
Chesky, just one of 22 Fortune 500 CEOs who can say they founded their empires, notes that his newfound management philosophy isn't an authoritarian approach to leadership, but it's certainly one that’s magisterial and positions him as the ultimate decision-maker in an effort to streamline and expedite internal processes. Since news broke of his idiosyncratic oversight and, consequently, social media dissertations on whether it's a micromanagement rebrand, the CEO hasn't backed away from this ethos, primarily because he’s witnessed the benefits firsthand, Chesky says.
During the early days of his home-sharing et al. platform, Chesky says he had intimate knowledge of the company in its entirety. “I was in the details. I knew everything going on.” As Airbnb took off, he hired executives to help the company pivot into hypergrowth. The outcome was damaging in the long run.
“I did all these things everyone told you to do, like hire great people, empower them to do their job, give them space, and the results were devastating,” Chesky says. He felt too far removed from the minutiae of the company. But as I pointed out to him, Chesky’s self-proclaimed absence from the company didn’t appear deleterious until more recently, to which he agrees. In fact, Chesky acknowledges that well into 2015, the company “went on a rocket ship” despite the prosaic hands-off approach. In 2016, however, the foundation began to feel shaky. “I started feeling like I didn't know what I was doing,” Chesky said pensively. Unlike being a founder, he noted, “no one's born a good CEO. It is such a non-intuitive job.” By late 2019, growth was slowing, and costs were rising. Chesky recalls an employee lamenting their long work hours in exchange for low productivity returns. By 2020, the foundation had, in many ways, crumbled thanks to the pandemic. “All of a sudden, it's late January, and I'm in a meeting, and they're like, ‘Our China businesses dropped 80%,’” recalled Chesky. “Eight weeks later, everyone was talking about it, and we lost 80% of our business globally.” He likens this scenario to driving 100 mph and then slamming on the brakes. Airbnb went from one of the hottest IPOs to a business that had many, including respected journalists, he says, asking, “Is this the end?”
It wasn’t. As Intel’s third CEO, Andy Grove once said:
—A crisis destroys bad companies
—Good companies survive a crisis
—A crisis defines great companies
Chesky was determined to make Airbnb the latter. “I said this is gonna be our defining moment…We're gonna be this really lean, elite organization where not only am I in the details, we're all in the details.”
Such credence flies in the face of what most are taught about modern leadership, Chesky says, but it’s been espoused auld lang syne by the likes of Steve Jobs and Walt Disney and, more recently, Jensen Huang and Elon Musk. “They're people [who] are in the details,” he said, making a rejoinder to another aspect of his founder-mode management belief: “A lot of people hear this [and] say, ‘Wait, isn't that like micromanaging?’ There is a difference. You can be in the details of people without telling them what to do, working through problems with them.”
In our conversation, Chesky contemplated another question I posed: If you hire great people, shouldn’t they feel empowered to do their job in an emancipated way?
"How do you know they're great if you’re not in the details?” he asked. “This is about a mentality of belief that great leadership is presence, not absence.”
Admittedly, three years post-pandemic, Airbnb earned a spot on the Fortune 500 for the first time in 2023. The company landed at No. 450 with $8.4 billion in revenue, up 40.2% year over year, and reported its first-ever profitable year in 2022 with $1.9 billion. Last Thursday, the company reported third-quarter earnings that were shy of analyst estimates, according to CNBC, though revenue increased 10% from $3.4 billion a year earlier. The company said adjusted EBITDA for the third quarter was $2 billion, up 7% year over year.
Chesky, unsurprisingly, is the first to sing Airbnb’s praises. “The company went from losing money to one of the most profitable companies in all of Silicon Valley,” he told Fortune. “We've made over 500 improvements to the product in three years alone, and most importantly, [over] the next couple years, we're going to be launching new products and services.”
The CEO is all the more emphatic about founder mode—which he stresses he did not coin—as he leans into Airbnb's upcoming transformation. Next year, Chesky says, will see the platform again disrupt the hotel and travel industry, though he demurred on what that would entail. "We're going to be unveiling an entirely new Airbnb," he said. "It's by far the biggest moment in the company's history since its founding." Among Airbnb’s most recent changes is the launch of its co-host network, which allows hosts who have little time on their hands to find locals to act as property managers and maintain control of their rental homes. The initiative stemmed from prospective hosts who found Airbnb compelling but felt it required too much labor. “It's over 10,000 hosts in 10 different countries,” Chesky said of the initiative. “These are some of the best hosts on Airbnb; 73% are super hosts.”
Chesky says his vision is to unlock millions more homes soon, though he believes that will be more than two years from now. “I wouldn't want to put a specific timeline on it. It's just too unpredictable—but millions of new homes." In the meantime, he's doubling down on being in the details.
Check out the full must-watch interview here. And share your thoughts with me using the email below.
Ruth Umoh
ruth.umoh@fortune.com
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Today's newsletter was curated by Natalie McCormick.
