Brian Chesky, Airbnb co-founder and CEO, writes essays on company culture, early rejections, creativity, and his experiences building Airbnb.
HN commenters cite his posts on early investor rejections and protecting company culture, and one quotes his view that new experiences slow our sense of time.
airbnb is a great example for hardware companies. YC (specifically PG) didn't believe in the the idea. If they hadn't started selling Presidential Cereal, they would have died. Literally, they bet the whole company and a binder full of credit cards on Obama O's, a gimmick cereal. if no selling cereal, then no YC investment, and no airbnb.
This is an important lesson to hardware companies, who need more money than anyone will bet on them: FINANCE YOURSELF DOING SOMETHING ELSE. Nobody ever, ever believes in any idea, ever, even if it obviously works and is great, in fact ten billion dollars great. Nobody will believe you.
Go sell cereal - you'll get sales from a standing start in a market you've never played in, faster than you can get liquid investment when rushing full-scale ahead toward $10 billion that you're executing on.
Never, ever forget this lesson. Obama O's obviously weren't even a $50 million worldwide market. airbnb "obviously" was a $10 billion worldwide market. The former is what financed the latter - "convincing someone" didn't. Brian Chesky famously posted his 7 rejections here - https://medium.com/@bchesky/7-rejections-7d894cbaa084 (well, 2 didn't respond.)
The only one who will ever, ever believe in you is you. If you can't do it without money, go do something else: vc's don't care about seeing and investing in winners; they want to ride their coattails.
You may think I'm being cynical, but let me turn it around and make it a hypothetical:…
These are the positives I took from this post:
- Grit and formidability. "They did nothing half-way, and we could sense this even in the interview." If one doesn't feel so strongly about the problem they're trying to solve, it is going to be hard to sustain the energy needed for the effort required.
- The founding team is key. "We didn’t even like the idea that much. Nor did users, at that stage; they had no growth." Despite the "startups = growth" truism, it is refreshing to see that one of YC's biggest exits had no such trait even after a year of work (when they decided to fund them in W09) apart from the fact that the founding team was relentless.
- Momentum is everything. "No one ever worked harder during YC than the Airbnbs did. If you suggested an idea to them in office hours, the next time you talked to them they’d not only have implemented it, but also implemented two new ideas they had in the process." This may sound easy but it is so hard to do in practice (speaking from experience) because of the discipline and focus it requires to keep moving the needle a bit more every day.
- Don't let rejections break you [0]. "One investor they met in a cafe walked out in the middle of meeting with them." Again, it so very easy to let rejections get to you despite trying your hardest to not be bothered by them. You start to question all kinds of things which isn't a healthy thing to do but it is kind of inevitable because the disillusionment hits so hard.
- Live in the…
Margeret Heffernan has a really good TED talk on this topic [0]
"Social capital is what gives companies momentum. And social capital is what makes companies robust. It means that time is everything because social capital compounds with time. So teams that work together longer get better because it takes time to build the trust you need for openness and candor. And it’s time that builds better value."
Really good talk.
Brian Chesky of Airbnb also talks about this as "culture" [1]:
"Why is culture so important to a business? Here is a simple way to frame it. The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing. People can be independent and autonomous. They can be entrepreneurial. And if we have a company that is entrepreneurial in spirit, we will be able to take our next “(wo)man on the moon” leap. Ever notice how families or tribes don’t require much process? That is because there is such a strong trust and culture that it supersedes any process. In organizations (or even in a society) where culture is weak, you need an abundance of heavy, precise rules and processes."
When you have strong "social capital" or "culture", there's less management overhead, but it's very hard to come by and requires time (or hiring the right people).
[0] https://www.npr.org/2015/10/02/443412777/is-the-professional-pecking-order-doing-more-harm-than-good
[1]…
I don't really know what to think except the sheer amount of applications they receive. They received over 6500 applications for their YC Fellowship program alone and the application was open for only a week. Can you imagine having to write a personalized rejection letter for each application? That would take a much longer time as oppose of sending a template email. Believe me, I would love to hear personalized feedback as much as you, but I get why they can't do it. Angels and VCs don't deal with the volume that YC or TechStar do, so they can afford to personalize their rejection emails accordingly (if you're even lucky to get one in some cases). I found these two links to be particularly interesting:
https://www.reddit.com/r/startups/comments/39kswc/vc_rejection_email/
https://medium.com/@bchesky/7-rejections-7d894cbaa084
I haven't heard any stories where YC used their database nefariously and gave away ideas to other founders. This is interesting though, I'll keep this in mind.
Let me get this straight: in June 2008, Airbnb got intro'd to a bunch of investors, who all said no [1]. In September of 2008, Airbnb had a $250k round on the table that valued them at 2.5M[2]. And then, also in September 2008 (before YC usually does interviews) they rejected that offer for YC, who ended up giving them $20k[3], with a valuation presumably around $250k?? (Although Brian Chesky says that didn't happen until November, it sounds like they got some kind of verbal confirmation earlier?)
The timeline is weird.
1. https://medium.com/@bchesky/7-rejections-7d894cbaa084
2. https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/
3. http://www.quora.com/How-much-money-did-Airbnb-raise-What-is-the-companys-financing-history
Because they interview them but they aren't a "cultural fit".
Nothing is more important than protecting "the culture".
https://medium.com/@bchesky/dont-fuck-up-the-culture-597cde9ee9d4
The article above says that "Culture is simply a shared way of doing something with passion.", but in fact means "same as us: young white/indian/asian boys".
"Culture" is a get out of jail free card that allows anyone to deny a job to anyone at all whilst sounding entirely credible and important.
If you really want diversity then you would require reasons for rejecting any candidate, but you're not allowed to say "they weren't a cultural fit".