Airbnb CEO: "Grow fast, but not too fast"July 18, 2012: 3:34 PM ET
To get as big as its founder envisions the company might need to, well, slow down.
By Ryan Bradley, senior editor
FORTUNE -- By any metric Airbnb -- the social vacation rental website -- has expanded extremely quickly. In just four years, it has added about 500 employees, been valued at $1.3 billion, and opened offices around the world. It just moved into new digs in San Francisco, which will allow for another 700 employees. Most impressive, though, is the fact that people are using the service: on any given night, 50,000 people stay in a space they booked on Airbnb. So it's ironic that the most important lessons for Brian Chesky, the company's co-founder and CEO, seem to be telling him to hit the brakes.
As he related to the audience today at Fortune's Brainstorm Tech, some of the best business advice the accidental CEO ever received (Chesky is a graduate of the Rhode Island School of Design and was a self-admitted Silicon Valley neophyte when he arrived) was from Warren Buffett: "Get rich slow," the famed investor told Chesky when he sat down with Buffett and Amazon (AMZN) CEO Jeff Bezos.
The other lesson was harder earned, but echoed the Oracle of Omaha's bit of wisdom. In 2009, when Airbnb was doubling its user base and employees over the course of a few months, Chesky began working with property management groups to rent out properties. For a fast growing company, the move made sense: who else to better keep pace than other companies offering dozens of rooms for rent? But, Chesky said, "They had no pride, these power sellers, and our engineers spent six months developing tools for the wrong kind of person."
It was a trip to Paris that put things in perspective for the 30-year-old CEO. He stayed at two Airbnb properties: one run by a management company, the other by a Parisian couple. The former, he told the audience, felt like a hotel—sanitized, spare. The couple, however, toured Chesky around the city and gave him an experience he wouldn't have had otherwise. These people, he thought, were the one's Airbnb needed to court, not property managers.
So how big can Airbnb get? Very big, in Chesky's (biased) opinion: "We are about to enter the next wave of the Internet. It seems so inevitable that people are going to want to come off [online] and enter the real world. We are the physical manifestation of what people do on Facebook (FB)."