Airbnb CEO Brian Chesky Unveils ＂Icons＂： Extraordinary Experiences That Bring Magic to Life

Hello and welcome to The Global Dialogue. I'm Shirin Bhan and joining me on the program today is Airbnb's Brian Chesky. Brian, thanks very much for joining us here. It's wonderful to be here in LA with the Up House, which is up on Airbnb. And I want to understand from you, you know, in the context of your aim now to reinvent Airbnb, you've always spoken about the fact that products must have a soul. Is that the direction that the company is now headed in with the ICONS launch? Yeah, 100%. I think with ICONS, I think it's the beginning of us going beyond just being a place to stay. I also think, like I said on stage, this is not just a house. It's an experience. And I think ultimately at its best, Airbnbs are not just homes, they're experiences. And I think experiences is where we're going. More creativity is where we're going. And I think magic, trying to like take this magic that only exists in our imagination. And there's a lot of brands that like create magic, but to bring that into reality, that's where I think we can uniquely like excel, is to take these things from your imagination. And I mean, Airbnb kind of means to be real, right? To Airbnb something is to like get it in the real world. And so we thought, what if we take the craziest things, the biggest brands, the biggest celebrities in the world, but they only exist in our minds or social media, and now you can step inside them, quite literally. Quite literally. But you have this idea of converging creativity with technology, which is really part of what you're attempting to do. And how much of this was sort of a personal journey for you, given the RISD background and what you've been able to do and recreate here? I mean, there's a lot of like, there's a lot of good business reasons to do something like this. Like it keeps you top of mind that you can reach certain audiences, it can stretch the brand. But like some of the best ideas don't start with a clear business rationale, including Airbnb. Like we didn't, Joni and I didn't say, you know, we're going to try to come up with this like business model that so happens to be a global network effect, and we have a transaction model, and it's like a great business. We were only trying to do something really special for ourselves. And sometimes the best ideas, you start out of a passion. And this started purely as a passion. You know, I told the story of one day we're walking through an Ikea, and we thought it'd be funny to put one of the beds on Airbnb. And so it was like a night at the Ikea, and then we got bigger and bigger and bigger. The inflection point was last year at Barbie. The Barbie movie comes out, it becomes a sensation. We create the Barbie Malibu Dreamhouse, a real house in Malibu, it also became a sensation. And so we're kind of like, maybe we should like go bigger. Like people, this is clearly tapping into something, and it's like creating so much joy in the world. So the main goal I had was to do something fun that would just make people happy. And I trusted that if we do that, you know, like everything else will follow. Everything else will follow, meaning it will become a viable business proposition as well. For now, you're not monetizing it. What's the plan on that front? Remains to be seen. I think this is a stepping stone to the next chapter of Airbnb. I think the next chapter of Airbnb is more than just a place to stay. It's about new products, new services and experiences. It's about, you know, maybe kind of bringing some dream worlds to life. And I think the question is now, how do we bring the magic of icons to millions of people? And that's what we'll be huddling with our team to figure out next. You know, you talked about the next chapter of Airbnb, and you've said that the company is at an inflection point, and you've gone from adolescence to adulthood. What have been the big lessons for you along this journey and, you know, where you find yourselves today? What is the audacity of ambition from where you find yourself today? That's a great question. You know, every stage has a different lesson. And when we started the company, like, the lessons were like, how do you take an idea that's only your mind and bring it to the world? And that's like the first phase. And the goal is to get the product market fit. You know, where, like, the product fits the market and it gets traction. And if you're lucky enough to do that, and for every thousand entrepreneurs, maybe only a handful get, like, a true product market fit, then you go on the rocket ship. And now you go to hyper growth. That's a whole series of lessons. If the first one's about resilience, the second one is about hanging on. And then you go on a rocket ship. And then you have the third step, which is to become a real business, a real company, which means, you know, if you have all these shareholders, do they get an exit? You know, do they have liquid stock, go public? Are you actually profitable, like, in a net income basis? Are you really profitable? And so now you're a grown-up company, you're here, you're enduring, you're going to last. And the last question is, can you reinvent yourself? Are you only the thing you came up with in your 20s, or are you something more? And this is the beginning of us reinventing ourselves. This in and of itself is not the reinvention, but I'm hoping that this gives people a glimpse that if we can make a house float in the sky, we can do anything. You know, what could anything mean? I mean, you've been doing experiences, you're taking experiences to the next level with icons. But what are we talking about in terms of new products and services? You know, there's speculation on TV shows and the movie business and so on and so forth. I'm just trying to understand the scope of extending yourself. I think that the scope of where we could go is unlimited. I also learned a lesson the last eight years, having tried to do a bunch of things. And that's that you can do anything, but not at the same time. And so we try to really focus on doing one or a couple of things at a time. We put all of our energy, and we put our energy here, and we're working as we speak on this event next year. Exactly 52 weeks from now, we're going to have an event, and there's going to be some even bigger ideas. Do we have to wait a year for the next release? Yes, you're going to come. And I know some of what we're going to release, but I don't know everything we're going to announce. And the reason I don't know everything is you learn along the way. The best ideas we had, they changed, and they change as you get into it. And you learn, you discover. And you ever notice the concept cars are really cool, and they make the production cars kind of lame? That's a bad process. A good process, the idea grows, and the production is better than the concept originally. And this concept, we came up with in October. We've been doing this for 10 years, but in October we mobilized everyone. We said, you know, what if we created a whole category of experience like Barbie, and put them right on the homepage? And what if we made them even crazier? What would be crazier than Barbie? And so this is our attempt to do that. So this has only been six or seven months, and I think the ideas are just going to grow from here. But I think that's so exciting, right? The thing that's so exciting is where we go from here. And I know somewhat where we're going from here, but the most exciting part is what you discover along the way. Okay, so I know you're not going to tell me where exactly you're headed, but in terms of prioritization, you know, what changes as part of this reinvention? Because if so far the focus has really been on the core business and strengthening the core business, and you've come off a great year, record free cash flow at this point in time, you clearly have the risk appetite to do more, or at least I feel like you have the risk appetite to do more. You have the money and the balance sheet to be able to support that. So, you know, what will be prioritized over the next few months or years? You know, all the work we're doing is in two buckets. Bucket one is no matter how successful we become, we still need the foundation to be strong. And so that means we need to continue. We have a core business that is growing still very healthily. It's, you know, approaching $100 billion a year in gross buckets. That's really large. And we need to make sure we're providing great service. We have enough homes. The product is still easy to use. The homes are very high quality. So we've got to do the basics. And that's probably, like, still half my time is, like, making sure the company is doing really well. And the other half, if the first half is the foundation, the second half is about dreaming and magic. And that's about going places that no one would ever expect of us. And as we speak, we have four, five, six ideas that we're developing. They may not all ever come out. Sometimes you work an idea, and it doesn't ever meet the quality threshold. You don't launch it. But I think a few of these are going to be hits, and you'll see them over the next few years. Let's talk about AI and what you're doing with AI and what AI is doing to the world. And I know that you believe that there's no going back from where we are today. So let's talk first about Airbnb and AI and then about your view and what AI could potentially do to the world and jobs. Yeah, so let's start with Airbnb. I think that AI is going to affect Airbnb more than the hotels in the next five years, and I think it's obvious. And the reason why is AI is primarily changing the digital world. Now, there is AI in self-driving cars and autonomy and robotics, but most of the innovation and development is happening in the digital world. We're much more digital than a hotel, and so the Airbnb experience is going to change and evolve much faster than our competitors. I think it's really exciting. So now the follow-up question is, well, how might we change? I'll give you just two examples. The first is customer service. We have a disadvantage against hotels. A hotel is a front desk, and if there's a problem, you can just go to the front desk. We don't have a front desk. And so the closest thing we have to a front desk is a host, but sometimes things go wrong. You can have a guest from Japan staying with a host in France. They don't speak the same language, and they call us, and they need an issue resolved in, like, an hour. And that's a huge tax on customer service, right? They've got to, like, read through all these different policies. And so AI can be, like, the ultimate 24-7 agent that can augment our agents and help them resolve issues. And if that can happen, and we can provide, like, the best customer service you've ever seen in your life, then a whole bunch of people that are afraid to stay in an Airbnb because they don't know what they're going to get and they're worried there's no front desk won't be worried anymore and we'll get a lot more business. So where are you on that path at this point in time? Are you at the start? Are you somewhere sort of, you know, to the middle? Where do you find yourselves today? That's a great question. I don't know if anyone knows where they are. Like, you know, I think we're all on a journey, and I don't know if we know where the mountaintop is. And I think the further we... I think I don't want to speak for everyone, but the further we all go down this journey, the bigger the potential, but the more work I think we realized it was. Like, it's not just this magical thing that just changed your business overnight. You'll notice something. These models are incredibly powerful, and there's new models coming out, and there's a lot of innovation at the bottom of the stack, at the GP level and the model level. But at the application level, so you have GPUs, languages, models, applications. Here's a test. Open your phone or have anyone at home open their phone and look at all the apps on your home screen and ask how many of those have fundamentally changed because of generative AI. I bet you you cannot discern anything that's changed about most apps in the last 18 months since Chachapiti launched. There may be the algorithmic changes and some kind of cool demonstrations. So I think all of us are still trying to figure out how to apply it. We are not an infrastructure company. We're not a core research company. So you're not going to get a lot of new research from us. Where we are one of the best in the world is at interface design and really trying to figure out what to do with the technology and apply it, so we might call it application layer. I hate to put out a specific timeline, but I think over the next couple of years you're going to see some really big changes. I think like a lot of technology, it's going to seem really small at first. You're going to barely notice it, and it's going to get bigger and bigger and bigger, and one day, boom. I think we're all wondering when's the inflection point where AI just fundamentally changes all of our businesses. We all know it's coming. I don't think anybody knows when it's coming. Not even Sam Altman? I think that they know when the next model's coming, but I don't think anyone can tell you what everyone's going to do with the models. I think AI is going to change the world more than people think, but it's going to take a lot longer than people think. I think when Chattopadhyay launched, I think people thought the internet is going to be totally different in two years, and this November will be a two-year mark, and the internet will not be that much different this November than two years ago. So it's going to take a while to change, kind of similar to self-driving cars. Are we overestimating the impact in the short term and underestimating it in the long term? I think we tend to do that about life. We tend to overestimate what we can do in our lives in the next year, underestimate how much we're going to do in our lifetime. I think we are absolutely overestimating how much the world will change with AI in the next year, and we're probably underestimating how much it's going to change in the next 10 years, because I think we tend to think linearly. Actually, we think asymptotically. You think half the change will happen in the next two years, and the rest of the change is going to happen in the next 100 years after that. It's the inverse. 0.1% of change will be in the next couple years, and 99% of change will be far out. It will be exponential like the history of technology. I think that people aren't appreciating that it will take time to get the application layer right and for people to adopt the technology.