How to live your Purpose (it’s hard). #3: You’re relentlessly focussed on the long-term.
This is the fourth installment in a series of articles about ‘Purposing Companies, Communities and Brands’ and the third on How to live your Purpose. Here’s a summary of all the current and imminent articles.
4. How to live your Purpose: #3. You’re relentlessly focused on the long-term.
8.How to live your Purpose: #7. The Purpose must be measured…and given equal status to business metrics.
You’re relentlessly focussed on the long-term
Airbnb’s story appears to be one of a fast and furious success. But if you look behind the headlines you’d see a more considered reality. One where difficult choices are made that favour the long-term. Plan B Decisions. Ones that mean taking lower valuations than were offered, slower growth than is actually possible, suffering critical empty positions during rapid expansion, and of course, the toll of long hours and relentless demands on stamina and creativity when you forge a new path.
That Sunday afternoon in March when we were surfacing the Core Values was the first time that all three founders looked back over the history of the company together. They drew some big general conclusions about what they had done, and why they had done it. The meta-conclusion that dawned on them was that they were always acting on behalf of the longevity of Airbnb, even though the decision in front of them appeared to be urgent, immediate and critical.
Of course, they had had a rough idea of what they’d been doing. But because we were rooting the discussion in actual events and then drawing out their meaning, the process surfaced the specific from the inchoate, the conscious from the unconscious feelings and principles that they had been operating by since the company’s founding in 2008. It was a crystallization of not just the Core Values of the company, but the coordinates of longevity.
Brian gave an example of investing in the long-term from the very early, sweaty, frantic days when short-term crises seemed to dominate every waking moment:
“Our first engineering hire. We desperately needed an engineer, but still waited four or five months, maybe six months ’til we hired Nick Randy because we wanted to hire somebody that we felt like could represent the culture. That had a cost of growing slower because of an investment in the Culture. Culture is really a short-term price you pay for long-term results, very long-term. Like you pay a short-term price to not hire your first engineer because you believe in the long-term that they’ll hire ten people that will represent the Culture.” Brian Chesky
The short-term cost was very real for this start-up of just three people. It was the product improvements not launched, the growth not gained and the Hosts not getting the tools they had asked for as they waited those five months until they found an engineer with the right cultural fit.
The three also recalled sitting on a bench in Berlin in 2011. They were discussing whether to buy a copycat site called Wimdu. It had been built by the infamous Samwer brothers to bait Airbnb into buying a turn-key European operation. This was the brother’s business model: make a European copycat of an American Internet company and the original will have no option but to buy it, and at a high price. Ebay had complied and bought ‘Alando’ in 1999. Groupon caved in and payed out $100 million to buy ‘CityDeal’ in 2010.
What was at stake here was buying a turnkey operation with 400 staff, a European office network, and a ready-made European user base. Or, doing Plan B: franticly build your own from scratch while facing off with the competitor you didn’t buy. They felt the big, non-negotiable issue was the threat to the Airbnb Culture. Wimdu’s was so different and so toxic that it would jeopardise the original in San Francisco. Culture is one the ‘sacred three’, alongside the Purpose and Values, that they will protect at all costs.
Nate described their decision to say “no”, and what it cost them:
“It was an example of not compromising and not giving in to pressure. But then also having to hustle. We needed plan B, as we called it. Which is, if we’re not going to pucker up with these guys who could basically make us — then what are we going to do to counteract that threat? Because they had 400 people and we had 40 people.” Nate Blecharczyk
Once they agreed to reject the Wimdu offer, they immediately got to work to build their own network from scratch with their own kinds of employees. Ones who, as in San Francisco, had to undergo two ‘cultural fit’ interviews that carry the final yay or nay for hiring. By the time I joined in 2012, the European business had already eclipsed the U.S. in users and revenue. In terms Culture, you could walk off a plane from San Francisco into an Airbnb office in Berlin, Paris, London or Barcelona and immediately feel at home. You’d see the distinctive Airbnb architecture where every meeting room was a recreation of a local Host’s home. And there would be the ‘Airfam’: Airbnb employees welcoming you with whatever adult beverage you needed after a long overnight flight, or breakfast, and hosting you like family.
I asked Brian why they bothered to make Plan B decisions, especially since they normally happen in moments of crisis when the sense of urgency and import makes you yearn for a quick, painless, off-the-shelf solution:
“I think it’s us feeling like our life’s work building this amazing place has a profound impact on the world. And I think we think more generationally than annually. I think we think about it more than most companies do. I think a lot of them are just focused on the near term.” Brian Chesky
The ambition for a lasting impact is not for everyone. But it is increasingly for those who want more than just a salary check…a large chunk of the millennial generation, for example. Even some of the CEO’s of top Dow 100 companies have realized that both their customers and employees want to see more ambition from their company than immediate shareholder value. In any event, it’s what you’ll end up doing if you operationalize your Purpose: you’ll develop a gimlet-eye for the far future, not just the expedient present.
Culture, with Purpose and Values, is one of the ‘sacred three’ in which the founders invest for the long-term. The Culture at Airbnb was famously strong in 2015 after all the ‘deposits’ that had been made since Airbnb’s founding in 2008. It was strong, but it was also getting wobbly. The next article describes what happened in 2015 that led to some people to feeling that “the culture is well and truly fucked…”