What seven years at Airbnb taught me about building a company

Tips for new employees, painted on the walls during a hackathon (by Andrea Nguyen, Jeany Ngo, Katie Chen)

In 2012, shortly after Airbnb acquired our startup, I overheard one of the co-founders (Joe Gebbia) giving guidance to a designer tasked with redesigning the home page. He said, “Build something the internet has never seen before.” I vividly remember thinking “What does that even mean? And is this the bar for everything around here?” Looking back, I’ve come to recognize that this mindset, along with six other key lessons I’ve attempted to distill below, have been key ingredients in Airbnb’s historic growth.

I first joined Airbnb as an engineer, and then as one of the first members of the budding PM team. Back then there were a couple dozen engineers, a few designers, and two very cute dogs. Over the next seven years as the company scaled to thousands of global employees, countless cute dogs 🐶, and over $30b in value, I took on a lot of interesting problems and worked with many incredible people. Since leaving a few weeks ago, before I get too deep into starting my own thing again, I‘ve been jotting down my biggest lessons from these experiences. I quickly realized I should share these lessons with anyone else working to build their own company. I can’t promise these will apply to your situation but I will say these have been core to Airbnb’s success over of the years.

1. The competitive advantage of culture, values, and rituals 💛

It’s becoming increasingly common for people to choose companies that connect with their personal values, as both consumers and employees. From day one, Airbnb has been a company obsessed with strong culture, clear values, and quirky rituals. Over the years I’ve witnessed how effective this has been in creating a competitive advantage for Airbnb, allowing them to hire the best talent, move quickly when opportunities arise, and push through adversity when challenges appear. Most importantly it has made it easy for leaders to stay true to the long-term mission and for the team to hold them accountable.

How did Airbnb create a strong culture? Three key ingredients:

  1. Founders obsessed with culture. See Exhibit A. See Exhibit B. This is fundamental, especially as you scale. It influences who your first few hires are (who co-create the culture), the values you model (knowingly or unknowingly), and determines how much of a priority it ends up being many years in.
  2. A strong sense of self. Airbnb did this through a codified set of Core Values, which a small task-force of employees created about three years in. Airbnb uses these core values when measuring success (are we actually achieving our mission), hiring (there’s a core values interview group that vets all candidates), when evaluating performance (it’s baked into the peer review process), and when looking at large deals. Everyone at the company can recount the values verbatim.
  3. Rituals. Cookie Time Tuesdays. New Hire Tea Time. Hosted Bar. Human tunnels. Fun facts. Silly but regular rituals create space for employees to strengthen bonds and bring joy to the workplace. Don’t overthink your rituals, experiment and see what sticks.
Two early Airbnb rituals combined — Formal Friday and the human tunnel

Here’s an excellent video to help you get started in building your own culture and values.

Main takeaway: Be obsessed with your company (and team) culture.

2. Nail the problem statement 🤔

I venture to say that crafting and aligning on a problem statement is the single most important step in solving any problem. I’ve consistently seen simple projects with vague problem statements go in circles for weeks and months, while complex projects with strong problem statements sail smoothly. This has been especially evident in postmortems of failed projects —nine times out of ten root cause had been the lack of a clear problem AND/OR a lack of alignment on what the problem was.

A few key tools that I’ve found helpful in facilitating the process:

  1. This 1-Pager template is something I’ve refined and used over the years to crystalize the problem and opportunity for my team and stakeholders
  2. The Situation-Complication-Resolution framework is extremely helpful in communicating the story to a wider audience
  3. The Jobs-To-Be-Done framework helps you make sure you’re addressing real customer needs

Main takeaway: Obsess over crystalizing the problem you are trying to solve, and align your entire team behind it.

3. Achieve ambitious outcomes by having even more ambitious goals 🔭

At the end of each year, looking at our growth charts we were often shocked at how close we came to hitting our wildly ambitious, seemingly impossible, goals. And when I say wildly ambitious, I’m making an understatement — Brian, Airbnb’s CEO, is (in)famous for doubling our proposed goals, and often pushing us to 10x the goal. Either he knew something we didn’t, or the wildly ambitious goals pushed teams to think bigger and rise to the occasion. It was absolutely the latter.

Five key ingredients to doing this well:

  1. Set uncomfortable goals. Our approach was to always pick a goal that made us feel very uncomfortable, while also clearly understanding why hitting it would be such an incredible thing for the business. Two questions we often asked when setting goals are (1) What would need to be true to be able to hit this goal, and (2) What could you accomplish without any barriers (budget, people, dependencies, etc.)?
  2. Make sure someone’s directly accountable for that goal. Hitting this goal needs to be an individual person’s job. If a number doesn’t have a person’ name next to it, it’s not going to happen.
  3. Think long-term. We generally worked backwards from a 5–10 years time horizon in order determine this year’s goal, both in terms of growth and in terms of our mission. Though we didn’t always nail it, we’ve increasingly put a lot of thought into the impact our work has on the many stakeholders we serve, which was recently crystalized by Brian in a public open letter.
  4. Align a cross-functional team behind that goal, and give that team ownership of HOW to achieve it. Your #1 job as a leader is to assemble the right team, point them in the right direction, and to stay vigilant in unblocking them.
  5. Celebrate success, don’t punish failure. Follow through on the original intent of this goal — it was meant to push you, not kill you. If you don’t hit the goal but get close, congratulate the team and move on to the next ambitious goal.

Main takeaway: When setting goals think bigger.

4. Start with the ideal experience and work backwards 🔮

A variation of Amazon’s working backwards methodology that I’ve seen work exceptionally well at Airbnb is starting with what the perfect user experience would look like and working backwards from that.

A classic example that I got to witness right as I joined was a project codenamed Snow White. Inspired by the approach Disney took in developing the original Snow White film, the founders began looking at Airbnb not as just a website or a service but as a story, with a beginning, middle, and end. Snow White was one of the first films to use the technique of storyboards, and thus the team developed a set of storyboards of the ideal guest and host experience, identifying key emotional moments along that journey. These storyboards quickly became a key tool in identifying our biggest gaps and opportunities, and informed the early company strategy. You can read more here and here, and watch this great video of the team discussing the process.

Host and Guest Snow White storyboards

Another more recent example was when we wanted to make it significantly easier for guests to book a home on Airbnb. The booking process had many steps, including an unexpected waiting period where a host manually reviews the guest request. Instead of spending months/years micro-optimizing individual parts of the funnel, we took a big step back and explored what an ideal booking experience would look like. In this case it was unquestionably a guest being able to instantly book any home they want, without having to wait to be approved. Initially, it seemed impossible to convince every host to allow guests to book without approval (only about 5% of bookings were instant at that time). Nonetheless, it became very clear very quickly this was where our business needed to go long-term, so we put all of our team’s resources behind this bet. Over the course of a couple of years, we ended up transforming the marketplace to where the vast majority of all bookings are now instant.

A few key ingredients to this process:

  1. Write out or draw out what the ideal experience looks like, feels like. In our case, before diving into any short-term optimizing, we sketched out the ideal booking flow on paper, and wrote a sample blog post to describe what we’d announce if this were to become real. This makes it very concrete in a matter of days.
  2. Create a framework. To make the problem more tractable, figure out a way to break it down into manageable chunks. In the case of instant book, the biggest gap was giving our hosts much more control over who could book their home instantly. We broke that gap into two types of problems — what we called CAN problems (am I able to use it?) and WANT problems (do I want to use it?) — and worked through them in priority order.
  3. When it feels uncomfortable, get more data. Often times a change this significant is scary for your colleagues or for some of your users. Before you give up, I strongly encourage you to look at actual data. Validate your assumptions through a quick experiment, user research, or looking at historical data. As one data point, many people internally and externally assumed a trip booked instantly would lead to a significantly lower trip quality (e.g. less communication, more transactional), hurting long-term growth. A quick data dive clearly showed us otherwise, and that, along with a few other key data points, cleared the path for internal buy-in.

Main takeaway: Look for opportunities to make a step-function change by imagining the ideal state and working backwards from that.

5. Think of your org design as a product 🌱

As you move up the ranks of leadership at a product org you quickly learn the most important product to get right is how you organize your people. How you structure your org can be a force multiplier or an incredible hindrance to achieving your mission. From my experience there are a number of key ingredients to successful org design:

  1. Optimize for dedicated cross-functional teams with a clear mandate. In my experience this is the single most impactful thing leaders can do when setting up a team. You want self-contained teams that can move as autonomously as possible, towards an agreed upon goal. Any missing resource (e.g. designer, DS, budget), additional cross-team dependency, or conflicting surface area, cuts the team’s impact by an immense amount (this is often invisible until later). Think through all the times a team will need to meet with or wait for another team and make that number as small as possible. Well-functioning teams feel like a black box that outputs regular updates and amazing work.
  2. Get the goals right. A lot has been said about goals (e.g. SMART goals, OKRs), but I think teams still underestimate the power of getting goals right. In my experience the right goal is the difference between incredible progress and unending churn. What has worked best for me are goals that (1) are as few goals as possible — ideally just one or two, (2) have quick feedback loops so that you can see impact immediately, (3) have a direct connection to top-line business growth, (4) are easily understood, and (5) are uncomfortable.
  3. Be aware that there is no perfect org design, only the best idea you have at that time. While at Airbnb I’ve been through almost a dozen re-orgs. In that time I’ve never seen a single org plan that addressed every issue and that everyone was happy with. Make sure you’re addressing the biggest pain points, future proofing it as much as you can, and then just move forward. It’ll have flaws (e.g. overlapping product ownership, two teams with the same key metric, a team owning far too much), so note them and put systems in place to work around them. Set expectations that the org will change again in the future.
“Use Your Voice”, by Shantell Martin, drawn free-hand over the course of a day at Airbnb HQ

Main takeaway: Build autonomous units with well-defined goals and get out of the way.

6. Maintain a high bar for EVERYTHING 🧐

Coming from the startup world I got accustomed to moving quickly, settling for good enough, and thinking short-term. There was always too much to do and way too little time to do it. Who knew if the company would be around a year from now. Shortly after joining Airbnb an early manager instilled in me the power of keeping a high bar on all of the work I did. Looking back, I find that this one change has made a profound impact on my career.

A few examples of where/how to keep the bar high for yourself and for the team around you — it’s the little things that often make the biggest difference:

  1. Emails. Force yourself to look at your email at least once before sending it. There’s always something you can cut or clarify further. Here’s a style I love, courtesy of the military.
  2. Shared docs. ALWAYS ask for feedback from at least one person before sharing a doc widely. Focus on clean and consistent formatting. Close out comments before sharing with execs. Make it easy to scan. Keep pushing yourself to learn to write better.
  3. Meetings. Include the primary goal of the meeting in your invite, ideally along with an agenda. If you are attending a meeting that’s not feeling productive call it out. Invite as few people as possible. Leave with clear action items. Follow up over email with the action items and owners.
  4. Presentations. Are you sure you need to do a presentation, vs. an email? Make sure the audience concretely knows the goal of the presentation — are you looking for a decision, general feedback, or purely sharing information? It’s not as obvious as you think. Get feedback on your presentation from people around you, fresh eyes always help you catch the most glaring issues. Keep it short — no one ever wished that presentation went longer.
  5. Hiring. The people you bring in determine the company you become. My advice is to only hire people you feel “hell yes” about. If it’s a maybe, it’s a no. More on this advice here.

Main takeaway: Ask yourself and your team these questions often: How could you go just a bit bolder? What would it take to make this slightly better? How do we make this meeting slightly more productive? How do I make this doc or email a little bit crisper? Could I set the bar a little bit higher?

7. Less is more: The power of Focus 🧘‍♂️

When I took over the supply growth team at Airbnb I found a small team spread across a very long funnel. They were seeing wins but were unable to build real momentum. I saw the same thing earlier when I took over a team responsible for improving trip quality. In both cases simply reducing the problem space for a team and giving them a more focused mandate resulted in significant gains in both impact and morale. Aim for teams to have a focused problem to rally around and obsess about.

In the case of supply growth, our solution was to first divide up the team into very focused units (a team driving referrals, a team owning top of funnel organic growth, a team owning performance marketing, etc.), and then grow each of these teams with resources appropriate to that problem space. In the case of trip quality, we dedicated a quarter at a time to a specific aspect of quality (host response rate, guest review rate, etc .) and once we found large opportunity we doubled down in the subsequent quarter.

Similarly, if you take this same lesson and apply it to your product, allowing your users to focus on the task at hand is one of the most powerful tools in increasing the number of successful user experiences. Some of the biggest guest conversion gains I’ve ever seen at Airbnb came from simple tweaks that gave users fewer things to think about. This includes things like opening listings in new tabs (avoids getting lost while exploring), extending your session length (so that you don’t need to log in as often), and removing links within the payments flow (to avoid distractions). We saw the same thing on the host side, from always having a “Recommended” tag when presenting a set of options, to defaulting settings based on a host’s persona, to adding inline tips so that users don’t bounce. Do not underestimate the power of focus.

Main takeaway: Focus. Focus. Focus.

In conclusion…✨

Thinking back to what Joe suggested to that one designer many years ago, Airbnb truly has built something the internet has never seen before. It’s been an incredible experience watching the company grow and evolve through the years. I feel grateful to have had the opportunity to be a part of that ride for so long, and especially to have gotten to work with the brilliant, kind, and driven people who walk the halls of Airbnb every day.

If this post resonated with you, if you have questions, or if you are curious about other topics, I’d love to hear from you: Hit me up on Twitter.

Summary

Here’s is a cheatsheet of the main takeaways from this post:

  • Be obsessed with your company (and team) culture.
  • Obsess over crystalizing the problem you are trying to solve, and align your entire team behind it.
  • When setting goals think bigger.
  • Look for opportunities to make a step-function change by imagining the ideal state and working backwards from that.
  • Build autonomous units with well-defined goals and get out of the way.
  • Ask yourself and your team these questions often: How could you go just a bit bolder? What would it take to make this slightly better? How do we make this meeting slightly more productive? How do I make this doc or email a little bit crisper? Could I set the bar a little bit higher?
  • Focus. Focus. Focus.

More to come

If I included all of the things I’ve learned at Airbnb, I’d never get this post out. Look for future posts that dive deeper into some of these topics, in addition to how we tactically drove supply growth over the years, how we built trust in a marketplace, how to manage PMs, how to transition from eng to product management, and the importance of bringing joy to your work.

Thank you for reading this.

Sincerely,
Lenny

A big thank you to Vanessa, Ann, Brett, and Yelena for reviewing early drafts of this post.