I want to start today's deep dive by asking you
to visualize something. It's 2008. The financial
world is, you know, it's basically on fire. Banks
are collapsing left and right. Cold chaos. Right.
And in this tiny apartment in San Francisco,
you've got two guys. They're standing in their
kitchen and they're holding a hot glue gun and
a cardboard box. That does not sound like the
beginning of a tech giant. It sounds more like
an arts and crafts project. It pretty much was.
They're gluing together a cereal box, but it's
not just any cereal. They've designed and printed
these caricatures of Barack Obama and John McCain.
Oh, I remember these. Yeah, they called them
Obama -Os, the breakfast of change, and Captain
McCain's, which promised a maverick in every
bite. That's pretty clever, you have to admit.
Super clever. They literally bought the cheapest
generic cereal they could find, stuffed it into
these homemade boxes, and then... sold them on
the street for $40 a box during the election
conventions. $40 for what was probably just like
generic Cheerios. Exactly. That is an insane
markup. But here's the thing, and this is the
crucial part. They didn't do this because they
had a passion for breakfast food. No, they did
it because they were desperate. Completely. They
were $30 ,000 in credit card debt. They were
literally eating the leftover unsold cereal for
dinner because they couldn't afford to buy groceries.
And that $30 ,000 they made. That was the seed
money. That was the seed funding for a little
company called Airbnb. It's just an incredible
story to go from hot glowing cardboard boxes
in your kitchen to, well, to running a company
that as of today in early 2026, we know generated
over $11 billion in revenue last year. $11 billion.
And that's exactly what we're unpacking today.
We are doing a deep dive into the complete history.
of Airbnb Inc. We've gone through the archives,
the financials, all the scandals, the regulatory
fights, basically to figure out how a frantic
attempt to make rent money turned into a global
superpower. And superpower is, I think, the right
word, because we're not just talking about a
travel company here. We're talking about a business
that fundamentally changed how we think about
property. How so? Well, they created a new asset
class. Really, they took your spare room or your
entire apartment and turned it into a source
of income. But as we're going to see, that kind
of disruption, it comes with a huge price. A
price for who? For the founders, for the cities
they operate in, and for the very idea of what
a community even is. So today is Friday, February
6, 2026. Airbnb has now been a public company
for, what, just over five years? It's a household
name, a verb even. People say, I'm going to Airbnb
a place. It's like Google or Uber. For sure.
But the path to get here was just... So messy.
It was full of rejection, lawsuits, and frankly,
some very questionable decisions along the way.
So what's our mission today? Our mission is to
really get under the hood of that disruption.
First, we need to understand the mechanics of
the business. I mean, how do you make that much
money without owning a single hotel room? And
then we pivot to the externalities. The consequences.
Exactly. How did their slogan, belong anywhere,
somehow... Turn into a global war over housing
affordability and neighborhood identity. All
right, let's do it. Let's rewind the clock. It's
October 2007. San Francisco. We've got our two
main characters, Brian Chesky and Joe Gebbia.
Roommates. Both designers from the Rhode Island
School of Design, RISD. And as we said, they're
completely broke. Their landlord had just raised
the rent and they were scrambling. They just
didn't have the cash. And it's really important
to get the context here. October 2007 is just
before the economy completely implodes. But in
San Francisco specifically, there was something
else going on. A huge industrial design conference
was coming to the city. Right. And if you know
anything about San Francisco, when a big conference
like that hits. The hotels are gone. Capacity
just hit zero. Everything was completely sold
out. So this is that classic, you know, necessity
is the mother of invention. They didn't start
with some grand vision to democratize travel.
No, they started with a math problem. A very
simple math problem. We need rent money. There
are people coming to town who need a place to
sleep. We have a living room. But they didn't
have beds, which is key. They had air mattresses.
And that's where the name comes from. Air, bed,
and breakfast. That specificity is so important
because it shows what they were actually offering.
They weren't trying to be the Hilton. Not at
all. They were offering a crash pad, a place
to sleep, and maybe a Pop -Tart in the morning.
So they threw up this super simple website, airbedanbreakfast
.com, and aimed it right at the attendees of
that design conference. And it actually worked.
To their surprise, yeah. They got three guests,
a 30 -year -old guy from India, a 35 -year -old
woman from Boston, and a 45 -year -old father
from Utah. They charge them 80 bucks a night.
And right there, that's the proof of concept.
It proved that, yes, strangers will pay to sleep
on an air mattress in your living room if the
price and the context are right. But, you know,
proving a concept to three people is a world
away from actually building a business. Absolutely.
Which brings in the third co -founder. So in
February 2008, they bring on Nathan. blake chersick
nate he was chesky's former roommate but crucially
he wasn't a designer he was the tech guy he was
a coder an engineer and you absolutely need that
technical architect chesky and jebbia had the
vision for the brand the look the feel but to
scale this thing beyond a simple web page you
need a back end you need someone who can actually
build it blazer sick became the cto so with him
on board they do a more formal launch august
2008. Nothing. Crickets. Nobody cared. And this
is the part of the story that always gets glossed
over in the triumphant retellings. Everyone assumes
it was an overnight success. It was the opposite
of an overnight success. For that first year,
they were barely making $200 a week. Investors
thought the idea was, frankly, insane. Well,
I mean, can you blame them? It's 2008. Your pitch
is, hi, I have a great idea. We're going to convince
complete strangers to let other complete strangers
sleep in their home. It just sounds like a recipe
for getting robbed or murdered. It really does.
It breaks the first rule your parents ever teach
you. Don't talk to strangers and for God's sake,
don't let them sleep in your house. Silicon Valley
investors at the time, they wanted scalable software.
They didn't want real world liability. So they
got rejected by everyone. Which brings us right
back around to the cereal boxes. The hustle.
They needed money just to keep the lights on.
So they did the Obama owes thing. But that stunt.
It did something more important than just making
them 30 grand. It got them a meeting. With Paul
Graham at Y Combinator. And for anyone who doesn't
know, Y Combinator or YC is basically the Harvard
of startup incubators. Paul Graham is a living
legend in Silicon Valley. And the story goes
that Graham, he actually hated the idea. He thought
it was weird. He thought it was a terrible idea.
He just couldn't imagine why anyone would ever
use this service. But as the meeting was ending
and, you know, it was not going well. Chesky
pulls out a box of Obama O's. He just had one
with him. Yeah, he had a box. And he tells Paul
Graham the story of how they funded the company
so far by selling these things for 40 bucks a
pop. And that's what flipped the switch for Graham.
Completely. Graham later said something like,
if you can convince people to pay $40 for a $4
box of cereal, maybe you can convince them to
sleep on each other's air mattresses. So he wasn't
investing in the idea at all. No, he was investing
in them. and their sheer tenacity. He famously
called them cockroaches, which he meant as a
compliment. Meaning you just can't kill them.
You can't kill them. They will find a way to
survive. So YC accepts them. January 2009, they
get $20 ,000 for a 6 % stake in the company.
Wow, a $20 ,000 investment for 6%. That valuation
is, I mean, it's just laughable today. It's nothing
now, but back then it was a lifeline. But YC
gave them something even more valuable than the
money. Paul Graham gave him a piece of advice.
He said, go do things that don't scale. What
does that even mean in this context? It means
stop trying to be a huge tech company. Stop trying
to write code that solves every problem for a
million users you don't even have yet. He told
them, go meet the 10 users you do have. And they
took that literally? They did. Chesky and the
team, they flew to New York City, which was their
biggest market at the time. They just started
knocking on the doors of their hosts. To do what?
Just to say hi? To get feedback. To fix the product.
Yeah. Because they realized once they were inside
these apartments that the photos on the website
were awful. Oh, right. These are just like blurry
flip phone pictures. Exactly. Dark corners, unmade
beds. It looked terrible. So they rented a professional
camera and Chesky and Jevia, the founders, went
door to door themselves and took beautiful, high
resolution photos of their hosts' apartments.
For free. That seems so manual, so time consuming.
Like the CEO is playing the part of a real estate
photographer. It was completely unscalable, but
it worked. Their revenue in New York doubled
almost immediately. Wow. Just from better pictures.
Just from better pictures. Because you have to
remember, in hospitality, the photos are the
promise. If a photo looks bright and clean and
professional, you trust the host. You trust the
space. And if it looks like it was taken on a
potato, you assume the place smells like cat
food. Exactly. So they figured out that trust
was the real product and photography was the
way to build it. And around that same time, March
2009, they made another big change. They finally
dropped the airbed part of the name. Right. They
became just Airbnb. It was a huge strategic shift.
They realized their market wasn't just conference
goers looking for a crash pad. It was people
looking for a room, an apartment, a castle, a
treehouse, a villa. They needed a name that didn't
literally imply you'd be sleeping on a bag of
plastic. Precisely. So they have the new name.
They have a model that's starting to work and
they have these professional photos. Now the
rocket ship phase begins. OK, so let's get into
the financials, because the jump from surviving
on leftover cereal to billionaire status happens.
I mean, it's frighteningly fast. It really is
a classic hockey stick growth curve. Once they
cracked that code of trust, which was a combination
of the photos and a two -way review system, the
network effects just took over. Can you explain
that term for a second? Network effects? Sure.
It's the core of any successful marketplace.
It's a two -sided platform. The more hosts you
have, the more attractive the platform is to
guests. Because there's more choice. And the
more guests you have? The more attractive it
is to host because there's more demand. It creates
this self -reinforcing flywheel. It just spins
faster and faster on its own. And the venture
capitalists saw that flywheel starting to spin.
Oh, yeah. By 2011, they're raising a huge round
from Sequoia Capital and Andreessen Horowitz.
Even Ashton Kutcher got in on that round. Kutcher
seems to pop up in every major tech story. He
does. But his involvement was actually really
important for the brand. It helped make Airbnb
feel cool and mainstream, not just some weird
thing for budget travelers. So the valuation
just starts exploding. Exponentially. By 2014,
they hit a $10 billion valuation. By 2017, it
was $31 billion. But the real main event, the
big payday, is the IPO, December 2020. I want
to pause on that date because it seems like the
single worst time in modern history to take a
travel company public. It was an incredible gamble.
Yeah. December 2020. The world was still deep
in lockdown mode. International travel had completely
vanished just six, seven months earlier. They
must have been terrified. They were. But they
had also noticed a really interesting trend.
There was a huge rebound in domestic travel.
People were renting cabins for a month to escape
the city. The work from anywhere thing was starting.
Exactly. So they bet that the market would see
their resilience, not just their weakness. And
they were absolutely right. They raised $3 .5
billion. And the stock just took off. It doubled
on the first day of trading. It valued the company
initially at over $100 billion. Which is just
staggering. And didn't they do something unusual
with the IPO stock, something for the hosts?
They did. This was a really fascinating move.
Normally, when a company goes public, the shares
at the IPO price are reserved for big institutional
investors. You know, banks, hedge funds. The
little guy can't get in until it's already trading.
Right. But Airbnb set aside about 9 million shares.
specifically for their hosts. So if you were
a longtime host, you could actually buy stock
at the opening price. Exactly. You could buy
in at $68 a share. It was a really smart gesture,
a way to acknowledge that fundamentally Airbnb
owns nothing. Their entire global inventory of
rooms is owned by these individuals. If the hosts
all decide to leave tomorrow, the company is
worthless. It's worth zero. So it was a clever
way to buy some loyalty and share the upside.
OK, let's fast forward to the present day. We're
looking back at the full year financials for
2024. How big is this machine now? It is massive.
The revenue for 2024 was $11 .1 billion. And
the net income, so the actual profit, was $2
.65 billion. That is a very, very healthy profit
margin. It's huge. And you have to understand
why it's so high compared to, say, a traditional
hotel chain like Hilton or Marriott. Because
they don't own the buildings. They own nothing.
Hilton has to pay for the building, the mortgage,
the electricity, the cleaning staff, the person
at the front desk. Airbnb pays for servers and
marketing. The asset light business model. Precisely.
They're a software company that just happens
to be playing in the travel industry. Their take
rate, the percentage they keep from every booking,
is their lifeblood. How does that work? Well,
they take a small cut from the host, usually
around 3%, but then they charge the guest a service
fee that can be, you know, 14 % or even higher.
So on a $1 ,000 booking, Airbnb might walk away
with $170 just for being the middleman. Nice
work if you can get it. It's a fantastic model.
And they're using that cash to expand aggressively.
They're not just waiting for people to list more
homes. They're out there buying companies. What's
their acquisition strategy look like? Who are
they buying? Well, back in the day, they would
buy smaller local competitors just to shut them
down. Companies like Accolio in Germany or Crashpatter
in the UK. Just take them off the board. But
the strategy's changed now. It's much more sophisticated.
In 2019, they bought Hotel Tonight. Which felt
like a total contradiction at the time. We're
the anti -hotel company and we just bought a
hotel booking app. It was a smart hedge. They
realized they were weak on last -minute bookings.
An Airbnb host often needs a day or two of notice
to get a place ready. Hotels are built for instant
booking, so Hotel Tonight filled that gap. But
what's been the most interesting recent acquisition?
For me, it was November 2023. They bought a small
company called GamePlanner .ai. Oh, of course,
the obligatory AI pivot. Every tech company in
the 2020s has to have an AI story. It's true,
but for Airbnb, it actually makes a ton of sense.
Brian Chesky has been talking for years about
creating the ultimate concierge. What does that
mean? It means going beyond just booking a room.
Imagine an AI that can plan your entire trip.
You just say, find me a quiet place in Tuscany
near a good vineyard that's friendly for a family
with a toddler, and also book us a pasta -making
class for Tuesday afternoon. So they want to
be the travel agent, not just the booking engine.
We want to own the entire travel experience,
from the moment you start dreaming about a trip
to the moment you check out. that's the holy
grail for them but this is where the story starts
to get complicated because you can't just grow
to an 11 billion dollar company with millions
of listings all over the world without bumping
into the real world. Without bumping into the
neighbors. Right. And this brings us to what
we've called the Airbnb effect. And depending
on who you talk to, this effect is either a brilliant
liberation of capital for homeowners or it's
the complete destruction of local communities.
And the debate gets very heated very quickly.
So let's break down the core economics of it,
because that's really the root of the entire
conflict. Why does Airbnb make rent go up for
everyone else in a city? It comes down to a concept
called the yield gap. It's just a fancy term
for a simple choice. Okay, give me an example.
Let's say you own an apartment in a popular city
like Barcelona. You have two options. Option
one, you can rent it to a local family on a long
-term lease for, say, 1 ,000 euros a month. Okay,
stable income. Stable, predictable. Option two,
you can put that same apartment on Airbnb for
150 euros a night. So if you rent it for just...
10 nights in a month, you've already beaten the
long -term rent. You've beaten it. And if you
read it for 20 nights, you've doubled your money.
As a rational property owner, what are you going
to do? You're going to chase the higher yield.
You kick out the local family and turn your apartment
into a full -time, unregulated hotel. Exactly.
But when thousands of landlords in a city all
make that same rational decision at the same
time, you suddenly remove thousands of housing
units from the long -term rental market. Supply
goes way down, demand from locals stays the same.
And prices for the remaining apartments go through
the roof. And suddenly, the barista who serves
coffee to the tourists can't afford to live in
the city anymore. That's the accusation. And
we've seen this play out in major cities all
over the globe, which of course led to a massive
regulatory backlash. The city started fighting
back. It feels like a global game of whack -a
-mole. Let's take a quick tour of that battlefield.
New York City seems to be ground zero for the
war against Airbnb. New York went for the jugular.
For years, it was a legal gray area, but with
a rule called Local Law 18, which really came
into force in 2023 and 2024, they effectively
banned the core Airbnb business model for most
departments. How did they do that? What are the
rules now? The rules are incredibly strict. For
any rental under 30 days, the host, the owner
or primary tenant, must be physically present
in the apartment during the entire stay. So you
can't just rent out your empty apartment while
you're on vacation. No. You can only rent out
a spare room while you're there sleeping down
the hall. And you can't have more than two guests.
That immediately kills the professional host
model, the people running dozens of investment
properties. It obliterates it. And on top of
that, you have to register with the city to get
a license. And the process is designed to be
very difficult. The number of legal Airbnb listings
in New York City fell from over 10 ,000 to just
a few hundred almost overnight. Wow. A huge blow
to their biggest market. What about in Europe?
I know Berlin was famously aggressive. Berlin
had a law with a fantastic German name. The Zweck
und Femdungsverbot. Which means roughly the prohibition
of misuse. They legally defined taking a residential
apartment and using it for tourism as a misuse
of the city's housing stock. They've tweaked
the rules over the years, but generally renting
out an entire apartment short term requires a
very hard to get permit. And Barcelona was another
hospital, right? Barcelona is probably the most
hostile city to Airbnb in the world. They completely
stopped issuing new licenses for tourist apartments
years ago and have teams of inspectors who hunt
down illegal listings and issue massive fines.
They're trying to reclaim the city for residents.
Now. Airbnb's defense in all of this is always
the same. They paint themselves as the victim
of the big, bad hotel lobby. Is there any truth
to that argument? Oh, absolutely. There was a
shadow war going on. The hotel industry, represented
by groups like the American Hotel and Lodging
Association, saw Airbnb as a direct existential
threat. So they lobbied city governments? Aggressively.
But their public argument was never, they're
taking our customers. That's a weak argument.
So what was their... Angle? Their angle was about
fairness and safety. They would go to city councils
and say, look, a hotel has to install fire sprinklers,
pay millions in occupancy taxes, follow disability
access laws, and carry extensive insurance. These
Airbnb hosts are doing none of that. They're
running mini hotels without any of the costs
or regulations. If it walks like a hotel and
quacks like a hotel, that was the argument. And
Airbnb's counterargument for years was Section
230 of the Communications Decency Act. The shield
of the internet. The Shield. They said, we're
not a hotel company, we're just a website. We're
a platform, a bulletin board. What the hosts
do on our site is their business, not ours. But
that legal shield has been getting weaker and
weaker lately. It's crumbling. More and more,
courts and regulators are saying that platforms
are responsible for what happens on their platform.
Which brings us to probably the darkest part
of this whole story. Safety. Because when you
check into a Marriott, you have a baseline assumption
of safety. There's a front desk, security, a
brand to protect. But when you check into a stranger's
guest house, you're basically on your own. And
that lack of any standardized safety protocol
has led to some truly horrific situations. The
one that always goes viral, the one that taps
into this primal fear, is the hidden camera.
This is the thing that creeps people out more
than anything else. For sure. And we're not talking
about one or two isolated incidents. There have
been... Thousands of reports over the years,
people finding cameras hidden in smoke detectors,
in digital clocks, even inside shampoo bottles
in the shower. It's a complete violation of privacy.
And for a long time, Airbnb's official stance
on this was confusing, to say the least. What
was their policy? Well, up until early 2024,
they actually allowed cameras. in common areas,
like a living room or a hallway, as long as the
host disclosed it in the listing. But nobody
wants that. It feels like you're on a reality
TV show. Guests hated it. And then came the CNN
investigation in July of 2024. And that was a
bombshell. It was. The report, based on internal
documents and whistleblowers, revealed that when
a guest reported finding a hidden camera, Airbnb's
internal safety team didn't have a standard procedure
to call the police. They didn't call the police.
What did they do? They would conduct an internal
investigation. They'd call the host, ask them
about it, which, you know, critics argued just
gave the host time to remove the camera and destroy
any evidence. The report basically suggested
they prioritized avoiding bad press and potential
lawsuits over making sure the host was actually
prosecuted. That was the implication. And after
all that public pressure in March 2024, they
finally changed the policy. They banned all indoor
cameras. Period. No exceptions. Living rooms,
hallways, doesn't matter. If it's inside the
property, it's banned. Better late than never,
I suppose. But there's another kind of safety
issue that plagued them for years, and that's
safety from discrimination. The whole Airbnb
while black hashtag. This issue really strikes
at the core of the platform's original design,
because in the early days, your profile photo
was front and center. The host saw your face.
The guest saw the host's face. Everything was
visible before the booking. And that led to bias.
Massive bias. A Harvard study famously found
that guests with distinctly African -American
sounding names were about 16 percent less likely
to be accepted for a booking than identical guests
with white sounding names. Sixteen percent. That
is a staggering gap. It completely shattered
their marketing slogan of belong anywhere. It
proved that if you just give individuals the
power to be gatekeepers, they will bring all
of their implicit and explicit biases with them.
So how do you fix a problem like that? You can't
just send an email telling millions of hosts
to stop being racist. You can't. You have to
change the system. They brought in some heavy
hitters like former U .S. Attorney General Eric
Holder to help them craft new anti -discrimination
policies. But the biggest and most effective
change was a product change. What did they do?
They started hiding the guest's photo. Now, as
a host, you don't see what the guest looks like
until after you have officially accepted their
booking request. So you have to say yes to the
transaction before you can see the person's face.
Exactly. It forces the decision to be based on
the guest's reviews, their profile information,
and the economics of the stay, not on their appearance
or perceived race. It hasn't solved the problem
completely, but it was a major step. We should
also touch on the party house era because for
a while there, especially in places like L .A.
or Miami, It felt like every weekend there was
a news story about a huge out -of -control party
at an Airbnb that ended badly. This was a huge
liability for them. People were renting these
massive mansions specifically to throw ticketed
events, and it was a nightmare. The neighbors
were furious about the noise and the traffic,
but worse, people were getting hurt. There were
shootings, even murders, at some of these unauthorized
parties. So they just banned parties. They did.
It actually started as a temporary measure during
COVID to discourage gatherings, but they made
the ban permanent and global in June 2022. But
they didn't just publish a new rule. They built
technology to try and enforce it. How can an
algorithm know if I'm planning to throw a party?
It looks for a combination of risk factors. It
analyzes things like the age of the user, how
far they live from the listing, the length of
the stay, and the day of the week. So if you're
like 21 years old, you live in the same city
and you're trying to book a 10 bedroom house
for one night on New Year's Eve. The computer
says no. The algorithm flags it as a high risk
booking and automatically blocks it before it
can even be sent to the host. It knows you're
looking for a venue, not just a place to sleep.
Precisely. It's about preventing the problem.
Before it happens. OK, let's zoom out a bit.
We've talked about neighborhoods. Let's talk
about nations, geopolitics. Because when you
operate in nearly every country on Earth, you
inevitably get dragged into international conflicts.
It's the curse of being a truly global company.
You can't stay neutral. You have to make choices.
And every choice you make is going to anger someone.
The Israeli settlements in the West Bank are
probably the most contentious example of this.
Walk us through that whole flip -flop. It was
pretty confusing. It was. So in November 2018,
under immense pressure from human rights groups,
Airbnb announced they would delist 200 properties
in Israeli settlements in the occupied West Bank.
They took a moral stance. They did. Their statement
said that they concluded these settlements were
at the core of the dispute between Israelis and
Palestinians. But then the backlash to the backlash
began. The lawsuit started. Hosts in the settlements
sued them. Several U .S. states threatened to
divest their pension funds from Airbnb, accusing
them of boycotting Israel. So in April 2019,
they completely reversed the decision. They put
the listings back online. But they didn't keep
the money from those listings. That was their
attempted compromise. They announced that they
would allow the bookings to continue, but that
they would donate all of Airbnb's profits from
those specific listings. two humanitarian aid
organizations. An attempt to please everyone
that probably ended up pleasing no one. That's
usually how those things go. And then you have
China. This is such a fascinating business case
study. So many American tech giants have tried
and failed to crack the Chinese market. Google,
Uber, the list goes on. Airbnb really, really
tried. They tried so hard. They created a whole
separate Chinese brand name, A -Bing, which translates
to something like... welcome each other with
love. They stored Chinese user data on servers
within China. They bent over backwards. But in
May of 2022, they just pulled the plug, shut
down the whole domestic business. Why? It was
a combination of things. On the one hand, the
constant zero COVID lockdowns at the time were
making domestic travel in China impossible. So
the business was suffering anyway. But there
was a deeper issue, wasn't there? Yes. The market
structure is just different. In China, users
live on super apps like MeTuan or Ctrip. They
want one app for their travel, food delivery,
movie tickets, everything. A standalone app like
Airbnb was always going to be a niche player.
And the regulatory environment there must have
been a nightmare. Extremely invasive. The Chinese
government requires travel and hospitality companies
to share guest data with them in real time. Who
is staying where, when, their passport information.
Airbnb had to comply with that, and it created
a huge privacy headache. And for all that trouble,
how much money were they actually making there?
And that's the kicker. For all that effort and
all those compromises, the domestic China business
accounted for less than 1 % of their global revenue.
1%. That's a shocking statistic. It really is.
It shows that sometimes the total addressable
market you see on a spreadsheet doesn't reflect
the on -the -ground reality. It just wasn't worth
the cost. OK, let's pivot now to the modern era,
post scandals, post China exit. We mentioned
COVID earlier, but I don't think people really
grasp how close Airbnb came to completely collapsing
in 2020. It was a true near death experience,
an existential crisis for the company. In early
2020, as the world shut down, they lost a billion
dollars worth of bookings practically overnight.
Their revenue dropped by 80 percent in just a
matter of weeks. And that's when the layoffs
happened. A quarter of the entire workforce,
1 ,900 people, were let go in a single day in
May 2020. It was brutal. Brian Chesky wrote this
very emotional, very famous letter explaining
the cuts, but it was still a bloodbath. But then
something unexpected happened. The great reshuffling
began. The work from home revolution. Exactly.
White collar workers realized, hey, if my job
is just on my laptop, why am I paying $4 ,000
a month for a tiny apartment in New York or San
Francisco? They started looking for escapes.
And they started booking Airbnbs. But not for
a weekend. They were booking them for a month,
two months, three months at a time in a cabin
in the woods or a house by the beach. So long
term stays became their new growth engine. It
became their fastest growing category by a huge
margin. Stays of 28 days or longer. Airbnb suddenly
wasn't just for vacations anymore. It was for
living. And the company itself really leaned
into this shift. In April 2022, they made a huge
announcement for their own employees. They told
them they could live and work from anywhere forever.
No pay cut if you move from San Francisco to
a cheaper city. It was a radical move. They started
living the lifestyle that their product enables.
They perfectly aligned their corporate culture
with their product. It was a brilliant marketing
move, but it also just acknowledged the new reality
of the modern workforce. And now in this more
mature phase, they're trying to cement their
status as a permanent blue chip company through
these massive global sponsorships, the Olympics,
for example. And now the FIFA World Cup. That
partnership is enormous. They're a major sponsor
of the Club World Cup in 2025, and then the big
one, the 2026 World Cup across the U .S., Canada,
and Mexico. Just think about the logistics of
that 2026 tournament. Millions of fans will be
moving between dozens of cities across three
countries. The hotels can't possibly handle that
volume of people. So Airbnb is positioning itself
as the official default overflow housing solution
for the biggest sporting event on the planet.
It's a huge step for legitimacy. It says we aren't
a disruptive startup anymore. We are global infrastructure.
But even as they become part of the establishment,
they can't seem to escape controversy. We have
to mention the recent DOGE news from last year.
Right. In February 2025, it was announced that
co -founder Joe Jebbia had joined the Department
of Government Efficiency. This is the new government
reform initiative, the one led by Elon Musk.
Correct. And Jebbia, a tech billionaire, stepping
into a powerful role focused on efficiency and
cutting red tape sparked a lot of debate. It
blurs the line between Silicon Valley and Washington.
It does. And critics immediately raise concerns,
worrying about tech moguls being put in charge
of dismantling the very regulations that, well,
often restrict the power of companies like Airbnb.
A pretty clear conflict of interest, potentially.
Or a synergy, depending on your political perspective.
But it shows that the founders of Airbnb are
no longer just business leaders. They are now
major players on the political stage. OK. So
we've gone from the cereal boxes to the boardrooms,
from the IPO to the AI. I want to try and synthesize
all of this because, honestly, I feel really
conflicted. I use Airbnb. I love staying in a
cool house somewhere new. We all do. But I also
hate what I see happening to the character of
cities I love, seeing whole neighborhoods turn
into essentially tourist -only zones. And that
is the central paradox of this company. On one
hand, Airbnb genuinely democratized travel. It
made it possible for an ordinary person to stay
in a treehouse in Costa Rica or a houseboat in
Amsterdam for the price of a generic, boring
hotel room. That is a real innovation. But the
cost of that innovation was the commodification
of the home. You've nailed it. They took the
most personal, intimate asset we have, our home,
and they turned it into a financial instrument.
They made every homeowner... a potential CEO,
and every spare room, a potential hotel. And
it's interesting. Unlike a hotel, they have no
loyalty program. I've always found that so strange.
Marriott has Bonvoy. Hilton has Honors. Why no
Airbnb points? It's because of that individual
decentralized nature. A hotel chain wants you
to be loyal to their brand. Airbnb isn't a brand
in the same way. It's just a connector. Their
competitive advantage, their moat. isn't loyalty,
it's liquidity. Meaning? They just have the most
hosts and the most guests. That's the network
effect we talked about. It's incredibly difficult
for a competitor to break that cycle. So as we
wrap this up, what's the final takeaway? If you're
listening to this right now and you're about
to go book your summer vacation, what should
you be thinking about? I think you just have
to be a conscious consumer. You have to understand
that your booking has a real tangible impact
on the neighborhood you're visiting. Read the
reviews, not just for whether the place was clean,
but for clues. About the host. Is this a person
renting out their spare room or a corporation
running 50 -scarrel apartments? And maybe give
the smoke detector a quick look when you check
in. Definitely check the smoke detector. I want
to leave you with one final thought. The genius
of Airbnb was proving that trust could be designed
and that it could be scaled. They proved that
deep down we are willing to trust strangers with
our keys, our homes, and our safety. But as the
company continues to grow and automate, the question
becomes, Can they maintain that delicate trust
when the financial transaction starts to feel
more important than the human connection? That
really is the billion -dollar question for them.
If it just becomes another faceless transactional
booking site, it loses all the magic that made
it special in the first place. But if they can
somehow keep that original spirit of hosting
alive, they might just survive the regulators
and the backlash. It's a fascinating story of
serial censors and sleeping on a stranger's floor.
Thanks for listening to The Deep Dive. We'll
see you next time. Stay curious, everyone.