Stanford course CS183B: How to start a startup . Started in 2012 under the leadership of Peter Thiel. In the fall of 2014, a new series of lectures by leading entrepreneurs and Y Combinator experts took place:
Second part of the course Alfred Lin : I will start with a few slides and comments, but the most important thing on our stage will be Brian when he comes out here and talks about how he created the culture of AirBnB.
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So, here you looked through several presentations and learned how to create a startup. You have put together a team, you know how your product should look, it is in demand, and your company is growing. People love your project, you know how to get their attention. You figured out how to create a unique and unique company, and you have no competitors in the market, and this is already worth something. And the market you want to enter is still a little more than the market of paper airplanes, so all is well with you. Now what?

We are here to prove that culture, in fact, is a very important component in the development of a company, just as important as a team. I hope that after our conversation you will learn what culture is. Why is she important? How to form core values? You will also learn about the components that form the core values ​​and culture that form a good, effective team, and get some practical skills in this area.
What is culture? Does anyone want to define culture? What did you say? Simple values ​​in a team? Nice try. Did you give this definition because you have a computer and Internet access at hand? You can find a couple of definitions in the Webster dictionary, but we are with you at Stanford. This is a kind of trick question. In the office of computer science is never simple questions.

When I asked this question, I meant: “What should corporate culture look like?” We can use the word culture in different contexts: when we talk about society, about groups, places or other things. Here we will talk about corporate culture.
Can anybody define a corporate culture? We can take the previous definition and change it a little. Here's a hint how to define a corporate culture: “_____ and _____ of each team member, aimed at achieving the _____ company”.

People entered absolutely different things in the passes. The first pass included: assumptions, opinions, values ​​and, my favorite point, core values. In the place of the second pass often enter the behavior and, my favorite word, - actions, how will you act? For what? The third pass seeks to answer this question. For the sake of achieving goals - somehow rather weakly, in order to pursue large and complex goals - is already a little better, but the best definition is to achieve the company's mission.

Now we know the definition. So what do we do with it and why is it important? Here is a quote from Gandhi: "Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become habits, habits become values, and your values ​​become your destiny." If there is no culture in your company, then you cannot follow the path of your destination.

Culture is important because it lays down the basic principles that will guide you when making decisions. Culture is a way to instill in people values, important companies, and provide some level of stability on which to rely.
Culture also establishes a level of trust, and people begin to trust each other, but it can also show us what needs to be done, and, more importantly, what we should not do. This approach will help you keep the "right" employees. There are people who will not fit into your company, but if you have a good and strong culture, strong core values, then you will be able to understand who wants to stay in the company and who does not. Once you know who is who, this will help you move forward faster.

You think that I am telling you some muddy things, but here is another thing for you, this time more scientific. Here are the stock indices from 1994 to 2013 — these are the S & P500, Russell 3000, and Fortune 100 stock indexes. The creators of the Fortune 100 index included all the companies with which, in their opinion, work best.
The growth rate of investments in companies from this list was 11.8%, which is two times more than the other two indices. It can be concluded that the real strength of the company is ensured by a good attitude towards employees, trust in the team - that is, by building a strong corporate culture.

How do you shape values ​​and build a company culture? I am often asked about this.
You need to start with the leader of the company and its founder, that is, ask yourself what qualities are most important to you? Which of them relate to the business? Who are the people you would like to work with? What do they appreciate?
By answering these questions, you highlight the necessary set of values. Think about what people you would not like to work with. What are their values? Think about them opposite, maybe they will suit your company. Finally, remember that your values ​​should follow the company's mission, and if they do not follow it, then you are missing something, ultimately, they should be trusted and be uniquely associated with your mission.
For example, in order to unambiguously follow our mission, we in Zappos focused on creating a culture “tied” to excellent customer service. The first value was the provision of excellent service. Our culture was built very specific, first of all we wanted to serve customers perfectly, to leave a striking impression about ourselves.
We [in the company] had a small text explaining what we are raising under this. We wanted to support people, pleasantly surprise them, help our employees, our clients, our trading partners and investors. But at the same time, as if contrary to what was said, we did not want to work with arrogant people, so modesty became one of our core values. Here are two examples of how we created reliable basic values, which unambiguously follow our mission.

After thinking about it, you can isolate your basic values, there may be several of them, be it honesty, reliability, high quality of service or teamwork. It can be a whole list that can start from three points and grow to ten, or even thirty.
When Zappos went through this, we asked all the employees to pick out a few core values ​​for themselves, and they wrote out thirty-seven pieces. We reduced their number to ten. To do this, it took us a long time, about a year. You may ask why? Well, if you entered the word "honesty" in the list, I believed you right away! Everyone wants the culture to be honest, no one wants to be lied to every day.
Service, what do you mean by "service"? This word has a lot more hidden meaning than it seems. Everyone constantly talks about teamwork, but this is not the teamwork that we see at university competitions or in baseball. How to figure out what teamwork is? What will not be useful for the team?
Many of these things are connected with communication and mutual understanding, with people learning something, and here you can dwell in more detail. There have always been a lot of smart people in Zappos. And when they argued with each other about who was right and who was not, it was an irrational waste of time. We wanted people to help and tell each other to make any idea better. It was about the company getting an improved idea, and not about that someone from the staff proved that he was right. We wanted to promote the idea that in the first place is always the company, in the second - the department, in the third - the team, and only then - you yourself. How to achieve this?

Let's delve into the question. There is one more element of high-performance teams that I really love. This element is a pyramid created by Patrick Lensioni, who wrote an interesting book “The Five Vices of the Team”.
In it, the author tells about the reasons for disagreements in groups. Many teams fall apart due to lack of trust, and even if there is one, then why is it needed? If there is trust, then there can be debate and discussion during which truth is born. If there is no dispute, then it turns out that the blind lead the blind. How can you know for sure that you made the right decision if you didn’t discuss it? In fact, people are not that they do not want to take on obligations, they are afraid to do it.
Let's assume that you have moved to another level: you are able to get down to business. What can go wrong? As a rule, problems arise because people are not responsible for the actions they perform. If people are not responsible for what they did, then they will not achieve results. If you think of a company as a black box, the output of which is either financial profit, or an excellent product, or anything else as a result of the company's work, then at the entrance to the black box one of the most important parameters will be the company's culture. We will discuss some other practices in a series of questions and answers, which will probably result in a conversation about the need to combine the company's mission and its values, which I have already mentioned.

In the course of work, you need to seriously think about the values ​​that you initially chose. Many companies do not do one thing: when applying for a job, they interview an applicant about technical skills, but do not check it for compliance with the company's culture, do not evaluate whether he will believe in the ideas of the company and follow its mission.
I think this is an absolutely wrong approach. I believe that you may have the smartest engineer in the world, but if he does not believe in a mission, he will not put his heart and soul into the work. Hiring personnel is one of those things during which it is very important to think about your corporate culture: if you make this thoughtful approach a part of your daily routine, then you will go far in creating the value base of your company.

Concluding the conversation, I’ll say that corporate culture is like customer service and fitness, motherhood and apple pie. Everyone wants to provide excellent customer service, and each company wants to create a good corporate culture. What they forget is to make it their daily habit. You can not become slim, if you do not train regularly. Suddenly you will lose shape, become fat and then say, "Oh, I need to go on a hard diet to get in shape." It does not work, and this applies not only to fitness, but also to culture. Well, I think we went through all the points, and we can move on to questions and answers with Brian.
Brian Chesky: Hello everyone. How quiet it is here. [Audience laughter]. I will be honest, now I feel more free. There is nothing worse when you are in a quiet room with a bunch of people, and they all look at you, but now I have calmed down.
Alfred Lin: Well, I told about 5-10 minutes, you can spend a little more time. So, Brian, can you talk about how you came to understand that culture is very important in building a company and AirBnB in particular?
Brian Chesky: Yes, but I will not tell the story of the formation of AirBnB in its entirety, but will try to tell in brief. Some of you may know her. Here is an abbreviated version of the story: AirBnB did not reflect on how the company and the startup. I quit my job and lived in Los Angeles.
I once moved to San Francisco, where I started living with my friend in the Rhode Island School of Design Joe Gebbia. I had a thousand dollars on my bank account, and I had to pay a thousand and one hundred fifty dollars for the rent. That weekend, an international design convention was held in San Francisco. All hotels were reserved, so we decided to turn our house into a bed and breakfast hotel for the duration of the conference.
I didn’t have a bed, but Joe had three inflatable mattresses that we got out of the closet and called our hotel The Air Bed and Breakfast. So the company was born.
I remembered this story ten thousand times, and did not think that I would have to tell it to someone. I remember how I grew up, how I went to college, my parents were social workers and never thought that I would go to art school. They were worried that I would not get a job after college, although I am sure that all parents are concerned about this issue.
Mom asked me to promise her that I would find a job with health insurance, and I eventually created AirBnB. I remember how she told me: "I guessed that you would never find a job with health insurance."
The reason I'm telling you this is because AirBnB was never a brilliant idea. It was a way to pay the rent, so we could think about something more significant. But it turned out that we turned the solution to this problem into something significant.
Today we will not touch on how we created our product, this is a topic for another conversation, today we will talk about how you need to form a team and a great company. In the early days, there were only three founders: Joe, Nate and me. I think that one of the reasons for our success was my tremendous luck.
I do not think that I was lucky to come to the idea of ​​AirBnB, and I do not think that we were lucky to create a successful team, I am sure that we could try many other ideas and come to success. I think I was lucky because I found two wonderful people with whom I would like to start a startup, and whom I sympathized with. They were just frighteningly clever.
I think that this is one of the first tasks - to build a team of people so talented that you feel a little uncomfortable with them - this gives you the confidence that together you will break through.

In 2008, we started working together, and we were like a family. You consider the co-founders as your family, and the company as a child. And the child's behavior will depend on what kind of relationship established between the parents. If the parents are able-bodied, but do not work as a team, then the child, to be honest, will turn out to be another blockhead. You do not need it.
You want the culture in the company to be top notch. So Joe, Nate and I were a real family at the start, we usually worked
18 hours a day, seven days a week . At a time when we were part of the Y Combinator, we worked together, ate together and even went to the gym. We were like special forces on assignment.
We shared the responsibilities perfectly and performed them with great responsibility, which formed the basis of the company. And then we thought: at some point you are transferring the product to the second stage, which is to build a company, which in turn will already produce the product.
Most of the talk begins to be conducted on how to produce a product, how to find your niche in the market. As soon as it comes to such conversations, people need to create a company. It does not matter how great and original the idea is your product, if you do not create a company, it will not survive in the market. We thought about it and realized that we want to do this for a long time and build a business.
We wanted to create a competitive company, and in order to do this, we began to look closely at other businesses with which we had something in common. All companies around that existed for quite a long time had an understandable mission. They had a clear understanding of their values, and in creating something unique, characteristic only for themselves, they acted in many ways similar.
And now, three people: Joe, Nate and I decide to pay attention to these businesses. I noticed Apple. The main value for Steve Jobs was the belief that people deeply convinced of something can change the world. He said: "Our products are changing, but our values ​​are never." We studied Amazon, we studied Nike, we learned about their origins. In this vein, we can talk about nations. If a nation has values, and the people of this nation have rights, then such a nation will exist for a long time.
We began to understand that we need a goal, we need to create a company culture. And so we met with Alfred. We received funding from Sequoia, and Alfred just joined them with Zappos, and I heard that Zappos has an incredible culture. To find out more about her, we met up with Tony in Las Vegas.
Alfred Lin: So what did you learn?
Brian Chesky: Well, you guys are just flying. We have learned that if corporate culture is the path to success, then this is an art, even two different types of art.
Orders are one of them, and they can change, maybe in 50 years. Rituals and orders change and differ, but there are also such things that never change.
The second is the
principles , ideas that persist for a long time and make you thee. And I, thinking of basic values: adherence to principles, honesty; I realized that they are not basic. These are qualities that everyone should possess.
Besides them there must be others: three, five, six pieces that are unique for you personally. Think of such things in your own life.
What makes you different from all other people?What three words can you describe yourself so that other people understand what kind of person you are? In Zappos, when a hundred people already worked for them, they realized this and brought out ten core values. I learned this from Tony, and I did not want to wait until we hired 100 people, I wanted to realize the idea and write out the core values ​​as soon as possible. I spoke to Sam, and he believes that we are the only company in which core values ​​were identified before they hired someone.
Alfred Lin: How long did it take you to hire the first employee?
Brian Chesky: Well, our engineer was our first employee, we were looking for him for about 4-5 months. I looked through the profiles of thousands of people and personally interviewed at least one hundred.
Alfred Lin: How much time passed between when you wrote down your values ​​and when you hired the first employee? One day, two, three?
Brian Chesky: I think that we started working on this at one time in Y Combinator, around January 2009. It was a process that took place over a period of 6-7 months. We finished Y Combinator in April 2009, and hired our first engineer in July. Probably 6 months have passed. Some people asked why we spent so much time hiring the first employee.
I think that attracting my first engineer is akin to the appearance of a DNA chip at the company. If we are a successful company, this person will be a model for thousands of future employees. It was not a question of bringing someone to add the following three functions to the product; we needed a starting point for users. The first engineer was chosen with an eye to the future and for a long time.
Will I want to work with a thousand people like him? In the company you need a variety of views, you need different people of different ages. But you do not need a variety of values, beliefs must be homogeneous. This is the only thing that should not be different for all your employees.
Alfred Lin: So what were those values?
Brian Chesky: There were six of them. I will talk about three of them.
The first core value we’ll talk about is to fight for the idea.This means that we want to hire people who come to the company because of the idea. We do not need people who believe that our company is prestigious, who like the design of our office or need work, to those who simply consider our company cool. We need people who come here for one thing that will not change - our mission. Many people describe AirBnB as a way to book a room or house and travel around the world. And this is what we do, but the reason why we do it is different. To answer this question, I will tell you a story, I think it will give you an idea of ​​our mission.
In 2012, I met a host named Sebastian, we are looking for people all over the world where demand is growing. Sebastian lives in the north of London, he is about fifty. He looked at me and said: "Brian, there is one word that you do not use on your site." I asked him what the word was, to which he replied: "This is the word" friendship ", I would be happy to read the story of friendship."
“Well, tell me a story about friendship,” I say. What he did: “Six months ago, a massive riot began right in front of my house, and I was very scared. The next day, my mother called me to find out how I was doing. I said I'm fine. Then she asked about the house, and I said that he was fine too. ”
Here he continued: “And here’s an interesting thing, from the moment the riots broke out in front of the house, until the time my mother called me, 24 hours had passed.
During this time, I received a call from seven previous tenants from AirBnB and asked if everything was all right with me. Just think, seven of my guests called me before my mother. ”
I think it speaks more about his mother than about his guests, but every day this summer, four hundred twenty-five thousand people used our services, living in each other’s homes and coming to each other from one hundred ninety different countries around the world, excluding North Korea , Iran, Syria and Cuba. Hearing this story, I realized what value we have. It is much more than just booking a room or a trip. Our service helps to unite the world. We do this by giving you a feeling of comfort wherever you go.
Our mission is to feel at ease everywhere. I do not know whether we will continue our business in five or twenty years from now, but I can guarantee that we will always pursue the goal of bringing people together. This is our main idea.
Therefore, when you hire people to work, the first thing you need to make sure is that the person supports your ideas and will fight for your mission. You are upholding your mission, living a life by its rules. Do you believe it? Do you have stories related to this? Do you use [our] product? Do you believe in him?
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And the company will be successful if you have the right vision, a good strategy and the right people. And in the end, you will simply articulate your vision again and again when applying for a job, communicating with investors, seeking funding, giving PR interviews and giving a lecture in the classroom. You always reinforce values. You do this even in the process of writing an email to a client.
A very good question: how can we be sure that homeowners reinforce the culture of AirBnB?
The answer is: we are working in this direction, but not everything is perfect yet. When we first founded AirBnB, I went to Craig Newmark’s school of thought. Craig - the founder of Craigslist, said that everyone should be able to use AirBnB. If you want to rent a house, you should have this opportunity.
It turned out that many people believe in our values ​​because we talked about them and believed in them. But there were people who used AirBnB, not because they believed in our values, but because they realized that they could earn a lot of money by renting out their homes. Not everyone fits perfectly into the framework of our culture. In fact, these people caused a lot of problems, and this was a lesson to me. At first, it was not obvious to me that homeowners also had to be in line with culture. We met with them and attracted people like us.
We realized that the owners of the houses are our partners, and they must believe in the same thing that we believe.
Now we have a program called Super Host, where they must demonstrate their values ​​in order to reach a level that corresponds to priority customer support. We have very important meetings of homeowners, where they meet together and communicate, thereby strengthening our values. In response to the question I will say: we are late with this thought, but now we are strengthening our culture at every step.
Q: Brian, AirBnB has made a huge contribution to the open source community. Do you have any thoughts on what this brings to your culture and company values?
Brian Chesky: Yes, in general, this concerns AirBnB in two points. We want our culture to be fairly open, we believe in a common world where people share information, collaborate and make communities and individual business sectors stronger. My philosophy is to talk openly about everything, except for things relating to customers' personal information. If your question does not concern confidential information, then we tell about it.
In addition to the development of open source culture, we would like to make sure that all the people working for us feel like a team, and we would not like to share all of our source code with others - because each company wants to somehow protect itself from competitors. Unique technologies could provide such an opportunity to “protect themselves”, but we did not want to rely only on them.
We wanted to distinguish us from our competitors by the fact that we and our huge community provide the best customer experience in the world. We thought that this moment was more important than the technologies we used, so we found it possible to share part of our technological developments with others. This moment is also related to our values ​​- I have never asked anyone to do this. We just hired developers who share our values, and they decided that doing so is right.
Question: What did you do when you had no money, and you only received payment from users of the site? What have you done to increase the number of users? How did you get them to the site?
Brian Chesky: Well, the question is not related to culture, but I will answer it anyway. The best advice I heard was given by Paul Graham. I remember how he said the following: “It’s better to have a hundred people who love you than a million people like you.”
And indeed, it is better to have a hundred people who love you. And the reason is this: if you have one million customers or users, and they don’t care, they only use your application and think that you are doing well, then getting them to participate in your destiny is a very difficult task. I don’t know how to make a million people take care of something overnight. But I know that if you have a hundred people who love you dearly, then each of them will go out and tell a hundred more people. Everything that leads to the creation of a company or an idea begins with hundreds of people.
Why is this so important? To explain this to us, Paul gave us another lesson: if all you need is to make a hundred people love you, you need to perform those tasks that cannot be scaled. If you have a million users, it is very difficult to meet each of them. But you can meet and talk with a hundred people. That is what we did. Joe, Nate and I went from door to door in New York or in Denver, where the Democratic Party held a national convention, we literally lived with our users.
There is a joke, they say, if you buy an iPhone, Steve Jobs will not come down to you [literally: “If you buy an iPhone, Steve Jobs will not come to you to sleep”]. But I will come. Living with our users has been very helpful. All that had to be done was to make friends with them and share a passion for the idea we had invented.
Before you finish this conversation, I will give one more example. Now with AirBnB, you can click on the button and enter your home in the database, and a professional photographer will come to your home and make his photos for free. We have 5,000 photographers around the world, and they took photos of hundreds of thousands of homes. So this is probably one of the largest on-demand photography groups.
It all started when Joe and I stopped at the same housewife in New York. Her house was just great, but the photos of the house were just awful, and we wondered why she would not upload a better photo? It was in 2008, even before the appearance of excellent cameras and she could not figure out how to download photos from her phone to a computer. She was not a very technically savvy woman. And I offered to take a photo for her. In fact, I asked: what do you say if after you press the button, someone will ring the doorbell and take professional photos? She said it would be just magical.
The next day I knocked on her door, then took pictures of her at home. After I sent a few e-mails, which stated that we had a magical service for photographing houses, when a professional photographer comes to you at the touch of a button. And when people clicked on this button, I received a notification.
We rented a camera in Brooklyn, and in January, making our way through the snow, we went and took pictures of people's houses. We did it manually, without the use of any technology. We managed all of this with a spreadsheet. I didn’t ask Nate to design something for photos. Then we started hiring photographers for work. It so happened that we hired an intern who ran all the photographers. Then we opened a full time position for a manager who would manage interns working with photographers. At some point (before we developed software solutions on this topic) we had too many people, they became difficult to manage. We had hundreds of photographers. Then we created tools for working with them, but we did it after we realized how the ideal service of this kind should look like.
Question: Another question: with regard to AirBnB, many believe that this is not so much a technology company as a marketing one.
Brian Chesky: Good question, I will answer it with a story.
Alfred Lyn: Let me rephrase the question into a series of questions. Do you have your own design?
Brian Chesky: Yes
Alfred Lin: Do you have "technological protection" against competitors?
Brian Chesky: Yes
Alfred Lin: Does your business have a network effect?
Brian Chesky: Yes
Alfred Lin: Can you dictate your prices to the market?
Brian Chesky: Yes
Alfred Lyn: Do you have a good brand?
Brian Chesky: Yes
Alfred Lin: Are you monopolists?
Brian Chesky: I will not answer this question.
Alfred Lin: Going back to the question, just forget about everything that I just said. People think that companies with network effects that were able to enter the market are just lucky.
Brian Chesky: Let me answer this question. This is a completely fair question, and since people say so, I will answer it. The guy who owns Sequoia Capital is Doug Leone. About a year and a half ago, he declared to me: "You have a lousy job." I wondered what the hell, and what did he mean? He replied that I have the worst job for the CEO, which he has in his portfolio. Then I asked him to explain.
That's what he said: "First of all, you are a technology company." To which I replied that it is. “You are going through the same tests as other companies I deal with, but you work in 190 different countries. And you need to understand how to become an international company. You have to hire people in every country of the world. ”
And we are present in virtually every country, with the exception of North Korea, Iran, Syria and Cuba. We are a financial company. We operate with billions of dollars in remittances for the year, and we have a license to do business in California, and constant risks of fraud. The site must be protected like Fort Knox. He replied: “As a rule, the problems of companies end there, but you have to worry about other things, about trust and security.”
We have 425,000 customers sleeping in other people's personal beds, on their personal sheets. Think of a woman from Texas who is staying in the middle West, or vice versa. Think about cultural conflicts and misunderstandings that may arise. 425,000 people use your service every day. It is like being the mayor of Auckland. Imagine that you are the mayor of Auckland, and remember what happens every day in Auckland. You must provide both trust and security.
Now we have problems with management. We work in thirty thousand different cities, and each city has its own rules, its own laws, many of which were written centuries ago. They were written before any technology appeared. They need to search and learn.
Google search is pretty good at doing business, but it can give me results, of which only one or two are correct. We have forty thousand houses in Paris - you will not find for yourself there anything better than what we have. Therefore, we must be the best in combining people and technology. Another example, Facebook is a digital product. Their product is a website.
Our product is the experience that you get in the real world. We are not just an online product, but not only an offline business. In short, the bottom line is that we must have world-class technology, world-class design, and our brand must also be world-class.
We must convince the government that we are worthy neighbors, we must convince people that we are not crazy, but we have to do this, and we must make sure that the trust and security of our business are at the highest level. We manage all payments and work with risks. And I did not even mention the culture. This is not about culture, but I don’t see AirBnB as a marketing company.
Alfred Lin: Thank you
Brian Chesky: Thank you.
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