Airbnb’s CEO Is Pivoting to ‘Founder Mode’

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[00:00:30] Hey, TNB listeners. Before we get started, heads up. We're going to be asking you a question at the top of each show for the next few weeks. Our goal here at Tech News Briefing is to keep you updated with the latest headlines and trends on all things tech. Now we want to know more about you, what you like about the show, and what more you'd like to hear from us. So our question this week is, what kind of stories about tech do you want to hear more of? Business decision-making? Boardroom drama?

[00:00:57] How about peeking inside tech leaders' lives or tech policy? If you're listening on Spotify, you can look for our poll under the episode description, or you can send an email to tnb at wsj.com. Now on to the show. Welcome to Tech News Briefing. It's Wednesday, May 14th. I'm Victoria Craig for The Wall Street Journal. A pair of WSJ-exclusive stories for you today. First, Airbnb revolutionized travel.

[00:01:27] Now its founder and CEO is widening the scope for the company's next chapter. Our reporter has details from that interview. Then, big tech companies saw carbon credits as a way to offset the environmental impact of power-hungry streaming and AI data services. But a court ruling in Kenya threatens to tarnish those green credentials. But first, do you remember the first time you stayed at an Airbnb?

[00:01:55] I do. It was a rented room in a big house somewhere in Connecticut. The room where my now-husband and I slept with our dog was definitely haunted. And the woman who owned the house and slept in the next room over asked my tech-savvy partner to help fix her TV. It was an interesting experience. But it didn't deter us from exploring Airbnb again. The platform has come a long way in the nearly two decades since it shook up the travel industry.

[00:02:22] But its founder and chief executive, Brian Chesky, is thinking about the company's next iteration. The Wall Street Journal's Ben Cohen sat down with Chesky at his home in San Francisco and wrote about the conversation for WSJ magazine. Ben, you can already book not just accommodation, but experiences as well on Airbnb. How is the company starting the process of transforming itself? What will actually change for customers?

[00:02:47] So the big change that Airbnb revealed on Tuesday was that it's now getting into the services business. So the idea is that you can Airbnb anything now. And anything means a private chef or a caterer or a massage. Brian Chesky, the founder and CEO of Airbnb, says that one day he could see services being even bigger than homes on Airbnb. Like it being a bigger business for Airbnb, which is crazy to think about considering Airbnb is like an $100 billion company at this point.

[00:03:17] Airbnb has been under pressure from hotels, especially in the advertising world. I wonder how much of this decision was based on that pressure and also based on what he calls this ethos that he has called founder mode. Well, it's a little bit of both. I mean, it's a little bit of how do you grow the company when probably everyone knows what Airbnb is. And there are definitely markets that they can still crack, including the market that we are in right now, New York City. They're not really allowed here because of a ban on short-term rentals.

[00:03:45] But if you think about what is next for Airbnb, services and like revamped experiences is a natural fit. It's also it does reflect Brian Chesky's management philosophy of this founder mode in that it is coming directly from him. He is the guy who founded the company almost 20 years ago, grew it from three airbeds to like $100 billion in market value. And this is what he thinks is next.

[00:04:11] And what I thought was really interesting about how you describe this in your piece is that he comes at it from a very design-centric approach. That's his educational background. It's his own passion. So in this new Airbnb, he's consulted with other leaders that he wants to emulate or respects. He's mentioned to you, Walt Disney, even Barack Obama. That's right. So Brian Chesky went to the Rhode Island School of Design. He is an industrial designer by training. If you ask him today, like, how do you think of yourself?

[00:04:38] He doesn't think of himself as an entrepreneur or an engineer or a tech founder. He says, I am a designer. And if you ask him about founder mode, like who are these other founders who have inspired you over the years? The first two names that come out of his mouth are Steve Jobs and Walt Disney. And he says they actually have a lot in common and people sort of misunderstand something important about them. If you ask him, he says people think of Steve Jobs today as a technologist and Walt Disney as an artist.

[00:05:07] And actually, Steve Jobs is the artist and Walt Disney was the technologist of his day. And that intersection of art and science and technology is where he thinks that he sits. And that's how he envisions himself. And you mentioned Barack Obama. Brian Chesky, he's giving $100 million to the Obama Foundation, launching a scholarship with him and talking with him like every week for a while. Obama actually played this key role in the evolution of Airbnb over the years. Chesky and Obama were talking in 2017. And Obama asked Chesky about his vision for the company.

[00:05:35] And Brian Chesky sat down and wrote out this whole manifesto of how he sees Airbnb, sent it to Obama. The two of them discussed it. They kept talking about it. And if you ask him, he says those essays that he wrote for Obama back then actually shaped the letter he wrote in the Form S1 that Airbnb filed when it went public. So what does Chesky want this company to be in the next decade? What is his vision? It's a really good question. The version of this question that I asked him was like, what is Airbnb now? Is it a tech company? Is it a hospitality company?

[00:06:06] Is it a travel company? What he likes to say is that Airbnb is in the business of human connection. It's a business that has existed forever and will continue to exist forever. What we do know is that Airbnb now is worth more than any hotel chain. Even though for every one person who checks into an Airbnb, nine people check into a hotel, including me. When I went to go see Brian Chesky, I stayed in a Marriott in San Francisco. I did not stay in an Airbnb. Did you tell him that? I did tell him that. And I saw like the twinkle in his eye disappear for a second.

[00:06:33] But it is sort of interesting because everyone knows what Airbnb is. Lots and lots of people have stayed in Airbnbs. But there are still times when you don't want to stay in an Airbnb or you might not use Airbnb unless you are going on a trip. And that's what services and experiences and what they are hoping to roll out over the next few years will help address. The idea is that Airbnb wants to be everywhere and they want you to do everything on it. That was WSJ's Ben Cohen there.

[00:06:58] Coming up, a dispute over access to grasslands in Kenya threatens to upend a program big tech has used to offset the environmental impact of its emissions. We'll have that story after the break. Talking about guns with others might not always feel comfortable, but it could save a life. Here's a way to start a conversation. Your family is going over to your neighbor's home for dinner for the first time.

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[00:07:46] A carbon project in Kenya that launched in 2012 was designed to preserve millions of acres of grassland. The area plays host to threatened species like cheetahs and black rhinos, and it's owned by Maasai herders and other groups.

[00:08:06] The trust that oversaw the project sold more than 6 million carbon credits to companies including Netflix and Facebook parent company Meta, worth up to $90 million. But those carbon credits are now caught up in a dispute between the herders and the conservationists. WSJ Africa correspondent Caroline Kimeyu has been digging into this conflict. Caroline, walk us through the central issue in this case and how these big American tech companies are involved.

[00:08:35] Essentially, this was pitched as something that was going to be a win-win for everyone. The idea, essentially, which was designed by the American soil scientist Mark Ritchie and is run by a Kenyan NGO called the Northern Rangelands Trust, was that they would get pastoralist communities who are based in around 4.7 million acres of grasslands in the north. These are the Maasai, the Burana, Samburu, to essentially adopt a rotational grazing system that was supposed to restore the grasslands that they graze in,

[00:09:04] which the scientists said had become degraded over time by overgrazing. The pastoralists who've had their own style of grazing for centuries say that this brought in an imposed change. They aren't essentially able to graze in the way that they would before, meaning that they lose livestock and to the Maasai and other such indigenous communities. Their livestock is their life. This is how they provide for their families.

[00:09:29] So the project really just took a turn where it became about how is community land being used and who makes the deals about how it's used. The tech companies who are buying into this scheme from the U.S., such as Netflix, Meta, believing that it is doing all of these things. It was supposed to meet multiple aims for them. It was supposed to help them secure credits to offset their emissions and boost their environmental credentials.

[00:09:56] For the herders, they were supposed to get a share of the carbon revenue. And then for the grasslands, they were recovering, etc. And also the wildlife had better habitat. But now what the issue became when this sort of became thrown into controversy was that was there proper consent? And what this means for the big tech companies is that what was supposed to be a really good scheme contributing socially,

[00:10:23] environmentally is now something that's being said to do the opposite. And now with the major carbon certifier who is Vera saying that the project has been suspended as it reviews some of these issues, there is the question of what will happen to the offsets that they bought. They bought large blocks of projects early on when the project started selling credits. And now what the ruling essentially says is, look,

[00:10:53] the trust has no right to operate in one of the biggest conservancies that struck this carbon deal. So essentially, that's about 20 percent of the credits that Meta and Netflix bought into. And lawyers are essentially saying it could be much more than that. And this was a big opportunity, I suppose, for companies like Meta and Netflix, as you said, because the idea was that they could generate emissions through all of their operations,

[00:11:22] streaming video, powering social media, training AI models, even offsetting employee travel, as you point out in the story. Meta even claimed that it became carbon neutral as a result of these credits. So have we heard from Netflix or Meta in response to this action? They did say in response to general questions about the scheme that these credits have been rigorously verified, pegging it on verifications from Vera, the certifier.

[00:11:50] But at the same time, we know that Vera is also facing troubles of its own regarding some of the credits that it has greenlighted in the past. This is the second time this carbon project has been put on pause. So it does raise questions as to whether consent was properly sought in the process of establishing this scheme. This is the issues that the ruling is going to trigger both Vera and the project itself, the trust to really dig into a bit more.

[00:12:19] Carbon credits are controversial. But when projects like these go bad, then it does raise questions. Companies already struggling with accusations from rights groups about potential greenwashing, which is suggesting that your company practices are more environmentally friendly than they are. So this definitely brings some of those issues up again. So what's next in this case? What happens now? So the trust has appealed the decision and there's no timeline set.

[00:12:46] It looks like this issue is set to go on for a long period of time. The dispute has been going on for years already. That's WSJ Africa correspondent Caroline Kameu. And that's it for Tech News Briefing. Today's show was produced by Julie Chang with supervising producer Melanie Roy. I'm Victoria Craig for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.