Airbnb CEO Brian Chesky may now run a $30 billion company, but that doesn’t mean he didn’t make mistakes along the way.
On a recent episode of Masters of Scale, Chesky tells podcast host Reid Hoffman that many entrepreneurs, including himself, tend to get ahead of themselves when working to start their companies.
If Chesky could go back in time and speak to his younger self, these are the pieces of advice he would share.
Wait to meet investors
Before accepting investors for your company, Chesky recommends first figuring out who in your field already supports you.
“Wait longer before you meet investors,” Chesky says, “because you’re going to spend an enormous amount of time getting rejected.”
When you meet investors, Chesky says you need to make sure “that you have people vouching for you, that are telling the investors how amazing you are.”
If you don’t have any people already vouching for you, Chesky recommends that you seek out mentors.
“Investors aren’t going to meet you, unless through an introduction,” he says. “And they may not have the courage to invest in you.”
Your mentors should be people your investors will admire and respect when they brag about you and say how smart you are, Chesky adds.
Raise as little money as possible
Chesky says he thinks startups raise more money than they really need to in their early days.
“I would make sure that I did not raise too much money,” Chesky says.
“If you develop a scrappy culture,” Chesky says, “the scrappy culture requires you to build more novel solutions, use fewer out-of-the-box software things and you end up just building a scrappy, more frugal, more startup-like environment.”
Another benefit to raising less money from investors, Chesky says, is that you get to keep more control of your company and thus create more constraints.
Chesky says he abides by this old saying: “Constraints create creativity.”
Don’t give up too much control
Going back to his younger self and not taking too much money from investors, Chesky says he would make sure that he gives away control grudgingly.
“If you become really successful, you’re going to want to make sure you have that control,” Chesky says.
He notes that a lot of people give away control and make these decisions for in the event the startup doesn’t go well.
“Who gives a s–t? Start another company,” Chesky says.
“Make decisions in the event it goes really well. OK, in that event, are you still happy with the outcome? Otherwise, you guarantee you’ll never be happy,” he says.
Seek the highest quality investors
Chesky says that a lot of entrepreneurs race to meet with investors because they are obsessed with raising money at the highest valuation possible. But he would caution his younger self against doing that.
Though people may say “money is just money,” Chesky says that he has never experienced that.
“In the upside that you’re super successful,” Chesky says, “you will be happy that you raised a little less money, gave up less control, and you have a higher-quality investor.”
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