Airbnb’s IPO Runway

This week I interviewed Airbnb cofounder and CEO Brian Chesky at the New York Stock Exchange for the Economic Club of New York, a 110-year-old organization whose membership draws from the top executive levels of business, industry and finance. Sitting in the NYSE’s grand and stately board room, Chesky and I had a wide-ranging conversation about the company’s roots, lessons learned along the way, and future. One topic I pressed the executive on were his plans to take Airbnb public.

Chesky said he and his team are “working on making sure the company is ready to go public”—a process, he said, they consider a two-year project. Chesky’s comment is consistent with what he told me in 2015 when he said Airbnb wanted to give itself a “runway,” and therefore the flexibility to choose the right moment, to go public. Then, Chesky told me Airbnb wouldn’t start thinking about beginning that process for another year. This week, he offered an update: “We’re probably halfway through that project as far as being ready to go public.” That doesn’t mean Airbnb will go public next year—though it sure sounds like it might—but rather that it plans to be finished the process of getting “ready” by next year.

Chesky believes a company goes public for four key reasons: because it needs money; because it seeks a “branding event”; because it wants currency with which to make acquisitions; and because it wants liquidity for its shareholders. Airbnb doesn’t need the money, Chesky said—whether for ongoing operations or for M&A (the company just completed another $1 billion funding round and has reportedly spent less than 10% of the $3 billion plus in equity it has raised ), resources aren’t a limitation. The use of an IPO as a branding event is a “pretty bad reason to go public,” he added. So the “only reason to really go public,” in Chesky’s opinion, is “to get liquidity for shareholders.” So far Airbnb’s investors have been pretty patient, he said. The company remains founder-controlled, having been able to negotiate to maintain that control in each subsequent funding round.

Related: Airbnb CEO Brian Chesky: Going Public Is a ‘Two-Year Project’

But scale is important in today’s public markets, Chesky said. The way he sees it, there are three tiers of public companies: small market cap, mid market cap, and what he calls “Tier 1” companies—multi-hundred-billion giants like Google, Amazon, Apple, Facebook, and Microsoft. When Chesky first came to Silicon Valley, he said, being big was considered a “bad” thing. “Big companies couldn’t innovate, they stopped growing and they were considered weak,” he said. Today, Chesky pointed out, it’s the opposite: “Competing with Google or Amazon doesn’t seem like an awesome idea. Like, they’re just very, very powerful.”

This benefits of being big may reverse at some point, Chesky acknowledges, but “for now, you want to be robust.” That advice was given to him by Jeff Bezos, an investor in Airbnb, he added: “[Bezos] told me that you want to be a robust company so if somebody hits you, you can stand up.” The public markets, Chesky said, “provide a huge force against companies. And if you’re not strong and you don’t have good roots, you don’t have good fundamentals, you will just fall over. And I think you’ve seen a lot of small cap companies not really make it out very well.”

I also asked Chesky to weigh in on the recent tumult at Uber, a company often lumped into the same bucket as Airbnb as the poster children of the “sharing economy” and which has been dealing with extensive fallout from accusations of an aggressive and sexist culture and a leaked video showing CEO Travis Kalanick berating an Uber driver. “I think that all of us are on our leadership journeys, frankly,” Chesky said, choosing his words carefully. “I know Travis is and I’ve been on mine myself. I think we’re all learning.”

Chesky also discussed Airbnb’s early days. He said its co-founders had a fair amount of luck in getting the company off the ground, stumbling unexpectedly into filling a common need. “A lot of products fail because they start as business plans,” he said. He also talked about the company’s new “economic empowerment agenda,” including a forthcoming tool that will allow hosts to pledge that they pay $15 per hour to cleaning services and the like, and the release of a new report the company had commissioned that found that Airbnb will support an estimated 1.3 million jobs this year.

Chesky’s trip to New York was part of a worldwide tour to promote the company’s new Trips platform, the new menu of experiences and services launched last November marking its first foray outside of accommodations. He had just flown in from London. After New York, Chesky was heading to South Africa, then India, then China. We’ll post an edited version of the full conversation next week on Fortune.com. Of course, you can learn much more about Airbnb’s history, trials, tribulations and triumph in my new book, The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions…and Created Plenty of Controversy.