Video and transcript: Brian Chesky and John Donahoe

July 23, 2013, 4:39 AM UTC


Below is an unedited transcript:

STEPHANIE MEHTA:  I would like to call to the stage our first panel, Brian Chesky, who is the CEO of Airbnb, and John Donahoe, CEO of eBay.  Come on up, gentlemen.


There’s water on the table, if you would like to heed Adam’s orders.  Welcome back.  You both have been interviewed here at Brainstorm Tech on one-on-one interviews, and we decided to try something a little different this year.  Brian Chesky is an art school graduate, and recent subject of a Tom Friedman column in the New York Times.  John Donahoe is an economics major from Dartmouth, Stanford MBA, cut his teeth in years and years at Bain Consulting.  On paper these guys look like they wouldn’t necessarily have a lot in common.  But, in fact, they have quite the mutual appreciation society.  And, more importantly, they spend a lot of time learning from each other.

So John, how did you all meet?

JOHN DONAHOE:  Well, Marc Andreessen is a board member, and a couple of years ago I asked Marc who the best founder in Silicon Valley was, because I wanted to reach out, I felt like we had things we needed to learn about innovation and design.  And he said Brian Chesky.  He had an immediate answer.

And so we had met each other once, but I called Brian and said, can I come buy you a cup of coffee?  And so I went up there to “bnb’s” office and started just asking him how he approaches design, and how he approaches innovation, and how he approaches product.  And I was furiously taking notes.  We sat down for what was going to be a couple of hours on that table, and I was learning an enormous amount.

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I learned, frankly, his definition of how he thinks about design is really relevant to our company because our companies are so similar.  And then at the end of it Brian says, you don’t get a way to do with that, I get to come pick your brain.  And a couple of weeks later we had brunch.

And so what’s ended up happening is he’s been my tutor or mentor on design, on innovation, and it turning out to be on a lot more on how you run a more nimble company.  And I think it’s worked a little bit reciprocately as well.


STEPHANIE MEHTA:  Were you surprised, Brian, when you got the call?

BRIAN CHESKY:  Yes.  So one of the things I’ve always done is I imagine I’m as smart as the people I surround myself with.  So I’ve always tried to seek out ‑‑ like a lot of people ask how out of art school in five years do you learn how to become a CEO?  And the answer is, you talk to CEOs, and you talk to people who have done the job.

And I’ve talked to numerous CEOs, but John was different than everyone else I talked to.  Everyone I talked to, I went to to get advice.  And what they did is, they gave me advice, because they saw themselves as bigger, more successful, and more advanced, and so therefore they knew something I didn’t know, and they were there to teach me.  John was completely the opposite.  He was like you know something I don’t know, and he was essentially trying to get as much information and knowledge out of me, and that was like the mutual mentorship that we had was unbelievable.

But I think it’s incredibly prescient because so many ‑‑ a company needs to be both nimble and robust.  And if you aren’t both, you will eventually die in the technology industry.  And so us, we’re nimble, we’re innovative, but we have to become a robust company.  We’ve got to scale.  We want to be one of the next great marketplaces, like eBay.  Well, John has done that.  So if there’s one person in the world to talk to it’s John.

Well, John wants to build a 100-year company, but the problem with these technology companies, they’re in worlds where people like us are coming around, and we’re changing the game every few years.  And so he has to completely be dialed into what’s new.  And I think he’s very smart.  And history has shown so many different companies who they thought they knew everything, they thought the world would never change, and look what happened.

STEPHANIE MEHTA:  So, John, if you could distill it, what are a couple of the best things that you’ve learned from talking to Brian?

JOHN DONAHOE:  Well, just how he defines design.  Most people when you think about design think about the pixels.  And Brian said to me, look people spend less than 5 percent of their experience on the Airbnb experience, so the design of the user experience on the site or mobile app itself may be important, but it’s only a small piece of the equation.  He said to me, John, what’s important is design thinking, bringing a systematic approach to how you design a great experience for your customers end-to-end.  And if you think about it, they’ve got an incredible challenge, the full Airbnb end-to-end design experience.

STEPHANIE MEHTA:  But it’s not that different from the eBay experience.

JOHN DONAHOE:  It’s not.  It’s not.  And he took me, like I said, it was upstairs at that time, and they had these frames.  He calls it the frames of the customer’s experience.  They are 15 frames, and only one was a site experience.  And so just a systematic way he’s thinking about design and design thinking.

And what I’ve done is shamelessly stolen everything I can, the concept, the ideas, and we’re trying to inject these more into eBay, because, again, as you said, we have a very similar experience.

STEPHANIE MEHTA:  So if I went to eBay’s site today, is there something that I might be able to look at that is a direct result of the conversations you’ve had with Brian, or that reflects the ethos that he’s shared with you?

JOHN DONAHOE:  Yes.  About the same time, what we have over the last really six to ten months, we’ve implemented what we’re calling Voice of the Customer.  And it’s called Voice of the Customer Rapid Response, where we are ‑‑ and it’s not anything on the site itself, but we have rapid cycle teams, we have dedicated rapid cycle teams that every time there’s an inbound problem, a bug, something about the post-transaction experience, we have a dedicated team who is fixing it.  And Brian’s systematic approach of design syncing, and the whole end-to-end consumer experience, he talks about a seven-star experience.  And this is just what I love.

BRIAN CHESKY:  Beyond a five-star, if there’s only five stars, what would the imaginary sixth or seventh star look like?

STEPHANIE MEHTA:  It goes to seven.

JOHN DONAHOE:  And Brian talks about having a seven-star experience.  And I went back and said, if we had a seven-star experience, what would that look like?  And that’s a question I wouldn’t have asked before I met Brian.

I had him come to our board meeting, I had him come to our leadership team.  He’s spoken to the top 200.  So he’s been an enormous source of education and learning for our organization, and been a lot of fun.

STEPHANIE MEHTA:  Same question for you, Brian.  If you could distill it, what are the things that you’ve learned from John that have proven most valuable?

BRIAN CHESKY:  Our relationship probably started around this time last year.  I remember I actually came and I spoke here at Fortune about a year ago.  At that time, I did not have an executive team.  In fact, I was still trying to figure out what exactly an executive team was, and what it did, and how do you function with one.  And we had been through crazy growth.

Only two years before that point, we were working out a three-bedroom apartment.  And I realized one day I woke up and we had like four or five hundred people.  WE didn’t ha a team of executives.  And so what ended up happening was I was just under-leveraged.  I would be in meetings about like what kind of ‑‑ like the most minute details.  And there were like tens of thousands of tiny decisions that I was getting pulled into.  I didn’t really feel like I had the time in my day, and I didn’t feel like I had leverage.  And I was trying to understand how do I build a team to give me leverage and grow and scale.

I didn’t really know how to scale a company.  And I had talked to a number of different people, but when I met John, the amazing thing is, you can meet a lot of people, but you want to make sure the advice you get is relevant to you, and it’s contemporary.  So there are some kind of universal things, somebody has run a company 20 years ago, or they’ve run a company in the advertising industry.  But how lucky could I be to find somebody in my market and marketplace, contemporary, real lessons right now.

And I talked to John about what do I need to look for in a CFO.  He actually helped me recently with a new organization we have for operations, and how do I centralize operations and lean out the team, what do I need in different functions, how do I run a team, how do I manage a board, all these things I never even thought about.  Because when you start a company, you don’t think about the business, you don’t think about the company, you think about the product.  All you care about is the product and the users.

And what happens is a lot of founders are product centric.  They’re either designers or engineers, and they’re trying to build a product.  Well, before your eyes you have a company, and that company has to be managed.  At some point, you can’t manage the product, you have to manage the company to manage the product.  And John is probably the best person I’ve ever meet to do that.  And I’ve been able to meet a lot of great people.

STEPHANIE MEHTA:  But John reached out to you, so what do you think might have happened had you not met him?  I mean, how would you have solved or addressed all those problems?  I know it’s a little bit of weird question.

BRIAN CHESKY:  I think as a founder, you eventually learn everything, but it’s time.  It’s like how many mistakes will I make, and how much time is it going to take before I actually figure that out.  And the biggest enemy of a founder is time, because you’re growing so quickly, and you can’t afford to turn late.  So John really I think has helped me circumvent so many different issues around a management team, showed me how to upscale the team, how to manage meetings.  Even really difficult things, like if an employee is not working out, how do you tell them, and how do you work with them, and do it in a really humane way, just things I didn’t know how to manage, I didn’t know how to do.

The things I do on a daily basis, I almost learned nothing at art school to do that.  In fact, even growing up in high school.  And I can’t call my parents and ask.  And so at some point, who do you call?  And I do have some other great advisors.  Jeff Jordan is on our board, and I think Dan Rosensweig is here as well, and he’s amazing.  So I try to make sure I have like a circle of three or four or five people that I’m constantly pinging for advice.  But the thing about John is that he’s a contemporary CEO running a company right now in a marketplace that’s there’s only one of those in the world.

JOHN DONAHOE:  I know this sounds like the mutual admiration society.  Believe it or not, it’s legitimate.  But what makes Brian unique is he’s constantly trying to learn.  He has multiple mentors, I think.  And he is a learning animal, and he learns from Jeff on his board.  He was learning a lot from Dan in the green room.  And I have other people I’m trying to learn innovation from.  What ended up happening is this just clicked.

And so we ended up talking it’s probably every other week we end up, hey, how do you think about this; or, hey, how do you think about that?

STEPHANIE MEHTA:  And it’s real-time.

JOHN DONAHOE:  And in every interaction I feel like ‑‑

STEPHANIE MEHTA:  I’ve got a problem, I’m going to call John.  John has an issue ‑‑

BRIAN CHESKY:  And it’s distinct from somebody on your board.  Those relationships are incredibly important, but there’s an informality, and there’s a matter of like neither of us has any stake in the other’s success that is actually really important to be truly candid.  And it’s not even being candid.  It’s like you don’t have a stake, so you don’t have a lens.  Your lens is completely ‑‑ you have no agenda, you have no opinion, no personality about it.  And that’s been incredibly important.

And now when I meet other CEOs or founders and I have a lot of like friends running companies of similar sizes, I recommend the same thing to them.  And everyone wants to get to know like Larry Page or somebody, but I say you should find somebody who is actually more of a match with your business and frankly wants to also learn from you and wants to spend time with you.  And like every CEO wants to spend time with Larry Page or Jeff Bezos, those are names that keep coming up, but everyone wants to spend time with them, but you should find somebody who like you can also get back to, and is a good cultural fit.  And us like we have a great relationship and friendship.  I think it’s like the friendship has to be as important as what you’re trying to get out of it.  Otherwise it doesn’t work.  At the end of the day there’s a trust here.  And I think that’s hard to find.

STEPHANIE MEHTA:  Just to reiterate, you all are not on each other’s boards?



STEPHANIE MEHTA:  But, John, you at one point considered putting Brian on your board, why did you not go that way?

JOHN DONAHOE:  To be honest it was one of the things I was thinking early on.  It was like, oh, it would be great to get Brian on our board, because we need to inject more design.  He understands innovation, and the businesses are so similar.  I actually had him come speak to our board.

And you didn’t know that.  It was partly to get the board to meet you.

But, then as I sat there I thought, you know what, I’m going to get more impact and value from having Brian not be on our board than be on our board, because he can sit in board meetings, but half the board meetings would be not relevant things, and he’s an incredibly ‑‑ he’s running what will be the most successful startup, I think, of this generation.  I mean, their growth rates, Jeff Jordan is here, who was at eBay at the beginning, and he’s on the Airbnb board, and said the growth rates are at or above what eBay’s were.  So Airbnb has a future that is stunning.  And to take him away from that and make him sit in some of our board meetings didn’t seem right.  And we were getting 80-90 percent of the value just through our informal communications.

BRIAN CHESKY:  And in our stage everything is about execution.  I met with Jeff Bezos last week and I had a similar conversation with him and he basically the end of the conclusion, he said, this company is going to be massively successful as long as you don’t fuck it up.  And I was like, why would you fuck it up?  He’s like, well, you’ve got to execute.  And we talked a lot about that and that’s one of the things I’ve talked to John about is that like our business is now known, we’re in an industry rivaling the size of the oil industry.  Travel is huge, another great marketplace.  It’s all about execution.  It’s all about focus.  And for people in our position it’s easy for founders to like crash and burn.  You’ve got to be really, really focused and I think there’s like a humility that like the people that aren’t successful, they don’t have the right advisors around them and the right kind of coaches and mentors.

STEPHANIE MEHTA:  I’m not going to put you on the spot and ask you who is a better advisor, John Donahoe or Jeff Bezos.

But, John, I am going to put you on the spot.  You acquire a lot of small upstart companies.  Have you considered acquiring Airbnb?

JOHN DONAHOE:  We couldn’t afford it.  We’d love to.

STEPHANIE MEHTA:  Your valuation is about $2.5 billion?  I mean it seems like it would be a great fit.

JOHN DONAHOE:  Yes, but the innovation that Brian is driving, I mean this is going to be a standalone business.  I mean you can look at certain startups, and certain businesses and say, some of them will get to certain stages and will flatten out.  Other ones have network effects potential that is just extraordinary.  And Airbnb is one of those companies.  It will be the next eBay.  Airbnb will be the next eBay and I firmly believe it and watching Brian drive it and grow it is just extraordinary.

BRIAN CHESKY:  Yes and again, all this comes back to can we execute.  So you start to ask, why won’t Airbnb do that?  And you ask, well, because we won’t execute.  Well, who is responsible for executing?  Me, so what are the challenges I may have, well, one, two, three, four five?  John, how do you deal with those?  I mean you can literally deconstruct whether or not we’ll be successful back to our conversations in whether or not we make the right decisions.  And with him, I mean, with John eBay is a massive company.

And I think the biggest risk to any company like eBay is that for every company like eBay there’s another Airbnb in a living room somewhere doing something really, really interesting.  And again, you have to be robust and nimble.  And I think there are so many stories of companies that they’re nimble, they become robust, and the problem is they become tankers.  And as they’re robust they stop moving quickly.  And I think the biggest indicator of whether a company is going to be disrupted is whether the CEO is a learner or a knower.  So if the CEO knows everything then they’re not going to be successful.  And you probably saw this with the media industry, like how could they be blind-sided by this next movement.

But, John is not going to be blind-sided and that’s the thing that’s so great, because he’s talking to me and all these other CEOs and founders of younger companies and we’re constantly telling him, but I can tell you for a fact that I’ve met with many other CEOs who are just teaching me, or they don’t get it, and they’re not really interested in what’s happening.  I mean they were ahead of mobile even before we were.  It’s amazing.  And we grew up in the mobile generation.

JOHN DONAHOE:  You know, Stephanie, one of the things I think is beginning to happen in this is based on these kinds of interactions what I’m discovering is that founders bring a unique set of capabilities to drive innovation.  And so partly driven by our conversations, we’ve now acquired about 20 startups over the last three years and we’ve got, I think, by recent count 15 founders still working at eBay.  And they’re driving huge levels of innovation.  And our value proposition is you get to innovate at scale.

You get to bring that kind of ‑‑ founders have incredible clarity of direction, often they’re great at product and design, and they have ‑‑ they’re nimble and they know how to drive execution faster.  They have a faster cycle time.  So I think part of what’s happening both in our conversations and what’s happening in the Valley is a bridging between the best of the small companies and the best of the large companies.  And they tend to get polarized.  The narrative in Silicon Valley is you’re either a startup or a big company.  And the reality is I think certainly big companies can learn a lot from startups and can benefit from founders.  And I think the reciprocal is probably true for the most successful startups, which are going to scale.

BRIAN CHESKY:  None of us, like Pablo Picasso had a saying, the bigger you get the stronger the wind gets and it’s always in your face.  None of us want to become the thing we’re trying to disrupt.  So the last thing I want to do is build a big kind of company that I want to disrupt, because when we were small we hated big companies that were irrelevant.  The same thing, that was never Pierre’s vision at eBay (EBAY) and that’s not what John’s going to build.  And I think one of the things that makes the Silicon Valley work so well, and I’m not sure other industries work this way, is none of us have a zero sum mentality.  And I bet you if this was, I don’t know, maybe Hollywood or New York, or some other industry, like there would be maybe this notion that for you to win I have to lose.

And I think one of things at the Valley is, when I came u here I came up here literally with nothing.  I had $1,000 in the bank.  I put everything in the back of a Honda Civic and everyone in the Valley was here to help me.  And every step of the way, whether it’s John or Jeff, Dan, others here, like they’re all here to help.  And I think the reason is because we’re all in hyper-growth.  It’s like you can imagine so much growth ahead of us that there’s no pie, the pie can just continue to grow.  And I guess the thought I would have is I would tell like a lot of other entrepreneurs, like just try to help more people and try to get more help, because I think ultimately we make each other stronger, because we’re not really competing with each other.  We’re competing with essentially the status quo.

JOHN DONAHOE:  And my version of the same, what I would tell big company CEOs is pay attention to what’s going on with the disruptive innovators, because there’s something real here.  It’s easy to dismiss it and write it off.  But, there’s something real, it’s fundamental and it’s different.

STEPHANIE MEHTA:  But, it’s also easy to say yes, I understand there’s disruptors, I’m going to go and do five meetings with disruptors every month and then not really take in or understand that information.  What do you think is the key to really opening your eyes and ears to what the disruptors are telling you?

JOHN DONAHOE:  Well, in my case I’ve got to feel like I really need it.  So it’s being paranoid, compulsive, and scared to death that if we don’t innovate faster, if we don’t keep driving innovation, going to the next level of innovation inside of our company, we’re not going to continue to succeed and thrive.  And so every conversation I’m having with Brian is one where I’m not just asking him stuff because it’s intellectually interesting, it’s because we need to learn, we need to grow.

That’s why I brought him to speak in front of my top ‑‑ our global VP group.  It’s our top 200 people, because I wanted them to hear this, because it’s so important for us to be successful.  And we have.  We’ve injected more innovation inside of eBay, and I’m proud of what we’ve done over the last five, six years.  But, we’ve got to go to the next level and so I think to really listen, to have it to be authentic, it’s got to feel very real, and everything that I’m getting from Brian is very real and very applicable for what we do.


STEPHANIE MEHTA:  We’re going to go to questions from the audience in a few minutes.  Brian, you recently said that you’re going to be rethinking your international strategy a little bit.  Can you tell us what the thinking is around international now and what advice and conversations you had with Brian around that?

BRIAN CHESKY:  Yes, John is actually very, very helpful in helping me think through that.  Essentially two years ago we had a company of 40 or 50 people and the Samwer brothers came around, cloned our company, raised 90 million dollars and said they were going to do this huge international expansion, and we realized that we had to grow pretty quickly, because we felt like a global travel site that wasn’t global was like a phone without e-mail.  It wasn’t going to be very, very useful.

STEPHANIE MEHTA:  And the Samwer brothers I’m sure everyone in the room knows, but they’re famous for squatting on ideas started somewhere else.

BRIAN CHESKY:  And so we had to grow really, really quickly and we continued ‑‑ we scaled out a home-shored customer support model, which coincidently is what eBay did in their early days.  They had people working from home and we ended up having people in 80-100 locations around the world and we separately opened up over dozen offices around the world and over the last couple of years we’ve been able to pull away from our competitors.  And we started thinking, what is a really sustainable organization we want to build and a few thoughts we had.  One of the things was we wanted to go from being proactively reaching out to people and introducing them to the website, because a lot of people now know what Airbnb is, to actually building in the customer experience.

In fact, one of the things we did is, and I always talk to John about this is, the simplest thing to do, and Paul Graham actually wrote an essay about this recently is, don’t work on the product, work on making the experience amazing for the users you already have.  And so make like an imaginary screenplay of what the perfect experience would be on your website and just make that.  And our code word for that was Snow White, because it’s modeled after Snow White, which was the first feature-length animation movie that used the storyboards.  So create the perfect storyboard and then have a different set of teams operationalize the perfect experience.

We started to realize there were so many different things we should be doing for people internationally.  And John helped us think through how we bring people together in different offices and so ultimately created what I think is going to be a leaner and more effective organization that’s even more focused on service.  And they were one of the original adopters in that Promoter Score and in the early days we were obsessed with how much people loved Airbnb but we weren’t super sophisticated in our analytics.  And they were really I think the ones that bring that to popularity.

STEPHANIE MEHTA:  Right.  So there’s obviously some hard choices involved in going leaner in international.

John, did you offer any advice on how to restructure?

JOHN DONAHOE:  Well, all I could do is I could speak to our experience at eBay and then my experience in business.  So yes, going global is hard.  It takes a decade.  And growing a global organization and decisions about what you do locally versus regionally, versus on a more global basis, how you recruit and hire talent, which is things that I’ve had experience with.  And I was sitting here thinking that the other thing that happens here, we keep referencing Jeff who is such a ‑‑ and Dan who happens to be in the audience, as well.  Jeff was at eBay early on, is now on the Airbnb board.  So there’s a lot of cumulative learning here.  And the ability to share what worked and what didn’t and vice versa, what Brian is doing that we aren’t is ‑‑ there’s kind of a network effect here of sharing and learning that’s kind of fun.  And it benefits both.

BRIAN CHESKY:  And I’ve always viewed that I’ll be as successful as the humility I have to continue to take advice from people that have been where I hope to be one day.  And this is an example of that.

STEPHANIE MEHTA:  So when people talk about Airbnb as the next eBay, you don’t think I could be even bigger than eBay?

JOHN DONAHOE:  Yes he does.  Of course he does.  I hope so.

BRIAN CHESKY:  And I think John thinks obviously, and I think, that eBay could be much bigger than what it is today.  I think that this is literally day two of the Internet, as Jeff Bezos said 10 years ago, and it’s still day two, because we’ve got 100 years in front of us of something incredibly interesting.

JOHN DONAHOE:  I mean we compete in a 10 trillion dollar market.  And we enable $200 billion of commerce last year.  So there’s a lot of runway, a lot of runway.

BRIAN CHESKY:  And the travel industry is, depending upon who you ask, around $2 to $6 trillion, depending upon how you size the deal, the industry is about $4 trillion.  So there’s plenty of market here for us.  And we obviously believe that for us to win no one else has to lose.  Now, there’s a lot of industries in which that’s not the case.  If you’re a restaurant in a certain town, maybe like the customer is going to go to one restaurant or the other.  But, we are sufficiently different.

STEPHANIE MEHTA:  Let’s go to the audience for some questions.  I’m going to hold off on Mr. Schrage for one moment to see if there’s a question from elsewhere.  It’s all the journalists.  Any participants who want to jump in here?  Okay.  We’ll go to Michael Schrage, risers on the far end there and then after that Miguel Helft right in front of him.

QUESTION:  You guys clearly like each other and respect each other enormously, but we want to know what’s the best argument you guys are having right now?

BRIAN CHESKY:  We’re having arguments?

JOHN DONAHOE:  Hell no.  I don’t know.  I don’t think we argue that much.  I’ll tell you, so here’s a funny story.  We were in the green room and Jeff and Dan were out there and we were talking about an organization change Brian is contemplating.  And I was saying what I thought, I said to Dan, what do you think?  And Jeff walked up and I said, Jeff, what do you think?  And Jeff disagreed with Dan and they started a debate and here you got this former COO of Yahoo!, bringing his experience.  You got Jeff bringing his experience.  I’m throwing in mine.  I don’t know if you call it a debate or an argument, but it’s a debate and then Brian gets to choose, there’s 10 percent of it, 5 percent of it isn’t insightful.  And so it’s less arguing, it’s more how do you spark ‑‑ because there’s not right answers for many of these things.

BRIAN CHESKY:  Plus, like the other reason there is probably not a lot of arguing is we kind of view each other as a source of wisdom for the other’s topics, which we want to learn from.  So I’m not going to argue with him about management.  He’s probably not going to argue with me about innovation.  He’s going give his perspective and then he’s going to decide.  It’s more a matter of you’re going to decide what to listen to and not to listen to.

The other thing is, and this is a great example is I think that all great ‑‑ I wouldn’t know what advice to necessarily give to an executive CEO of a really large company, but for any founder running a company, I would say you have ‑‑ they call it different names, like CEO Council.  You should have five people, typically.  But it can be like whatever the number should be.  And I think you should have one person, and just take your businesses.  So for my business, I try to have John help me as far as like how to be a CEO.  Being a CEO is a distinct job, it’s got specific responsibilities, and no one ever teaches them.  The problem is that there’s no appreciation for learning how to be a CEO.  Your employees coming to work aren’t appreciating the fact that every day you’re learning.  They don’t appreciate that.  They do, but ultimately they have needs, and you need to deliver.  And you cannot have a learning curve.  The learning curve can be very expensive.

So John became that person for me.  And I have other people as well that help me with marketing, and other things as well.  And I try to match.  In this wonderful movie “Jiro Dreams of Sushi” says to be a great chef, you must eat the best food.  To be great at anything in the world, you must meet the best in the world.  So I asked myself, who is the best CEO in the world, and who is the best professional CEO in the world that is going to be amazing at the things I’m not good at.  And John, having come from Bain and really scaled eBay and run it, is literally the archetype of a true world class CEO that knows how to manage.  And then you try to go point by point.  So for design, I have talked to some designers from Apple.  And so for marketing I talked to Michael Ovitz.  And for trans and safety, I talked to George Tenet.  But John has become essentially like more of the CEO coach.

JOHN DONAHOE:  And one of the things, Stephanie, I think that we were just talking about this earlier today that is true, and I go to Brian for innovation, and I go to other CEOs that I’ve learned a lot from around scaling.  I go to Jeff Immelt, or Sam Palmisano, or Jamie Dimon, or CEOs I admire enormously.  And what is true about them, and I think what is true about the most successful CEOs, and is true about the most successful founders, is it’s a continuous learning process.  To some extent, the biggest fear I have is am I the bottleneck?  Am I not learning fast enough to keep up with the company?

And this notion that’s not really talked a lot about, about how important it is to learn, and to keep learning.  And the minute you think you’ve gotten something figured out, it’s changing.

BRIAN CHESKY:  You can literally create a curve of growth, and the curve is how fast your company is growing.  And the next curve is how fast are you as a CEO growing, and are you growing like this?  In which case the company is out-scaling you, and the company is pulling you.  Are you growing at this speed, or are you growing ahead of it?  You always want to be hopefully growing faster in the company, so you’re pulling the company essentially around the corner and into the future.  But you can’t do that if you don’t know how to do basics of the company in my case, or in his case you’re not going to know if you don’t know what technologies are around the corner.

STEPHANIE MEHTA:  Right.  Miguel, and then we have a question down here in the front after that.

QUESTION:  John, the story of big valley companies trying to bring the startup spirit in-house is pretty common.  You’re doing it with Brian.  You’ve also done it with ‑‑ you bought, I think it’s Zong, Dave Marcus’ company.  And then pretty soon you promoted him to be the president of PayPal.  I’m sure he’s done great things at PayPal.

When I talk to the next generation of payment startups, and you ask them about PayPal and innovation, they roll their eyes or worse.  And I’m sure it’s not fully justified, but once you bring somebody in like that, how do you keep that spirit?  How do you make sure that doesn’t get stifled, that it keeps giving what you’re trying to get, which is this nimbleness and innovation?

JOHN DONAHOE:  Well, the example Miguel is talking about is, we bought Zong, which was run by David Marcus, three-time founder and entrepreneur, who is a fantastic product and design guy.  And so he had never managed more than 200 people in his career, but I felt that PayPal really needed a sharp injection of great product, great design, great injection of user experience.  And David exudes that.  So I put him in charge.  And that’s in charge of 12,000 people.  And he’s doing a fantastic job of really bringing that spirit of innovation, of the consumer user experience back into PayPal.

And that will take time, and PayPal is doing all right in the interim.  You’re always scared of disruption, you’ve always got to pay attention to it.  PayPal has some enormous advantages, like 130 million active users processing $150 billion of volume.  It’s growing 29 percent.

But we still are ‑‑ if you talked to David here, he would still say, we want to inject more innovation and accelerate the pace of innovation at PayPal.  Part of that we’re doing organically, and part of that we will acquire smaller companies that are driving innovation.  I think certain innovations can be best done in startups.  And I think other innovations larger companies like ours can drive centrally.

But what’s powerful is when you take a founder and say, here’s your opportunity to innovate at scale.  Here’s the opportunity to take your vision, to take your idea, to take your concept, and apply it instantaneously to 130 million users globally.  And that’s a really compelling value proposition for a founder.  So we’ve got a lot of work to do, but I’m really pleased with the progress David is making.

BRIAN CHESKY:  For whatever it’s worth, I’m friends with a number of the up and coming startups in the payment space, Stripe, Balance, and a number of other ones.  I think what they have going for them is they’re incredibly nimble, but what PayPal is going for is incredibly robust.  And you can’t really ‑‑ you’ve got to always understand, we, as small nimble companies, always want to compete on being nimble, but being robust is incredibly important.  And I’m actually incredibly impressed.  I think what he’s done with David has been pretty amazing.  The culture is entirely changing at PayPal, and I think in a good way.  I think it’s definitely centered more around innovation.

STEPHANIE MEHTA:  Time for one more quick question.  Stand up and identify yourself, please.

QUESTION:  Thanks, Stephanie.  Laura Lauder, Lauder Partners.  So my question to you has to do with Tom’s article.  So it described how your company is promoting and fomenting trust.  What a wonderful thing.  Now, very different from eBay, where you’re buying and selling products.  You are buying and selling bedrooms.  So my question to you is how do you inculcate that spirit of trust and encourage that?  One Tylenol product scare could really harm your business.  So how do you ensure that?

BRIAN CHESKY:  So when we started the company this was something that I wasn’t sure if anyone would do this and one of the things we thought was there are a couple of tenants that would make this product work.  The first was design.  I think our background is design, design instills trust, and it creates an emotion for you.  The second was, we wanted to live in a world without anonymity.  And so we wanted to remove anonymity from the transaction.  We felt like if you knew the history of every single person you can understand who you’re transacting with.  And recently we’ve offered verified ID, where we verify the identification cards of every single one of our users.  We’re rolled out to about 25 percent in the U.S.  And so I think over history the platform becomes more and more trusted.

In fact, the thing that surprises most people is not how many times this is a problem, but how many times this works.  We have a $1 million insurance claim that we’ve had for essentially almost two years now on our platform.  We’ve never had anything close to that claim.  We’ve had tens of millions of nights booked through our website.  So I think ultimately the first thought is that we are much larger than most hotel chains, as far as the amount of volume we’re doing, this is not a new idea.  We didn’t invent the idea of staying in a bedroom.  In fact, if you look a the roots of the hotel industry they actually start with people staying in bedrooms, boarding houses, a third to half the people in the United States used to stay in boarding houses in the last century.  So I don’t think we’re inventing a new idea here.  But, I think trust and design, removing anonymity really, really helps.

STEPHANIE MEHTA:  And I think it’s an interesting note to end on, this whole notion of trust, because clearly there’s a trust that exists between these two executives that may ultimately be the lynchpin of why this relationship works.  Ladies and gentlemen, please join me in thanking John Donahoe, CEO of eBay, and Brian Chesky, CEO of Airbnb.  (Applause.)