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TechAirbnb

How one young guy can create $25 billion

By
Patricia Sellers
Patricia Sellers
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By
Patricia Sellers
Patricia Sellers
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June 30, 2015, 7:02 AM ET

Airbnb founder Brian Chesky is unique in many ways, as Leigh Gallagher notes in her recent profile of the first-time CEO. He’s a Rhode Island School of Design grad who planned to build a career as an industrial designer, but instead he built a company that’s now valued at $25.5 billion—more than the stock-market value of Marriott (MAR).

But if you look at Chesky, 33, through another lens—the lens of Silicon venture capitalists who notice first-time CEOs keeping firm control of their companies—the Airbnb boss is an increasingly common sort of highly connected entrepreneur.

“We’re living in an era where highly connected individual can do what only large organizations once could,” says author Nilofer Merchant, who is writing a book on this topic, Onlyness, due out next spring.

Says Juliet de Baubigny, a senior partner at Kleiner Perkins Caufield and Byers: “I have never seen a moment in time when there is such unprecedented support for the founder-led company.” De Baubigny has a theory—actually, three theories—about why this is so.

First, there’s ever-growing proof that founder-led companies can become valuable, durable “treasures,” as she calls Amazon (AMZN), Facebook (FB), Google (GOOG) and other aging startups that have their once-green and youthful founders still at the helm.

Second—and what’s new lately—is that companies are staying private longer than they used to. Thanks to unprecedented levels of private money going into tech startups, the list of unicorns—privately held startups with valuations of at least $1 billion—keeps growing. The wider window for private ownership gives more time for a CEO to grow in his or her role before going public

And third, the smartest young CEOs have learned to connect—as Merchant advises—with experts who enable them to thrive. Facebook’s Mark Zuckerberg did it one way when he recruited Sheryl Sandberg from Google to be his COO. Chesky did it another, by knocking on the doors of many business-building pros, including Warren Buffett (BRKA), Disney (DIS) CEO Bob Iger and investor Peter Thiel.

The most important advice, Chesky says in this video interview with Gallagher, says came from Paul Graham, the VC who runs startup incubator Y Combinator. Graham told Chesky: “It’s better to have 100 people love you than have a million people that sort of like you.” Chesky applied this advice to hone his business model and “reverse engineer” as he says, to scale Airbnb—rather than haphazardly chase growth. That’s a smart route to a $25.5 billion valuation and a secure place at the helm.

About the Author
By Patricia Sellers
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