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How an Airbnb renter’s horror story taught the company’s CEO his greatest leadership lesson

Michael Kovac/GettyAirbnb cofounder and CEO Brian Chesky.
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Some investors, like Silicon Valley star Chris Sacca, refrained from investing early in Airbnb, which was founded in 2008, due to fears of the disasters that could happen when people share their homes with complete strangers.
The first Airbnb horror story that made waves in the media happened in June 2011, when the renter of a woman’s San Francisco home destroyed the apartment, took her valuables, and stole her identity while she was traveling for business.
Her personal blog post describing the scene went viral, and the media waited for Airbnb cofounder and CEO Brian Chesky to address it.
According to a new Fortune profile by Leigh Gallagher, this crisis resulted in the most significant leadership lesson Chesky learned as CEO.
The renter wrote on her blog that it took 14 hours to get a response from Airbnb, and that the company’s straightforward apology was insufficient. Chesky and the

here">Airbnb executive team knew they had to react publicly and strongly, Fortune reports, but couldn’t settle on a direction.
Weeks went by as the renter’s story attracted more attention. Finally, in August, Chesky made a decision.
“I finally had this really dark moment and I got to the point where I wouldn’t say I stopped caring, but my priorities completely changed,” Chesky told Fortune. “And I basically said I should stop managing for the outcome and just manage to the principle.”
He wrote on Airbnb’s blog that after finding out about the disaster, “We felt paralyzed, and over the last four weeks, we have really screwed things up… We should have responded faster, communicated more sensitively, and taken more decisive action to make sure she felt safe and secure. But we weren’t prepared for the crisis and we dropped the ball.”
He then announced that Airbnb would issue $50,000 in protection to renters, a decision that Silicon Valley venture capitalist Marc Andreessen helped Chesky arrive at. Chesky decided to announce this guarantee despite the advice he received within the company to test it before making it universal.
The embarrassment and frustration of the experience taught Chesky the lesson he considers the most important of his career: “A consensus decision in a moment of crisis is very often going to be the middle of the road, and they’re usually the worst decisions. Usually in a crisis you have to go left or right.”
Fortune reports that Chesky’s announcement earned him a tremendous amount of respect within the company, representing his maturation into a true CEO.
Further, Chesky’s decision influenced the company’s direction toward providing more safeguards to customers as it grew. As of January, Airbnb upped its guarantee from $50,000 to $1 million for renters in the US — with the caveat that the guest and renter’s insurance companies must be solicited before Airbnb’s insurance takes effect.
Chesky now finds himself at the head of a company that is much larger than it was four years ago. The Wall Street Journal reports it is internally valued at $24 billion and continues to grow.
To learn more about Chesky’s real-world management education, check out the full Fortune profile.


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