What does long-term focus really mean? Do companies really wait months to decide on a priority position? When does culture really matter?
We welcome back best-selling author, branding expert and former Airbnb global head of community, Douglas Atkin on this Cult Brand Series episode of The Chad & Cheese Podcast.
This podcast is a companion to Douglas' series authored entitled Purpose Must Come First on Medium.
Enjoy this SmashFly exclusive.
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Joel:
All right. All right. All right, let's get ready to pod. We got Douglas Atkin back-
Chad:
Yeah.
Joel:
... for our fourth show installment.
Chad:
Dude, the cult brand hits just keep coming kids. Today, we welcome back our friend Douglas Atkin, former global head of community at Airbnb, partner and chief community officer at meetup.com. And all around, incredibly smart, branding icon, dude.
Joel:
And he's just a good guy too.
Chad:
Knowing that Douglas is going to be on the podcast, I mean, I just can't sleep the night before.
Douglas:
Could we do this every morning? I just... I need you to say all these things every morning to me so I can have a good day.
Joel:
We can record it, man. You can just pop in your iPhone and listen to this everyday.
Chad:
No, that's not good enough, I want to have some more Douglas time. That being said, this is the fourth installment of Douglas' How to Live Your Purpose series, which is really intended to be a compliment to your writings over on medium.com, Douglas. And most importantly, again, this is about how to become a cult brand and stay a cult brand. You know, we all have the why, kind of like the Simon Sinek why, but this is the how. How do you you actually make that happen? So again, welcome back Douglas. Thanks for coming back on the show.
Joel:
Great to have any Douglas.
Douglas:
Oh, it's my pleasure, I love talking about this stuff.
Chad:
Well today's show is centered on, this is one of my favorites, being relentless, focused on the longterm. So in a short term profit and board driven world, how in the hell is that even possible today?
Douglas:
I know, I know. It's... but I mean, think about it. When Airbnb... I joined in 2012, late 2012, when there was about 150 people there in HQ. And it was a classic Silicon Valley startup. So, craziness every day. So build on top of that the fact that almost everything we're doing at Airbnb's never been done before. You're inventing stuff up, you're making stuff up every day as you're going along.
Chad:
Yeah.
Douglas:
So even within that context, your being faced by daily craziness. What I loved and admired about the founders and my colleagues was that we would always try and make decisions that favored the longterm. Or what we called plan "B" decisions, there's a separate podcast you've done about this. But Nate describes these decisions really well. Which is, normally the pla-
Douglas:
... what we call plan "B" decisions, we take, because they do favor the longterm in some way... they're better for the culture, they're better for our hosts, they're better... they live our values and they will achieve our mission, our purpose.
Douglas:
If you do plan "A" though, however, the way something is normally done, it won't do any of those things. So we always make plan "B" decisions. But plan "B" decisions don't exist, you have to invent them because they've never been done before. And as Nate says, told me once, "It's like there's a path before you and you can down it and it's kind of safe but you don't like it and you say no, I'm not going to do that. But then it's not really clear what the alternative is and you have to forge a new path." So Nate told me that one day when he was trying to describe... Basically, I had asked him and the other two founders to think of all the meaningful moments in the company's history, and by meaningful moments, I mean those moments where you did something with meaning, on principle.
Chad:
Uh-huh (affirmative).
Douglas:
Often there was a big risk attached. Often there was a big short term cost to it, like short term cost of money or not being able to launch a product on time or whatever it was. And that was one of them. He said, "Basically, we make plan "B" decisions in forging our own path." And actually one of the first things that the founders did for their... the first hire they wanted to make, this is way back in 2008, was another software engineer. And there was only three of them at the time and they were trying to hire this software engineer because what was also happening at the time is they were in "Y" Combinator, which is an incubator in Silicon Valley, a famous one.
Chad:
Pretty popular.
Douglas:
Yeah, very popular. And Brian and Joe were flying to New York every weekend to talk to hosts and find out what they needed and would telephone back to Nate, who is the CTO, who was the programmer, and get him to often change the site overnight, more in line with what the hosts needed to be good hosts.
Douglas:
So... but they... and then we had a long list of products and innovations they wanted to make to the site and so on. So they really needed this first engineering hire and that, actually, I'll just read you something that Brian told me about this. He said, "Our first engineering hire, we desperately need an engineer but we still waited four or five months, maybe six months, till we hired this guy Nick Randy because we wanted to hire somebody we felt could represent the culture. So that had a cost of growing slower because of an investment in the culture." This is still Brian talking. "Culture's really a short term price you pay for longterm results, very long term. Like, you pay a short term price not to hire your first engineer because you believe, in the longterm, that they'll hire 10 more people that will represent the culture."
Douglas:
So imagine it, there's only three of you, you're in startup mode, incubation mode, you're trying to get product made. You would think, like most startups, you would hire... any engineer will do, basically. Any decent engineer will have them. But no they deferred all the products that they wanted to launch so urgently until they found the right one, the right person who they felt shared their values and would perpetuate a strong culture.
Joel:
And Douglas, so we have a lot of recruiters that listen to this show.
Douglas:
Uh-huh (affirmative).
Joel:
And they're sitting there thinking, "What in the hell? My job is to find people as quickly as possible." So to that recruiter that says, "I can't worry about culture, I got to fill this rec immediately, or as fast as possible." Your answer to them is what?
Douglas:
Well normally that recruiter, and I know because I've been in exactly that situation, that recruiter is saying that because the manager is usually standing on their desk and saying, "I need this engineer, I need this marketing person right now, otherwise we're screwed. We won't launch this. We won't be able to do "X", "Y" and Zed." Right? So it's for really good reasons why they're desperate to hire. But we don't. I mean, from the outside, Airbnb looks like this meteoric... At the time, by the way, we were growing, and this is when I was there, which is 2012, '13, '14, '15. We were growing at 200 to 300% per year.
Douglas:
Meaning that we had twice, or three times as many, people, customers, revenue, listings, hosts, guests, every single year. So it was as Marc Andreessen, the VC guy, called us, like he called eBay, hyper growth company. So we were going hyper, hyper growth. And this is still true, we would never hire someone without checking they fit the core values first. Because everyone in the company knows that no matter how urgent their hiring need is, for whatever they need it for, it's not so urgent that you're willing to sacrifice the powerful culture that helps deliver the purpose or the mission.
Douglas:
Because yes, you may solve a short term problem, but you'll create a much worse, longer term problem. Where, in a couple of years, you look around and say, "What have we become? This is not what we intended. This isn't who we are. We've got all these high performing assholes," as my colleague called them, "... really good at their jobs and make a lot of impact but don't live the values. And this is not the culture that's going to deliver our mission."
Douglas:
So what I would say is, even in a hyper growth company like Airbnb, where we were growing way faster than 99.9% of companies in the world, we still paused on hiring and made sure that ,for new hires, and it's absolutely true now, they get six to eight skill interviews. Say I'm an engineer, there'll be interviewed by six to eight engineers to check that I'm a really good engineer.
Joel:
Mm-hmm (affirmative).
Douglas:
Then I'll get two interviews, core value interviews, that are being... that are given to me by non-engineers, by people not in my discipline. And what those interviews are for is to check that your personal values are aligned with the values that are shared at Airbnb. And if those core values interviewers think that you may be a good engineer but you don't embody those values, they have veto power. So... and this also happened to me once as a manager. I wanted to recruit this grassroots organizer, one of the best in the Obama campaign, I think. I urgently needed her to parachute into a city and to mobilize hosts. And she went through all the interviews, I knew her skills were brilliant but she had two core values interviews and they turned her down.
Douglas:
And of course my first response, even though I should know better, was, "What the fuck? It's like, I need her to fly in tomorrow, you know? It's like, this is crazy because there's going to be this..." Some legislation was being passed in three weeks time, I really needed her to go in there tomorrow. But then I calmed down and thought, "Okay, fair enough. We all live with this. It would solve my immediate problem but will create bigger, bigger, much worse problems, longer term. And I'd rather deal with a short term issue than the longer term one."
Chad:
I mean, this came from the top. That the core values... I mean, the founders. So we're talking about recruiters but really we also have a ton of DPs, and directors of talent acquisition, that listen to us. It's really on their shoulders to focus on this, being relentless for the longterm, right?
Douglas:
It is, yeah. And so, yeah, no, the founders keep talking about it all the time. And I mean, as I say, it's built into our values. Our first value is, champion the mission. Which, our mission is our purpose. Which is, create a world where anyone can belong anywhere. And there's a... There's three behaviors under each mission and under each value, by the way, core value. And one of the behaviors under that, champion the mission, core value is, always favor the mission in every decision you make. So it's built into our values and everyone is held accountable to the values. Old and young, whatever seniority, whatever discipline, whichever country you're in, you have to live the values, specially if you're a leader.
Douglas:
Because as leaders tend to make the big decisions and are more visible and if they don't embody the values, which includes championing the mission and making decisions for the longterm, then why would anyone else?
Joel:
Douglas, do you have any insight into what that extra set of interviews meant to recruiting? In other words, I think on the surface you would say, "Wow, if engineers knew that not only do they have to pass the skills stuff but then they have to take a values interview." I think you would say, a knee jerk would be, "Well I'm not going to even bother with interviewing with Airbnb if they're going to put me through that kind of rigor." But my guess is this probably helped you recruit better people, and more people, because of that extra hurdle.
Douglas:
Oh yeah, yeah. No, it's the opposite effect. People want to work at Airbnb because of the culture of the values, they say that. It's... They're kind of famous. And it's a fantastic differentiator actually. It helps us recruit in a highly competitive market, particularly in San Francisco, it helps us recruit the best. And by the way, it's not just recruitment. This, again, is going to come up in another podcast but it's recruitment, it's reviewing and it's rejecting as well, the three "R"s. So once you're in Airbnb, your reviewed not just on how much impact you've had, what you did, but you also reviewed about how you did it. So... And it's 50/50. So did you do all these things whilst living the core values? And if the answer is no, then you'll be given a warning and fired if you don't change your ways.
Douglas:
And this is true also of people on the leadership team. There were two or three people in 2015, 2016, who... I talked to a lot of people in the company at the time. A lot of people were grumbling about them because they felt that they had somehow got through the filter and really didn't embody the core values and didn't really seem to be championing the mission. And the decisions they're making too didn't seem to be... they seemed to be favoring short term growth rather than the longterm mission. And eventually those three leaders were let go. And now leaders in the company are given much longer core values interviews by more senior people, including, sometimes, the founders. Because it's even more important for the leaders to demonstrate that they are living the values in the long term.
Douglas:
There's a good example I wanted to tell you about actually.
Joel:
Sure.
Douglas:
So I gave you an early example about the first engineering hire. There was another pretty early example too which, other companies, famous companies folded, did plan "A". There are these brothers called the Samwer Brothers in Germany and their business model is to make a copy of a successful American's startup internet company. So they made copies of Groupon of eBay and many others. And then the whole modus operandi is to build it up enough so that you have to buy it. Because if you don't buy it-
Joel:
That sounds evil.
Douglas:
Evil. Because if you don't buy it will be a major competitive threat. So they had done this, they had launched a site called Wimdu, it still exists. They had about, I think 200, maybe 400 I think, people in the European offices. They had a large customer base and the three founders in 2011, I think it was, flew over to meet them and meet the people in the company and try and decide whether to buy them or not.
Douglas:
And eBay and Groupon, in those situations, bit it and bought their copycat versions of their organizations. But they decided to say no. And again, here's Nate, again, saying why. I asked him to tell me about. He said, "It was an example of not compromising and not giving into pressure but then also having to hustle. We need a plan "B" as we call it. Which is, if we're not going to pucker up with these guys, who could basically make us, then what are we going to do to counteract that threat? Because they had 400 people and we had 40." So what he was saying there was, "We're not going to buy them because their culture is pretty toxic and alien compared to ours. And if we merge them by them, they could destroy the culture and the mothership. But if we don't buy them, they've got this business already established in Europe and we don't have any. We've got a small little business with 40 managers and people around the continent. What are we going to do?"
Douglas:
So they went ahead anyway and didn't do plan "A", which was to buy Wimdu. They did plan "B", which was to create their own European network force from scratch, in six months, to be as good as, if not better than that already established competitor, which they did.
Chad:
Wow.
Douglas:
So that's another good example of a plan "B" and thinking for the longterm. So again, most companies, eBay, Groupon, they bought the Samwer Brothers clones of their companies. And it would seem to be the logical business thing to do. The founders weren't thinking about just the logical business thing, they were also saying that the culture is more important than short term business results, even business results over the next two or three years.
Chad:
We'll get back to the interview in a minute. Building a cult brand is not easy, which is why you need friends like Roopesh Nair. CEO of SmashFly on your side.
Joel:
To become cult brands, companies need to build from the inside out. How can messaging and technology facilitate that type of growth?
Roopesh Nair:
It's easy to build a so-called employer brand in paper and say, "Hey, this is my EVP and these are my pillars of EVP." But it is much more difficult to activate it internally and ensuring that as you build your EVP, that activation is top of your mind. I've seen a lot of organizations build these awesome EVPs which stands for who they are, but then not necessarily using that effectively internally. Some of the times it's because the EVP is not created in a very genuine way.
Roopesh Nair:
Then obviously it will not stand the test stuff, that internal activation and hence you need to ensure that your EVP is credible and aspirational as you think about the future. But at the same time spending that time to ensure that every persona in your company understands what your differentiation is, what do you stand for as a company and why is it relevant to that particular individual in that particular role is very important as you basically ensure that you're building that culture or value proposition inside out. Then it's easy to activate it because then you can use your own employees to really activate your EVP and you brand as you think about external activation.
Chad:
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Joel:
Also sounds like another, fight the power, moment.
Douglas:
Yeah it was, it was. And of course, there are investors, they had investors and the CFO saying, "No, we've got to buy them." And blah blah blah, blah blah blah. And they just said, "No, we're not going to."
Chad:
It shows... great examples. Because all the way down to... One hire versus the opportunity to take a competitor off the board but the problem is, it didn't align with purpose. That engineering hire needed to align with purpose. Those managers didn't align, which is why they're not there anymore. And the rest of the culture-
Douglas:
Exactly.
Chad:
... will let you know that, right? But yeah, this is... I think this is a great example because this isn't just about a hire, which is definitely important. This is about something that is very big. And when you talk about the founders focusing on purpose, they're not just looking at everybody else and saying, "Hey, you do this because this is our purpose." They're actually living the purpose and they're demonstrating that by doing their own plan "B" and not buying Wimdu.
Douglas:
Absolutely. Yeah. And again, that was another meaningful moment in the organization's history. One that has a lot of meaning, that's used and reviewed and talked about by people. Because it did embody what we stand for, which is the longterm, creating a world where anyone can belong anywhere. I mean, in the end what happened, as I say, is they built their own European offices, staff and marketplaces of hosts and guests. So that by the time I arrived in 2012, 2013, you could fly into London or Berlin or Stockholm and both the offices looked like, and the people there felt like, the people in San Francisco. Even more so, I must say. They welcomed you, they hosted you, were made to feel like a guest in that office. They would offer you tea or a stiff drink, whichever you needed after a long flight and set you up properly.
Douglas:
And really, there's a whole team in Airbnb and all of the offices called ground control. Ground control to major tom. And ground control is, they're like the leading edge of the hosting part of the offices, where they really look after people who are coming in, anyone, whoever it is, visitors, whatever. So yes, the thing... So it's an unusual thing for companies to do, which is to favor the longterm rather than the short term. And in fact, most public companies unfortunately, I'm sure they hate it too, they're held to short term goals to quarterly reporting.
Joel:
Yeah. We talk a lot about automation on the show, in terms of recruiting, right? It becomes a very objective form of recruiting, where it's not about how old you are, your skin color, your sex, it's about your skill levels and your skill sets. We've been talking before the show about an actual robot that is interviewing people for jobs. And what I'm hearing from you is that there is a level of human to human contact that should happen in order to make sure that there's a fit for the culture. How do those two ideas of automation and taking out bias in hiring join with Airbnb's mission of culture fit and getting people who actually fit with each other to work together? Or are they complimentary?
Douglas:
We didn't automate that at Airbnb. I mean, we had a recruitment team just in San Francisco of about a hundred people. Their job was just about recruitment. I mean, the way they did it was, in the recruitment process, from the first phone call and letters and coming in for interviews and things, they were treated like guests. Again, these recruiters would be living one of the core values, which is being a host and engage in lots of face to face contact, make the person feel incredibly welcome, like they already worked here and are already a huge success. They may end up turning them down in the end but it was all about this humanity. It's part of our ethos and DNA and it's part of our, being a host is basically being a human with extreme empathy. And I don't know how you could automate that, to be honest. And I don't think Airbnb ever will because there's too much of an emphasis on humans.
Joel:
And I think that'll be a struggle with a lot of employers who want to be unbiased in their hiring but also want culture fit. And somewhere in this journey of podcasts, hopefully we can find some answers to that maybe.
Douglas:
Well so the... Yeah. I mean, the culture fit at Airbnb is so important that it has veto power and it also has firing power. That if, somehow, you've slipped through and you're not working, behaving according to the core values and living the mission, that you'll be removed on that basis alone. So it's extremely important. And basically, you have to decide as an organization, do you value culture or not? If you really do value culture then you'll eat the costs of it. And the costs are things like, not hiring urgently and putting bums on seats but hiring well, according to the culture. And taking your time and getting, not just the skills, but also the culture fit that you need. And that's a cost. That's a cost of work not getting done that's urgently needed to be done.
Douglas:
It's a cost of having recruiters and interviewers. I mean, it's costly now. In an Airbnb now, which is about five, 6,000 employees, 500 of them also double up as core values interviewers. So that's 500 people around the world taking time, not doing their job, to interview people to make sure that they are a cultural fit.
Chad:
I mean, it's just that important though, right? Yeah, it's very important. For Airbnb it is, yeah. So my point is that, as an organization you have to decide if it's important to you. And the next podcast we're going to do, I think, is about culture. And we talk about, I talk about, why we think culture is unbelievably important. And certainly the founders think it's probably the most important thing.
Joel:
For sure.
Chad:
I can't wait to get to it.
Joel:
Okay. Very good.
Chad:
Excellent, Douglas. Hey, we appreciate, once again, you taking time. This is the fourth installment. We have much more of Douglas Atkin to share with you. Once again, thanks Douglas.
Douglas:
You're welcome.
Chad:
There any way that these wonderful people might be able to get ahold of you, a LinkedIn, website, how can they find out more about you? LinkedIn probably is the best thing. And also just, you can see my articles about the stuff we've been talking about on Medium. I talk about how Airbnb found its purpose and why it's a good one. And then a series of articles about how Airbnb lives its purpose, which again, most companies don't ever do.
Joel:
Thanks Douglas.
Douglas:
Thank you.
Chad:
We will have those on the website as well. So if you go to chadcheese.com, you're already subscribed, we will make sure those links are there so you can check out the Medium articles as well. Thanks so much, Douglas.
Douglas:
Thank you very much guys. Cheers.
Joel:
Thanks Douglas.
Chad:
Cheers.