Greg McKeown, Chip Conley
Greg McKeown 0:03
Come with me on an exploration of self discovery. On this podcast, we decipher what really matters as we unravel the chaos of day to day work, to learn how to build an essential life. Hello, friends and Happy New Year to you all. Welcome to the water central podcast. And thank you for being here. Really thank you for investing in yourself for joining us in the first episode of 2022. I hope you’ve had a marvelous holiday a great Christmas and had a chance to do a little reset at least to think about what’s essential for you. In this coming new year. One of my New Year’s resolutions is to be more centered, especially in my communication with other people. And to be centered is a challenge. I think for people right now, perhaps it’s a challenge for you in what the military calls a VUCA world that is a world that’s volatile, uncertain, complex and ambiguous. How do we figure out what’s important now? How do we get centered into the most important work and relationships of our lives, so that we don’t just get pulled into all of the trivial many. And to help us with that conversation, we have the perfect New Year’s guest, Chip Conley, a successful entrepreneur in his own right. He’s also been the chief adviser to the CEO, and also the other founding members of Airbnb. What you’re going to learn in this episode is how to focus on what’s important now, that is to use the nice acronym to win, even in uncertain times. And that’s something that’s so relevant right now to all of us. Just listen, as we discover the things that chip helped that founding executive team to do, to focus on what mattered amidst all the different opportunities and uncertainties they were faced with. So let’s get right into that now.
Tell us how we officially met,
Chip Conley 2:17
we officially met at Airbnb because I had recommended you as someone else on the team, as a speaker at our one Airbnb employee event. Part of the challenge at Airbnb when I joined, was, we were going in way too many different directions at once. So we had 30 Strategic Initiatives, when I joined in early 2013. Wow. And by September, as the head of strategy and Head of Global Hospitality, and also the mentor, to Brian, the CEO, we had gotten it down to four. But having you come and talk to the company, around essentialism, allowed us to get clear on our priorities.
Greg McKeown 3:00
One thing that I think is interesting is that Brian said to me, my number one concern for the company is that we’re doing too many things. That’s true. He said to me, I can see it as a threat to our success to our ability to go forward. I mean, I have sometimes thought about that conversation as the epitome of the success paradox in essentialism, that as you become more successful, you’ll have more options and opportunities. But if you’re not disciplined about how you handle those, they can become a catalyst for failure for the entire enterprise. And we can see companies that that’s happened to. So that’s the first thing that’s interesting to me. The second thing is that you successfully went from 30 to four. Can you talk about how you did that? Really? Sure.
Chip Conley 3:51
Let’s start by saying that Airbnb is a beautiful example of essentialism. And it is that it is true back when I joined in early 2013, that we needed to go to from 30 to four, which I’ll talk about in a moment. But also, when the pandemic came along, Airbnb was on the verge of not being a business anymore, this hopefully, spring of 2020. And, and Brian and with me helping to sort of be a mentor by his side, he came to the conclusion that there were a whole collection of new businesses that the company was going to go into any wanting to get, he got rid of those and went back to the core business, which was, you know, home sharing and alternative accommodations. So the company has, you know, when in doubt, come back to it’s the right place and look at how successful the company is, in terms of its valuation. It is more worth more than Marriott Hilton Hyatt and four seasons combined. So take us through chapter one. So chapter one, in terms of when I was brought in here was this company Airbnb, a young tech startup that was disrupting In the industry, and no one in the company had any history with that industry. And that’s the hospitality and travel business. And nobody in Frankie had ever really run a very large company. And so I’d started a boutique hotel company when I was 26. And ran it for 24 years called Jawad Aviv. And, you know, lo and behold, sold it. And that’s how I ended up at Airbnb because I had space in my life. So the first week I joined, I said to Brian, show me what the strategic initiatives are, or at least tell me what they are. He says, I could never tell you what they are, I can’t remember what they are. And I said, Well, Brian, if you can’t remember them, then how does the average employee remember them? He said, Well, we have a list. And this is okay. And there was a list of 30 strategic initiatives.
Greg McKeown 5:44
Something that Brian shared with me is that when they first got together, these three co founders, I mean, they’re exploring everything, their ideas for possible businesses ranged all over the place, one of them was for political themed cereal, the idea was to go to the Republican National Convention and the Democratic National Convention, and the cereal would be there themed around the colors of those political parties when you go from that. And then you say, well, actually, maybe we can rent out space on an air mattress in our own apartment, they had a 90 day period before the fundus conference. And they wanted to demonstrate that they could be ramen profitable. By that time, meaning if they three of them ate only ramen noodles for breakfast, lunch and dinner for that 90 day period, that they could show that the business was technically profitable. By the time that this conference was going on. He said that was the most focused he has ever been in the company. And so that’s sort of Chapter zero, you can see what happens, it proliferate. They’ve got these 30 different objectives. Please continue now into chapter one.
Chip Conley 6:56
Sure. And so we had a leadership team. And one of the things that we tried to get clear on is, what is it that we, what business are we in Peter Drucker, long ago, the management theorists said, the most important question any organization leader can ask is, What business are you in? So I set up an exercise where we had three founders and seven other senior executives in groups of two. And I would ask Brian, the question in a private room where and with just the two of us, and the other eight people are in other private rooms, Brian, what business are we in? And he would say we’re in the home sharing business. And I say, I’d say, Brian, thank you. What business are we in? And we did a repeating question five times, and you could not answer the same way. Twice. Once he had gotten to his fifth answer, that it was my turn, that actually helped us to get clear on the essential nature of what our business was, was we were in the belong anywhere business. So belong anywhere became our mantra and our way of thinking about everything we did from that time forward.
Greg McKeown 7:59
And now let’s just take a moment for an ad break. And now, back to our conversation, you have this five levels, you can’t share the same answer twice, I love that you’d be your turn, you would do it again. Then each of the different paths of doing this, you would then walk collect all of the answers together, you get everyone back in a room together, share the answers,
Chip Conley 8:22
we all come back into the room, each of us say the best one of the five that we think we came up with, no one had said belong anywhere. But based upon all 10 of us coming back in the same room, the idea that Airbnb at homes or everywhere got us to the point where we said belong anywhere is going to be our anthem that differentiates us and in essence says that is what is the essence of this business?
Greg McKeown 8:45
Did you find that out in that first meeting where you’d all just done those things?
Chip Conley 8:50
We didn’t at that meeting? It was not long after that, that we actually said that’s it.
Greg McKeown 8:54
It’s now you were the facilitator through all of these sessions?
Chip Conley 8:57
Yes, yes, I was. I was a facilitator for much of them. But I also was the senior executive.
Greg McKeown 9:01
Right, you’re in as well talk to us now about chapter two. Because in the midst of all of this, you know, this tremendous level of success. Right? Right idea right time, you know, they’ve got the right focus. It’s generating this massive transformation, if I’m understanding it, right, that when that pandemic hit was the year that Airbnb was to go public, and everything’s looking great. I mean, the January February, this is like literally going to be the public offering of the year and the pandemic hits.
Chip Conley 9:31
Yes. So recognize, first of all that over 50% of Airbnbs businesses, international travelers, so it’s people going across the border, and the pandemic basically meant no one was crossing borders anymore. So that was that was number one. Number two is very few people were traveling, so the whole travel industry was hurt by that. Number three is Airbnb had built up for growth. That was in anticipated in 2020, and was planning on doing a spring or summer IPO. And then, you know, we start seeing the early signs of challenges in, in China, and then in places like Spain and Italy. And lo and behold, you know, a pandemic is announced on March 11 2020. And by May of 2020, Airbnb, we had to make the decision to lose Unfortunately, 25% of our employees lose all of our all of our consultants, and take out some very expensive loans, to make sure we had enough cash in the bank to go through this difficult time. We needed to react with not caution. But with decisiveness. One of the things that Brian and I talked about during that time was we got to be resilient. So it really meant we had to like trim our sails in terms of our costs. Resilience buys you time, and adaptability buys you a future. So the adaptability is what Airbnb did mid spring and early summer, because Airbnb as a tech platform, could actually monitor on a daily basis where demand was starting to shift. And of course, the demand was shifting from international to domestic travel, and often local travel, and often whole homes as opposed to shared homes, and often in locations that were pretty remote, where people could feel like they weren’t around a lot of other people. And so all of those changes made it such that within about four or five months, Airbnb was doing about the comparable business it had done the year before, whereas the hotel industry was still down 60 or 70%. And that is why by December of 2020, just what eight months after the eight or nine months after the pandemic was announced, Airbnb did an IPO that led to a valuation of $100 billion. So I mean, this is what a year and and 2021 has been a year where that essentialism focus has continued and led to Airbnbs value going up even more being able to go public.
Greg McKeown 12:10
Did that mean that all the debts were just immediately paid off that had been taken on earlier in the year? So that was immediately gone? Suppose in one year, you have got rid of these? I mean, those those debts were massive, how what what were the level of the of those those incurred debts?
Chip Conley 12:29
Well, at the time, they seemed massive, because the valuation of company was plummeting company might be worth 15 18 billion, and the debts were a little over 2 billion. But what was painful was that the interest on those debts, it was not so much that as much the interest on the debt was very high. And therefore, you know, you don’t you don’t want to have debt like that very long. But when you get a valuation of $100 billion, and you go from 15 to 18 billion to 100 billion, in less than a year, you have the ability to pay off expensive debt, but believe it but that would not I mean, the point of the story is not to say you should be taking on a lot of debt during a during a downturn. But if debt creates resilience, and resilience gives you time for adaptability, and you’re a data company, that helps, the number one thing every hotel company needs to do, is to actually hire a lot more data scientists, because actually, the world of data is really how you keep track of the pulse of your customers.
Greg McKeown 13:30
Well, what you would normally say in hospitality is that you would keep your pulse on your customers by talking to them. But what you’re saying is that you have to also digitally listen deep digital listening means that you have to be gathering data and understanding the behavior of your customers when they’re not with you, and what causes them to be with you when they are with you. And of course, you have the advantage with Airbnb being such a digital platform, you know, right from the beginning, what’s the takeaway that somebody can apply to their business, to their family, to the decisions they’re trying to make? Well,
Chip Conley 14:09
I think one key message here could be when things get challenging, it’s the most important time for essentialism, being able to focus at a time where the world is falling apart is an essential practice of a great leader.
Greg McKeown 14:25
You mentioned before that Brian and the team eliminated a series of product services initiatives, at the time of the pandemic hitting
Chip Conley 14:34
That’s correct. Things like flights, everything was not going to create an airline, but Airbnb was looking at how we could create a whole new approach to how people booked their flights, and maybe even some kinds of charter flights that would be appropriate and affordable. But that went by the wayside because that was a future product that was not actually going to generate net income in the short term. I don’t think it was good enough. really improved the brand over time to the mass audience that Airbnb was reaching out to.
Greg McKeown 15:06
Actually, that’s a really great illustration because that’s something that maybe somebody outside of Airbnb isn’t going to immediately appreciate why somebody inside Airbnb would think that was a really good idea. But when you’re working at the kind of scale that Airbnb is things that seem unreasonable to outside can be very reasonable inside, if you have the capital, if you have the growth, if you’re looking to expand, and you say, Well, where can we go? Well, that, you know, people are already having to travel to all of these houses. Well, how can we disrupt that industry to in a sense, what I hear you saying is that the pandemic turned out to be a tremendous opportunity, and actually strengthen the core to the point that you didn’t just survive as a company. But actually, were able to hit the IPO in maximum strength.
Chip Conley 15:54
Yes. And Brian deserves an enormous amount of credit, there’s a lot of pressure on him, for us to as a company look more like booking.com, which booking does everything they have experiences, and they have flights? Well, the truth is, you know, booking has had a really rough pandemic as well, partly because they’re probably a little too disparate. The key story here is that it takes wisdom to be able to distill down all of the possibilities into what is essential.
Greg McKeown 16:22
Yeah, and if I had to choose a new word, even though I recognize why wisdom is a good word to choose that it’s like conflict, is the price.
Chip Conley 16:32
I’m going to push back because I think embracing conflict alone doesn’t tell you, what is the superpower that allows you to take it down to what’s essential, because there’s a lot of things embracing conflict, you have to have an operating system for how you take the conflict and the choices and then get clear on what’s essential. Yeah,
Greg McKeown 16:52
I agree, there’s, there’s a lot of richness that I’m implying in the word conflict today,
Chip Conley 16:57
one of the things that I had to learn for myself was, I have spent my life being a conduit kind of person, you know, there’s a when I had jotted even I was CEO for 24 years, the hotel company, I gave away the book, The Little Engine That Could to every single employee in the company 3500 employees, because The Little Engine That Could was the one that the little children’s book said, you can get up the hill, and then you get to the other side and, and against all odds, you can make it well, to be a conduit person says, I can do it. But to be a conduit person is moving from the idea of I can do it alone, to the idea that I am a channel and I am a I am the conduit that helps people make great decisions. And that is a major shift in my career and my life over the last 10
Greg McKeown 17:49
years. And it’s what you’re trying to help the leaders around you do as well. That’s what you’re really advocating for. That’s exactly right. Can Do It, in comparison feels. A sort of there’s an immaturity to the, to the can do it theme. But but at the same time, that’s been a little too negative, because there’s just a period of life that I think is about, can you do it too, you know, can you just work and make it happen?
Chip Conley 18:16
Is that ego, it’s that ego again, I mean, the ego, the ego says I can do it, the egos and and again, there’s a positive side to that. But if you actually take that into the second half of your career or life, it means you’re the person who does not, you’re not the conduit for wisdom to other people, you don’t channel great leadership. So other people know how to make great decisions, you have to be the hero, and great leaders recognize that being heroic all the time, actually diminishes all of the other leaders around them.
Greg McKeown 18:49
Yeah, it’s a shift between something like I can, to we will, or
Chip Conley 18:55
something like that beautiful, beautiful, beautiful
Greg McKeown 18:58
this theme of heroics is, is one that’s very much on my mind of late basically, because of the research and writing of effortless because when you have people who want to have 10x results, but they can’t work 10x Harder, which is like basically every single person listening to this conversation, you want better results, you want to accomplish more, contribute more, but you don’t have 10 times the effort available that you can’t work 10 times harder. But the problem is, is that I found that lots of people try to that because they think there’s only one path to better results. But then you get to a point where you’re running out of space, you’re teetering right on the edge of exhaustion and everything will start feeling harder than it really ought to, or what do you do and it’s like in that moment, you either fail at some level, you start to not be successful at things you wish you were or you find an easier, smarter path. And that’s what you’re describing here is the shift from can do it to conduit my role shifts.
Chip Conley 19:56
It’s one of the things that we do at the Modern Elder Academy
Greg McKeown 20:00
Tell me about the Modern Elder Academy.
Chip Conley 20:02
So when I finished four years, with Bryan and Airbnb, when I moved from that full time role, I went down to southern Baja, about an hour north of Cabo San Lucas, in Mexico. And I started working on a book, my fifth book, which is called wisdom at work, the making of a modern elder going for a run on the beach, I had a Baja Aha, I had an epiphany. And my epiphany was, why do we have no schools or tools or rites of passage or ritual for people at midlife to understand how to cultivate and harvest their wisdom, and maybe repurpose it in new ways. And so that’s when we created mea, the modern elder Academy because at Airbnb, they called me the modern elder. And we’ve now had 1700 50 students or alumni from 28 countries, and we have 25 regional chapters around the world. So there certainly is a need for people to reimagine how they want to repurpose themselves in their 40s, or 50s, or 60s, or even younger or older. And we live in a world where we’re constantly accumulating knowledge, but what’s really scarce in the world is wisdom. And helping people to understand how to be wiser, and how to cultivate that wisdom, and be more discerning is part of what we help them with.
Greg McKeown 21:20
And now let’s just take a moment for an ad break. And now, back to our conversation. unbelievable. We
Chip Conley 21:29
It’s really go through a series of exercises during the day that help people to see what mindsets ways of thinking what things in their life. They’re ready to edit, we do something called the Great midlife edit, and the great midlife edit helped them to see that this is the time because the first half of your life is about accumulating knowledge and things and relationships and work the second half your life moves from accumulating to editing and learning how to be discerning about what no longer serves you and you need to actually cut out of your life, because it isn’t essential anymore, is one of the most important parts of what it means to be in midlife. You know we’ve missed named midlife as a crisis, but instead it’s really an editing process that we call the midlife awakening or the midlife calling when people actually realize what’s essential in midlife and beyond. And they invest in that.
Greg McKeown 22:23
Yeah, that’s so well said I love the phrase, the great midlife edit, what a terrific thing. What specifically do you recommend people do? Like, what is that process?
Chip Conley 22:35
First of all, to understand what a mindset is, mindset can be a fixed mindset could be a growth mindset. When you’re in a fixed mindset, you tend to be looking at proving yourself and you define success as winning. And so you can help a person to see yes, this is something I think I am, I have a fixed mindset on because I don’t really care about learning anything more. I just care about winning and getting recognition for it. But if as people to start to realize what’s important to them, they might move move into the growth mindset. And instead of focusing on how do I prove myself, you focus on how do I improve myself? And instead of focusing on winning, you focus on learning?
Greg McKeown 23:11
Yeah, when when you say it’s the great midlife at it, it really sounds like the great mindset at it.
Chip Conley 23:20
Oh, so that’s so true. So true. I love that.
Greg McKeown 23:23
I like that too, for a couple of reasons. Because of course, you don’t have to wait for a midlife moment. Although of course, that is a very particular kind of inflection period people go through right now no matter what stage someone’s at, no matter where they are in their journey, they can start looking at what are the dominant mindsets that I’ve held on to? And which ones can I eliminate? How does somebody discover the mindsets they currently have? Mm hmm.
Chip Conley 23:52
Great question. We do a few exercises that help people to understand what it is that is most ailing them. So some of those questions relate to what is it that you feel like you’re not very good at? Or what is it that you used to be good at that you’re not very good at anymore? And where is it that you find a certain amount of guilt or shame in how you show up in the world? And it doesn’t feel quite good to I mean, it’s some pretty deep and and penetrating questions more than anything, pain, especially emotional pain is a real good indicator for something that’s not working. And it’s time to try something different.
Greg McKeown 24:30
You said a couple of really interesting things there. One was this tangible way to get to your mindset is just what’s not working in your life. And the second thing I was just sent an interesting article published in the American Society of psychology as a brand new research that shows contrary to what people expect. If you have a deep conversation with a stranger, you will enjoy that experience more than if you have a shallow conversation with them.
Chip Conley 24:56
The way the world the world tends to work as we get to know each other from the outside in, what we look like with color of our skin, gender, etc, how we dress how we talk. And when you get to know people from the outside in you, you have a tendency to make pre judgments. And so getting to know people from the inside out is a whole different ballgame. Because you don’t you know, when people come to a modern elder Academy workshop, average age people’s 54, but we’ve had people as young as in their 20s. And as old as 88. They’re no one is reading each other’s LinkedIn profiles. No one even knows each other’s last name. And so you start to get to know people from the inside out. And it’s fascinating how quickly you build an intimate, trusting and frankly, generative relationship with people. When you start the relationship that way.
Greg McKeown 25:55
I just love that. I love the visual that creative of getting to know people from the outside in versus the inside out. I’m seeing sort of two concentric circles and the outside what you see what’s obvious. And what you know, that’s where any prejudice exists. And not just not just the usual categories that we think of is with prejudice, but any kind of prejudice, just thinking you know about somebody when you don’t. I loved a conversation. It’s sped by for me. I couldn’t love more the language that you described the great midlife edit, I’m fascinated by the programs that you’ve created. I’m delighted to have the excuse to talk with you today. Chip Conley, the modern elder, thank you. Thank you for being other parts of central podcast.
Chip Conley 26:42
Thank you, Greg, thank you for reminding us what’s essential.
Greg McKeown 26:49
What we’ve come to that time, again, the end of the show, thank you for being here for investing in yourself for investing in what’s essential. And this conversation with Chip Conley, I hope has been helpful in helping you to discern what’s important now, so that you can pursue that all the way through 2022. As a thank you to you the first five people who write a review of this episodes on Apple podcasts will receive a signed copy of effortless, make it easier to do what matters most. Just take a screenshot of your review, send it to info at Greg mcewen.com. That’s ai n fo at GRE G MC K EOW n.com With your address. And if you’re one of the first five people to do it, then you will receive your signed copy of effortless really again, thank you. And see you next week for the Watsa central podcast.
Transcribed by https://otter.ai