2020 has been a year of wild and unpredictable changes for Airbnb. The vacation rental platform was hit hard by the global pandemic, which disrupted its business operations and forced management to put plans for expansion on hold and go public.
Over the summer, Airbnb had been working on putting plans to go public back on track, and in mid-August, management confidentially filed its IPO paperwork.
The financial specifics of the IPO are yet to be made public, but the company was valued at $18 billion in its last funding round in April, which is significantly lower from its previous 2017 valuation of $31 billion.
In this article, we go over five media appearances of Brian Chesky in which he touches upon Airbnb’s upcoming IPO, and how he kept the company going forward throughout the crisis, which can help you better understand the company’s IPO valuation.
Book Club: The Infinite Game (with Simon Sinek)
What’s this podcast about?
Book Club: The Infinite Game is a mini-series of video podcasts presented by Simon Sinek that is part of a podcast series titled Book Club. The Book Club podcast was launched in April this year in which the host Simon Sinek presents the concepts and ideas presented in his books.
Book Club: The Infinite Game is a smaller collection of episodes that deal with chapters of The Infinite Game, which is a book on business leadership authored by Simon Sinek.
Book Club: The Infinite Game features discussions with the audience and guests. The format of the podcast is interactive, with fans of the show joining in from all over the world (from New York to Norway and New Zealand). The audience is empowered to ask questions to Simon and the guests, and the show is streamed live across various social media and streaming platforms.
The guest star of the episode we are presenting today is Brian Chesky, the CEO, and co-founder of the short-term rental platform Airbnb.
This episode showcases a captivating discussion between Sinek and Chesky about Airbnb’s response in light of the challenges presented by Covid-19.
Who is the host?
Simon Sinek is a US-based author and motivational speaker. He has published five books on the topics of business and leadership. Some of his well-known works include Start With Why (2009), and his latest The Infinite Game (2019).
Leaders Eat Last (2014), which is his second book, was ranked on the bestseller lists of The New York Times and the Wall Street Journal. Sinek is an accomplished motivational speaker and has spoken at numerous TEDx conferences and even at the UN Global Compact Leaders Summit in 2016.
What did Brian Chesky say and how could it affect Airbnb’s IPO?
During his appearance on Book Club: The Infinite Game, Sinek and Chesky discussed the impact of Covid-19 on travel and how it affected Airbnb.
Chesky reflected on how the global pandemic disrupted the functioning of Airbnb and the hard decisions they had to make to keep the company going forward.
Importantly, Chesky talked about how Airbnb’s leadership was able to pivot on its core business and continue in a direction that enables the company to operate under the new circumstances. Chesky said that in times of crisis, it is important that companies look out for moments that will enable the company to innovate and overcome challenges. He explained that Airbnb had such a moment right before they decided to offer online experiences.
Brian Chesky also spoke about how companies react when their core business is shattered and suggested that instead of focusing on preserving resources, companies need to learn how to grow and continue to create value because that is in the best interest of their shareholders
The future of Airbnb business
Airbnb will probably maintain the new product (online experiences) and have a mixed business in the future. It could be argued that online experiences are here to stay even in the future when life returns to normal and people are able to travel again.
This is important to consider because it will add another revenue stream for Airbnb which will undoubtedly have a positive impact on the company’s valuation and future earning potential.
Influencers (Yahoo! Finance) with Andy Serwer
What is this podcast about?
Influencers is a podcast hosted by Andy Serwer. Produced under the brand umbrella of Yahoo! Finance, Influencers is a weekly podcast show presented in an interview format.
Influencers has showcased some of the biggest names in the world of business and politics. And as you may have guessed, the guest in the episode we are presenting is Brian Chesky.
Andy Serwer, the host of Influencers, aims to give the audience the big picture, which is why the show mostly focuses on industry trends and what is happening in the world, as seen through a business lens.
In this episode of Influencers, Chesky answers some profound questions about the pandemic’s impact on Airbnb and the short-term rental industry, as well as rumored IPO due at the end of this year.
Who is the host?
Andy Serwer is a business and finance journalist, a former editor of Fortune, and the current editor in chief of Yahoo! Finance.
What did Brian Chesky say and how could it affect Airbnb’s IPO?
Being at the helm of a travel giant such as Airbnb allows Chesky to have a discerning insight on how the pandemic is changing the way people travel.
In this episode of Influencers, Chesky gives a full account of the extent to which the global pandemic affected travel. At the same time, he reveals new travel patterns that emerge as travelers learn to adapt to the new reality.
New travel patterns draw out new demand
According to Chesky, during the global pandemic travelers are choosing destinations closer to home. People prefer to travel with their families and tend to stay there longer. Because of this, the preferred type of accommodation is changing as well. Travelers are on the lookout for bigger and more comfortable spaces where they can work and study remotely. This means that as travelers’ preferences shift, and a new way of travel comes into play, a new demand also helps Airbnb bounce back from the loss of bookings that hit the platform at the start of the pandemic.
Towards a more ‘mean and lean’ business model
Chesky explained that due to the impact of the pandemic and the need to cut costs, some plans for expansion of Airbnb’s business have been scaled back, while others have been paused. Even though Chesky suggested that those may come back in the future, it is certain that over the next year (or at least by the time Airbnb goes public), the short-term platform will be focusing on its core business model. This affects the company’s financial position, i.e. with expenditure for new projects scaled back we can expect improvement across all major financial performance indicators and possibly a more optimistic valuation.
Ready when the market is
Chesky explained that the company has been preparing to file for IPO since the start of 2020 until March when the pandemic hit and global travel nearly came to a standstill. At this point, Airbnb had to stop and put those plans on hold.
Chesky went on to say that together with the rest of the management of Airbnb, they have recently dusted off the paperwork and resumed prep work that is necessary for the company to become public. However, the Airbnb co-founder concluded that the company would not go public if the market is not ready.
This means that if we were to predict when Airbnb would eventually go public, we need to look out for positive developments of key performance metrics and their possible bounce-back to pre-pandemic levels.
According to Chesky, as long as people are unsure and nervous about traveling, that is a signal that the market is not ready for Airbnb to go public. But as the company has seen some recovery, with figures for the second quarter quite close to 2019 levels – it is an encouraging signal.
As business slowly recovers…
… it is very likely that Airbnb will follow through with the IPO in the upcoming period. It seems Airbnb will have everything ready and standing by and will wait for that market signal to launch its public offering. Some have suggested that this could come as early as December 2020.
How I Built Resilience (How I Built This: Resilience Edition) with Guy Raz
What’s this podcast about?
The host of How I Built This, Guy Raz presents the stories behind some of the world’s most popular companies. From Microsoft to Airbnb, this podcast takes the audience on a journey about innovation and innovators, and entrepreneurship and entrepreneurs.
The podcast focuses on the people behind some of the best-known companies and on their stories about how they’ve built their businesses and kept them growing. Brian Chesky featured on How I Built Resilience, which is a special edition series of How I Built This.
The How I Built Resilience series stepped up to the plate as a source that showcases how companies deal with the difficulties caused by the global coronavirus pandemic.
The focus of How I Built This Resilience series is the response of businesses to the turmoil caused by the health crisis. Covid-19 presented a major challenge for companies around the globe, however, it seems that the travel industry, and along with it – short-term rental platforms such as Airbnb suffered the most as preventive measures significantly affected demand in the sector.
Who is the host?
Guy Raz is best known for his work as a podcast host at NPR. In his professional life which spans over 20 years, Guy Raz has worked at NPR as a journalist, correspondent, and radio host.
The New York Times described Raz as one of the most popular podcasters in history, a title well deserved given that his monthly audience reaches up to 19 million listeners.
Guy Raz is the author of the book “How I Built This: The Unexpected Paths to Success from the World’s Most Inspiring Entrepreneurs” – which ranked number one on the Wall Street Journal business book bestseller list and was ranked in the top 10 bestseller list of the New York Times. As the title suggests, the book is based on the highly acclaimed podcast.
What did Brian Chesky say and how could it affect Airbnb’s IPO?
The business of Airbnb is changed, and so must the paperwork
Chesky told host Guy Raz that he will be intensifying work on the required documentation for filing for an IPO. He clarified that the S1 form, which is a 300-page document submitted to the U.S. Securities and Exchange Commission by companies that aspire to go public, had been taken off the shelf. The Airbnb founder said that the document will be updated to reflect the changes of Airbnb’s business that have taken place since the start of the pandemic
Building resilience in times of crisis
According to Chesky, a business must be creative and think about how to build resilience in times of crisis. Sometimes, Chesky said, getting back to the core idea of the company can achieve exactly that.
Masters of Scale with Reid Hoffman
What is this podcast about?
Hosted by the co-founder of LinkedIn, Reid Hoffman, Masters of Scale is a podcast focused on finance and business. Each episode of the show focuses on a different theory about how businesses can successfully scale up. The host, Reid Hoffman then interviews the founders of successful companies and tests the validity of the theory by discussing with them their path to success (and scale).
The podcast is famous among general and business audiences as some of the prominent figures that have featured in it include Brian Chesky (Airbnb), Mark Zuckerberg (Facebook), and Reed Hastings (Netflix), among others.
Who is the host?
Reid Hoffman is an investor, author, and internet entrepreneur best known as the co-founder and executive chairman of LinkedIn. Hoffman has also been associated with successful companies such as PayPal and currently works in the venture capital industry.
Reid Hoffman is an author and has published four books: The Start-Up of You (2012); The Alliance (2014); Masters of Scale (2017); Blitzscaling (2018).
What did Brian Chesky say and how could it affect Airbnb’s IPO?
Will Airbnb diversify its product offering to boost its IPO?
Most likely no. Chesky thinks that product changes are less likely the bigger a company gets. Once you’re big, says Chesky, you have to deal with more customers, more blowback, more systems, more legacy. The most innovative leaps a company could ever make are during the time the company is really, really small. Being small allows you to change the product entirely in a week. “Try doing that at Airbnb today, that would be a huge disaster”, Chesky said.
Quest Means Business with Richard Quest
What is this podcast about?
Quest Means Business is CNN’s flagship international business program, hosted by Richard Quest. The show features Quest’s view and analysis on some of the biggest news stories from the world of business.
Though not a podcast, this video deservingly finds its place on this list. Chesky’s appearance on Quest Means Business and the topics discussed give an insightful glimpse into the future and the upcoming IPO.
In this episode, Brian Chesky joins Quest to discuss the company’s continued plans to go public in the midst of the coronavirus pandemic.
Chesky reflects on new travel trends that take over the industry and talks about the resilience of Airbnb in weathering the pandemic storm.
Who is the host?
Richard Quest is a journalist and presenter at CNN. He anchors the weekly Quest Means Business and also appears as the host of other CNN shows such as Business Traveller, The Express, and Quest’s World of Wonder.
What did Brian Chesky say and how could it affect Airbnb’s IPO?
Winners and losers on the path to recovery
Chesky talked about the paths to recovery for the travel industry. He spoke about the support mechanisms that can be put in place that may promote growth in spite of the deteriorating effects of the pandemic.
He added that the path to recovery in the travel industry is very country-specific and that the size of the domestic market is a major driver. In fact, countries with large numbers of domestic travelers and tourist destinations, such as Germany and France in Europe, and the United States and Mexico in North America, are already seeing an increase in bookings.
Key takeaways
Airbnb’s IPO is expected to be the biggest one this year as the short-term rental unicorn aims to raise $3 billion in proceeds and bring the company valuation up to $30 billion. The Covid-19 pandemic upended Airbnb’s operations and dropped its internal valuation to $18 billion which previously stood at $31 billion. Looking at data, we’ve imagined what promises and risks the Airbnb IPO prospectus could uncover.
In anticipation of the official date and financial details, we present five media appearances of Airbnb’s CEO Brian Chesky. In these podcasts, Chesky talks about the upcoming IPO which can help you better understand the company’s IPO valuation.
