Brian Chesky’s Back-to-Design Turnaround

In May 2020, Airbnb’s revenue collapsed by 72 percent in eight weeks, and cancellation refunds drained nearly a billion dollars from the balance sheet. CEO Brian Chesky called it “the most harrowing experience of my life.” Five years later, Airbnb’s market cap sits near $110 billion, fueled by record bookings, profitability, and a renewed focus on design-led simplicity. Chesky says the crisis “forced us to stop being everything and start being ourselves again.”

Origin Moment, From Air Mattress to Marketplace

In 2007, Chesky and roommate Joe Gebbia couldn’t afford San Francisco rent. A design conference was in town, hotels were full, and they inflated three air mattresses in their apartment, offering breakfast the next morning. They called it “Airbed & Breakfast,” charged $80 a night, and hosted three guests.

Encouraged by early traction, they teamed with engineer Nathan Blecharczyk to turn the idea into a website. Venture capitalists were skeptical, so the trio sold Obama O’s and Cap’n McCain cereal during the 2008 election, raising $30,000. The quirky marketing made them memorable, but it was their design sensibility crisp photography, uncluttered layouts that began differentiating Airbnb from Craigslist rentals.

First Turning Point, The Pandemic Freefall (2020)

By March 2020, Airbnb had grown into a $31 billion travel giant. Then borders shut, bookings evaporated, and hosts demanded refunds. Chesky cut marketing spend from $800 million to almost zero, laid off 25 percent of staff, and paused non-core projects like hotels and transportation.

In an emotional letter to employees, he promised to treat each departure with empathy offering 14 weeks’ pay, a year of health insurance, and letting them keep company laptops. The transparency and humanity in the layoffs preserved goodwill among alumni and hosts.

Why it mattered: By stripping the business back to its core homes and experiences Airbnb emerged leaner, with a clear product story.

Cultural Reset, “Back to the Airbed”

Chesky used the downtime to personally call hundreds of hosts, asking what they needed most. The result was a renewed “host-first” philosophy: better pricing tools, simplified fees, and a redesigned onboarding flow that cut listing time by 60 percent.

He also brought design reviews back to the top of the agenda. As a RISD graduate, Chesky sees design not as decoration but as problem-solving Airbnb’s 2021 relaunch featured 100+ improvements focused on clarity, from bigger photos to “categories” that help guests discover unique stays.

Second Turning Point, The Live Anywhere Shift (2021-2023)

Recognizing the remote-work boom, Airbnb launched “Live Anywhere on Airbnb” in mid-2021, encouraging stays of 28 days or longer. By 2023, long-term bookings accounted for 18 percent of nights booked. Partnerships with cities helped attract remote workers to rural areas, balancing tourism and community needs.

IPO in December 2020 gave Airbnb the capital to invest in trust and safety, including identity verification for all guests and anti-party tech. These moves reassured hosts and positioned Airbnb as a platform for both vacations and new lifestyles.

Key insight: Responding quickly to societal shifts can redefine a company’s category without alienating its base.

Mindset & Habits, Five Practices You Can Steal

Lessons for Readers

1. Focus on the Core

When survival is at stake, shed side projects and double down on what makes you indispensable. Chesky’s return to homes and experiences clarified Airbnb’s value proposition and rebuilt its path to profitability.

2. Lead with Humanity

Transparent, empathetic communication during layoffs preserved trust and brand reputation. Treating people with dignity in hard times strengthens long-term loyalty from both employees and customers.

3. Make Design the Strategy

Airbnb’s design-led improvements increased usability, discovery, and trust. When design solves real user problems, it becomes a powerful engine for growth.

4. Anticipate Social Shifts

Recognizing remote work early allowed Airbnb to capture long-term stays and new user segments ahead of competitors. Staying alert to cultural and economic changes helps you adapt before the market forces you to.

5. Stay in the Conversation

Regular direct calls with hosts ensure leaders don’t drift into echo chambers. Constant engagement with your core users keeps feedback loops fresh and decisions grounded in reality.

Weekly Challenge

Pick one key user group and have a live conversation with three members this week. Ask what frustrates them most and what small change would delight them. Document the common themes and share them with your team within 48 hours.