🦠 How Airbnb survived coronavirus
Podup | Best 3 Business Podcasts of the Week 🥉🥈🥇
GM, this is Podup #17. Discover the best 3 business podcasts of the week (save 2 hours 38 mins listening in the process).
What you need to know
🧠 Making data memorable
🤑 Sell simple things to simple people
🦠 How Airbnb survived coronavirus
It’s all about your delivery
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🥉 Third place (5 min read vs 22 mins listening)
Most companies are crap at using data. I’m not talking about data-driven decision making (although most companies are crap at this too). I’m talking about data-led messaging. How you translate numbers into something meaningful and memorable.
Karla Starr joined Phill Agnew on Nudge, the podcast about the behavioural science behind great marketing. She shares how you can use data to reinforce the value you provide and connect with customers on a deeper level.
What they say
Karla introduces concrete phrases
97% of the Earth’s water is salinated. [3% is] freshwater. Almost 99% of fresh water is trapped underwater, is polluted, or is trapped in glaciers. Leaving only 0.007% of the Earth’s water to drink.
Compare this to ‘If you put all of the Earth’s water into a gallon jug, humans would only be able to drink the last few drops.’
I remember very clearly seeing this Earth day special on TV and I still remember this image of this women pouring out water from a gallon jug as she was saying that. That image stuck with my mind for my entire life.
Karla Starr
Phill has an experiment for you to try
This example sticks with us because it links the number to something concrete that we can visualise.
This is due to something called the concrete phrase effect. This is the idea that concrete phrases are more memorable than abstract phrases.
To help prove this, I’m going to do a little experiment with all of you listening. I’m going to read out 10 phrases and you have to remember as many phrases as possible. Don’t write them down. Try to keep them in your head and recall how many you remember. Here you go:
Square door
Impossible amount
Rusty engine
Better excuse
Flaming forest
Apparent fact
Muscular gentleman
Common fate
White horse
Subtle fault
Give yourself 10 seconds. Which ones do you remember?
The chances are you remember phrases like square door, rusty engine, flaming forest, muscular gentleman and white horse.
In tests using this exact experiment, Richard Shotton found that people are 10 times more likely to remember concrete phrases over abstract phrases.
There’s an easy lesson for marketers here. Use terms that people can visualise and will be more likely to be remembered.
Concrete phrases can help your numbers stand out. But that’s not all. Karla says that anchoring is important too. Anchoring is a cognitive bias that means when information is scarce, we’re largely swayed by the anchor we’re presented with.
Phill Agnew
An example of anchoring
With the drops of water and gallon jug example, another way that I translated that is ‘Imagine you make $75,000 a year and yet you can only spend $5 a year.’
Karla Starr
Why anchoring is important
By anchoring the percentage of water we drink to a different point of reference, salary in this case, we’re able to better understand it and be more likely to remember it.
Phill Agnew
What I say
Why it matters: Karla co-authored the book Making Numbers Count with Chip Heath. The Amazon book description says: “How much bigger is a billion than a million? Well, a million seconds is twelve days. A billion seconds is…thirty-two years.” Unless you’ve heard this before, this is pretty eye opening. It puts into perspective how primitive our brains are at dealing with numbers.
My take? Don’t assume your customer understands what you’re saying. Particularly consumers. Even more so when using numbers. You know what you’re talking about. But, it’s difficult to unlearn what you already know and to put yourself in someone else’s shoes. You’ll be surprised at what most people don’t know.
Between the lines: Karla’s advice is best applied to large numbers that the brain struggles to visualise. However, concrete phrases and anchoring can cause more harm than good when you’re using small numbers that are easy to understand. This is exacerbated when you’re working with limited real estate on mobile. Take this subheading for Podup as an example:
Get over 2 hours of podcast listening in a 12 minute read
The numbers are small enough that you can understand the meaning very quickly. Sure, we’re almost always off by a few minutes when we guess what time it is. But we’re close enough to have a good grasp of time in the near term.
Keep it simple stupid
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🥈 Second place (2 min read vs 1 hour 15 mins listening)
From NSA spy techniques to the quilting industry to a hostile takeover of a person, this episode has it all. Patrick Campbell recently sold his business, Profitwell, for circa 9 figures. He dug into a bunch of exciting topics with Sam and Shaan. This episode is 💯 worth a listen.
What they say
Take the easy path
I’m reading a Slack message I sent to myself last night at 12.35am.
If you’re selling a cool thing to a cool person, you’re playing the game wrong. That is hard mode.
You meet most people in D2C and Silicon Valley. They’re in their 20s. They’re cool and new in the world. They’re selling to cool and new people in LA, New York and San Francisco.
What you want to do is sell simple things to simple people.
I don’t want to sell to these fickle millennials. I want to sell something to a Mom in Texas. If I can do that, that’s a license to print money.
The best selling car for the last 30 years is the Ford F-150. It’s a pickup truck that sells for $36,000. If you go around San Francisco you won’t see one. You would think the best selling car in America is the Tesla Model X.
To most entrepreneurs and most young people, get out of your bubble.
If you’re going to innovate, innovate on just one thing. Sam did the news but he did it through email instead of through printed paper. He didn’t need to change anything else.
Shaan Puri
What I say
Why it matters: The simplest advice is often the best. Sell to moms in middle America. Try putting a spin on products like baby grows, school supplies, and quilting. You’ll find lower barriers to entry and less sophisticated competition than if you tried building the next social app or millennial clothing brand.
Between the lines: Fish where no one else is fishing. There’s a lot of money to be made in rolling up trade businesses, self storage facilities, and other reliable, cash flowing businesses. The one caveat is you should have some interest in what you’re doing. Founder market fit is important if you want to build a sustainable, long term business.
Lead from the front
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🥇 First place (6 min read vs 1 hour 1 min listening)
Airbnb almost died. Coronavirus ravaged the travel industry, causing Airbnb’s revenue to crash 72% YoY in Q2 2020. Brian Chesky and co pulled off a miraculous recovery. They’ve gone from staring at deaths door to a $60B+ public company in July 2022.
Sanchan Saxena was Head of Product at Airbnb. He’s since taken the web3 red pill and made the switch to VP of Products at Coinbase. He sat down with Lenny to reveal the behind the scenes survival story of Airbnb, along with other insights to help product and business leaders.
What they say
How to keep top talent during tough times
Employees are looking for clarity. What should they work on? Is the thing they’re going to work on meaningful?
Many people ask me ‘What does 6 months look like? Where are we a year from now?’
The most honest answer you can tell them is I don’t know. If you cook shit up, they’re going to see through that lie.
We’re very honest as leaders and very vulnerable as leaders. [We said] ‘This is a truly once in a lifetime thing. We don’t know how we’re going to navigate it. But here’s what we believe to be true.’
We had to get people from feature obsession and revenue obsession to believe obsession.
You bring stories that make people believe the future that we’re working toward is actually possible.
There was a survey that said ‘If money wasn’t a consideration, what would you do for the rest of your life?’ 99.9% of people said ‘I will travel the world.’
Travel is in the human genes. We had to pivot to believe why travel will be back, why Airbnb will survive, and why Airbnb will eventually thrive.
Sanchan Saxena
The outsized impact of founders
In these tenuous times, you can’t pay employees better than market. When Coronavirus happened, FAANG companies were at our door trying to poach our engineers overnight.
You notice the people who thrive in these situations will be the ones who believe both in the mission and more importantly in the founders to make that mission come to life.
Many companies have a similar mission. Some succeed and some don’t. The secret sauce with that in my opinion is the founder.
If employees do not believe in the founder, if the founder is not able to connect with the employees, those companies go down in flames. The founder needs to be on the front line.
Brian Chesky was on the front line. Literally 24/7 available, interacting, making decisions, holding all hands, sending messages and assuring people that I’m in this with you.
Sanchan Saxena
The DRI framework at Coinbase
[At Coinbase] we take big, bold bets with tiny teams that can move at lightening speed and make shit happen. We have a very different mindset of how we make decisions.
When I was at Facebook, Instagram, and other companies, the decision making process could get a little bit convoluted. You’ve got to align, influence, align, influence, align.
The thing that ends up shipping is the least common denominator that annoyed everyone the least amount.
The idea [at Coinbase] is a Directly Responsible Individual, or DRI. For every project, we establish a DRI.
It could be a person in operations, engineering, design, legal, marketing, depending on the nature of the project.
The DRI’s job is to listen to the cross functional partners and get their input. We have a very written culture like Amazon so every input is provided in writing so you can see what your head of legal is saying, what your head of operations is saying.
The DRI’s job is to take all of that input and make a decision. Not do what’s right by everybody. Still do what’s right by the customer and the business.
Others have to champion it to the rest of the team as if it was their decision. It’s not just disagree and commit, it’s disagree and champion. Go out there and evangelise this is the right thing to do.
There’s lots of advantages to that. It cuts all of the passive aggressive behaviors I’ve seen in different companies.
Sanchan Saxena
What I say
Why it matters: Where to start? There’s so much to unpack here. Let’s focus on two actionable takeaways.
(1) Leading by example. In calm water every ship has a good captain. Only when you navigate rough waters do you see the difference between good and great leaders. Brian Chesky, Elon Musk and Jeff Bezos are great leaders. Why? Because they rolled up their sleeves during tough times. Elon infamously lived at the Tesla factory until production issues were fixed. Jeff made every employee work in fulfilment centres one Christmas season. If you can make yourself accessible and walk the walk as a leader, you’ll inspire your team to do the same and follow you off a cliff.
(2) Adopting a decision making framework. The DRI framework is a clever approach to empowering decision making at a big company. Things I love about this are:
Unambiguous. It’s clear who is the owner from the outset.
Collaboration. The owner is expected to involve all relevant stakeholders.
Agility. There’s no analysis paralysis, bureaucracy or death by committee.
Engagement. Everyone is bought into the decision and evangelise it.
One thing to note is it’s less about what framework you use and more about consistent adoption from your leaders. Most software is only as good as the person using it. The same goes for this framework, it’s only as useful as the team adopting it.
Between the lines: Emilie Choi, President and COO of Coinbase, expands on the DRI framework in more detail in this great post. What Emilie and Coinbase do really well is context setting. There are clear instructions at the top of the RAPID and Problem/Proposed Solution (P/PS) templates.
It sounds obvious, but they include best practices on document length, purpose, and what to do next. This means that anyone new to the company can instantly know how to use the doc and consistently apply each framework in their day to day jobs. Adoption is key.
Note, these quotes were pulled at different points of the episode. Some sentences were left out to make the narrative clearer and more concise. Podup is not associated or affiliated with any podcast (unless otherwise stated). All roundups are independently written and do not imply any sponsorship or endorsement by the podcast.