I want to tell you the story about the time I almost got kidnapped in the trunk of a red Mazda Miata. It's the day after graduating
from design school and I'm having a yard sale. And this guy pulls up in this red Mazda and he starts looking through my stuff. And he buys a piece of art that I made. And it turns out he's alone
in town for the night, driving cross-country on a road trip before he goes into the Peace Corps. So I invite him out for a beer and he tells me all about his passion for making a difference in the world. Now it's starting to get late, and I'm getting pretty tired. As I motion for the tab, I make the mistake of asking him, "So where are you staying tonight?" And he makes it worse by saying, "Actually, I don't have a place." And I'm thinking, "Oh, man!" What do you do? We've all been there, right? Do I offer to host this guy? But, I just met him -- I mean, he says he's going to the Peace Corps, but I don't really know if he's going
to the Peace Corps and I don't want to end up kidnapped
in the trunk of a Miata. That's a small trunk! So then I hear myself saying, "Hey, I have an airbed you can stay on
in my living room." And the voice in my head goes, "Wait, what?" That night, I'm laying in bed, I'm staring at the ceiling and thinking, "Oh my god, what have I done? There's a complete stranger
sleeping in my living room. What if he's psychotic?" My anxiety grows so much, I leap out of bed, I sneak on my tiptoes to the door, and I lock the bedroom door. It turns out he was not psychotic. We've kept in touch ever since. And the piece of art
he bought at the yard sale is hanging in his classroom;
he's a teacher now. This was my first hosting experience, and it completely changed my perspective. Maybe the people that my childhood
taught me to label as strangers were actually friends waiting
to be discovered. The idea of hosting people on airbeds
gradually became natural to me and when I moved to San Francisco, I brought the airbed with me. So now it's two years later. I'm unemployed, I'm almost broke, my roommate moves out,
and then the rent goes up. And then I learn there's a design
conference coming to town, and all the hotels are sold out. And I've always believed
that turning fear into fun is the gift of creativity. So here's what I pitch my best friend
and my new roommate Brian Chesky: "Brian, thought of a way
to make a few bucks -- turning our place into 'designers
bed and breakfast,' offering young designers who come
to town a place to crash, complete with wireless Internet,
a small desk space, sleeping mat, and breakfast each morning. Ha!" We built a basic website
and Airbed and Breakfast was born. Three lucky guests got to stay on a 20-dollar airbed
on the hardwood floor. But they loved it, and so did we. I swear, the ham
and Swiss cheese omelets we made tasted totally different
because we made them for our guests. We took them on adventures
around the city, and when we said goodbye
to the last guest, the door latch clicked, Brian and I just stared at each other. Did we just discover
it was possible to make friends while also making rent? The wheels had started to turn. My old roommate, Nate Blecharczyk, joined as engineering co-founder. And we buckled down to see if we could turn this into a business. Here's what we pitched investors: "We want to build a website where people publicly post pictures
of their most intimate spaces, their bedrooms, the bathrooms -- the kinds of rooms you usually keep closed
when people come over. And then, over the Internet, they're going to invite complete strangers
to come sleep in their homes. It's going to be huge!" (Laughter) We sat back, and we waited
for the rocket ship to blast off. It did not. No one in their right minds
would invest in a service that allows strangers
to sleep in people's homes. Why? Because we've all been taught
as kids, strangers equal danger. Now, when you're faced with a problem,
you fall back on what you know, and all we really knew was design. In art school, you learn
that design is much more than the look and feel of something --
it's the whole experience. We learned to do that for objects, but here, we were aiming
to build Olympic trust between people who had never met. Could design make that happen? Is it possible to design for trust? I want to give you a sense
of the flavor of trust that we were aiming to achieve. I've got a 30-second experiment that will push you past your comfort zone. If you're up for it, give me a thumbs-up. OK, I need you to take out your phones. Now that you have your phone out, I'd like you to unlock your phone. Now hand your unlocked phone
to the person on your left. (Laughter) That tiny sense of panic
you're feeling right now -- (Laughter) is exactly how hosts feel the first time
they open their home. Because the only thing
more personal than your phone is your home. People don't just see your messages, they see your bedroom, your kitchen, your toilet. Now, how does it feel holding
someone's unlocked phone? Most of us feel really responsible. That's how most guests feel
when they stay in a home. And it's because of this
that our company can even exist. By the way, who's holding Al Gore's phone? (Laughter) Would you tell Twitter
he's running for President? (Laughter) (Applause) OK, you can hand your phones back now. So now that you've experienced
the kind of trust challenge we were facing, I'd love to share a few discoveries
we've made along the way. What if we changed one small thing about the design of that experiment? What if your neighbor had introduced
themselves first, with their name, where they're from, the name
of their kids or their dog? Imagine that they had 150 reviews
of people saying, "They're great at holding
unlocked phones!" (Laughter) Now how would you feel
about handing your phone over? It turns out, a well-designed reputation system
is key for building trust. And we didn't actually
get it right the first time. It's hard for people to leave bad reviews. Eventually, we learned to wait
until both guests and hosts left the review before we reveal them. Now, here's a discovery
we made just last week. We did a joint study with Stanford, where we looked at people's
willingness to trust someone based on how similar they are in age,
location and geography. The research showed, not surprisingly, we prefer people who are like us. The more different somebody is, the less we trust them. Now, that's a natural social bias. But what's interesting is what happens when you add reputation into the mix, in this case, with reviews. Now, if you've got
less than three reviews, nothing changes. But if you've got more than 10, everything changes. High reputation beats high similarity. The right design can actually
help us overcome one of our most deeply rooted biases. Now we also learned that building
the right amount of trust takes the right amount of disclosure. This is what happens when a guest
first messages a host. If you share too little, like, "Yo," acceptance rates go down. And if you share too much, like, "I'm having issues with my mother," (Laughter) acceptance rates also go down. But there's a zone that's just right, like, "Love the artwork in your place.
Coming for vacation with my family." So how do we design for just
the right amount of disclosure? We use the size of the box
to suggest the right length, and we guide them with prompts
to encourage sharing. We bet our whole company on the hope that, with the right design, people would be willing to overcome
the stranger-danger bias. What we didn't realize is just how many people were ready and waiting
to put the bias aside. This is a graph that shows
our rate of adoption. There's three things happening here. The first, an unbelievable amount of luck. The second is the efforts of our team. And third is the existence
of a previously unsatisfied need. Now, things have been going pretty well. Obviously, there are times
when things don't work out. Guests have thrown unauthorized parties and trashed homes. Hosts have left guests
stranded in the rain. In the early days, I was customer service, and those calls came
right to my cell phone. I was at the front lines
of trust breaking. And there's nothing worse
than those calls, it hurts to even think about them. And the disappointment
in the sound of someone's voice was and, I would say, still is our single greatest motivator
to keep improving. Thankfully, out of the 123 million nights
we've ever hosted, less than a fraction of a percent
have been problematic. Turns out, people
are justified in their trust. And when trust works out right, it can be absolutely magical. We had a guest stay
with a host in Uruguay, and he suffered a heart attack. The host rushed him to the hospital. They donated their own blood
for his operation. Let me read you his review. (Laughter) "Excellent house for sedentary travelers prone to myocardial infarctions. (Laughter) The area is beautiful and has
direct access to the best hospitals. (Laughter) Javier and Alejandra instantly
become guardian angels who will save your life
without even knowing you. They will rush you to the hospital
in their own car while you're dying and stay in the waiting room
while the doctors give you a bypass. They don't want you to feel lonely,
they bring you books to read. And they let you stay at their house
extra nights without charging you. Highly recommended!" (Applause) Of course, not every stay is like that. But this connection beyond the transaction is exactly what the sharing
economy is aiming for. Now, when I heard that term, I have to admit, it tripped me up. How do sharing
and transactions go together? So let's be clear; it is about commerce. But if you just called it
the rental economy, it would be incomplete. The sharing economy is commerce
with the promise of human connection. People share a part of themselves, and that changes everything. You know how most travel today is, like, I think of it like fast food -- it's efficient and consistent, at the cost of local and authentic. What if travel were like
a magnificent buffet of local experiences? What if anywhere you visited, there was a central marketplace of locals offering to get you thoroughly drunk on a pub crawl in neighborhoods
you didn't even know existed. Or learning to cook from the chef
of a five-star restaurant? Today, homes are designed around
the idea of privacy and separation. What if homes were designed
to be shared from the ground up? What would that look like? What if cities embraced
a culture of sharing? I see a future of shared cities
that bring us community and connection instead of isolation and separation. In South Korea, in the city of Seoul, they've actually even started this. They've repurposed hundreds
of government parking spots to be shared by residents. They're connecting students
who need a place to live with empty-nesters who have extra rooms. And they've started an incubator
to help fund the next generation of sharing economy start-ups. Tonight, just on our service, 785,000 people in 191 countries will either stay in a stranger's home or welcome one into theirs. Clearly, it's not as crazy
as we were taught. We didn't invent anything new. Hospitality has been around forever. There's been many other
websites like ours. So, why did ours eventually take off? Luck and timing aside, I've learned that you can take
the components of trust, and you can design for that. Design can overcome our most deeply rooted stranger-danger bias. And that's amazing to me. It blows my mind. I think about this every time
I see a red Miata go by. Now, we know design won't solve
all the world's problems. But if it can help out with this one, if it can make a dent in this, it makes me wonder,
what else can we design for next? Thank you. (Applause)
