Brian Chesky explains how Airbnb solved the chicken-and-egg problem “Marketplaces are incredibly defensible at scale, and maybe it’s because they’re incredibly hard to start. And the problem is simple - they call it the chicken and egg problem.” As Brian explains, it was tough to bootstrap Airbnb in the beginning because travelers couldn’t book homes if there was no inventory, and homeowners didn’t want to list their homes unless people were going to book them. “We didn’t know what to do for a while .We tried a lot of different things. And I can tell you what worked. Summer of 2008, the press announces that Barack Obama is moving from a 20,000 seat basketball arena to an 80,000 seat football stadium. And we said, that’s our shot. You have 60,000 people that don’t have housing, surely at least a few of them are going to need a place to stay… And so we literally started with local people in Denver. Then we started emailing bloggers. We got the bloggers. Then the Denver Post and the Rocky Mountain News covered us. Then the local ABC and NBC and CBS affiliates. And then the Wall Street Journal. Then the New York Times and CNN are in our living room… We did that in a matter of three weeks.” Brian continues: “We started these little infernos. You start getting a few users here, a hundred here, fifty there… And we did the same thing with the inauguration. And when you have a hundred people here and there, then you obsessively meet them… Paul Graham, our first investor, said it’s better to have a hundred people love you than a million people kind of like you. And the reason why is it’s really hard to build off of a really wide but shallow base. But with a hundred people, you can find out everything they want… You meet them, you spend a ton of time with them, and once they fall in love with your product, they’ll tell every one of their friends. That’s why [Airbnb] took a really long time to start, but it grew much faster later on.” Video source: @cwclub (2011)

Marc Andreessen on “preferential attachment” and why it’s critical for startups “A startup needs to get into a loop where it’s accruing more and more resources as it goes.” Marc explains. “Those resources are qualified executives, technical employees, future downstream financing, positive brand momentum, public perception, customers, revenue, ability to throw weight in the government. There all of these resources that you need to be able to succeed as a business.” Marc continues: “You’re either a snowball rolling down the hill, picking up resources, gaining size and scope and scale, power, credibility as you go, or you’re not – you’re kinda stuck at the top of the hill as a snowflake and you’re just not going anywhere. The question becomes how do you get into this aggregation of resources thing?” Economists call this preferential attachment, and this observation the rich get richer is sometimes called cumulative advantage or the Matthew effect, taking its name from the Parable of the Talents in the biblical Gospel of Matthew: “For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.” It is this process, Marc argues, that drives the power law distribution in startup outcomes. Your job as a founder is to get your company to the point where the next resource that you need is more likely to attach to you versus somebody else. And this is something venture capital firms can help you with. As Marc puts it: “A top-tier VC is a bridge loan of credibility at a point in time when the startup maybe deserves it but just doesn’t have it yet. And that credibility is harvested primarily in the form of personnel, money, and brand. And those things turn out to be really important in the beginning.” Video source: @stripe @collision (2025)

Sam Altman: The best founders do these 9 things #1 Get to know your users really well “The best founders do customer support themselves. They go visit their users—in the case of Airbnb they go live with them. You want to get to know your users really really well.” #2 Have a short cycle time & understand compound growth “The cycle here is basically: talk to customer to understand pain point → build product to address that → get that in front of user → see what they do → repeat cycle. This cycle is how you iterate and improve. The law of compound growth being what it is: if you can get 2% better every iteration cycle, your iteration cycle is every four hours rather than every four weeks, and you compound that over the course of a few years, you’ll be in a very very different place. Make it one of your top goals to build one of the fastest iterating companies the world has ever seen.” #3 Make a long-term commitment “Most companies have a 2-3 year time horizon. But companies are almost always a 10 year project if they work. If you think about it that way from the very beginning, you will make very different and much better decisions. I think this is the only arbitrage opportunity left in the market. Almost no one makes a fairly long-term commitment to a new project. But if you do that, you will think in a different way, you will hire different people, and it will work very well.” #4 Stay lean until everything is working really well “In the early days, when you’re experimenting and zig zagging, you’re like a fast little speed boat and want to be able to turn the whole company on a dime. You can’t do that if you’re a big company—cash burn aside, which is another problem. The flexibility of the company basically decreases with the square of the number of employees, so you want to stay really small until you’re sure things are working. Once things are working, then you can get really big.” #5 Resist the urge to hire; especially resist the urge to hire mediocre people “Vinod Khosla has a saying that I love: ‘the team you build is the company you build.’ This is really true and I never appreciated how true this was for a long time. If you build a team of great people and you have a product that people love, you’ll have a 90%+ chance of success. Those are both really hard to do, and they’re independent variables. But don’t ignore the team component. The best CEOs I know spend huge amounts of time recruiting and retaining good talent.” #6 Relentless execution “You have to keep going, and do things perfectly, and get all of the details right. You have to care too much about every experience that a customer has with their company.” #7 Startups are about not giving up “One of the very best companies in the last YC batch applied 7 times before they got in. This is just a version of what happens in startups all of the time: you get beat down, again, and again, and again. And that last time when you get pushed down and don’t think you have enough energy to get back up—that’s the time it actually works. This is what you sign up for if you’re going to start a startup.” #8 Fiduciary duty to take care of yourself “This is a 10 year marathon and you have a fiduciary duty to your shareholders to take care of yourself. Some people treat startups like an all-nighter: they don’t take care of their health, they don’t sleep, they don’t maintain their personal relationships. It is true that startups are a bad choice for work-life balance. But you have a duty to yourself, your team, and your investors to take care of yourself.” #9 Clear mission “You don’t have to figure this out on Day 1, but all of the most successful startups I’ve been fortunate enough to be a part of pretty quickly—in the first one to two years—figure out a really important mission. It’s this mission that gets people to join them. It drives the founders. It gets the media to write about them. And even if you start off building a project that’s just interesting to you and solves a problem in your life—which is how you should start—remember that you should have a clear mission at some point… That is what will convince people to come help you, and that is how you will build this idea into a huge company with a ton of people that really love your product.” Video source: @StanfordOnline (2017)