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- Warren Buffett advised Airbnb CEO Brian Chesky to “slowly get rich” years ago.
- Chesky expedited the process on Wednesday by filing a lawsuit to take his home rental business public, even though it still exists against the coronavirus pandemic.
- The Airbnb boss cut costs, raised $ 2 billion in capital, and laid off 25 percent of its workforce earlier this year because it expected annual sales to fall more than 50 percent.
- On a positive note, Airbnb customers booked more than 1 million nights of future stays worldwide on July 8 for the first time since March.
- Visit the Business Insider website for more stories.
Warren Buffett once advised Airbnb CEO Brian Chesky to ‘slowly get rich’. Chesky accelerated business on Wednesday by filing a lawsuit to make its home rental business public, despite the coronavirus pandemic that continues to weigh on its business.
Buffett, a billionaire investor and CEO of Berkshire Hathaway, made the comment during lunch with Chesky and Amazon CEO Jeff Bezos, Chesky said in a PandoMonthly interview in 2013. Bezos asked Buffett why not everyone copies his simple investment strategy and a fortune.
“Because no one wants to get rich slowly,” Buffett replied.
‘Getting rich slow is not really slow’
Chesky underlined the wisdom of Buffett’s approach in a 2017 Fortune interview, after Airbnb was privately valued at $ 30 billion.
“Nothing about Airbnb was slow,” he said. “It’s only nine years old. But I think it was helpful for us to go a little slower and take a break and be a little more thoughtful.”
However, Chesky added that tapping the brakes at a fast-growing company is difficult and could lead to jobs piling up in the future.
“Getting rich slowly is not really slowing down,” he said. “It’s slower in year one, but it can be faster in year seven.”
Airbnb did not immediately respond to a request for comment from Business Insider.
Back back
Chesky and his staff attempt an IPO shortly after the most difficult period in Airbnb’s history. The coronavirus pandemic caused widespread lockdowns earlier this year, devastating global travel and expected demand on the Airbnb platform.
Chesky wrote in May that Airbnb’s revenue had plummeted more than 50% this year. He responded by cutting costs, raising $ 2 billion in fresh capital and laying off 1,900 workers or 25% of the group’s global workforce. The measures were intended to help focus and “evolve” the company for the era of the virus, he said.
Airbnb has also reimbursed customers who were forced to cancel trips, setting aside $ 250 million to reimburse hosts who have lost bookings. Bookings bounced back in June, but were still 30% back against the same period last year, Bloomberg reported.
The overall outcome was a 67% year-over-year increase to $ 335 million last quarter, resulting in a loss of $ 400 million before interest, taxes, depreciation and amortization, Bloomberg said.
On a positive note, customers have booked more than one million nights of future Airbnb worldwide on July 8 – the first time bookings have reached that level since March, Airbnb said.
Airbnb’s recent challenges raise the question of why Chesky is pushing to list the company this year, and may not be able to ignore Buffett’s advice. One reason may be pressure from employees to go public before lucrative stock options expire, The Wall Street Journal reported.
The rapid recovery of the stock market can also be a factor. Both the S&P 500 and Nasdaq closed at record highs earlier this week.
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