"When we went to the valley, design was viewed as a huge liability," he said Monday at the Bloomberg Businessweek Design 2013 conference in San Francisco. "It was not good that we were designers. What they were really saying is the heart of a company is its product, and the heart of a product is technology. And technology is created by engineers."
Airbnb, a San Francisco startup, has gained popularity by connecting travelers with apartment and home owners across the world, providing an alternative to hotels. Founded in 2008, the company has more than 200,000 listings in 34,577 cities. The website raised $112 million at a valuation of about $1.3 billion in July 2011, in a financing round led by Andreessen Horowitz.
The founders have pedigrees that favor design over engineering. Chesky, who started the company with Joe Gebbia and Nathan Blecharczyk, graduated from the Rhode Island School of Design with a bachelor of fine arts in industrial design. Gebbia is an alumnus of the same school, with degrees in industrial and graphic design, while Blecharczyk has a computer science degree from Harvard University.
Chesky brought up the late Steve Jobs, who he said created a company worth more than $470 billion by applying "the thinking of a designer to every part of the business."
That kind of thinking, Chesky says, will help resolve Airbnb's standoff with local governments, which have been trying to extract taxes from bookings made on its website.
Under a 2011 New York state law, residents can rent out rooms in apartments they occupy, but not the entire space. While Airbnb features entire apartments for rent on a short-term basis, hosts are responsible for complying with local laws. In California, the company has been battling the city of San Francisco, which says that hotel taxes -- at 14 percent -- should apply to those renting out their residences.
"We're navigating a world of very uncertain and fragmented laws in many cities," Chesky said. "We have to think broadly and very differently and holistically about government relations. It's not just about meeting with government officials. It's about solving a design problem -- if we have problems in governments, that's a design problem we need to solve."