How much financial sophistication do you need to start a $10 billion company? Zero, if you're Brian Chesky.
That was how much he possessed six years ago, when Airbnb was just a tiny startup going through Y Combinator, according to the accelerator's president, Sam Altman.
"I still remember sitting with Brian and going through the financial model with him for the first time and being like, 'You are financially illiterate. I don't even know how to explain this to you,'" Altman reminisced, to laughter, at the Airbnb Open conference in San Francisco Thursday.
That was just fine with Altman. The worst kind of founders, he said, are the MBA types who come armed with spreadsheets precisely quantifying the size of the opportunity. The best are the ones like Chesky, who only have an idea they care about.
Often, he said, those ideas strike others as insignificant or unnecessary. "Who's going to stay on an air mattress in a stranger's apartment, honestly?" Altman asked. "People always make the mistake of calling an idea small or stupid because they don't know how it's going to evolve. If you bet on smart people, they eventually figure out their way into the big idea."
Because it's so hard to tell a bad idea from a good one at first, Altman said he looks for other things. First, are the founders capable of clearly articulating what they're doing? "Even if the idea doesn't sound very good, if it's at least clear, that's helpful," he said.
More importantly, do the founders seem like the kind of people who'll stick with the idea until it pans out? "Intelligence is usually relatively easy to identify in a 10-minute conversation," Altman said. "Determination is much harder. Most startups fail because in the first couple years because the founders give up at some point. Founders who aren't going to do that -- that's really valuable."