Airbnb's approach to Product

A deep dive into how Airbnb is rethinking product management

If you followed the just concluded Config 2023, you would have probably stumbled on this tweet from Kevin Gao saying “Brian Chesky just told the audience they got rid of the PM function at Airbnb. The crowd of designers erupts in applause” 

Brian Chesky is the co-founder and CEO of Airbnb, a Fortune 500 company, with US$8.40 billion in 2022 and over 6,000 employees. 

This tweet immediately generated plenty of social media hype, with a lot of unfounded assertions.  People proclaiming the end of product management, calling for Product Managers (PMs) to rethink their careers, empowering the design and engineering team to do more Product work and so on. 

Perhaps, this was the perfect time many people have been waiting to reel all their hidden grievances about product managers and the value they bring to a team. Someone even went as far as saying, “PMs for me are a nuisance”. Of course, anything for the clicks.

In response to the growing public misinformation, Brian Chesky in a tweet quickly clarified what he mentioned at the Config conference, “I should have been more clear. We morphed the function into an Apple-style product marketing function”

Like many rumours, the correct narrative does not get enough virality as the false one. But what's an Apple-style product marketing function? We will get to this later in the article.

What happened at the Config 2023? 

During Config 2023, Brian Chesky challenged the traditional product management function and spoke about empowering designers to take the front seat in decision-making. His speech was a defining moment about the future of product management, and how teams should be organised around a shared vision. The full interview is here. According to him, 

The designers are equal to the product managers. Actually, we got rid of the classic product management function. Apple didn't have it either. We combined product management with product marketing and we said that you can't develop products unless you know how to talk about the products. We made the team much smaller. We elevated design

From the reaction of the audiences – majorly designers – you can easily tell that most companies are not maximising the Design function, and designers are eager for a change. We will come back to this later too.

To be clear, Airbnb is not getting rid of the PM role, as wrongly assumed by many social media posts.  It is simply evolving the role. But, no doubt that there is something fundamentally wrong with how Airbnb previously do product management. Hence the need for these functional changes, even if the role title remains the same. 

Let’s dive into Brian’s statement. Two key themes that stood out to me: 

1. We combined product management with product marketing

2. We elevated design 

Let’s dig deeper into these.

We combined product management with product marketing…

The view shared by Brian Chesky may be new to the public, but it actually started when the company was restructured during the pandemic in 2020. Let me provide some historical context. During the COVID-19 shutdown, Airbnb lost about 80% of its business. ​​Home bookings collapsed by more than 50% in New York, Seattle, and San Francisco.  The company's valuation plunged by $5 billion, as it prepared to go public. Some people wondered if home-sharing would even exist post-lockdown because of the new normal shaped by the pandemic. 

Airbnb was on the verge of survival and it had to improve its efficiency in order to survive. Brian hired Hiroki Asai, who was the creative director at Apple and that decision dramatically changed the trajectory of the company. He drew inspiration from what Steve Jobs did to Apple when it was 90 days away from bankruptcy in 1997. Steve Jobs did two things: He cut Apple's number of products (which was about 80) by more than 90%. Then he reverted Apple back to a functional organisational structure. 

That was exactly the same thing Airbnb did. The CEO scrapped its previous divisional structure (where each product group becomes a self-sustaining organization responsible for developing, and marketing its products), and went back to being a functional organisation (where activities of similar nature across the entire company are grouped together as one department instead of spreading the functions across multiple product groups). 

As this restructuring happened, one of the key decisions Airbnb made was connecting Product back to Marketing. You might be wondering why I said connecting back to Marketing.  Let me again give you some historical perspectives. 

Modern product management started in 1931 when Neil H. McElroy, who was working at Procter & Gamble (P&G) wrote a memo justifying the need to hire more people in brand management, called “Brand Men”. His proposal was granted, hired two people and that led to the birth of product management in the fast-moving consumer goods (FMCG) sector. 

The original product managers and the majority of product (or brand) managers in FMCG today were part of the Marketing function. They focused on understanding the customer needs, and fulfilling those needs using the 4P’s of marketing - putting the right Product in the right Place, at the right Price with the right Promotion. However, because product development in consumer goods takes a long time (imagine the time it takes to produce a new antiseptic soap formulation), Marketing functions in FMCG focused more on Place, Price, and Promotion leaving product development to other departments or outsourced companies. 

However, as the product manager role moved into the tech industry, the separation of Product from other 3P’s was impossible. Tech companies are typically inventive and innovative in bringing new products to the market. In addition, reducing time to market and rapid innovation was the hallmark of building products in tech. Unlike the consumer goods sector, there is no need to set up huge processing lines or acquire large-scale industrial facilities. With the lean startup methodology, the time to market became even shorter. This brought product development back to the cynosure of product management. In many tech companies today, Marketing is about brand communication, lead generation and customer acquisition, while Product owns the vision and development of the product. This pushes the Marketing function far away from the engineers.   

Brian puts it this way during Config 2023,

Product at a company are like chefs, marketing are like waiters, and they never allow the waiters in the kitchen, or they get yelled at. And I thought, well, what if you actually have them collaborate on product? What if marketing, you know, challenges engineering and engineering inspires marketing?…We have no pure product marketers who don’t do product management.

Airbnb is not the only company merging PM & PMM functions. Apple’s PMM role is a combination of traditional PMM and PM roles in other tech companies. 

Separating product management from product marketing means that there would be a lot of overlap between both functions. For instance, who owns the user? The PM or the PMM?  The skills of a PM and PMM overlaps a lot. The difference is that the PM applies the skills towards product development, while the PMM applies them towards market adoption. Many PMs don’t understand commercial impacts, nor do they know how to best position their products for maximum market penetration. So there is a gap between value creation and value extraction. 

I have maintained a similar position in the past. In this post, I argued that Marketing and product ownership functions should not be separated. I have also written extensively on bringing PMs closer to revenue. 

The responsibility of PMs is to ensure that a product is successful. A product is successful when it sells, and sells very well. That means PMs need to pay attention to go-to-market. Who should Marketing target? With what message? How should Sales talk to prospects from the qualification to closing? 

Next, let's talk about

We elevated design…

When Brian Chesky said “Actually, we got rid of the classic product management function”, the crowd of designers erupted in applause. That is deeply worrisome because it reveals that most designers have sub-par experience working with PMs. The reason may not be far-fetched. Many PMs are often overly prescriptive in design specifications, thus taking over user experience (UX) responsibility while leaving UI responsibilities to the designer.

PMs tend to optimize for business metrics, which sometimes can be at the expense of user experience. This leads to the PM imposing tasks and timelines on the designer. PMs also interface with senior leadership, understand engineering capacity and own the roadmap.  They are able to push their narratives upwards, giving them some advantage over the designer. 

The work of a designer and that of the PM can overlap in many instances, especially when it comes to UX. While the PM often measure business metrics and product adoption, designers are motivated by creating a great user experience. Beyond usability, the designer also focuses on the sleekness of the feature. Is the feature enjoyable to use? Designers bring a unique perspective to the solution.

A designer can do more than move pixels on the screen. A designer can design a company to have fewer parts…Product managers are critical, but they shouldn't be doing the job of a designer, says Brian 

Unfortunately, in many organisations, the Design team is treated as a service team or delivery team. The PMs write out the detailed requirement for a design task and then hand it over to the designer to implement it. This kind of workflow underutilizes the value of a designer. In fact, some designers have gotten used to hand-offs that they only want to work off requirements and completely avoid ambiguity. The result is that you have the PM prescribing solutions to the designer, which inhibits innovation and demotivates the designer. Tech companies need to realize that designers can do more. 

Product designers should not come after design specification has been defined. The most ideal situation is involving the designer right from discovery and user research so that there is a shared understanding of the problem that needs to be solved and why. This would also save the PM’s time in trying to communicate context to the designer down the line. 

Designers should be the design-thinking expert on the team. They should be very close to the user to understand them, challenge assumptions, redefine problems and create prototypes for testing. When a PM is doing discovery calls, the designer should be part of that call to hear from the user directly. Designers should have the freedom to grow, experiment and make user decisions, or else they are just glorified pixel movers. 

In reality, the ideal situation is most times not the case. The designer might be stretched across multiple product designs and graphical designs to serve the needs of different functions. They end up not having the capacity to take on UX responsibility. But when Brian Chesky said, “We elevated design”, it means Airbnb empowered the designer to take the lead on discovery,  user experience and owning the solution space.  It is a deliberate decision and not just one that comes naturally. This is the same way Apple builds products, where Design is at the centre of making product decisions. 

Brian believes that

There is a whole new generation of designers that aren't just going to work for engineers. They are going to sit alongside the engineers. They are not just going to be told what to do by PM. They are going to be helping drive the product

Putting all together

Airbnb’s structural decision to merge PM & PMM and to elevate Design has transformed the company if you look at its product shipping velocity and financial position. As these methods of reorganizing and redefining functional teams continue to deliver improved performance at Airbnb, more tech companies would adopt them, and it may gradually become the norm. As a product manager or designer, you should be prepared for these kinds of functional shifts, and upskill to remain relevant. 

However, this approach may not work for your company. It depends on the stage of your company, the kind of products you are building and the type of market you are serving. 

For instance, if you are building an API product, a design-led product approach may not be appropriate. You cannot solve all problems with a user experience and not all solutions are created with user experience. There are a lot of tech products that customers use daily but without a visual layer to them.

Your company is unique. No other company is like yours. No other company has your product, people, and processes. There are no best practices. Instead, there are common practices. You should look out for ways to optimize or reorganise your team to ensure that you are maximizing value from them, and not duplicating responsibilities.

Stay lean.