Now it's starting to get late, and I'mgetting pretty tired. As I motion for the tab, I make the mistake ofasking him, "So where are you staying tonight?" And hemakes it worse by saying, "Actually, I don't have a place." AndI'm thinking, "Oh, man!" What do you do? We've all beenthere, right? Do I offer to host this guy? But, I just met him -- Imean, he says he's going to the Peace Corps, but I don't really knowif he's going to the Peace Corps and I don't want to end up kidnapped inthe trunk of a Miata. That's a small trunk!

So then I hear myself saying, "Hey,I have an airbed you can stay on in my living room." And the voice inmy head goes, "Wait, what?"

That night, I'm laying in bed, I'mstaring at the ceiling and thinking, "Oh my god, what have Idone?There's a complete stranger sleeping in my living room. What if he'spsychotic?" My anxiety grows so much, I leap out of bed, Isneak on my tiptoes to the door, and I lock the bedroom door.

It turns out he was not psychotic. We'vekept in touch ever since. And the piece of art he bought at the yard sale ishanging in his classroom; he's a teacher now.

This was my first hosting experience, andit completely changed my perspective. Maybe the people that my childhoodtaught me to label as strangers were actually friends waiting to bediscovered. The idea of hosting people on airbeds gradually became naturalto me and when I moved to San Francisco, I brought the airbed withme.

So now it's two years later. I'munemployed, I'm almost broke, my roommate moves out, and then the rentgoes up. And then I learn there's a design conference coming to town, andall the hotels are sold out. And I've always believed that turning fearinto fun is the gift of creativity.

So here's what I pitch my best friend andmy new roommate Brian Chesky: "Brian, thought of a way to make a fewbucks -- turning our place into 'designers bed and breakfast,' offeringyoung designers who come to town a place to crash, complete with wirelessInternet, a small desk space, sleeping mat, and breakfast each morning. Ha!"

We built a basic website and Airbed andBreakfast was born. Three lucky guests got to stay on a 20-dollarairbed on the hardwood floor. But they loved it, and so did we. Iswear, the ham and Swiss cheese omelets we made tasted totally differentbecause we made them for our guests. We took them on adventures around thecity, and when we said goodbye to the last guest, the door latchclicked, Brian and I just stared at each other. Did we just discoverit was possible to make friends while also making rent?

The wheels had started to turn. My oldroommate, Nate Blecharczyk, joined as engineering co-founder.And webuckled down to see if we could turn this into a business.

Here's what we pitched investors: "Wewant to build a website where people publicly post pictures of their mostintimate spaces, their bedrooms, the bathrooms -- the kinds of roomsyou usually keep closed when people come over. And then, over the Internet, they'regoing to invite complete strangers to come sleep in their homes. It'sgoing to be huge!"

We sat back, and we waited for the rocketship to blast off. It did not. No one in their right minds wouldinvest in a service that allows strangers to sleep in people's homes. Why? Becausewe've all been taught as kids, strangers equal danger.

Now, when you're faced with a problem, youfall back on what you know, and all we really knew was design. In artschool, you learn that design is much more than the look and feel ofsomething -- it's the whole experience. We learned to do that for objects, buthere, we were aiming to build Olympic trust between people who had never met. Coulddesign make that happen? Is it possible to design for trust?

I want to give you a sense of the flavor oftrust that we were aiming to achieve. I've got a 30-second experiment thatwill push you past your comfort zone. If you're up for it, give me athumbs-up. OK, I need you to take out your phones. Now that you haveyour phone out, I'd like you to unlock your phone. Now hand yourunlocked phone to the person on your left.

That tiny sense of panic you're feelingright now --

is exactly how hosts feel the first timethey open their home. Because the only thing more personal than your phone isyour home. People don't just see your messages, they see yourbedroom, your kitchen, your toilet.

Now, how does it feel holding someone'sunlocked phone? Most of us feel really responsible. That's how mostguests feel when they stay in a home. And it's because of this that ourcompany can even exist. By the way, who's holding Al Gore's phone?

Would you tell Twitter he's running forPresident?

OK, you can hand your phones back now.

So now that you've experienced the kind oftrust challenge we were facing, I'd love to share a few discoverieswe've made along the way. What if we changed one small thing aboutthe design of that experiment? What if your neighbor had introducedthemselves first, with their name, where they're from, the name of theirkids or their dog? Imagine that they had 150 reviews of people saying, "They'regreat at holding unlocked phones!"

Now how would you feel about handing yourphone over?

It turns out, a well-designedreputation system is key for building trust. And we didn't actually get itright the first time. It's hard for people to leave bad reviews. Eventually,we learned to wait until both guests and hosts left the review before wereveal them.

Now, here's a discovery we made just lastweek. We did a joint study with Stanford, where we looked at people'swillingness to trust someone based on how similar they are in age,location and geography. The research showed, not surprisingly, weprefer people who are like us. The more different somebody is, theless we trust them. Now, that's a natural social bias. But what'sinteresting is what happens when you add reputation into the mix, inthis case, with reviews.

Now, if you've got less than three reviews, nothingchanges. But if you've got more than 10, everything changes. Highreputation beats high similarity. The right design can actually help usovercome one of our most deeply rooted biases.

Now we also learned that building the rightamount of trust takes the right amount of disclosure. This is whathappens when a guest first messages a host. If you share too little, like,"Yo," acceptance rates go down. And if you share too much,like, "I'm having issues with my mother,"

acceptance rates also go down. Butthere's a zone that's just right, like, "Love the artwork in yourplace. Coming for vacation with my family." So how do we design forjust the right amount of disclosure? We use the size of the box to suggestthe right length, and we guide them with prompts to encourage sharing.

We bet our whole company on the hopethat, with the right design, people would be willing to overcome thestranger-danger bias. What we didn't realize is just how many people wereready and waiting to put the bias aside.

This is a graph that shows our rate ofadoption. There's three things happening here. The first, an unbelievableamount of luck. The second is the efforts of our team. And third isthe existence of a previously unsatisfied need. Now, things have beengoing pretty well.

Obviously, there are times when thingsdon't work out. Guests have thrown unauthorized parties and trashedhomes. Hosts have left guests stranded in the rain. In the earlydays, I was customer service, and those calls came right to my cell phone. Iwas at the front lines of trust breaking. And there's nothing worse thanthose calls, it hurts to even think about them. And thedisappointment in the sound of someone's voice was and, I would say, stillis our single greatest motivator to keep improving.

Thankfully, out of the 123 million nightswe've ever hosted, less than a fraction of a percent have beenproblematic. Turns out, people are justified in their trust. And whentrust works out right, it can be absolutely magical.

We had a guest stay with a host in Uruguay, andhe suffered a heart attack. The host rushed him to the hospital. Theydonated their own blood for his operation. Let me read you his review.

"Excellent house for sedentarytravelers prone to myocardial infarctions.

The area is beautiful and has direct accessto the best hospitals.

Javier and Alejandra instantly becomeguardian angels who will save your life without even knowing you. Theywill rush you to the hospital in their own car while you're dying and stayin the waiting room while the doctors give you a bypass. They don't wantyou to feel lonely, they bring you books to read. And they let you stay attheir house extra nights without charging you. Highly recommended!"

Of course, not every stay is like that. Butthis connection beyond the transaction is exactly what the sharing economyis aiming for.

Now, when I heard that term, I have toadmit, it tripped me up. How do sharing and transactions go together? Solet's be clear; it is about commerce. But if you just called it the rentaleconomy, it would be incomplete. The sharing economy is commerce withthe promise of human connection. People share a part of themselves, andthat changes everything.

You know how most travel today is, like, Ithink of it like fast food -- it's efficient and consistent, at thecost of local and authentic. What if travel were like a magnificent buffet oflocal experiences? What if anywhere you visited, there was a centralmarketplace of locals offering to get you thoroughly drunk on a pubcrawl in neighborhoods you didn't even know existed. Or learning to cookfrom the chef of a five-star restaurant?

Today, homes are designed around the ideaof privacy and separation. What if homes were designed to be shared fromthe ground up? What would that look like? What if cities embraced aculture of sharing? I see a future of shared cities that bring uscommunity and connection instead of isolation and separation.

In South Korea, in the city of Seoul, they'veactually even started this. They've repurposed hundreds of governmentparking spots to be shared by residents. They're connecting studentswho need a place to live with empty-nesters who have extra rooms. Andthey've started an incubator to help fund the next generation of sharingeconomy start-ups.

Tonight, just on our service, 785,000people in 191 countries will either stay in a stranger's home orwelcome one into theirs. Clearly, it's not as crazy as we were taught.

We didn't invent anything new. Hospitalityhas been around forever. There's been many other websites like ours. So,why did ours eventually take off? Luck and timing aside, I've learnedthat you can take the components of trust, and you can design for that. Designcan overcome our most deeply rooted stranger-danger bias. And that'samazing to me. It blows my mind. I think about this every time I seea red Miata go by.

Now, we know design won't solve all theworld's problems. But if it can help out with this one, if it canmake a dent in this, it makes me wonder, what else can we design for next?

Thank you.