Reimagining work in the age of AI - Vanguard Corporate

Nitin Tandon: Real quick, the story from Airbnb—and tell me how much of this is urban legend versus reality. I think in 2009, Airbnb was a struggling startup. Growth had stalled. They weren't getting new bookings. So the founders and management team decided to put their laptops aside and actually go visit hosts and guests to understand what was missing. Initially, they thought it was a product problem, but after those conversations they realized it was a trust problem. People were afraid of strangers staying in their homes. What if they trashed the house? How do I trust where I'm going? Based on that listening tour and those visits, they implemented a number of changes and evolved Airbnb from a marketplace into a trust platform, building in ID verification, property verification, and other features that helped people gain more confidence. Those changes helped restore trust and put the company back on an upward trajectory.

Tara Bunch: Yeah, that's spot on. And it's the journey that really, even to this day, Airbnb continues. You know, it's fascinating. I think the question was like, how have Airbnb and Apple sort of leaned into this whole idea of customer experience being a differentiator? You know, Apple, you know, way before I joined, like 2001, when Steve reentered the company, it was struggling. It's not the iconic brand that it is today. And one of the things he did is he decided, around the time that the iPod was being introduced, and he was really frustrated with the fact that he was selling these, really in this case, the iPod was a very novel product, through all these third-party distributors and they just didn't get it. They didn't know how to sell it. It was just a thing that sat on the shelf. There was no kind of customer education as part of the sale. The service was really wonky. And so, you know, if you had a problem with it, they'd just give you another one. And so he decided that was the time when he decided to stand up all of the Apple retail stores, which was really, I mean, the beginning of a very different Apple over the next several decades. He wanted control of the customer experience from beginning to end. And he wanted it to be absolutely unbelievable. And he didn't put these stores in strip malls, which is where you typically found a lot of the kind of electronics companies. He put them in beautiful high-end malls, and these were some of the most beautiful, you know, shops inside of these malls, all glass and incredible. And people were so riveted by the experience of coming in there and trying out the products. If something went wrong, they could ask a Genius what to do or get it repaired or just get instruction on how to use the product and get more out of it. And that's when Apple really took off, followed by obviously the iPhone and every other product since then. And Steve really got that companies that focus on just the physical product and not the experience of using the product are kind of pushing on the wrong side of the balloon, so to speak. That really, at the end of the day, people will buy a product and they will come back to you again and again when they first trust you, but also when they feel like you really care about them as a customer, that you're investing in them and you want to make sure that they get the most out of that product and you've got their back. And Airbnb, interestingly enough, when I joined Airbnb, it was going through another sort of crazy time. It was COVID. And so you might question my judgment, but after having six kids, you know, it's not really that great. Rational people don't make some of these decisions. But I decided to join the company in the middle of COVID. They were going to take the company public. And actually they were really struggling on a number of fronts. But one of them was that in addition to, you know, obviously we'd lost a lot of business, we could see that as summer was coming and people were getting antsy in their homes and saying, "Hey, I want to get outside of my apartment that I've been trapped in for two months," they began to book Airbnbs like crazy. And so the company just exploded, which is a good thing. But also we were grossly unprepared for that level of growth in the middle of such a chaotic time. And we really doubled down at that point in time on customer experience. We felt like people were afraid of COVID, they were afraid of getting sick, they were afraid of being exposed to hosts or any other people they might come in contact with. And we doubled down on that whole customer experience. We put in a whole cleaning process that we guaranteed every host that was on the platform was being held accountable for. We really focused on our whole homes where people would be isolated, like you said. We really focused on pictures and descriptions that helped people find the right property they would be comfortable with. Customer support was—we went completely virtual as a company and we put our customer support completely virtual, like a lot of companies did. And we really began investing in, at that time, I would say it was more traditional machine learning, but we were really concerned that people fell into two groups that were going on Airbnbs at that time. One group was families that were desperate to go somewhere with their family that was safe. And the other were young people who were not afraid of COVID at all and were using Airbnbs to throw parties. So my first big role, my first big job at Airbnb—and hosts did not want to host if people were going to throw a party—so you had these two groups, right? So we spent a lot of time then building a machine learning algorithm that has now evolved over time to detect when somebody was probably going to throw a party. And you can imagine, as a mother of six, I had some pretty good intuition on what that looked like. Just like, you know, when the 22-year-old books a mansion and says it's a family reunion, you know, I mean, it's like no family puts their 22-year-old in charge or something like that. So it was this whole process of building trust and making that safe for everybody that was involved that was key to us coming out of that. And with the platform that we have today.

Nitin Tandon: Fascinating. I'd love a copy of that machine learning model you've seen now at least for four years in the time that you've served on our board. You know, one aspect of financial services I'm sure through your personal finances you've seen, and other aspects as well, how would you compare and contrast the financial services client experience compared to some of the high-tech experiences that you've seen at Apple and Airbnb?

Tara Bunch: Yeah. And I, you know, obviously I'm not an expert in all of the financial services areas, but I'm ramping up.

Nitin Tandon: Trademark qualities, like I've learnt a lot from Tara over the last four years. You know, humility and insights are two things that distinguish her. So don't believe her when she says she's not an expert. She's a deep expert.

Tara Bunch: But here's what I think. Not just financial services, but I would say many industries sometimes are too transactional in the way they treat customers. They treat that interaction like a transaction, and it's not. It's a relationship. And I will say, I think Vanguard is one of the companies that figured that out early on. The trust that Vanguard has is because people believe in the brand, they believe in the relationship that they've built with the company over time, and they know they can trust this company with their money. And I think that is an incredible strength to be built on. But I would say that in general, in the industry, treating customers as a transaction is a weakness. And I think in the age of AI, it could become a death knell because AI will do transactions better than any industry, company, or brand can ever do it. But they cannot build a relationship. Only a company can do that, one that really cares about their clients and is willing to invest in that relationship. And so I could not be more excited, honestly, about the position that Vanguard is in because I think you already have a relationship with your clients, and now it's how do you build on that and strengthen it and make it a differentiator that is impenetrable by any other company, but also cannot be disrupted by any other technology. In fact, it can actually help you build on that.