The Perk Bubble Is Growing as Tech Booms Again

To Woo and Keep Employees, Start-Ups Stress Playthings; a Nap in the Tree House

From the Wall Street Journal | July 6, 2011 | By GEOFFREY A. FOWLER

SAN FRANCISCO—The social calendar posted on a wall at Internet start-up Airbnb Inc. is covered in multicolored sticky notes. A recent Wednesday was blocked out for a wine and cheese mixer and an all-hands talk on stock options. Friday brought a rooftop barbecue, and Saturday there was an air-guitar contest.

Then there are the regularly scheduled perks at the 120-person vacation-rental marketplace outfit, including Mustache Mondays (employees wear fake ones), Yoga Tuesdays (before company lunch) and Thursday Recess (company-wide kickball).

Working at Airbnb "is like a really fun school where you get paid," says Joe Gebbia, the 29-year-old co-founder of the company, whose offices have a two-story indoor tree house and a section of a retired Pan Am plane. "Or maybe it's more like camp."

Here in the capital of the latest tech boom, engineers and product developers work late into the night creating the next big thing. But they take office culture just as seriously, fueling behavior that is reaching a level of froth not seen in a decade.

Some Web start-ups are partying like it's 1999. Airbnb's housewarming later this month is to include a visit by rapper and occasional tech investor M.C. Hammer. The party room at reviews site Yelp Inc. has three beer kegs with built-in iPads to offer information about what's on tap. Last month, start-ups Peanut Labs Inc. and AdParlor Inc. sponsored the sold-out "Pirates of Silicon Valley Cruise," a $600-per-person seafaring party.

Companies say the fierce competition for talent among start-ups has necessitated extraordinary perks meant to attract and retain employees.

At Facebook, the social network sponsors an annual "game day," in which the whole company competes in schoolyard classics such as kickball and Capture the Flag.

Online storage site Dropbox Inc. has a rock room where employees play guitars and drums, and another one dedicated to playing the arcade game Dance Dance Revolution.

Erin Kunkel

Free gourmet meals are now routine. Above, Zynga's chocolate fountain.

Free company-wide gourmet meals are now routine. Zynga Inc., which filed for an initial public offering on Friday, serves lunch and dinner daily to its employees, using specialty ingredients like wasabi oil, Japanese Kewpie mayonnaise and pinecone syrup as well as locally sourced produce. The social gaming company has said that its goal is to offer sustainable and fresh food rather than be flashy or excessive.

The blue shirts and khaki pants that defined the dress code—and ethos—of the 1999 tech bubble have given way to the cult of the hoodie. Many of tech's leading lights, including the leaders of Dropbox, Angry Birds-maker Rovio Mobile Ltd. and FourSquare Labs Inc., wear hoodies to press conferences and business meetings.

Nancy Friedman, co-founder of a tween website called Kidzvuz.com in New York, says she was caught by surprise by the Web's new dress code at her first tech conference in April.

She was wearing business casual—and just about everybody else was wearing a hoodie.

Her look was "uncoolness," the 46-year-old wrote in a tweet. But the hoodie uniform reminded her of "teenagers who think they're being unique but they all look alike," she says. Still, she now has a hoodie with her own company logo, which features a bee.

The hoodie's centrality to tech culture was solidified by Facebook founder Mark Zuckerberg, who has made it his uniform. "I never take off the hoodie," Mr. Zuckerberg told participants at the D8: All Things Digital conference last year, while sweating in the spotlight.

But Mr. Zuckerberg, 27, did take off the hoodie for a February dinner with President Barack Obama. When Mr. Obama came to visit Facebook's headquarters in April, he introduced himself as "the guy who got Mark to wear a jacket and tie." Mr. Zuckerberg ended the session by giving Mr. Obama a hoodie of his own.

Cashmere hoodies are all the rage on Sand Hill Road in Menlo Park, Calif., home to many big-name venture-capital firms, according to venture capitalist Marc Andreessen, who recently brought on former U.S. Treasury Secretary Larry Summers as a special adviser. Mr. Andreessen says "the challenge for now is to get Larry to wear a hoodie."

At Airbnb, which was founded in 2008 and lets people book vacations in other people's homes, institutionalized fun is a philosophy. "You can't take the day too seriously if you're in a meeting with somebody wearing a fake mustache," says Mr. Gebbia, who often participates in the company's Mustache Monday.

He says creating a space where people feel comfortable spurs innovation: "We're going to work hard and play hard."

The plan for Airbnb's new office, a 25,000-square-foot San Francisco facility the company moved into three weeks ago, was inspired by its first one: Mr. Gebbia's apartment. There, employees at the growing company had worked cheek-by-jowl, even in bedrooms and the kitchen. The new office has long, spacious benches that surround three "living rooms" used as conference rooms, modeled after the three most popular houses that the company rents out to travelers on its website.

One living room is a tree house called the Mushroom Dome, with an upstairs nap area.

Airbnb has managed to fuel both sales growth and investor fervor. The company, which raised money from venture-capital firms and the actor Ashton Kutcher, says bookings on its site grew 800% last year and nearly doubled in the past four months.

"I think it feels like home," says Mr. Gebbia. "If you are really passionate about something—and you absolutely love working on it—does it really feel like work at the end of the day?"

—Pui-Wing Tam, Yukari Iwatani Kane and Amir Efrati contributed to this article.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com