In October 2007, Brian Chesky and Joe Gebbia — friends from the Rhode Island School of Design — were sharing an apartment in San Francisco and struggling to pay rent. A big design conference was coming to town and hotels were sold out. So they inflated three air mattresses, put up a simple website and offered "AirBed & Breakfast" to attendees.
Three guests showed up. The idea was small, but it worked. Their former roommate Nathan Blecharczyk, an engineer, joined to build the product properly.
The cereal that saved the company
Growth was slow and investors weren't interested. Running out of money during the 2008 U.S. presidential election, the founders designed limited-edition cereal boxes — "Obama O's" and "Cap'n McCain's" — and sold them as collectibles. The stunt brought in roughly $30,000, enough to keep going.
It also got them into Y Combinator. Paul Graham reportedly wasn't sold on the idea, but was impressed by founders resourceful enough to fund their company by selling cereal. Airbnb joined YC's Winter 2009 batch, where the founders went door to door in New York, photographing hosts' apartments themselves to make listings more appealing — an early lesson in "doing things that don't scale."
The cereal didn't prove the market. It proved the founders wouldn't quit.
From near-collapse to IPO
Airbnb grew into a global platform, then faced its biggest test in 2020 when the pandemic froze travel. Bookings collapsed, the company laid off about a quarter of its staff, and Chesky refocused the business on core hosting. In December 2020 — months after many had written it off — Airbnb went public, and its shares more than doubled on the first day of trading.
Lessons
- Solve your own problem first. The founders were the first hosts.
- Do things that don't scale. Personally photographing listings changed the product's quality bar.
- Resourcefulness is a signal. Investors back founders who find a way.
