In 2007, and two designers, Brian Chesky and Joe Gebbia, were struggling to pay rent in San Francisco. With a design conference coming to town and all hotels booked, they hatched a wild idea: rent out air mattresses in their living room and offer breakfast to guests.
They launched a simple website, "Air Bed & Breakfast", and soon welcomed their first guests.
But the road wasn't smooth. Initial launches flopped, and investors were sceptical. Facing financial ruin, the founders turned to a creative solution: selling presidential-themed cereal boxes!!
Believe it or not, the founders raised $30,000 by selling cereal named after the two candidates of the 2008 United States presidential election, Barack Obama and John McCain.
This quirky move caught the attention of legendary investor Paul Graham from Y Combinator, leading to their acceptance into the startup accelerator. (You can read more about Y-Combinator here )
In Y Combinator, they honed their model, built relationships with users, and transformed their platform. By 2011, Airbnb was operational in 89 countries and valued at over $1 billion. Despite regulatory challenges and industry pushback, Airbnb continued to innovate and grow, eventually going public in 2020.
It became profitable for the first time in the third quarter of 2020 and earned $4.8 billion in profits in 2023 alone!!
Not bad for a company who once pivoted to selling cereal boxes.
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