From selling cereals to building an $80 Billion company, here’s how Airbnb founders did the unthinkable.

Akshay Lakra 🧭
4 min readMar 3, 2023
Cereals that were sold by Airbnb founders.

Imagine you’re a rich venture capitalist who enjoys investing into startups that may have the potential to go big. 3 young lads come to you for funding and what they have to build? — An app that lets people rent out their rooms to strangers just for some quick bucks.

It might not seem odd today knowing the massive success of Airbnb but believe me, it was the wildest idea anyone could have.

The 3 Co-founders Brian Chesky, Joe Gebbia & Nathan Blecharczyk started out to build Air Bed and Breakfast 🛏 Fast forward one year, they had nothing is sales. That’s when they decide to sell cereals during a political event, which ended up being the first funding for their startup.

Here’s a not-so-famous campaign that the founders at Airbnb took up to keep the company running 🍻

Let’s travel back to 2008. 🗓️

This is the fall of 2008 and no VC is interested enough to put money into a weird idea of 2–3 guys that let strangers stay in a stranger’s home. It has been a year since Air Bed and Breakfast started & they haven’t achieved the product market fit. No good number in terms of bookings, no traction to show, and no hope to rely upon.

The problem was to bring the first set of users that propagate the idea of sharing home for money ,plus convincing users to stay in someone else’s rooms. A pretty weird problem in a pretty weird time of history.

A short-lived success 🎖️

By Aug 2008, they launched 3 websites and it was time for the Democratic National Convention, 2008. All the hotels and rooms were booked and they thought of making Obama supporters stay at Obama supporter’s places. That’s when they got a momentary success. They booked stays for 600 people but soon the bookings again, came down to Zero (0). All they needed was one instance where the network effect of the product kicked in.

The first funding of Air Bread and Breakfast 💵

It was now Sept 2008 and just when Brian and Joe were thinking of how to keep the company running, they thought of selling cereals during the Convention. ( Keeping in mind, the company was then named bread and breakfast).

They named the cereals “Obama O’s — Hope in every bowl”, and “Cap’n Mccain’s — A maverick in every bite”. (📸 above)

They designed the boxes of cereals and went to Kellogg’s and some manufacturers to get the production done. The plan ended up being a nightmare. No cereals manufacturer wanted to have the deal and even if they had, they wanted a deposit as high as $250,000. Tired of being on the lookout of a manufacturer, they had one ray of hope. They met an alumni from Brian’s college who had printers with him. He wanted to help these guys and offered to print 1000 boxes for FREE. They got the boxes done, filled them up with cheap cereals from local stores, and sold them all.

They netted a total of $30000 from the cereal boxes selling a box for around $40 each. And that, my friend, was their first round of funding.

What happened next? ⏭️

After the end of 2008, they decided to enter Y-Combinator, the renowned startup accelerator. During the interview, Paul Graham, the founder of YC accepted their application holding the box of cereal saying — “If you guys can sell $4 worth of cereals for $40, surely you can ‘maybe’ convince people to stay in other people’s rooms.”

And, that was how the founders started their journey of building Airbnb & being the ‘cereal entrepreneurs’. Rest is as you know, history.

Nathan Blecharczyk, Joe Gebbia and Brian Chesky. (Photo by Stefanie Keenan/Getty Images for Airbnb)

Today Airbnb boasts of being one of the largest corporations that got funded with VC money, burnt billions of dollars, and is on the road to becoming one of the greatest cash cows in the global startup ecosystem.

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I write marketing & growth stories around businesses. Follow for more such breakdowns ✨

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Akshay Lakra 🧭

A Marketer amid the chaos . Read more about Marketing, Growth & Startups & let's together point the Growth Compass 🧭