In the late 2000’s, Airbnb founders Brian Chesky and Joe Gebbia moved to San Francisco with no friends, no money and no idea on what they were going to do. These former art students had just graduated from the Rhode Island School of Design and decided to take the plunge and become entrepreneurs. Originally, they had no interest in the hospitality business but they needed a way to pay their expensive rent. Realizing that all the hotels in their area were booked when a design conference came to town, they opened up their apartment as a place to crash. For only $80, a guest would receive a room complete with an air mattress and breakfast. Airbnb was born!

This success story was painful in the beginning. The company tried to launch at the SXSW festival, a design conference in Texas, but they received only two customers. Even worse, the feedback they received about their idea was brutal. The first comment ever posted to their website suggested that “The whole thing will come crashing down” and “the kind of people that rob, abuse, rape, and murder will start using these systems.” However, that did not deter them so they tried again when the DNC came to Denver. This time was different, but not because they had more customers. In fact, the company was deeply in debt, could not secure investors, and needed cash badly. With Senator Barack Obama growing in popularity at the time, the team had a crazy idea. They redesigned a classic box of Cheerios into a satirical recreation called Obama O’s and sold them on the street. They made them limited edition, only 500 were produced, so they could charge $40 each. They sold out and the haul of cash paid off their credit card debt, but more importantly, it made a venture capitalist take notice.

Y Combinator, founded by Paul Graham, is a company that helps make start-ups a reality in exchange for an equity stake in the company. In early 2009, Chesky and Gebbia are out of options. They decided to apply to the program last minute. Miraculously, they passed the difficult selection process and were granted an interview. Graham sat them down in front of a panel and asked a series of rapid-fire questions in a ten-minute interview. For the Airbnb team, the interview did not go well. Graham’s comment, “People are actually doing this? Why? What’s wrong with them?” (Gallagher) reasoned that people must crazy to sleep on a stranger’s air mattress. Before they left the interview, Gebbia handed a box of Obama O’s to Graham as a thank you gift. Confused, Gebbia explained the story behind how they funded the company through selling Obama O’s. Later that day they received a phone call saying they had been accepted into the program. Graham later told them, “If you can convince people to pay $40 for a $4 box of cereal, you can probably convince people to sleep on other people’s air beds.”

What inspires me with their company is that they made sleeping in strangers’ houses normal. They flipped an entire industry upside down and made headlines. They could have given up but they didn’t. Much can be learned from studying their success. The process they used was simple. They saw a problem and came up with a solution. They were able to find a way to increase convenience while reducing costs of hotel rooms. Combined with a passion for what they were doing and Airbnb had a recipe for success.