How AirBnb Started (Or How 3 Guys Went from Renting Mattresses to a $10 Billion Dollar Company)
Here’s how Chesky describes Airbnb’s early history (on the question-and-answer website Quora):
Airbnb approaches many investors in 2008. Most say “the market is too small.” Some are concerned 2 of the 3 founders are designers, thus creating a founding team DNA different from the success patterns they are looking for.
Running out of money, Airbnb starts selling collectible cereal, and makes $30,000 in the process. (See the Startup School talk for more about this here: http://www.justin.tv/startupscho…)
With their website low in traffic, their kitchen is without food. Airbnb starts living off their collectible cereal. This is a low point.
At a dinner with the founders of Justin.tv in November, 2008, Airbnb is convinced to apply for Y-Combinator. Paul Graham thinks “the idea is terrible,” but likes the founders because they “won’t die,” and are “very imaginative.” He decides to accept them. Airbnb finally raises $20,000.
By Demo Day in April, 2009, Airbnb becomes “ramen profitable,” and finally stops eating the leftover collectible cereal in their kitchen. Sequoia Capital takes notice. Sequoia leads a Seed Round of $600,000, led by Greg McAdoo. Keith Rabois, Kevin Hartz, and Jawed Karim of Youniversity Ventures participate.
700,000 nights booked later, Airbnb announces a Series A Round of $7,200,000 led by Sequoia Capital and Greylock Partners to expand from 8,000 cities to every city known to humankind. Reid Hoffman leads the round for Greylock Partners. New angels include Ron Conway, Jeremy Stoppelman, and Elad Gil.
Heres a video clip on Youtube on their story: