Everyone these days has heard of AirBnB and many people have used their service to book accommodation when travelling. Some of the places you can stay are amazing! But did you know, if it wasn’t for a box of breakfast cereal AirBnB may never have happened?
The AirBnB story is more than just a couple of guys renting out an air mattress on their floor then having an idea, it’s a story of how luck and resilience work together to realise a dream. It’s a story of one of the most troublesome companies to come along in recent memory, as it has disrupted the entire accommodation industry.
Sure AirBnB got lucky along the way, but it’s a funny thing, when you get 100% committed to something, when you put every ounce of passion and energy into achieving your dream, you start to get luckier and luckier…
The AirBnB Story
Back in 2007, AirBnB founders Brian Chesky and Joe Gebbia had moved from New York to San Francisco without jobs. They were going to be ‘entrepreneurs’.
One day, when they received a letter from their landlord advising of a 24% rent increase, panic set in. With no income, they actually couldn’t afford to pay the rent the next month. Here’s where AirBnB got lucky. Chesky and Gebbia did some research, and noticed all the accommodation in town was booked out for an upcoming design conference that attracted attendees from across the globe.
So, they bought some air mattresses, created a quick website called ‘air bed and breakfast’ and sold space on their living room floor for $80 a night!
They now had a sales model they could follow, and implemented the same strategy for the Democratic National Convention in Denver in 2008. Hundreds of thousands of people were coming to Denver for the convention, and there was nowhere to put them. Local government even considered allowing people to camp in city parks!
Over 600 people stayed in AirBnB accommodation for the convention, but the success was short-lived, as there just weren’t enough conventions to keep the business sustainable.
The Box of Cereal
At this point, things were looking dire for AirBnB. They had no money coming in, and people still weren’t using their service. They had created something so powerful, so disruptive, but didn’t have a market!
They entered what they call ‘The Trough of Sorrow’, a time of zero growth. This is when people usually quit and go back to the 9-5 world.
Founder Joe Gebbia actually had a folder of Visa and MasterCard’s that they would use to live on, that were all maxed out, and there was no hope for paying them off.
Then, they had an idea…
They thought that if they could add more value to hosts, by providing them with breakfast that they could give to their guests, more people would use their service. This is where a lightbulb went off, and the AirBnB story may never have happened!
Jokingly, they came up with an idea for Obama O’s and Cap’n McCains, as they were both vying for the US presidency in 2008. They approached some cereal manufacturers who wouldn’t take their call.
Undeterred, they found a graphic designer who agreed to make 500 boxes for a share of the profit. This was so powerful! Why? Because it created scarcity! The cereal boxes were now a limited edition. They sold the cereal for $40 a box, raised $20k, and AirBnB was saved.
How AirBnB Got Lucky
Not only did Obama O’s and Cap’n McCains pay off credit cards and save AirBnB, they also opened doors.
After dining with their mentor, the AirBnB founders got the green light to apply to be a part of the Y Combinator programme, where they would receive funding and guidance.
They met with Paul Graham of Y Combinator who wasn’t sold on the idea of AirBnB. When they were leaving, Joe Gebbia gave Graham a box of Obama O’s. Curious, Graham asked how they got them, and Gebbia explained how they created them.
It was this lateral thinking, this creativity, that got AirBnB into the Y Combinator programme! Then you know the rest, AirBnB is now valued at over $20 billion dollars and has over 3,000,000 listings worldwide!
Was it all Luck?
Some may say that how AirBnB got started was all down to luck. The design conference in San Francisco, the presidential conference in Denver, getting into Y Combinator…
But was it?
In order to get this luck, the team had to go all-in on themselves and their idea. They had to be 100% committed to seeing their business explode no matter what. They literally had no exit strategies. This meant they had leverage on themselves to make calls, send emails, and jump on planes to speak with their customers when it would have been easier to watch TV.
When you get 100% committed to your outcome, you’ll be surprised by just how much ‘luck’ comes your way too.
Kindest regards,
Matt Catling
