The Cereal That Saved Airbnb

In October 2008, two designers sat in a San Francisco apartment gluing cereal boxes shut.

They called them Obama O's and Cap'n McCain's. Brian Chesky and Joe Gebbia sold them for $40 a box in the final stretch of the presidential election. They'd burned through their savings and racked up $20,000 each in credit card debt.

Airbnb had no traffic.

The cereal was life support.

A year earlier, the idea had arrived almost by accident. A design conference filled every hotel in San Francisco, so the two roommates inflated three air mattresses, put out breakfast, and listed their place online as an "air bed and breakfast."

It worked. Strangers paid to sleep on their floor.

By 2008 they were pitching investors and getting rejected. Seven said no. The math everyone did: strangers will never sleep in each other's homes, so the market doesn't exist.

Then they tried something that doesn't scale.

They started flying to New York, where most of their listings lived, and going door to door. They met every host. They brought cameras.

The listing photos were tiny, maybe 200 pixels across, shot on phone cameras in bad light. Beautiful apartments looked like crime scenes.

So the two designers, both trained at RISD, photographed the apartments themselves. They threw parties to meet hosts.

They flew back again and again, throwing bigger parties, shooting more rooms. Paul Graham later wrote that when he pictured the Airbnb founders during Y Combinator, he pictured them with rolly bags, always just flown back from somewhere.

Bookings in New York doubled within weeks.

The cereal boxes mattered for a different reason. A RISD alum in Berkeley printed 500 boxes of each for free, for a cut of the sales.

The Obama O's brought in about $30,000 when they had almost nothing. The money helped, and the hustle got them in front of Paul Graham, who backed them into Y Combinator.

Graham called Airbnb the classic case of manual user acquisition. He estimated that about 30 days of going out and engaging with users in person made the difference between success and failure.

The cereal and the cameras were the founders doing the only thing that would teach them what the product had to be. Standing in a stranger's apartment is how you learn that a 200-pixel photo hides the reason anyone would book. No dashboard shows you that.

Airbnb went public in December 2020, valued at $47 billion.

The company that sold cereal to stay alive became one of the most valuable travel businesses on earth. The founders refused to let the product die before it found its shape.