Airbnb Case Study – Leverage Marketplaces


Brian Chesky and Joe Cebbia, two roommates from San Francisco, struggled with paying for the rent. They thought they could earn some cash by renting their apartment for a night. They bought 3 air mattresses and set up a page. They got 3 customers ($80/night each) when a big conference was going on in San Francisco, and the hotels were out of free rooms. They called their website AirBed&Breakfast. When Nathan Blecharczyk joined the team, their project became a website with hosts offering their places for booking a stay.

Guys went to Craigslist. They manually searched there for room-renting offers and wrote emails to their authors. They asked them to include AirBed&Breakfast in their posts. They got into Paul Graham’s Y Combinator and changed their logo and their name (Airbnb).

They also “hacked” Craigslist. They coded a bot that looked for room-renting offers itself, and then sent emails.

When they got short on money, they released Obama O’s and Cap’n McCain’s cereals.

  • During the U.S. elections in 2008 Airbnb founders had an idea to use election season to produce and sell election-themed cereals – “Obama O’s, the Cereal of Change,” and “Cap’n McCain’s, a Maverick in Every Box”.
  • They designed, printed, and glued the cereal boxes themselves. They filled them with common cereals from a local shop.
  • They contacted the press trying to pitch their cereal boxes – It worked, and a week later they got featured on CNN.

Within a week Obama O’s & Cap’n McCain’s sold $30k worth of cereals – almost 4 times what the Airbnb core business had made before this moment.

To improve UX, they visited their hosts to take high-quality photos of the rooms, and then they put them on Craigslist with a positive opinion. Soon, Chesky, Gebbia, and Blecharczyk got investors.

(Source: Insider)