How Airbnb got its first 600 customers: eight lessons for founders

Executive overview

Airbnb started not as a grand vision but as two broke designers renting air mattresses to cover rent. Within 48 hours of the idea, they had their first three paying customers and press coverage.

The company's early growth came from targeted micro-PR, rapid iteration after failures, and relentless resourcefulness — including selling election-themed cereal boxes to stay alive long enough to reach Y Combinator.

If you can sell a $40 box of cereal, you can convince strangers to sleep in each other's homes.

The origin and first customers

• Two roommates faced a 25% rent hike and noticed a hotel shortage during a design conference in San Francisco.
• Built a basic website in under 24 hours with photos of their living room and three air mattresses at $80 each.
• Emailed design blogs covering the conference; got coverage within 48 hours.
• Sold out all three beds — guests were delighted, and inbound requests from other cities followed immediately.
• Framing mattered: "two designers creating a new way to connect at IDSA" outperformed "two broke guys renting air mattresses."

Early failures and what they revealed

• Briefly abandoned the idea to pursue a roommate-finding product, only to discover apartments.com already existed.
• Relaunched for South by Southwest 2008 in two weeks: got five hosts, two reservations (one was a founder). Clear failure.
• Lesson from SXSW: conferences are too niche; pivot to vacation rentals.
• Lesson from in-person payments: move transactions online — awkward cash exchanges killed conversions and removed the fee model.

The Denver convention breakthrough

• Obama's 2008 DNC moved to a 100,000-seat stadium in Denver; the city had only 20,000 hotel rooms.
• Airbnb targeted local bloggers instead of CNN (who ignored them); those small blogs seeded major coverage later.
• Over 600 guests stayed through Airbnb that weekend — the first real scale.

Staying alive: cereal boxes and Y Combinator

• By end of summer 2008, founders were $25,000 in credit card debt.
• Designed and sold Obama O's and Cap'n McCain's cereal at $40 a box; raised ~$30,000.
• Obama O's sold out in three days; boxes later resold on eBay for $350.
• The cereal stunt got them on CNN and, crucially, into Y Combinator.
• Paul Graham: "If you can convince people to pay $40 for cereal, you can probably convince people to sleep in other people's airbeds."
• Received $20,000 seed funding for a 6% stake; entered YC January 2009.

Eight lessons for early-stage founders

1. Every business starts with a problem — keep a running list of problems worth solving.
2. Test your idea within days, not months; a 24-hour prototype beats a perfect plan.
3. Craft a story your customers find exciting, not just accurate.
4. Build a shortlist of potential co-founders before you need them.
5. Treat each failure as a data point; reflect on what to stop and what to continue.
6. Try many marketing channels, then 10x the one that works — Airbnb kept returning to small blogs.
7. Leverage existing skills for side income; assume no revenue from the business for at least a year.
8. Revolutionary ideas will be called crazy — Airbnb faced the same skepticism as Uber.