How Airbnb’s Early Adopters Saved the Company

In 2008, unable to pay rent, the co-founders of Airbnb (including the speaker) conceived their idea when San Francisco hotels were fully booked during a design conference. They rented out airbeds in their apartment, offering a holistic experience with airport pickups and breakfast. Initially, their website, airbedandbreakfast.com, flopped despite multiple launches, leading them into the “trough of sorrow” with minimal revenue. Rejected by 20 investors, they self-funded with credit cards and even sold politically themed breakfast cereal (“Obama O’s” and “Captain McCain’s”) to pay off debt. Paul Graham of Y Combinator advised them to meet their early adopters in New York. There, they discovered poor listing photos were a major issue. By offering free, professional photography and conducting ethnographic research in users’ homes, they found simple, actionable improvements. This hands-on approach dramatically doubled their revenue week-over-week, showcasing the power of direct customer engagement and iteration over scalable but detached problem-solving.
Everything changed after Joe Gebbia and his co-founders got to know their users.
Source: Inc.