How Selling Cereal Boxes Saved Airbnb in 2008

Today, Airbnb is a global hospitality giant valued at over $90 billion, but in 2008, it was just three guys with maxed-out credit cards and a failing idea. What kept them alive? A box of cereal.

Let’s break down the wild, true story of how Airbnb sold cereal to survive.

The Situation: Maxed-Out Cards and No Investors

In the fall of 2008, Airbnb (then called AirBed & Breakfast) was struggling to raise money.

• No VC was interested.

• Credit cards were maxed out.

• Revenue? Practically zero.

• The team couldn’t even afford rent.

The founders, Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, were desperate to keep the lights on.

The Cereal Box Hustle

That year, the U.S. presidential election was heating up between Barack Obama and John McCain.

Here’s what the Airbnb founders did:

• Designed limited-edition cereal boxes: Obama O’s and Cap’n McCain.

• Bought 1,000 empty cereal boxes and printed custom labels.

• Assembled them by hand in their kitchen.

• Sold them for $40 per box as a collector’s item.

They ended up selling $30,000 worth of cereal.

That money wasn’t just rent, it was survival.

From Cereal to Y Combinator

Paul Graham, co-founder of Y Combinator, was so impressed by the hustle that he let Airbnb into the YC program, despite still not understanding the product.

“If you can convince people to buy $40 cereal, you can probably convince them to book a stranger’s couch.” – Paul Graham

That changed everything:

• They got $20K in YC funding.

• Refined the product.

• Launched again during SXSW.

And Airbnb was off to the races.

Lessons from the Airbnb Cereal Story

• Resourcefulness matters more than resources.

• Side hustles can buy time when nothing else can.

• Use cultural moments (like elections) to create buzz.

• The story became a marketing asset that built trust.

Today, Airbnb has hosted over 1.5 billion guests across 190+ countries, but it all started with cereal.