How The Airbnb Founders Sold Obama-Labelled Cereal Boxes To Grow Airbnb In Its Early Days

Airbnb is a multi-billion dollar startup today that’s just a few steps shy of filing its IPO, an event that would’ve most likely happened this year if not for the toll Covid19 took on the company. But back in the day, its founders adopted some unique approaches to fund and grow the company. The story is one for the ages, but the CEO Brian Chesky refreshed everyone’s memories today with a tweet.

Back in 2008, when Airbnb had freshly come into existence as an apartment rental company, Chesky and co-founders Joe Gebbia and Nathan Blecharczyk devised some strange growth hacks that eventually worked. One of them was to cash in on the ongoing elections in the US, and ride the Obama-McCain wave.  With their credit cards maxed out and the company under debt, the trio decided to fund their apartment rental company with a wholly different side hustle – selling cereal! This was no ordinary cereal though. They repurposed boxes of Cheerio and Captain Crunch – popular cereal brands – into political schwag by selling them with images of Obama and McCain – the two main contenders of the US presidential race.  And almost like a school craft project, the founders built a thousand boxes from scratch, tacked the political imagery labels on them with a hot glue gun, and stuffed them with cereal. “It was like Origami in my apartment”, Chesky reportedly told the crowds at a supermarket where they physically sold these boxes. Initially when the boxes didn’t sell much, the founders decided to create bit of a PR buzz around the same, and it worked. The media lapped up the story, and  the Obama boxes sold out within a few days. Some people even started reselling the “limited edition” boxes on Ebay for a premium. The nifty side hustle did more than create a PR burst, with the enterprising founders netting around $20000-30,000 from the sales of the cereal, almost 4 times of what the Airbnb core business itself had made. 

The cereal hustle also helped the Airbnb founders land a deal with Silicon Valley startup accelerator Y-Combinator.  Their pitch to get accepted into the program didn’t impress Y-Combinator’s co-founder Paul Graham much, but the cereal story managed to seal the deal instead. During the pitch, the Airbnb team reportedly whipped out the cereal boxes and when Brian Chesky narrated the story of the cereal boxes to Graham, he was so impressed with the whatever-it-takes approach of the founders, that he ended up funding them with a $20,000 seed fund in exchange for a 6% stake in the company. “I was looking for cockroach startups for the program.” Graham had told reporters. Cockroach startups is of course Silicon Valley speak for resilient startups who don’t die easily. Sure enough, the daring, if oddball, growth hack saw Airbnb through the worst economic recession facing the US in 2008.

Now almost 12 years later, Airbnb is a vacation apartment rental behemoth with a valuation of $18 billion. It counts Y Combinator, Sequoia Capital, and actor Ashton Kutcher amongst its backers, and decidedly doesn’t need to sell cereal boxes to fund itself. But the cereal act serves as a fascinating backstory on how one of the biggest success stories of the startup world came to be with some nifty timing and out-of-the-box thinking. So much so that people have held on to and framed their “Obama Cereal Boxes” as a souvenir from a part historic election campaign, and part startup lore.

Would Chesky maintain the legacy and dare to repeat the hack in the upcoming US elections with Donald Trump and Joe Biden in the Presidential race? Likely not.  But the politically-active CEO is doing his bit around the current wave of anti-racism movement across the USA. Airbnb has announced a commitment of $500,000 towards organizations that support the Black community, even as its own bottom-line struggles in the aftermath of the Covid19 pandemic. But just like it has for the past 12 years, Airbnb will likely find a way around.