What a great investor can do for you. 📈

🌈 Abstract

The article discusses how Paul Graham, the co-founder of Y Combinator, helped Airbnb in its early days when the founders were struggling. It highlights how Graham believed in the founders' potential even when he was unsure about the idea, and how he actively supported them by introducing them to investors and encouraging them to take a chance on Airbnb.

🙋 Q&A

[01] Airbnb's Early Struggles

1. What were the challenges Airbnb faced in its early days?

• Airbnb was running out of money
• The founders, Brian Chesky and Joe Gebbia, were in $20k debt each
• They were getting rejected by all the investors they met
• Airbnb had no traffic and was not taking off

2. How did Airbnb try to make money in the beginning? Airbnb started selling $1 cereal boxes for $40 each, which helped them pay off debt and get media coverage, but the company was still struggling.

[02] Paul Graham and Y Combinator

1. How did Airbnb get involved with Y Combinator?

• Joe Gebbia and Brian Chesky met with Michael Seibel, the CEO of Justin.tv and Airbnb's advisor, who suggested they apply to Y Combinator.
• Initially, Chesky refused, believing Airbnb was too far in its journey, but Seibel convinced them.
• They secured an interview with Paul Graham, but he was not convinced by their idea.

2. How did Paul Graham's perspective on Airbnb change?

• When Gebbia pulled out the boxes of cereals they had sold, Graham said, "You guys are like cockroaches. You just won't die."
• Graham admitted Airbnb to the W09 Y Combinator batch, even though he didn't believe in the idea, because he felt the founders had something special.
• Graham said, "If you can convince people to pay forty dollars for a four-dollar box of cereal, you can probably convince people to sleep in other people's airbeds."

3. How did Paul Graham support Airbnb?

• Graham was actively involved in helping the company succeed, pushing his friends to invest in Airbnb.
• He introduced Airbnb to a great investor and encouraged the investor to take a chance on the company.