Two friends, Brian & Joe moved into San Francisco in 2007 searching for jobs. They noticed that all the hotel rooms in the city were sold out for a local conference. They had an idea. They bought some air beds and put up a website called ‘Air Bed & Breakfast’. 3 guests spent that night in their living room for $80 each.
But nothing happened after that. The site had just 2 users. So they relaunched it in Aug ’08, just ahead of the Democratic Convention in Denver. 600 guests stayed this time but they again hit a blank after the event.
Meanwhile their finances were in bad shape and no one wanted to fund. To survive, they came up with an idea of serving branded cereals as breakfast for their guests. And to ride the wave of 2008 US Presidential elections, they had two packs: Obama O’s & ‘Cap’N McCains.
They got the cartons printed, filled up the cereal and sealed the boxes at home. And ended up selling 1000 boxes and made a cool $30,000. They survived!
‘Heck, if you guys could sell this $4 cereal for $40, I know you’ll make your crazy idea work’ said Paul Graham, the venture fund head, looking at the packs.
And gave AirBnB it’s first funding.
It’s a great story to make a point on smart perseverance. And taking risks for long term gain!