Cliff Notes: HOW AIRBNB TURNED $1,000 BOXES OF CEREAL INTO $38 BILLION

An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States

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Today's Story. This episode's story will be on Airbnb.

Airbnb, Airbnb and Man amazing story.

Phenomenal, phenomenal story.

So I'll started off in two thousand and seven, right Joe Yad Drab Gebbia Gebbia and Brian Chesk Sheeshki. They were both twenty seven at the time, right, and they lived in San Francisco. If anybody's not familiar to San Francisco, I believe is the most expensive place to live in America, highest real estate. I'm pretty sure. I'm pretty Susie, No, I think it's more explored than that.

Yeah, I'm pretty.

Sure it is.

So they were struggling to pay rent, right, you know, twenty seven year olds stretch out of college, struggling. So they lived together. They have like a two bedroom apartment. I as soon and it was a big conference coming up in the city of Design conference.

So they both come from the Rhode Island School of Design. So there was a design conference and they were planning on a tendon.

Yeah, so all the hotels in the city were booked. Because if anybody familiar with San Francisco, San frys School is a very small city. That's why the real estate is so expensive in San Francisco because it's very small. Obviously, you have to look on valley nearby and tech industry. So it's a couple of different things that makes Simranusco so expensive. It's very small, and you're surrounded by the tech industry, which billionaires all around, so land is very scarce.

Yeah.

I think Joe sends an email to Brian like, hey, I have this idea, and he shows it that a lot of his presconsas is I have this idea. Yeah, you know what, there's no more city, there's no more hotels in the city, there's no more rooms.

We got something.

So they want to put three airbeds in their living room on the floor, and they are want to cook their guest breakfast.

All right, so we're gonna rent the space. We have some space in the living room, three air mattresses. Not only we're gonna let people rent that, but like you said, we're gonna make bread breakfast for them.

So the next day they launched a website.

The website is called air bed and Breakfast dot com because they give you an airbed and breakfast because they're gonna make you breakfast airbed and breakfast, hence the name Airbnb, but at first it was called airbed and Breakfast dot com, right, So from there they a few weeks later they actually get three people to come and I think they charged them eighty dollars.

A night per person per night.

Yeah, right, and it worked out for them.

And then next year is when they really take off because now they have an idea, they have a business model, we have a website.

Before they get to the next year, like they're broke. Oh that it broke, so like that conference came and it left, and they still can't pay the rent. So what they did is they took out as many credit cards as they could. Think he tells the story where he has well he remember he used to have trading cards and slip them in.

He had a trading card book. But it was just credit cards.

And I think they accumulated like fifteen thousand dollars in credit card that each just to they couldn't take out any more cash advances on their credit card.

Cash advances powerful tool, very dangerous tools.

We have some stories on them.

Yes, that's a different story.

Okay, So next year, two thousand and eight, there's a senator that is the talk of politics. His name is Barack Obama, right, so it is he's running for president the first time obviously, and there's the Democratic National Convention which is held in Denver, Colorado. So they gear up

But now they want to scale it.

So they want to recruit other people to rent their apartments, re rent their homes, and then they get a portion of that and they'll broker it for them.

And yeah, the idea was like, we're going to find Obama supporters in Denver to open up their homes for other Obama supporters.

Think you had eight hundred listings. They were able to find it.

Yeah, they found eight hundred homes and it was great. They made some.

Money, they made they made a little bit of money.

Yeah someone Yeah not enough, not enough. Yeah.

So they still even after the convention, they still broke no, no.

Before the convention is over, Before the convention is over. Leading up to it, they have eight hundred homes and apartments that they were able to get people to rent. But they still didn't really make any money, right, I don't know why. I guess it just wasn't profitable for whatever reasons. So now they go to the convention and they have the bright idea as a marketing tool, and they didn't really do this to make money. They did this as a marketing tool to make cereal limited boxes

So the it ties into what they do, right, We're gonna give you the room and how are we going to make breakfast now for you? Because the original thing is like you'll get the room and we'll provide breakfast.

But this was more of a pr store.

Yeah no, but so he says it in some of his speeches. He's like, look, we had to figure out how we're going to scale breakfast. So are we going to put eggs and ship.

It to people? No, We're gonna make cereal.

So what they did, like I think Joe Gebia does, is he goes to like the cheapest places he can find cereal.

So he goes to like dollar stores and buy Cereal and they press.

Up these pictures like they go to an architect like, hey, we need you to draw this picture. So they have Obama and they have McCain on the Cereal box and they make it limited.

Edition, limited edition.

Yeah, and each box has like the numbers, so if you bought one, you know that you have four out of five hundred, because I think they.

Only did a thousand buses eight thousand boxes each.

Each candidate got five hundred boxes, so they put like like four out of two hundred or five out of two hundred, so everybody had a limited.

Number on their box.

Okay, the brilliant thing is that we know boxes of Cereal of course like four hours at the most, sometimes a little bit more super size.

They charged foty.

Dollars for the box and they made thirty thousand dollars, So they made thirty thousand dollars off cereal and that was enough to propel them.

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An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas. Man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States

Sponsored by the United States Department of Homeland.

Security next year going forward, where they finally got the business off the ground, off and running, and then they were able to get substantial amount of money from an angel.

Investor, some seed money, some seed money.

Then in twenty eleven they get even more money from Ashton Cusher.

Yeah legend. People don't He's made some brilliant moves.

People don't even remember him.

Pump was it pumped? Was that the show punked? I think that's what the seventy show?

First they show punked. He had this movie called The Butterfly Effect.

I was just yeah, that was a decent movie. And then he married the Demi Moore.

Right, he was married to Demi.

Moore and now he's married to me La Kunis Okay.

Ashton Kushier. Not to get off topic here, but the guys.

Are genius, right, make good movies.

He's angel investor. He's a Hollywood A list celebrity who, at the peak of his career, decides to switch his focus and become an investor in tech companies. Some of the companies that he invests in early Spotify, Airbnb, Uber, Twitter, and now Ripple Yes cryptocurrency. Ripple So Aston Kusher comes in twenty eleven, gives them money.

And then they skyrocket Skyrocket.

It gives them money to hire more staffing. They go staffing the United States to now Europe. Officers become global Global.

Their current valuation is thirty eight billion dollars.

Wow, yeah, I think so. They're both founders, three founders. They're each worth four billion dollars four billion. They're under forty years old.

Yep, thirty eight billion dollar evaluation. The reason why I like this story is because it highlights if you are an entrepreneur, you have to do whatever you have to do. You have to hustle at all courts. Right, So they starting an idea to put air mattresses in their living room and they make people breakfast.

Nobody believed in them, like they took this to Silicon Valley and had twenty investors.

No, it's laughable if you take No.

If you think about it, right, you're putting three air mattresses in your living room and you're gonna make people breakfast, and you're gonna name the company Airbed and Breakfast.

They said. They laughed at they that's not a joke. They laughed at them, and they said, this is never gonna work. They had twenty investors.

Ten of them didn't respond to their emails, five of them met with them, and the other five sat down and had a tent in a conversation, all of them said no, none of them believed in it.

And then right nobody believed in it. And then when all else fails, they realized that they have to go to plan B and they sell cereal.

And that's what gets the money from the seat investors. They're like, if you can sell cereal to people at four hours of box, you must.

Be on something.

If one hustle isn't working, you got to switch.

It, right.

He said that his mom would call him like, wait, I thought you guys were a chain of like hotel services. Like you're selling cereal nowt here a food company now, So whatever we have to do.

To get this money, whatever by any means necessary.

Yeah, But it didn't.

Like I said, it didn't work at first, and they had to go to the drawing board and one of the things they said they met an investor, and he was like, go meet your people, And what that really meant was like, why isn't it working? And they found out that when they went to some of the places that they were listing, they realized that the people weren't taking great pictures. It wasn't displaying the homes like they should.

Know when we say all right, we give you guys these case studies. So when you go to like business school, Harvard, yeah, whatever, top business school, Boarden, they go through case studies, right, and it's entertaining stories, but it's more so it's education.

Right.

We're not just giving you these case studies just to entertain you. Hopefully you can learn something from it and implement it in your business, whether you sell T shirts, whether you're a barber, whatever, you can learn from other people's success stories and figure out a way how you can copy what they have done.

Right, there's nothing wrong with it.

Becase what they have done or inspire you or gain some type of insight. So I just want to leave that because you know, we give a lot of these stories and they are entertaining, but it's not just a bedtime story, like it's for actual action, like to take action, to leave some inspiration. So hopefully that story, to me at very least is a very inspirational story for a

Two thousand and seven, nobody believes in them. Two thousand and sixteen, they become the official sponsor of the Summer Olympics, like this brand that nobody believed in. So like that, that's to tell you, like, just be persistent from thirty believing yourself.

From broke to thirty thousand cereos to thirty eight billion valuation in ten years.

And anybody can do that. Yes, anybody can be a host. So it's like if you have space, like like anybody.

It's it's disruptive idea. They disrupted the hotel industry, which was the same for one hundred years. So if you want to find the next big thing, see what hasn't been changed in the last hundred years and find a way to disrupt that.

And look across, look across, like the people around you might be able to help you.

Yep, right, that's another lesson.

He reached out to his friend who was from the same design school. He reached out to another friend that was a web developer. That's how they got the site up. And then the person who gives them the seed money actually came from came from the Rye Island School of Design. He was like, wait, let me at least have a meeting with these guys since they came from our school. And that's how it starts. Man reach across.

An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President

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