Airbnb, Inc.

Brian Chesky and Joe Gebbia were broke San Francisco roommates in 2008 who couldn't afford rent. When a design conference came to town and all hotels were full, they bought three air mattresses and rented out space in their apartment to conference attendees for $80 a night. They called it "Air Bed and Breakfast." All three spots filled within hours.

Unable to raise venture capital, Chesky and Gebbia created two novelty breakfast cereals — "Obama O's" and "Cap'n McCain's" — timed to the 2008 presidential election. They sold 1,000 boxes at $40 each, raising $30,000. Paul Graham of Y Combinator later said the cereal hustle was the reason he invested: "If you can convince people to pay $40 for a $4 box of cereal, you can probably convince people to stay in strangers' homes."

Airbnb was accepted into Y Combinator in January 2009. Paul Graham invested $20,000 for 6% of the company. Graham told them the idea was crazy — but that the founders were determined enough that it might work anyway. At the time, Airbnb had seven paying customers.

By 2011, Airbnb had one million nights booked. Marriott, Hilton, and Hyatt began lobbying governments to regulate or ban the platform. More than 30 cities introduced Airbnb-specific legislation.

In February 2020, Airbnb's bookings were growing 30% year-over-year. By April, they had fallen 80%. The company laid off 1,900 employees — 25% of its workforce. Nine months later, Airbnb went public at $68 per share. The stock doubled on the first day. It was the largest U.S. IPO of 2020.