The $13B Company Funded by Cereal Sales

Everyone and their brother has a startup.

And when you’re a guy like Paul Graham – co-founder of Y Combinator – you hear a lot of pitches from wannabe entrepreneurs.

Paul has given seed funding to several hundred startups since its inception. No doubt he’s heard every story you can imagine.

Every now and again though, one comes along that blows even his mind.

Take, for example, the founders of the popular vacation rental site Airbnb.

Brian Chesky and Joe Gebbia came up with the idea of peer-to-peer property rental as an alternative to commercial lodging. At first, they were off to the races.

But as many have learned along their journey, success can be fleeting.

Strapped for cash, they turned to the Y Combinator program in hopes that Paul and his team would buy into their idea and provide a boost of capital to keep it going.

“Two things we care about are how determined people are and how smart they are. We can tell, in a ten-minute interview, how smart someone is. You just hit a few tennis balls across the net at them and see how hard they hit it back…”

“But telling how determined someone is in a ten-minute interview, we are often fooled.”

– Paul Graham

The boys gave it their all during the presentation, but in the end the pitch landed as flat as a futon.

Ouch…

Instead of meekly walking out of the room with their tails between their legs, they did the unexpected. They tossed up a Hail Mary.

Much to Chesky’s dismay, his partner Joe pulled a box of cereal from his bag and told the story of how it came to be. Not just any cereal though…their cereal.

During the 2008 presidential election, the two came up with a unique idea to capitalize on the hype surrounding the candidates. They bought a bunch of generic cereal and had a print shop create custom labeled boxes to repackage the contents.

“Obama O’s – The Cereal of Change” and “Cap’n McCain’s – A Maverick in Every Box.”

They created the package design themselves and glued each box together by hand.

Now’s that’s hustle.

The product went viral and the pair eventually raised $30K to keep their idea afloat.

Their foray into cereal made all the difference.

As Graham would later recollect…

“There’s often a point in the interview where we all kind of look at one another and decide, OK, we’re funding these guys. And as we heard that story, you know, it was all over, they were in.”

Graham told Chesky that Y Combinator was looking to invest in the type of people who could survive anything.

Or as Chesky would later comment,

“He said we were cockroaches and that’s why he funded us.”

Airbnb separated themselves from the crowd. During his Mixergy interview, Paul offered incredible insight into how newcomers can separate themselves from the crowd and gain the footing they need to skyrocket their growth.

Paul even discussed his top strategies for pitching to investors.

Get the interview below to find out what they are…