cartoon character</a> he seemed a tornado of energy. All three of them were like that. No one ever worked harder during YC than the Airbnbs did. When you talked to the Airbnbs, they took notes. If you suggested an idea to them in office hours, the next time you talked to them they’d not only have implemented it, but also implemented two new ideas they had in the process. “They probably have the best attitude of any startup we’ve funded” I wrote to Mike Arrington during the batch.</p>\n<p>They’re still like that. Jessica and I had dinner with Brian in the summer of 2018, just the three of us. By this point the company is ten years old. He took a page of notes about ideas for new things Airbnb could do.</p>\n<p>What we didn’t realize when we first met Brian and Joe and Nate was that Airbnb was on its last legs. After working on the company for a year and getting no growth, they’d agreed to give it one last shot. They’d try this Y Combinator thing, and if the company still didn’t take off, they’d give up.</p>\n<p>Any normal person would have given up already. They’d been funding the company with credit cards. They had a <em>binder</em> full of credit cards they’d maxed out. Investors didn’t think much of the idea. One investor they met in a cafe walked out in the middle of meeting with them. They thought he was going to the bathroom, but he never came back. “He didn’t even finish his smoothie,” Brian said. And now, in late 2008, it was the worst recession in decades. The stock market was in free fall and wouldn’t hit bottom for another four months.</p>\n<p>Why hadn’t they given up? This is a useful question to ask. People, like matter, reveal their nature under extreme conditions. One thing that’s clear is that they weren’t doing this just for the money. As a money-making scheme, this was pretty lousy: a year’s work and all they had to show for it was a binder full of maxed-out credit cards. So why were they still working on this startup? Because of the experience they’d had as the first hosts.</p>\n<p>When they first tried renting out airbeds on their floor during a design convention, all they were hoping for was to make enough money to pay their rent that month. But something surprising happened: they enjoyed having those first three guests staying with them. And the guests enjoyed it too. Both they and the guests had done it because they were in a sense forced to, and yet they’d all had a great experience. Clearly there was something new here: for hosts, a new way to make money that had literally been right under their noses, and for guests, a new way to travel that was in many ways better than hotels.</p>\n<p>That experience was why the Airbnbs didn’t give up. They knew they’d discovered something. They’d seen a glimpse of the future, and they couldn’t let it go.</p>\n<p>They knew that once people tried staying in what is now called “an airbnb,” they would also realize that this was the future. But only if they tried it, and they weren’t. That was the problem during Y Combinator: to get growth started.</p>\n<p>Airbnb’s goal during YC was to reach what we call <a href=https://www.ycombinator.com/"http://paulgraham.com/ramenprofitable.html/">ramen profitability</a>, which means making enough money that the company can pay the founders’ living expenses, if they live on ramen noodles. Ramen profitability is not, obviously, the end goal of any startup, but it’s the most important threshold on the way, because this is the point where you’re airborne. This is the point where you no longer need investors’ permission to continue existing. For the Airbnbs, ramen profitability was $4000 a month: $3500 for rent, and $500 for food. They taped this goal to the mirror in the bathroom of their apartment.</p>\n<p>The way to get growth started in something like Airbnb is to focus on the hottest subset of the market. If you can get growth started there, it will spread to the rest. When I asked the Airbnbs where there was most demand, they knew from searches: New York City. So they focused on New York. They went there <a href=https://www.ycombinator.com/"http://paulgraham.com/ds.html/">in person</a> to visit their hosts and help them make their listings more attractive. A big part of that was better pictures. So Joe and Brian rented a professional camera and took pictures of the hosts’ places themselves.</p>\n<p>This didn’t just make the listings better. It also taught them about their hosts. When they came back from their first trip to New York, I asked what they’d noticed about hosts that surprised them, and they said the biggest surprise was how many of the hosts were in the same position they’d been in: they needed this money to pay their rent. This was, remember, the worst recession in decades, and it had hit New York first. It definitely added to the Airbnbs’ sense of mission to feel that people needed them.</p>\n<p>In late January 2009, about three weeks into Y Combinator, their efforts started to show results, and their numbers crept upward. But it was hard to say for sure whether it was growth or just random fluctuation. By February it was clear that it was real growth. They made $460 in fees in the first week of February, $897 in the second, and $1428 in the third. That was it: they were airborne. Brian sent me an email on February 22 announcing that they were ramen profitable and giving the last three weeks’ numbers.</p>\n<p>“I assume you know what you’ve now set yourself up for next week,” I responded.</p>\n<p>Brian’s reply was seven words: “We are not going to slow down.”</p>\n<!--kg-card-end: html-->","comment_id":"1104603","feature_image":null,"featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2020-12-10T01:23:59.000-08:00","updated_at":"2024-03-21T06:49:41.000-07:00","published_at":"2020-12-10T01:23:59.000-08:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"/blog/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"}],"tags":[{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"}],"primary_author":{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"},"primary_tag":{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"},"url":"https://ghost.prod.ycinside.com/the-airbnbs/","excerpt":"To celebrate Airbnb’s IPO and to help future founders, I thought it might be useful to explain what was special about Airbnb.","reading_time":4,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"61fe29f1c7139e0001a71615","uuid":"b5b3c139-9765-484c-970b-f374ff1c98cb","title":"Meet the People Taking over Hacker News","slug":"meet-the-people-taking-over-hacker-news","html":"<!--kg-card-begin: html--><div class=\"posthaven-post-body\">\n<p>I did several different things while I was working on Hacker News, and these will now be taken over by different people.</p>\n<p>Kevin Hale (HN id kevin) will be in charge of design. I don’t think he plans to change much about the appearance of the site, but users will be happy to hear he has a plan to make it work better on mobile devices.</p>\n<p>Kat Manalac (katm) and Garry Tan (garry) will be the voice of YC on HN. They’ll be the ones who respond to most “Ask YC” posts and individual comments related to YC.</p>\n<p>Nick Sivo (kogir) is going to continue working on the code. He’s been working on HN for a while, and is the reason it’s actually faster now than it was a couple years ago, despite increased traffic.</p>\n<p>Finally, I’m delighted to announce that Daniel Gackle (pronounced Gackley), who has already been doing most of the moderation for the last 18 months, is going to join YC full-time to be in charge of the HN community. Many HN users know Daniel as gruseom, though now he’s going to switch to the slightly more legit sounding dang. Daniel is one of most thoughtful (in both senses of the word) people I’ve ever met. It kills him when people say mean, stupid things in comment threads. Moderating an anonymous forum is hard, and the fact that we get roughly equal grief for HN comments being bad and for being too quick to ban people is a sign he’s been doing a good job so far. He has plans for new tools that may not merely arrest the decay of HN comment threads, but actually improve them.</p>\n<p>I’ll still be around as a user, but less frequently than when I felt I had to check the site every hour or so to make sure nothing had broken.</p>\n</div>\n<!--kg-card-end: html-->","comment_id":"669488","feature_image":null,"featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2014-03-29T13:42:12.000-07:00","updated_at":"2021-10-20T14:11:30.000-07:00","published_at":"2014-03-29T13:42:12.000-07:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"/blog/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"}],"tags":[{"id":"61fe29efc7139e0001a71173","name":"YC News","slug":"yc-news","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-news/"}],"primary_author":{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"},"primary_tag":{"id":"61fe29efc7139e0001a71173","name":"YC News","slug":"yc-news","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-news/"},"url":"https://ghost.prod.ycinside.com/meet-the-people-taking-over-hacker-news/","excerpt":"I did several different things while I was working on Hacker News, and these will now be taken over by different people.","reading_time":1,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"61fe29f1c7139e0001a715df","uuid":"4c1f12d9-fdd8-4925-abf7-da8f4f0eb328","title":"Sam Altman for President","slug":"sam-altman-for-president","html":"<!--kg-card-begin: html--><div class=\"posthaven-post-body\">\n<p>I’m delighted to announce that Sam Altman has agreed to become president of Y Combinator starting next batch. I’ll continue to do office hours with startups, but Sam is going to lead YC.</p>\n<p>Why the change? Because YC needs to grow, and I’m not the best person to grow it. Sam is what YC needs at this stage in its evolution.</p>\n<p>I’m convinced there’s a fundamental change happening in the way work gets done. It’s becoming normal to start a startup. There will be a lot more startups in 10 years than there are now, and if YC is going to fund them, we’ll have to grow proportionally bigger.</p>\n<p>Of all the people we’ve met in the 9 years we’ve been working on YC, Jessica and I both feel Sam is the best suited for that task. He’s one of those rare people who manage to be both fearsomely effective and yet fundamentally benevolent–which, though few realize it, is an essential quality in early stage investing. Sam is one of the smartest people I know, and understands startups better than perhaps anyone I know, including myself. He’s the one I go to when I want a second opinion about a hard problem. And his association with Y Combinator is only about a month shorter than mine, because he was one of the founders in the first batch we funded, in 2005.</p>\n<p>So when Sam became available in 2012, I started trying to recruit him. It took me over a year, but eventually I succeeded.</p>\n<p>YC should feel the same to the startups we fund. Office hours are the way founders interact with me, and I’ll still be doing those. In fact, since I’ll only be doing office hours and not also worrying about running YC, I’ll probably be able to give better advice.</p>\n</div>\n<!--kg-card-end: html-->","comment_id":"656914","feature_image":null,"featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2014-02-21T10:54:56.000-08:00","updated_at":"2021-10-20T14:15:44.000-07:00","published_at":"2014-02-21T10:54:56.000-08:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"/blog/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"}],"tags":[{"id":"61fe29efc7139e0001a71173","name":"YC News","slug":"yc-news","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-news/"}],"primary_author":{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"},"primary_tag":{"id":"61fe29efc7139e0001a71173","name":"YC News","slug":"yc-news","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-news/"},"url":"https://ghost.prod.ycinside.com/sam-altman-for-president/","excerpt":"I’m delighted to announce that Sam Altman has agreed to become president of Y Combinator starting next batch. I’ll continue to do office hours with startups, but Sam is going to lead YC.","reading_time":1,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"61fe29f1c7139e0001a715b8","uuid":"4de8ba2a-32fb-49ec-8a28-9a02be40a285","title":"New YC Partner Investment Policy","slug":"new-yc-partner-investment-policy","html":"<!--kg-card-begin: html--><div class=\"posthaven-post-body\">\n<p>As of this batch we’re introducing a new policy for investments by YC partners in the companies we fund.</p>\n<p>YC partners have invested in the startups we fund since the first batch. In the beginning it was harmless, and occasionally even necessary. And other investors couldn’t treat investments by YC partners as much of a signal when I was the only one doing it, because I was so haphazard about it. But over the years this gradually changed, as there came to be more YC partners and they paid more attention to picking likely winners, till by the last couple batches, other investors could treat investment by YC partners as an accurate sign of how promising we thought a startup was. Which meant we were now making it harder for the startups that partners didn’t invest in to raise money.</p>\n<p>Our new policy is designed to prevent this by depriving other investors of this signal till it’s too late. The new rule is that YC partners can’t be in the first $500k a company raises, unless it’s 3 weeks past Demo Day. And since a startup’s fundraising trajectory is almost always established, one way or another, by 3 weeks after Demo Day, this should mean that we can’t affect anyone’s fundraising unless they’ve raised $500k, at which point their fundraising is already successful.</p>\n<p>This should fix the problem. If it doesn’t we’ll try something else.</p>\n</div>\n<!--kg-card-end: html-->","comment_id":"648519","feature_image":null,"featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2014-01-31T09:51:46.000-08:00","updated_at":"2021-10-20T14:18:58.000-07:00","published_at":"2014-01-31T09:51:46.000-08:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"/blog/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. He is the author of On Lisp, ANSI Common Lisp, and Hackers & Painters. In 1995, he and Robert Morris started Viaweb, the first SaaS company, which became Yahoo Store.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/paul-graham/"}],"tags":[{"id":"61fe29efc7139e0001a71173","name":"YC News","slug":"yc-news","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-news/"}],"primary_author":{"id":"61fe29e3c7139e0001a710b5","name":"Paul Graham","slug":"paul-graham","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/pg.jpg","cover_image":null,"bio":"Paul is a cofounder of YC. 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I’m delighted to announce that Sam Altman has agreed to become president of Y Combinator starting next batch. I’ll continue to do office hours with startups, but Sam is going to lead YC.
