Brian Chesky explains how Airbnb solved the chicken-and-egg problem

Marketplaces are incredibly defensible at scale. And maybe it's because they're incredibly hard to start. And the problem is simple. They call it the chicken and egg problem. Travelers don't want to book homes. Well, they're not going to book homes with no homes there. So you try to get the homes, but the homeowners don't want to list their homes unless people are going to book them. So what do you do? That was really hard and we didn't know what to do for a while. We tried a lot of different things. And I can tell you what worked. Summer of 2008, something was happening in the world that everyone was talking about. Barack Obama, Democratic National Convention. The press announces that Barack Obama's Moving from a 20,000 seat basketball arena, where I think the Denver Nuggets play, to where The Broncos play, 80,000 seat football stadium. And we said, that's our shot. You have 60,000 people, don't have housing, surely at least a few of them are gonna need a place to stay. And it was really in the spirit of the Mamba campaign that people wanted to stay with other people. Kind of a grassroots movement. And so we went literally, we started with like local people in Denver. Then we started emailing bloggers. We got the bloggers. Then the Denver, like Denver Post and the Rocky Mountain News covered us. Then the local ABC and NBC and CBS affiliates, and then Wall Street Journal, then New York Times, and eventually CNN is like in our living room over the course of three, three weeks. And we did that and literally went for a matter of three weeks, went from a few guys in an apartment, no business, no money, completely broke with no press, to a few guys in the living room with still no business, no money, still completely broke, maybe even more broke. But now we're on cnn, New York Times, and that kind of started these little infernos. So you start getting a few users here, 100 here, 50 there, 100 there. We did the same thing with the inauguration. And you have 100 people here and there, then you obsessively meet them. And the great thing, this is the last thing I'll say is this. One of our other advisors, his name's Paul Graham, he's our first investor, he said it's better to have 100 people love you than a million people kind of like you. And the reason why is it's really hard to have this really wide, shallow base and to continue to build off and you'll never even meet them. But 100 people, you can find out everything they want. Most of these people never even met somebody who started a website. You meet them, you spend a ton of time with them, and once they fall in love with you, literally, as a product, they'll tell every one of their friends. And that's why it took a real long time to start, but it grew much faster later on.