Airbnb's CEO wasted four months building a roommate-finding service before realizing it had already been done

Mike Nudelman/Business Insider

Brian Chesky, co-founder and CEO of Airbnb, revealed in a recent interview that his company, which is now valued at $25.5 billion, actually began as a roommate search site.

Chesky sat down with Reid Hoffman during a class at Stanford - video was uploaded to Medium by Chris McCann - and talked about Airbnb's origins.

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After college, cofounder Joe Gebbia convinced Chesky to leave his job and move to San Francisco to form a startup with him. He had $1,000 to his name, which was not enough to pay rent, but they had an idea.

"At the same time, there was this international design conference coming to SF and on the event page it showed all of the nearby hotels were completely sold out," Chesky said. "We had this idea that the designers coming to attend the conference needed a place to stay? -? we had no money? - ?so what if we created a bed and breakfast for the design conference."

They called their creation "air bed and breakfast" (the origins of the Airbnb name) and ended up roping in three people to stay on air mattresses. At that point, they realized they might have a profitable idea on their hands.

They brought on now co-founder and CTO Nathan Blecharczyk? and focused on the core idea of "what if you could book someone's home just like you could book a hotel room, anywhere in the world." But the trio wasn't thinking about it like a hotel just yet.

"We didn't have this flash of inspiration that Air bed and breakfast was going to be huge. In fact we started building a different product?-?a roommate search tool," Chesky explained. "We worked on this for 4 months and then realized roommates.com had already built this service. I couldn't believe how much time we wasted on this before checking the URL roommates.com"

Stanford / Chris McCann

But the main disappointment for Chesky was going home and telling his parents what he did for a living.

"When I went home for Christmas, my parents asked what I was doing?-?I didn't want to say I was unemployed so I said I was an entrepreneur," he went on to say. "This is when I learned that being an entrepreneur and being unemployed is just a difference in mindset (lol)."

He told them he was working on the air bed and breakfast idea and after giving it some thought, he "decided that we should go back to the drawing board and do this idea."

You can read the full interview between the two here.