Y Combinator, the X Factor of tech

IT SOUNDED like an oddball idea, but that is how many breakthroughs in Silicon Valley begin. In late 2008 three young men applied to Y Combinator (YC), a school for startups, looking for help with their tiny firm, AirBed & Breakfast, a website that helped people rent out inflatable mattresses in their living-rooms during conferences. Paul Graham, one of YC’s founders, did not think much of their idea, but liked their pluck. Strapped for cash, the three had sold novelty breakfast cereals during the presidential election (Obama O’s and Cap’n McCains) to earn enough money to keep their startup going. Mr Graham and his partners at YC helped them to refine their idea and meet early investors. Today Airbnb, as their firm is now known, rents out whole apartments in 190 countries and is one of the most talked-about startups, valued at $25.5 billion.