The Admirals Club was conceived by AA president C.R. Smith as a marketing promotion shortly after he was made an honorary Texas Ranger. Inspired by the Kentucky colonels and other honorary title designations, Smith decided to make particularly valued passengers "admirals" of the "Flagship fleet" (AA called its aircraft "Flagships" at the time). The list of Admirals included many celebrities, politicians, and other VIPs, as well as more "ordinary" customers who had been particularly loyal to the airline.
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Shortly after moving to San Francisco in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia could not afford the rent for their loft apartment. Chesky and Gebbia came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast. The goal at first was just "to make a few bucks". In February 2008, Nathan Blecharczyk, Chesky's former roommate, joined as the Chief Technology Officer and the third co-founder of the new venture, which they named AirBed & Breakfast. They put together a website which offered short-term living quarters, breakfast, and a unique business networking opportunity for those who were unable to book a hotel in the saturated market. The site Airbedandbreakfast.com officially launched on August 11, 2008. The founders had their first customers in town in the summer of 2008, during the Industrial Design Conference held by Industrial Designers Society of America, where travelers had a hard time finding lodging in the city.