Let's compare eBay to AirBnB.
eBay incorporated in 1996, AirBnB in 2008. After 6 years of existing, eBay's revenue in 2002 was $1.21 billion[profitable]. AirBnB's revenue after 6 years is $400+ million[not profitable].
Now, eBay got that revenue+profits by 2002 when:
> (1) there were only few hundred million people online - 7x less than now. Slow internet connection, ugly websites, no mobile.
> (2) people were somewhat insecure about transacting online and paying was pain in the ass.
> (3) they were only popular in the US, UK, AU and had recently entered Germany.
Compare that to AirBnB, which after the same number of years operates in environment where:
> (1) there are over 3 billion people online.
> (2) payments online are very common(booking hotels pioneered by other companies) and easy.
> (3) says it operates in 190 countries, 20+ languages.
Even after all these advantages, they only got 1/3 of eBay's revenue in 2002 with the same current valuation.
But, that is year 2015, which is 7th year since they incorporated and I was writing about first 6 years of existence.
For the record, eBay's revenue in 2003 (7th year of existence) was $2.2 billion.
I think the difference is that Uber and AirBnB's valuation assumes continue, explosive growth over the next decade.
Uber could slow and still grow at a decent rate and the valuation would plummet.
Other companies don't go full board, with more conservative growth in terms of features, but can scale more customers without the draw of huge marketing or in some cases smarter marketing. Viral-peer marketing works as long as your conversion out-paces your free sign-ups. I don't have any insights into Dropbox, but can say they're probably fine. There really isn't great competition in this space.. there's competition, but none of the cross-platform options are as good or at least not clearly better.
Yes, but Uber and AirBnB do not have (from a technical perspective) innovative products, nor strong lock-in businessmodels. Everybody could start a competitor. In fact, Uber faces a lot of competition already; see e.g. [1], [2].
[1] http://www.forbes.com/sites/liyanchen/2015/09/09/uber-wants-...
[2] http://www.wsj.com/articles/uber-meets-its-match-in-france-1... (paywalled)
AirBnb raised $1b last year, projecting 2015 revenues at $900m [0]. Until financials show otherwise, they appear to be doing just fine.
[0]: http://www.wsj.com/articles/the-secret-math-of-airbnbs-24-bi...
They're also the property owners right now, relative to the millennials.
It may be that for every $100M they spend on acquisition, they make $200M over three years in sales, in which case it would make sense to burn cash now to capture the market. They could also be going all LivingSocial: setting money on fire with no path to unicorn profitability.
Anyway, no real way to know without the inside financials.
Approx 30 calls, 6 or 7 responded, a couple of those hadn't kept their calendars up-to-date, and only 2 actually were available and matched the info on the site. I was doing my best to spend $6k on a ski vacation and vrbo just didn't want to cooperate. The whole thing was a giant waste of time.
Would recommend using http://www.homeaway.com (parent company of VRBO) instead - has same inventory but better interface.
People in tech just assume airbnb is better.
AirBnB prevents pre-booking contact because their model is different. They make money on bookings, mostly from the consumer. For HomeAway I pay them ~$1600/yr and get featured placement and no booking fees. That is actually a small marketing expense for my property so the consumer can actually pay quite a bit less by booking my property on VRBO instead of AirBnB which charges the consumer 6-12%.
AirBnB has the problem of being seen as the platform for renting shared space. I think they will do a good job branding as a place for entire home rentals but that may take some time with the older crowd. They have a good renter review system which doesn't exist on VRBO. They are prioritizing hosts that respond quickly because they know that in order to take real share from hotels/resorts and HomeAway/VRBO they will need to provide a better booking experience and also excel at last minute bookings. HA/VRBO doesn't have a lot of checks in place to ensure the consumer receives adequate service and this is mostly due to their chosen business model.
I don't know how this will shake out in full but as an owner, you should be on both. Expedia bought HomeAway so I think that is huge for them because they could launch a really compelling reward platform and provide owners more distribution. I would bet AirBnB would get scooped up by someone as well or finance a strategic acquisition of their own.
Once business travel falls to AirBnb/HA/VRBO due to incentivized rewards programs, hotels will be extremely scared, esp since most are franchises who are losing power. This hasn't happened yet. They're telling the story that AirBnB/VRBO has simply provided more room-nights that wouldn't have happened without them but I don't buy it.
Regardless, there is plenty of space for two heavyweights and I'm bullish on both.
People can live without Groupon. It hasn't changed habits fundamentally.
Uber and Airbnb, on the other hand, have changed consumers' habits.
If you can make something a habit, you're going to win (see: cigarette companies)
They have beat analyst expectations for both revenue growth and profit (well, less loss) for every quarter since IPO, it's just a tough market.
Hire an IT guy and have him setup network shares, done. But obviously there seems to be some need I'm overlooking, considering the revenue these companies are making.
Granted that businesses like Amazon are unprofitable, but Uber is not nearly going to be as stable
Twitter? No good way to monetize. Groupon? Failed to monetize effectively after virality faded and without a moat competitors did the same thing. Yelp? A web version of the BBB protection scheme whose profit comes from the shake down protection racket against small businesses, not from users. Zynga had no moat and other companies quickly did the same thing with much leaner overhead, like King and a dozen other cheap but profitable game makers. Box was just overvalued for what it is.
On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company.
As in, those companies accept money for every transaction and profit on them.
Twitter, box, groupon, yelp don't do that. And Dropbox doesn't and they aren't publicly traded and if they did sell stock it would probably be overvalued and shrink over time like Box.