The recent UberXPostgres articles are an insight into the engineering challenges that go into solving these business problems at scale.
The projects probably started as some hacky glue programmed Frankenstein but their current iterations solve considerably difficult and expensive problems that I don't think is trivial for new entrants to come in and instantly replicate.
So engineering and capital requirements aside, there's the matter of network effects and customer adoption to tackle. It'd be a very hard sell to convince users to stop using AirBnB or Uber - the inventory may be volatile, but it's deep and expansive.
Any country I go to, I will first think AirBnB or Uber as I will be confident without even checking that they'll have coverage. Much like how I don't even bother looking anywhere else for products other than Amazon - they'll probably have what I'm looking for, it'll either be the cheapest or close to the cheapest product and the delivery experience will be dependable. We at HN consider ourselves being more acquired than most but are probably still prone to appreciating convenience over optimisation now and then.
Current consumer trends suggest though that our behaviour is in the minority and so "first-mover"* advantage is king.
*(AirBnB and Uber almost certainly were not the first in their respective spaces, just like the iPad wasn't the first ever tablet)
However, I still question: 1.) how difficult that is to do (iirc its not like Lyft is far behind and there are others as well) and 2.) does uber have patents on these developments and 3.) how much of those UberXPostgres articles are just posturing to the investment community (i.e. Uber flexing it's muscles to show how it's spending that cash) vs. serious long-term competitive advantage?
You're missing my point about Airbnb, by pivoting to Uber, which I think is in a totally different boat than Airbnb given that Uber does have greater control over some of their inventory than Airbnb and total control over some of the Uber inventory which Airbnb does not. Unless Airbnb starts buying apts and renting them out themselves, which be a better play for them, albeit politically disastrous most likely.
As others pointed out, Airbnb has not published big engineering feats (ala UberXPostgres) nor does it need to, nor likely ever will. The point about Airbnb is that Airbnb is a retailer with total lack of control over inventory. Competitors will one day create a sleeker better platform because there's no defense for Airbnb.
I think a good analogy would be dating sites. It feels like every year there's a new app: Match.com->eHarmony->OkCupid->plentyoffish->jdate->tinder->bumble, the list goes on and on.
Where's the brand loyalty in dating sites? There is none because no one cares about the brand, they care about the inventory (i.e. booty) and so if a site has a better way of finding those dates (be it faster or more curated) or just better "inventory" then people are going to use those new sites. That's how I see Airbnb going. Eventually there are going to be different sites that do the same thing, but tailored to different needs. Airbnb will still be around, but it sure as hell won't be worth $30 billion dollars.
Also, home-sharing is about as fickle as dating. People date until they find a mate and then stop. Most people don't live their home for more than 3 years, especially in popular Airbnb markets like NYC, LA, or SF. Therefore there's a lot inventory turn over that Airbnb has to deal with, just like dating sites, which makes it easier for a competitor to come in and swoop up people who new to home-sharing.
Network effect + brand recognition is worth a TON. It's why you're probably wearing Nikes right now and not generics.
Its the same thing with Airbnb. Uber is going to pave the way for someone else to come along.
Look at Pets.com, people freaked out because they were first to sell pet stuff online. Investors said, look they built an ecommerce website (really hard to do back them), they are first so they have brand affinity, and they'll build trust. Where is Pets.com now?
As for Nike, they're on an upswing now, but they are constantly under siege. But you're missing my point, which is that products (like Nike) build brand affinity, not retailers. Do you buy your Nikes from the same place every time?
^1 unless uber can use their capital to develop a self driving car before anyone else. This would give them a huge advantage. Competitors would struggle to overcome this and would make über virtually invincible.
This is precisely the point most are overlooking when they disagree with your point.
I don't shop at Amazon, ebay, target or walmart because of certain brand affinity for their products. I shop at them because of the brand affinity with the store.
It's not a retailer; it's a marketplace. Marketplaces don't get commoditized. Is there another Ebay out there?
Retailers can purchase the inventory at will, then earn the demand. Marketplaces have to earn both sides.
Airbnb was not the first here; Homeaway has been away for a long time, owns all the web properties, and has far better SEO. Airbnb is kicking their ass.
Sure their dominance won't last forever, but no company's does.
People LOVED Sears for a century and then when someone offered the same products some where else for cheaper in a snazzier space, Sears went down the tubes.
People thought Target was a great experience, but then free 2-day shipping and a lower price from the comfort of your home for the same products came along and now Target is struggling.
Nobody pays a more for a ticket on Priceline.com if they know they can get it cheaper on Expedia.com.
If Airbnb, owned the homes and thereby owned the experience, they'd be able to build brand loyalty. But they don't own any of those things.
Being a retailer does not make you impervious, in fact it makes you more vulnerable IMO.
How many products can you name that are more than >50 years old? How many retailers can you name that are >50 years old?
As for Urban Outfitters, their net sales are more than triple what they were ten years ago. They don't see 30% year-on-year growth anymore, but they haven't seen a decline.
URBN is down 40% from their high stock price and analyst estimates are bad. That's the thing about retail your sales could be good, but your long term outlook bad. See my original comment about wall street hating retail.
Look at Target, they're killing it right now, but wall street still shits on their stock price.
Peter Thiel's Zero To One described four pillars that were necessary for a monopoly. It appears Airbnb has most if not all of these.
1. Network effects - this is usually more important than proprietary tech. They have this - global network effect. This is not a "retail company" any more than Amazon's 3rd party marketplace or Alibaba's is.
2. Tech - read blog and decide for yourself. It's easy to imagine at sub-scale also being able to build Facebook, Instagram, Snapchat, etc. Most of the challenges come at scale (and are protected by #1 above).
3. Brand - the commenters seem to agree they have this.
4. Economies of scale - they have this.
A competitor would need to be more than marginally better to compete subscale, as Airbnb was vs craigslist or original vrbo.
Does AirBnB have enough regulars to make those rewards programs worth it? Do travel-weekly business people use AirBnB? If not, it's like being given the buy-10-get-one-free sandwich card at the deli you go to once a year.
[1] - Edit: And prime!
As for Airbnb, because money is involved and its a retail transaction the game changes. It's like in Freakonomics how once you introduce money into a relationship, a whole new set of dynamics emerge.
Think about your affinity for retailers. Do you really care if your Moleskin notebook was bought from Amazon, Target, or B&N? You probably just went with the cheapest.
Look at this way, Airbnb is a broker for rental inventory that they never own or control. Since they don't actually control the inventory, the owner of the inventory is free to take it anywhere they want. Airbnb has no secret sauce.
This leaves Airbnb's business totally unprotected and vulnerable to an unlimited number of competitors coming up. Eventually Airbnb will make a mistake, maybe they'll push hosts too far, maybe some catastrophic thing will happen to a guest, the point is something will happen that will shift favor to a competitor. Maybe not tomorrow or next year, but someday.
But it gets worse, Airbnb is going to spend a lot of their vc funds fighting lawsuits, lobbying, and paving the way for their competitors. If I were to compete with Airbnb, I'd spend my time building a better platform and marketing strategy. Then wait for Airbnb to solve short-term rental legislation, then slip into those markets with a far lower cost to entry than Airbnb paid.
But what about technology you say? They've built a great platform that will take time for a competitor to replicate you say. Well if your business defense is solely based on having a complicated website, you're going to have a bad time.
They've hit on a great idea: home sharing. But they don't own the idea, they don't own the homes and those homes are free to list anywhere they want.