1/ The current crisis will be tough on everyone but strongly expect it will accelerate startup dominance across the board. A lot of the pessimism around high flying companies like Uber is misplaced.
Take AirBnb as an example.
Take AirBnb as an example.
2/ There’s been a lot of very negative press around their postponed IPO and “inflated valuations coming back to earth”. Perhaps. But look for them to become an even more formidable company on the other side of this crisis.
3/ Marketplaces are VERY hard to beat.
AirBnB exposure to a drop in accommodation prices is not direct but derivative. Commissions suffer as a percentage of GMV ... but that’s very different from having to sell your own inventory below cost.
AirBnB exposure to a drop in accommodation prices is not direct but derivative. Commissions suffer as a percentage of GMV ... but that’s very different from having to sell your own inventory below cost.
4/ Volumes are through the floor, clearly, so it’s a survival game right now.
But their fixed cost base is structurally lower and more flexible (people, marketing). No lease payments, no refurbishment costs (unlike say WeWork).
Massive operating leverage.
But their fixed cost base is structurally lower and more flexible (people, marketing). No lease payments, no refurbishment costs (unlike say WeWork).
Massive operating leverage.
5/ If their supply base gets hits, as it will, they don’t really own that problem, to be cynical for a second.
A number of people over-levered to become Superhosts as scale and a probably going to go down. But others will come to take their place.
A number of people over-levered to become Superhosts as scale and a probably going to go down. But others will come to take their place.
6/ And suffering homeowners looking for alternative sources of cash will be keen to put supply back on as soon as they can, with a marginal cost of zero.
Price elasticity drives liquidity.
Price elasticity drives liquidity.
7/ Its inventory is extremely granular & very local … so as soon as you have partial re-openings, you can bet local tourism will restart first.
AirBnb will be uniquely placed to capture those green shoots in travel and recover faster.
AirBnb will be uniquely placed to capture those green shoots in travel and recover faster.
8/ Meanwhile hotel operators 😱.
