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Disagree entirely. Twitter? No good way to monetize. Groupon? Failed to monetize effectively after virality faded and without a moat competitors did the same t

by criley2 11y ago

Disagree entirely. 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.

xianb 11y ago
>profit on them. Nope. http://gawker.com/here-are-the-internal-documents-that-prove-uber-is-a-mo-1704234157 http://gawker.com/here-are-the-internal-documents-that-prove... Granted that businesses like Amazon are unprofitable, but Uber is not nearly going to be as stable
- jethro_tell 11y ago
  Isn't uber a long play on self driving cars that can be summoned with an app? That's why GM invested in lyft. They need someone to buy their fleet since the number of car owners is going to drop to a few companies in the next 20-50 years.
amelius 11y ago
> On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company. 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-to-conquer-the-world-but-these-companies-are-fighting-back-map http://www.forbes.com/sites/liyanchen/2015/09/09/uber-wants-... [2] http://www.wsj.com/articles/uber-meets-its-match-in-france-1442592333 http://www.wsj.com/articles/uber-meets-its-match-in-france-1... (paywalled)
- supster 11y ago
  Their lock-in is their network effects. Airbnb has a huge selection of locations in many major cities around the world. Uber has an incredible number of drivers and riders on the system globally at all times of the day. Competitors will have a very hard time replicating that.
  - mylons 11y ago
    airbnb has a real problem: VRBO. VRBO is routinely cheaper than airbnb, has been around longer, and doesn't have the legal issues, and has the support of the baby boomers. Good luck, airbnb.
    - x0x0 11y ago
      Have you ever tried to rent from VRBO? I did a couple years ago and have never been back. 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.
      - siquick 11y ago
        This was probably before the online booking platform was launched - you'd find a whole different experience now. Would recommend using http://www.homeaway.com http://www.homeaway.com (parent company of VRBO) instead - has same inventory but better interface.
      - mylons 11y ago
        I sure have. Take a look at Lake Tahoe's VRBO/homeaway listings. They're routinely cheaper on VRBO than airbnb for comparable properties, and it works fine. People in tech just assume airbnb is better.
      - prawn 11y ago
        Yeah, I used VRBO in LA when everything on Airbnb was overpriced and rarely replying. Worked out well.
pyrrhotech 11y ago
I'll concede that Uber and Airbnb business models are stronger than the others, but they are still massively overvalued based on near future growth prospects. Those two will probably succeed in the long run, but they still won't be good stock picks
- sly_foxx 11y ago
  Agree. Airbnb's valuation is very close to eBay's. So, that means that it's expected that in the near future AirBnB will generate at least $2-3 billion in net profits per year. Actually, it would have to be more than that, because investors expect even higher valuation on IPO. Peter Thiel stated he thinks AirBnB will be $100+ billion company, which would imply he expects at least $7 billion after tax profits in the near future. 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.
  - nl 11y ago
    AirBNBs revenue is over 1.2B, 340M per quarter. http://skift.com/2015/11/23/airbnb-revenue-now-larger-than-choice-hotels-and-homeaway/ http://skift.com/2015/11/23/airbnb-revenue-now-larger-than-c...
    - sly_foxx 11y ago
      $340 was for Q3, which is when most people take vacations and doesn't reflect other quarters. The projection for 2015 was $800-900 million. 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.
sumzup 11y ago
Twitter's able to monetize; it's just not able to sustain user growth.
- askafriend 11y ago
  The user numbers have basically flat for many quarters now. It's really really bad.
  - lloyd-christmas 11y ago
    Define "Many quarters". 10% grown in 2015 is hardly "flat" (288m to 316m). It's definitely less than prior years and less than other social apps, but "flat" is a strong word.
blackaspen 11y ago
Twitter's YoY revenue growth is pretty respectable. I don't think they've 'failed to monetize'. (User growth, now that's a different story...)
askafriend 11y ago
If Box was overvalued then Dropbox must just be fucked.
- tracker1 11y ago
  I think it comes down to funding, marketing, development and revenue models. Many companies succeed in funding, then effectively jump the shark in terms of marketing spend and try to massively scale their developer teams in order to increase feature churn, which has the opposite effect a lot of times, and then they've burned through all the cash before they can handle the scaling. 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.
- Cookingboy 11y ago
  Box is probably a little undervalued since they are trading at only 3x their revenue, despite beating analyst expectation for every quarter since IPO. The rest of the cloud/SAAS sector are trading at about 8x-10x in comparison. Dropbox, on the other hand, is valued at 25-30x their revenue, so entirely different animal altogether.
refurb 11y ago
On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company. 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.
Cookingboy 11y ago
Just saying, Box's main target is enterprise market and they definitely charge a hefty amount from their customers. 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.
- puredemo 11y ago
  I still can't fathom how monetizing what are basically just shared network drives, a feature already built into windows, is a successful venture. 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.
  - majani 11y ago
    User friendly packaging sometimes makes all the difference. Apple's empire is built on user friendly packaging.
puranjay 11y ago
You have to ask yourself: how indispensable are these companies? 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)

by criley2 11y ago

xianb 11y ago

>profit on them. Nope. http://gawker.com/here-are-the-internal-documents-that-prove-uber-is-a-mo-1704234157 http://gawker.com/here-are-the-internal-documents-that-prove... Granted that businesses like Amazon are unprofitable, but Uber is not nearly going to be as stable

jethro_tell 11y ago
Isn't uber a long play on self driving cars that can be summoned with an app? That's why GM invested in lyft. They need someone to buy their fleet since the number of car owners is going to drop to a few companies in the next 20-50 years.

amelius 11y ago

> On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company. 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-to-conquer-the-world-but-these-companies-are-fighting-back-map http://www.forbes.com/sites/liyanchen/2015/09/09/uber-wants-... [2] http://www.wsj.com/articles/uber-meets-its-match-in-france-1442592333 http://www.wsj.com/articles/uber-meets-its-match-in-france-1... (paywalled)

supster 11y ago
Their lock-in is their network effects. Airbnb has a huge selection of locations in many major cities around the world. Uber has an incredible number of drivers and riders on the system globally at all times of the day. Competitors will have a very hard time replicating that.
- mylons 11y ago
  airbnb has a real problem: VRBO. VRBO is routinely cheaper than airbnb, has been around longer, and doesn't have the legal issues, and has the support of the baby boomers. Good luck, airbnb.
  - x0x0 11y ago
    Have you ever tried to rent from VRBO? I did a couple years ago and have never been back. 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.
    - siquick 11y ago
      This was probably before the online booking platform was launched - you'd find a whole different experience now. Would recommend using http://www.homeaway.com http://www.homeaway.com (parent company of VRBO) instead - has same inventory but better interface.
    - mylons 11y ago
      I sure have. Take a look at Lake Tahoe's VRBO/homeaway listings. They're routinely cheaper on VRBO than airbnb for comparable properties, and it works fine. People in tech just assume airbnb is better.
    - prawn 11y ago
      Yeah, I used VRBO in LA when everything on Airbnb was overpriced and rarely replying. Worked out well.

pyrrhotech 11y ago

I'll concede that Uber and Airbnb business models are stronger than the others, but they are still massively overvalued based on near future growth prospects. Those two will probably succeed in the long run, but they still won't be good stock picks

sly_foxx 11y ago
Agree. Airbnb's valuation is very close to eBay's. So, that means that it's expected that in the near future AirBnB will generate at least $2-3 billion in net profits per year. Actually, it would have to be more than that, because investors expect even higher valuation on IPO. Peter Thiel stated he thinks AirBnB will be $100+ billion company, which would imply he expects at least $7 billion after tax profits in the near future. 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.
- nl 11y ago
  AirBNBs revenue is over 1.2B, 340M per quarter. http://skift.com/2015/11/23/airbnb-revenue-now-larger-than-choice-hotels-and-homeaway/ http://skift.com/2015/11/23/airbnb-revenue-now-larger-than-c...
  - sly_foxx 11y ago
    $340 was for Q3, which is when most people take vacations and doesn't reflect other quarters. The projection for 2015 was $800-900 million. 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.

sumzup 11y ago

Twitter's able to monetize; it's just not able to sustain user growth.

askafriend 11y ago
The user numbers have basically flat for many quarters now. It's really really bad.
- lloyd-christmas 11y ago
  Define "Many quarters". 10% grown in 2015 is hardly "flat" (288m to 316m). It's definitely less than prior years and less than other social apps, but "flat" is a strong word.

blackaspen 11y ago

Twitter's YoY revenue growth is pretty respectable. I don't think they've 'failed to monetize'. (User growth, now that's a different story...)

askafriend 11y ago

If Box was overvalued then Dropbox must just be fucked.

tracker1 11y ago
I think it comes down to funding, marketing, development and revenue models. Many companies succeed in funding, then effectively jump the shark in terms of marketing spend and try to massively scale their developer teams in order to increase feature churn, which has the opposite effect a lot of times, and then they've burned through all the cash before they can handle the scaling. 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.
Cookingboy 11y ago
Box is probably a little undervalued since they are trading at only 3x their revenue, despite beating analyst expectation for every quarter since IPO. The rest of the cloud/SAAS sector are trading at about 8x-10x in comparison. Dropbox, on the other hand, is valued at 25-30x their revenue, so entirely different animal altogether.

refurb 11y ago

On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company. 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.

Cookingboy 11y ago

Just saying, Box's main target is enterprise market and they definitely charge a hefty amount from their customers. 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.

puredemo 11y ago
I still can't fathom how monetizing what are basically just shared network drives, a feature already built into windows, is a successful venture. 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.
- majani 11y ago
  User friendly packaging sometimes makes all the difference. Apple's empire is built on user friendly packaging.

puranjay 11y ago

You have to ask yourself: how indispensable are these companies? 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)