16 ms·

Uber and Airbnb Alumni Fuel Tech’s Next Wave

135 points by mdev 8y ago

akhilcacharya 8y ago
It's interesting to see a credential effect here similar to universities. Which credentials are the most valuable then? Which company as a new grad is most similar to Stanford, MIT?
- dawhizkid 8y ago
  I don't think it's so much "credentials" as opposed to being tied to a well-respected co + having experience navigating a co through hyper-growth + risk taking attitude. I am an alum of one of these cos, and I suspect the makeup of the average employee as far as risk-taking goes (and again experience seeing a company go from nothing to $20b+) is much higher than an equally competent employee at, say, Microsoft or Amazon. There's a level of self-selection involved here.
- krn 8y ago
  I think as far as credentials go, it's pretty simple: (market capitalization of the company) * (the level of responsibility given at the company). The smaller the company is, the higher the position has to be to make the credentials stand out. For instance, being a recent graduate at FAANG is probably more or less equal to being a pre-A series startup CTO, if there are no other entries in the CV.
  - chrisweekly 8y ago
    I didn't downvote, but I take issue w/ the example you cite. In terms of credentials & signalling, recent grads taking jr software engineer / entry-level positions in FAANG are not comparable to startup founders. That said, at more senior levels, your model fits more closely. A mid-level Alphabet product manager is likely to have been a founder or C-level exec in a startup or two.
    - krn 8y ago
      > not comparable to startup founders. I was referring to early stage startup founders, which are very likely to fail in the first 12-18 months. After a startup receives VC funding or becomes profitable, of course the credentials of its founders stand above the entry-level positions at FAANG. Otherwise, they might just signal a lack of fair judgement.
- deleted 8y ago
  [deleted]
matchbok 8y ago
Ah yes, "innovation" in skirting regulations as AirBnb does. Harming local communities and extracting wealth in the name of "tech disruption".
- rco8786 8y ago
  Its easy to be cynical. It’s harder to recognize that any significant societal change is going to come with some identifiable downside and that those downsides aren’t automatically a reason to not make the change.
  - luckydata 8y ago
    What kind of benefit does society get from Airbnb that's so necessary to disrupt the lives of people living in a city and raising rents on folks that can't afford it?
    - deleted 8y ago
      [deleted]
    - dmitriy_ko 8y ago
      "AirBnb increasing rents" is theory popularized by hotel industry and never been confirmed with hard data. AirBnb allows anyone to profit from demand for lodging, as opposed to few large hotel chains taking all profit. For many AirBnb hosts it's their livelihood. E.g. do you see benefit in anyone being able to start a restaurant or do you think only large restaurant chains should be able to do it? Also AirBnb increases tourist traffic benefiting other businesses.
      - Zhenya 8y ago
        Well you stepped right into it. You need a TON of permits to open a restaurant and you can not open in your house, it has to be in a commercial space. Furthermore, you are free to open your own hotel. You just need to do it in a commercial zoned area since you are doing commercial things.
mushufasa 8y ago
The people who were willing to work for a risky startup with a vast vision are willing to work for another risky startup with a vast vision again. The reverse causation seems like a compelling explanation: innovators built Uber and AirBnB, rather than Uber and AirBnB built innovators (as the title implies).
- dasil003 8y ago
  It's a little of both, and some other factors as well. People joining risky ventures with vast visions all the time, in all kinds of places, you just never hear about the ones that fail. And for the companies that do succeed, especially in SV, there is always a post-hoc founder story told retroactively in order to keep the troops motivated and investor money flowing. If you actually look at FAANG they all started with very focused products with the vision scaling just ahead of their successes to propel hypergrowth for a long period of time. And doing so, btw, takes a lot more than just innovators, it takes an army of people who are mostly focusing on the right things at the right time. The advantage of ex-Uber, ex-Airbnb folks is not that they are more innovative—it's that they have experience in solving the organizational problems of doubling the size of a company over and over and over again within a very short time frame. If you only get people who are good at making innovative small-scale projects then they'll hit a wall when the organizational challenges of hypergrowth suck all the productivity and alignment out of the team. If you get people who only have experience operating at huge scale they won't be able to prioritize short term goals needed to get and maintain traction.
- mcguire 8y ago
  What exactly does "risk" mean in this situation: former employees of a successful unicorn, presumably armed with their payouts, start new companies with the backing of a VC fund, also started by former employees of the successful unicorn?
AndrewKemendo 8y ago
Perfectly encapsulated in this tweet: 18: Go to Harvard or Stanford for CS. 22: Work at FAANG companies. 25: Quit and raise millions for your startup. 26: Sell your company to a FAANG company/IPO 28: Join a VC firm, invest in people like you, and make predictions on Twitter all day. https://twitter.com/TheLexTimes/status/1105131411411886081 https://twitter.com/TheLexTimes/status/1105131411411886081
- JoeSmithson 8y ago
  I understand this is off topic but does Netflix ever actually acquire startups? They are a very different company to Facebook, Apple, Amazon or Google, I feel like they are bundled in mainly to make a cooler acronym.
  - jameslevy 8y ago
    Or just a less offensive acronym.
    - jayd16 8y ago
      How about AFGA, then.
      - mcguire 8y ago
        Call them AGFA and we can buy film from them.
    - adamnemecek 8y ago
      How is it offensive?
      - biglenny 8y ago
        FAGT - Facebook Apple Google Tesla Is probably what he was alluding to. You see how it offensiv right?
  - 8y ago
40acres 8y ago
This is the cycle of Silicon Valley at play, and an example why despite the Exodus of many entrepreneurs and engineers SV is still the leader in software based start ups. Take the "PayPal mafia" for instance, out of one successful company spawned others -- SpaceX, LinkedIn, Facebook (via investment cash). These companies will spawn others, so on and so forth. It's a cycle that feeds upon itself and has been a successful model, but it does have major flaws due to "hardcoded" pattern recognition.
- chii 8y ago
  > It's a cycle that feeds upon itself and has been a successful model you just don't hear about the failures out there. I bet there's much more failures than there are successes. If it weren't, banks would've all lent out money to startups!
  - thereisnospork 8y ago
    > you just don't hear about the failures out there. I bet there's much more failures than there are successes. Sure there are, but a few successes can make up for a lot of failures. Ycombinator, for instance, has been doing its thing for quite a while now and appears to be doing quite well.[1] [1]Not personally having looked into their financials
- brogrammernot 8y ago
  It’s worth mentioning there’s a selection effect that takes place where the companies mentioned are successful, so the employees have more cash on hand usually to make the jump to their own venture without the normal risk attached. (E.g. - most should be able to float their own finances for 12-24 months without needing to take money out of cash flow) I have a couple buddies who have started their own thing out of Uber and they’re doing well. The issue I see is it’s going to be pockets of companies around the gig sharing economy for Uber and similar items in rental/real estate for AirBnB. Employees of both companies have solved some really tricky problems, and they know they can use their experience to solve another set of problems + make it easier to raise money for their venture. Also - I do appreciate you qualified your post with SV being the lead in software companies. I think that’s still true and SV will be the lead for a long time but other cities will be cheaper + you don’t need to be in SV to find great talent anymore and you don’t need to be there to raise good capital. If you have an idea that’s solid and a decent team you’ll be able to find fundraising but it’ll be interesting to see if software stays in SV and we see the software related but more physical goods startups relocate out of SV. SaaS businesses are so much less capital intensive than hard goods based businesses so I’d imagine those companies don’t start in SV so they can has less expenditures in areas that don’t matter.
tanilama 8y ago
I started losing the grab of the term 'Tech'
georgewfraser 8y ago
> The start-up world projects a meritocratic image, but in reality, it is a small, tightknit club where success typically hinges on whom you know. This is...so not true. My co-founder and I had hardly any network in SV. We applied to YC through the website, raised seed money after demo day. We ran on seed + revenue up to about 60 employees and we recently did a series A. If you don’t have a network, don’t be dissuaded. Silicon Valley is the least credentialist, most open community I’ve ever been a part of.
- deleted 8y ago
  [deleted]
- yaacov 8y ago
  New York Times has had a consistently anti-tech slant the last few years. I don’t know the reason for it, but I find it very annoying
  - gatherhunterer 8y ago
    I think that they are trying to ride a wave of sentiment. You can see a similar strategy in their political coverage that causes them to do some weird things, like dismissing the accusations against Justin Fairfax. They have good writers on staff but I have found that more incisively factual coverage of major stories can always be found in The Washington Post.
  - csallen 8y ago
    The media has a lot to lose in a tech-dominated world. They used to have a monopoly on reach. Readers came to directly to them. Today that role belongs largely to tech companies. Media companies are heavily dependent on the algorithms and whims of the likes of Google, Twitter, Facebook, Apple, and Amazon. And it's not just distribution: it's their business models, too. Apple taking a cut of NYC subscription revenue, Amazon doing similar things through its Kindle devices, Facebook and Google ads, etc. This would be an existentially terrifying position for any business to be in. And as much as the media likes to portray itself as putting truth-seeking and objectivity first, it's still very much a collection of self-interested profit-seeking businesses. When you're the media and you're faced with this situation, what do you do? What weapon do you have? Your content of course. It doesn't need to amount to full-scale propaganda or anything obvious. You simply hire writers and editors who are themselves anti-tech, and results will follow. Even if you don't hire that way as a media organization, your employees' incentives are aligned such that they should naturally lean anti-tech, given the realities of the business situation and its effect on their jobs.
warp_factor 8y ago
Airbnb or Uber are not really tech companies. They are business companies with a WebApp required as part of the execution. They didn't invent anything on the technical level, they brought some business ideas to existing tech (I mean Airbnb is literally a website with a DB) In the same way that United is not a tech company, but they have a website that accepts reservation. Tech companies create new Tech as part of their lifecycle: Intel, AMD, Google, etc etc. They create new Tech that didn't exist before, and this is core to their product. I get that Silicon Valley shifted from Real tech 20 years ago to Futile WebApps that deliver pizzas faster, but it makes me sad that the new definition of tech shifted so much to pure business.
- austenallred 8y ago
  I think you're drastically underestimating what those companies do
- ebarns 8y ago
  not necessarily true. AirBnb created Lottie which drastically changed the way people can do cookie cutter animations in in apps. I'd argue that their business decisions are driven by tech. By improving their tech/apps they enable their business to succeed more than the others. Ubers app is also pretty complex, it's not just a simple queue of riders and drivers
- goobynight 8y ago
  Anyone dealing with requests per second at their level is a tech company to a greater capacity than most companies will ever be. Do they create software as a service, hardware, and so on? No, but they are a group of practitioners that are really good at putting the pieces together. They've also built a few things like M3 and Envoy.
- tracer4201 8y ago
  What defines a “real” tech company? Gatekeeping what can or cannot be defined defined as a tech company. Am I on Reddit or hacker news? Wow.
  - 8y ago
habosa 8y ago
I have a hard time verbalizing it but something about Uber creating all these millionaires sickens me. In no order: * The business is fundamentally based on ignoring the law. * They've done nothing but lose money, more than any private company ever. * The money keeping them afloat is very dirty (mostly from Saudi Arabia) * The culture is well-known to be awful. * The drivers are completely exploited, working long days with no security and taking huge financial and physical risk. * Their headquarters is at one of the most awful corners in the city, which they've done nothing to improve. And in the end they'll have to start making money. Which means either increasing their prices or increasing their cut. When that day comes we'll realize what we've lost. But yet, all the people who signed up and coded the app will be millionaires. Smells like society misallocating value.
- joeblow9999 8y ago
  This is just one interpretation. Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. There's no question they have created value and the folks who showed up to work to make it happen aren't necessarily evil, scofflaws, or toxic.
  - bosie 8y ago
    > Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. I am genuinely not trying to be play dumb but what is the innovation or vast improvement? Apps like mytaxi were pretty much showing up before/after uber came to light, without violating laws or exploiting folks. Also, how does such a claim get balanced to the vast financial loss they seem to be accumulating? > created value For whom?
    - uwuhn 8y ago
      As someone who uses Uber and Lyft on a daily basis, and has done so for the past three years, their existence has measurably made my life better. Taxis were never an option due to a combination of cost, time, and inconvenience.
gandutraveler 8y ago
Times were different during PayPal mafia. I don't see how just working at Airbnb or Uber makes one any different than the rest in 2019 to start a successful startup. Bias maybe ?

135 points by mdev 8y ago

It's interesting to see a credential effect here similar to universities. Which credentials are the most valuable then? Which company as a new grad is most similar to Stanford, MIT?

dawhizkid 8y ago
I don't think it's so much "credentials" as opposed to being tied to a well-respected co + having experience navigating a co through hyper-growth + risk taking attitude. I am an alum of one of these cos, and I suspect the makeup of the average employee as far as risk-taking goes (and again experience seeing a company go from nothing to $20b+) is much higher than an equally competent employee at, say, Microsoft or Amazon. There's a level of self-selection involved here.
krn 8y ago
I think as far as credentials go, it's pretty simple: (market capitalization of the company) * (the level of responsibility given at the company). The smaller the company is, the higher the position has to be to make the credentials stand out. For instance, being a recent graduate at FAANG is probably more or less equal to being a pre-A series startup CTO, if there are no other entries in the CV.
- chrisweekly 8y ago
  I didn't downvote, but I take issue w/ the example you cite. In terms of credentials & signalling, recent grads taking jr software engineer / entry-level positions in FAANG are not comparable to startup founders. That said, at more senior levels, your model fits more closely. A mid-level Alphabet product manager is likely to have been a founder or C-level exec in a startup or two.
  - krn 8y ago
    > not comparable to startup founders. I was referring to early stage startup founders, which are very likely to fail in the first 12-18 months. After a startup receives VC funding or becomes profitable, of course the credentials of its founders stand above the entry-level positions at FAANG. Otherwise, they might just signal a lack of fair judgement.
deleted 8y ago
[deleted]

matchbok 8y ago

Ah yes, "innovation" in skirting regulations as AirBnb does. Harming local communities and extracting wealth in the name of "tech disruption".

rco8786 8y ago
Its easy to be cynical. It’s harder to recognize that any significant societal change is going to come with some identifiable downside and that those downsides aren’t automatically a reason to not make the change.
- luckydata 8y ago
  What kind of benefit does society get from Airbnb that's so necessary to disrupt the lives of people living in a city and raising rents on folks that can't afford it?
  - deleted 8y ago
    [deleted]
  - dmitriy_ko 8y ago
    "AirBnb increasing rents" is theory popularized by hotel industry and never been confirmed with hard data. AirBnb allows anyone to profit from demand for lodging, as opposed to few large hotel chains taking all profit. For many AirBnb hosts it's their livelihood. E.g. do you see benefit in anyone being able to start a restaurant or do you think only large restaurant chains should be able to do it? Also AirBnb increases tourist traffic benefiting other businesses.
    - Zhenya 8y ago
      Well you stepped right into it. You need a TON of permits to open a restaurant and you can not open in your house, it has to be in a commercial space. Furthermore, you are free to open your own hotel. You just need to do it in a commercial zoned area since you are doing commercial things.

mushufasa 8y ago

The people who were willing to work for a risky startup with a vast vision are willing to work for another risky startup with a vast vision again. The reverse causation seems like a compelling explanation: innovators built Uber and AirBnB, rather than Uber and AirBnB built innovators (as the title implies).

dasil003 8y ago
It's a little of both, and some other factors as well. People joining risky ventures with vast visions all the time, in all kinds of places, you just never hear about the ones that fail. And for the companies that do succeed, especially in SV, there is always a post-hoc founder story told retroactively in order to keep the troops motivated and investor money flowing. If you actually look at FAANG they all started with very focused products with the vision scaling just ahead of their successes to propel hypergrowth for a long period of time. And doing so, btw, takes a lot more than just innovators, it takes an army of people who are mostly focusing on the right things at the right time. The advantage of ex-Uber, ex-Airbnb folks is not that they are more innovative—it's that they have experience in solving the organizational problems of doubling the size of a company over and over and over again within a very short time frame. If you only get people who are good at making innovative small-scale projects then they'll hit a wall when the organizational challenges of hypergrowth suck all the productivity and alignment out of the team. If you get people who only have experience operating at huge scale they won't be able to prioritize short term goals needed to get and maintain traction.
mcguire 8y ago
What exactly does "risk" mean in this situation: former employees of a successful unicorn, presumably armed with their payouts, start new companies with the backing of a VC fund, also started by former employees of the successful unicorn?

AndrewKemendo 8y ago

Perfectly encapsulated in this tweet: 18: Go to Harvard or Stanford for CS. 22: Work at FAANG companies. 25: Quit and raise millions for your startup. 26: Sell your company to a FAANG company/IPO 28: Join a VC firm, invest in people like you, and make predictions on Twitter all day. https://twitter.com/TheLexTimes/status/1105131411411886081 https://twitter.com/TheLexTimes/status/1105131411411886081

JoeSmithson 8y ago
I understand this is off topic but does Netflix ever actually acquire startups? They are a very different company to Facebook, Apple, Amazon or Google, I feel like they are bundled in mainly to make a cooler acronym.
- jameslevy 8y ago
  Or just a less offensive acronym.
  - jayd16 8y ago
    How about AFGA, then.
    - mcguire 8y ago
      Call them AGFA and we can buy film from them.
  - adamnemecek 8y ago
    How is it offensive?
    - biglenny 8y ago
      FAGT - Facebook Apple Google Tesla Is probably what he was alluding to. You see how it offensiv right?
- 8y ago

40acres 8y ago

This is the cycle of Silicon Valley at play, and an example why despite the Exodus of many entrepreneurs and engineers SV is still the leader in software based start ups. Take the "PayPal mafia" for instance, out of one successful company spawned others -- SpaceX, LinkedIn, Facebook (via investment cash). These companies will spawn others, so on and so forth. It's a cycle that feeds upon itself and has been a successful model, but it does have major flaws due to "hardcoded" pattern recognition.

chii 8y ago
> It's a cycle that feeds upon itself and has been a successful model you just don't hear about the failures out there. I bet there's much more failures than there are successes. If it weren't, banks would've all lent out money to startups!
- thereisnospork 8y ago
  > you just don't hear about the failures out there. I bet there's much more failures than there are successes. Sure there are, but a few successes can make up for a lot of failures. Ycombinator, for instance, has been doing its thing for quite a while now and appears to be doing quite well.[1] [1]Not personally having looked into their financials
brogrammernot 8y ago
It’s worth mentioning there’s a selection effect that takes place where the companies mentioned are successful, so the employees have more cash on hand usually to make the jump to their own venture without the normal risk attached. (E.g. - most should be able to float their own finances for 12-24 months without needing to take money out of cash flow) I have a couple buddies who have started their own thing out of Uber and they’re doing well. The issue I see is it’s going to be pockets of companies around the gig sharing economy for Uber and similar items in rental/real estate for AirBnB. Employees of both companies have solved some really tricky problems, and they know they can use their experience to solve another set of problems + make it easier to raise money for their venture. Also - I do appreciate you qualified your post with SV being the lead in software companies. I think that’s still true and SV will be the lead for a long time but other cities will be cheaper + you don’t need to be in SV to find great talent anymore and you don’t need to be there to raise good capital. If you have an idea that’s solid and a decent team you’ll be able to find fundraising but it’ll be interesting to see if software stays in SV and we see the software related but more physical goods startups relocate out of SV. SaaS businesses are so much less capital intensive than hard goods based businesses so I’d imagine those companies don’t start in SV so they can has less expenditures in areas that don’t matter.

tanilama 8y ago

I started losing the grab of the term 'Tech'

georgewfraser 8y ago

> The start-up world projects a meritocratic image, but in reality, it is a small, tightknit club where success typically hinges on whom you know. This is...so not true. My co-founder and I had hardly any network in SV. We applied to YC through the website, raised seed money after demo day. We ran on seed + revenue up to about 60 employees and we recently did a series A. If you don’t have a network, don’t be dissuaded. Silicon Valley is the least credentialist, most open community I’ve ever been a part of.

deleted 8y ago
[deleted]
yaacov 8y ago
New York Times has had a consistently anti-tech slant the last few years. I don’t know the reason for it, but I find it very annoying
- gatherhunterer 8y ago
  I think that they are trying to ride a wave of sentiment. You can see a similar strategy in their political coverage that causes them to do some weird things, like dismissing the accusations against Justin Fairfax. They have good writers on staff but I have found that more incisively factual coverage of major stories can always be found in The Washington Post.
- csallen 8y ago
  The media has a lot to lose in a tech-dominated world. They used to have a monopoly on reach. Readers came to directly to them. Today that role belongs largely to tech companies. Media companies are heavily dependent on the algorithms and whims of the likes of Google, Twitter, Facebook, Apple, and Amazon. And it's not just distribution: it's their business models, too. Apple taking a cut of NYC subscription revenue, Amazon doing similar things through its Kindle devices, Facebook and Google ads, etc. This would be an existentially terrifying position for any business to be in. And as much as the media likes to portray itself as putting truth-seeking and objectivity first, it's still very much a collection of self-interested profit-seeking businesses. When you're the media and you're faced with this situation, what do you do? What weapon do you have? Your content of course. It doesn't need to amount to full-scale propaganda or anything obvious. You simply hire writers and editors who are themselves anti-tech, and results will follow. Even if you don't hire that way as a media organization, your employees' incentives are aligned such that they should naturally lean anti-tech, given the realities of the business situation and its effect on their jobs.

warp_factor 8y ago

Airbnb or Uber are not really tech companies. They are business companies with a WebApp required as part of the execution. They didn't invent anything on the technical level, they brought some business ideas to existing tech (I mean Airbnb is literally a website with a DB) In the same way that United is not a tech company, but they have a website that accepts reservation. Tech companies create new Tech as part of their lifecycle: Intel, AMD, Google, etc etc. They create new Tech that didn't exist before, and this is core to their product. I get that Silicon Valley shifted from Real tech 20 years ago to Futile WebApps that deliver pizzas faster, but it makes me sad that the new definition of tech shifted so much to pure business.

austenallred 8y ago
I think you're drastically underestimating what those companies do
ebarns 8y ago
not necessarily true. AirBnb created Lottie which drastically changed the way people can do cookie cutter animations in in apps. I'd argue that their business decisions are driven by tech. By improving their tech/apps they enable their business to succeed more than the others. Ubers app is also pretty complex, it's not just a simple queue of riders and drivers
goobynight 8y ago
Anyone dealing with requests per second at their level is a tech company to a greater capacity than most companies will ever be. Do they create software as a service, hardware, and so on? No, but they are a group of practitioners that are really good at putting the pieces together. They've also built a few things like M3 and Envoy.
tracer4201 8y ago
What defines a “real” tech company? Gatekeeping what can or cannot be defined defined as a tech company. Am I on Reddit or hacker news? Wow.
- 8y ago

habosa 8y ago

I have a hard time verbalizing it but something about Uber creating all these millionaires sickens me. In no order: * The business is fundamentally based on ignoring the law. * They've done nothing but lose money, more than any private company ever. * The money keeping them afloat is very dirty (mostly from Saudi Arabia) * The culture is well-known to be awful. * The drivers are completely exploited, working long days with no security and taking huge financial and physical risk. * Their headquarters is at one of the most awful corners in the city, which they've done nothing to improve. And in the end they'll have to start making money. Which means either increasing their prices or increasing their cut. When that day comes we'll realize what we've lost. But yet, all the people who signed up and coded the app will be millionaires. Smells like society misallocating value.

joeblow9999 8y ago
This is just one interpretation. Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. There's no question they have created value and the folks who showed up to work to make it happen aren't necessarily evil, scofflaws, or toxic.
- bosie 8y ago
  > Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. I am genuinely not trying to be play dumb but what is the innovation or vast improvement? Apps like mytaxi were pretty much showing up before/after uber came to light, without violating laws or exploiting folks. Also, how does such a claim get balanced to the vast financial loss they seem to be accumulating? > created value For whom?
  - uwuhn 8y ago
    As someone who uses Uber and Lyft on a daily basis, and has done so for the past three years, their existence has measurably made my life better. Taxis were never an option due to a combination of cost, time, and inconvenience.

gandutraveler 8y ago

Times were different during PayPal mafia. I don't see how just working at Airbnb or Uber makes one any different than the rest in 2019 to start a successful startup. Bias maybe ?