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A company growing as aggressively as AirBnB wasn't taking a 20-30% profit and paying out shareholders. They were taking that 20-30% and reinvesting back into g

A company growing as aggressively as AirBnB wasn't taking a 20-30% profit and paying out shareholders. They were taking that 20-30% and reinvesting back into growth. That means people, offices, tech, marketing, audits of homes, process, insurance, etc. When things look good you can run lean and focus on growth. If things start to turn you can ratchet back those costs. Unfortunately, things turned on them very fast and they aren't that nimble. When you've got 15k employees with salary, bonuses, benefits, offices that aren't being used and overnight you reduce your top line revenue by 50%+ you're likely in the red and from what I hear, they were in the red prior to this. AirBnB will likely be a casualty of this downturn. They're highly focused on the part of the economy hardest hit by COVID-19 and are unable to diversify in time. Lots of folks will lose their jobs, a lot of others may lose second or third homes that were used solely for part-time rentals. It's going to be hard on a lot of people and had AirBnB not gotten so far out over their skis they'd likely be OK, but would not be the market leader they were a few weeks back.

user5994461 7y ago
What I am trying to say is that AirBnb is a solid business that is not at any risk of disappearing. I am moderately sure that they could have turned profitable any minute if they wanted to. There was a subject on HN yesterday were people were posting offers from AirBnb in excess of 400k per year and from what you are telling me they have 15k+ employees now. Fact is, they're burning money for the sake of growth and metrics. Can they sustain this and sustain it forever? No, but there are pretty much no business in the world who could, so that's not a reasonable metrics to say they're doing poorly and in danger. They might get a reality check and cut some fat, like most unicorns playing the VC game get sooner or later, but the company is not at risk of dying.
imperialdrive 7y ago
There is NO WAY they have 15K employees! edit: Wow, ok, so the number appears to be 12,736 - incredible. Well, I'm speechless. Good for them for passing money down to staff, but my goodness, how does it make financial sense, no clue.
- CydeWeys 7y ago
  You're right, the correct number is around 13k.

user5994461 7y ago

What I am trying to say is that AirBnb is a solid business that is not at any risk of disappearing. I am moderately sure that they could have turned profitable any minute if they wanted to. There was a subject on HN yesterday were people were posting offers from AirBnb in excess of 400k per year and from what you are telling me they have 15k+ employees now. Fact is, they're burning money for the sake of growth and metrics. Can they sustain this and sustain it forever? No, but there are pretty much no business in the world who could, so that's not a reasonable metrics to say they're doing poorly and in danger. They might get a reality check and cut some fat, like most unicorns playing the VC game get sooner or later, but the company is not at risk of dying.

imperialdrive 7y ago

There is NO WAY they have 15K employees! edit: Wow, ok, so the number appears to be 12,736 - incredible. Well, I'm speechless. Good for them for passing money down to staff, but my goodness, how does it make financial sense, no clue.

CydeWeys 7y ago
You're right, the correct number is around 13k.