3 ms·

Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also

Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also pay for an office, hosting, legal support and ads. I can only see some millions (at most) of expenses per year here. And they are extremely popular, most of the people I meet use AirBnB regularly, they are for short-term living like what Gmail is for e-mail.

meowface 7y ago
Agreed. I don't know how software-based middle-man companies like Airbnb and Uber don't become insanely profitable. I'm sure we're both missing some complexities, but one would think you'd build the initial feature set and then basically be kind of done; is the rest not essentially just some UI/UX tweaks and engagement optimization over time? As far as I can tell, the functionality offered by Airbnb and Uber hasn't changed at all since they launched over a decade ago. The only things I've noticed them add are "Airbnb Plus" and "Uber Black", which are just "pay some more for a nicer/better-looking place/car". Of course building these apps to work as smoothly and engagement-y as possible isn't easy, and I'm sure I sound incredibly naive to many people who've worked at those companies, but my assumption would be that there'd be a lot of upfront investment and work building your one product with its one feature - connecting seekers and providers and offloading all the meatspace work to the providers (and phone manufacturers, for ridesharing) while you take a cut - and then your revenue and profit should just go up and up over time on its own. Why isn't that what happens? I'm sure one obvious answer would be "wasteful spending and unnecessary hiring", but I have no idea if that's actually the explanation here for either company.

3 ms·

Why was AirBnB never profitable? How do they even loose anything? All they seemingly do is maintaining a website a small team can maintain. Obviously they also

by qwerty456127 7y ago

meowface 7y ago
Agreed. I don't know how software-based middle-man companies like Airbnb and Uber don't become insanely profitable. I'm sure we're both missing some complexities, but one would think you'd build the initial feature set and then basically be kind of done; is the rest not essentially just some UI/UX tweaks and engagement optimization over time? As far as I can tell, the functionality offered by Airbnb and Uber hasn't changed at all since they launched over a decade ago. The only things I've noticed them add are "Airbnb Plus" and "Uber Black", which are just "pay some more for a nicer/better-looking place/car". Of course building these apps to work as smoothly and engagement-y as possible isn't easy, and I'm sure I sound incredibly naive to many people who've worked at those companies, but my assumption would be that there'd be a lot of upfront investment and work building your one product with its one feature - connecting seekers and providers and offloading all the meatspace work to the providers (and phone manufacturers, for ridesharing) while you take a cut - and then your revenue and profit should just go up and up over time on its own. Why isn't that what happens? I'm sure one obvious answer would be "wasteful spending and unnecessary hiring", but I have no idea if that's actually the explanation here for either company.