3 ms·

Isn't this just accelerating the inevitable for many of these companies?

hn_throwaway_99 7y ago
Yes and no. Certainly the unit economics for some start ups always looked problematic. But for others, it's not hard to see how they would have solid businesses in normal times, but have no resources to weather this downturn. I mean, it's not like people are never going to travel again or eat out at restaurants. But I certainly wouldn't want to be a travel startup or restaurant startup (at least of the dine-in variety) today.
- vhvjkyhkogvv 7y ago
  It may be that travel never has big enough margins to support a 10k employee middleman.
  - hn_throwaway_99 7y ago
    Expedia and Booking have been around nearly 25 years and both have well over 20k employees. Seems like travel has more than enough margins to support multiple companies that size.
    - lotsofpulp 7y ago
      There’s never been an extended global shutdown of travel like now though.
      - hn_throwaway_99 7y ago
        Yes, everyone fully understands with travel at a complete standstill, none of these companies are viable if the current situation were the norm. But the current situation is not the norm, people will eventually get back to travelling a lot, and when they do there will be plenty of economic activity to support large companies in the travel business.
        lumost 7y ago
        An extended shutdown with shut borders may have long-term effects on consumer's willingness and desire to travel. If the travel industry remains shut down for the next 12 months it's not unreasonable to think that the travel industry wouldn't fully recover for 10 years.
        learc83 7y ago
        Or maybe pent up demand will have the opposite effect. There's no way to know. I've had the same thoughts about the restaurant industry. Will lockdowns create a generation of home cooks, or will be so tired of staying in that the restaurant industry booms after this is over?
      - vikramkr 7y ago
        9/11 had a similarly chilling impact that shook the airline industry to it's core. Covid is likely going to be worse for the industry than that, but it's not without precedent
rudolph9 7y ago
Yes and no. Yes; lots of startups fail and now just fail sooner. No; many who would have otherwise found a foothold now have to re-examine their path forward. The startup I worked for until last Thursday is going through this. Despite most other startups in the space folding and the sales team finally getting traction with lots of buyers giving a path to becoming a viable business, those companies that were eager to sign contracts a month ago are having to rethink their cashflow and deciding if changing anything in their existing business is worth the risk.

Yes and no. Certainly the unit economics for some start ups always looked problematic. But for others, it's not hard to see how they would have solid businesses in normal times, but have no resources to weather this downturn. I mean, it's not like people are never going to travel again or eat out at restaurants. But I certainly wouldn't want to be a travel startup or restaurant startup (at least of the dine-in variety) today.

vhvjkyhkogvv 7y ago
It may be that travel never has big enough margins to support a 10k employee middleman.
- hn_throwaway_99 7y ago
  Expedia and Booking have been around nearly 25 years and both have well over 20k employees. Seems like travel has more than enough margins to support multiple companies that size.
  - lotsofpulp 7y ago
    There’s never been an extended global shutdown of travel like now though.
    - hn_throwaway_99 7y ago
      Yes, everyone fully understands with travel at a complete standstill, none of these companies are viable if the current situation were the norm. But the current situation is not the norm, people will eventually get back to travelling a lot, and when they do there will be plenty of economic activity to support large companies in the travel business.
      - lumost 7y ago
        An extended shutdown with shut borders may have long-term effects on consumer's willingness and desire to travel. If the travel industry remains shut down for the next 12 months it's not unreasonable to think that the travel industry wouldn't fully recover for 10 years.
        learc83 7y ago
        Or maybe pent up demand will have the opposite effect. There's no way to know. I've had the same thoughts about the restaurant industry. Will lockdowns create a generation of home cooks, or will be so tired of staying in that the restaurant industry booms after this is over?
    - vikramkr 7y ago
      9/11 had a similarly chilling impact that shook the airline industry to it's core. Covid is likely going to be worse for the industry than that, but it's not without precedent

rudolph9 7y ago

Yes and no. Yes; lots of startups fail and now just fail sooner. No; many who would have otherwise found a foothold now have to re-examine their path forward. The startup I worked for until last Thursday is going through this. Despite most other startups in the space folding and the sales team finally getting traction with lots of buyers giving a path to becoming a viable business, those companies that were eager to sign contracts a month ago are having to rethink their cashflow and deciding if changing anything in their existing business is worth the risk.