4 ms·

Is the writing on the wall? First Lyft, then Airbnb, and Uber... are all unicorns taking this kind of hit right now?

manuelflara 7y ago
Well, it makes a lot of sense that companies that make money in hospitality and transport would be taking a big hit. Other unicorns like Dropbox, Stripe etc that work pretty much exclusively online, however, are doing fine.
- johntiger1 7y ago
  Dropbox cancelled its internship program, so not sure if they're doing "fine"
  - CydeWeys 7y ago
    That may have more to do with the difficulties of hosting remote internships though.
  - whafro 7y ago
    Is that because of financial straits, or because they didn't think they could support an impactful and valuable internship program remotely? I could certainly understand the latter...
  - robjan 7y ago
    I doubt Dropbox have seen a significant drop in paying subscribers or increase in costs in the wake of the coronavirus.
- ssharp 7y ago
  Stripe is a different situation than Dropbox. Besides being predominantly online, Stripe is also directly involved in online transactions, including ecommerce. Shopify, which is 100% ecommerce, just reported record numbers. With quite a bit of retail shutdown as well as many people not wanting to leave their home, lots of money is shifting online, and these ecommerce enablement companies are going to benefit a lot.
munchbunny 7y ago
I wouldn't think of it as "all unicorns". Lyft, Airbnb, and Uber are especially exposed to COVID related issues because their revenue sources, like the travel industry, are directly affected by all of the COVID countermeasures. However, I think you can make a pretty good argument that it's going to turn into a general economic depression, which means pretty much every company is going to take a hit sooner or later. Millions more people (in the US) will be struggling to make ends meet over the next few months, and that's going to have bad ripple effects.
CydeWeys 7y ago
Airbnb is the only unicorn in that list. Lyft and Uber are publicly traded corporations now.
albertshin 7y ago
No - just the ones that focused on physical services. e.g. Notion (valued $2b) just raised an addl $50m and no major news on layoffs
- newacct583 7y ago
  Not even them. Amazon and Grubhub sell "physical services" and seem to be doing great. I don't know that this is so mysterious at all: Uber and Airbnb sold transportation and travel, which are two segments disproportionately affected by the pandemic. It has nothing to do with their "Unicorn" status at all. Uber is suffering for the same reason taxi cabs are. Hotels are getting pinched along with Airbnb. But taxis and hotels suffer in traditional ways, whereas startups show up on HN. But there's no "startupness" to this analysis at all.
  - rswail 7y ago
    Exactly. Not all tech darlings are in the same industry. The "disrupters" disrupt oligarchic industries with stagnant business models. They don't "disrupt" the actual industry they're in. Anything travel related is going to be screwed for the foreseeable future. There will be very little international travel for at least another 6-12 months. Cross-European travel restrictions are already being talked about. The US will continue to have community transmission in their "open" states. There is no business travel. Things are moving (food etc). People aren't. Australia and New Zealand have discussed opening their travel and perhaps expanding that to the Pacific nations, which have been mostly spared due to isolation.
  - eternalban 7y ago
    "We're all working for these guys now". That was the astute remark of the cafe/restaurant owner when I asked her how the business is going. (It's a lovely cafe/little hole in the wall in Brooklyn selling Brazilian fare.) She first expressed gratitude for having an understanding landlord and the arrangements they have made. "And we were already set up for delivery unlike some others", she said. I remarked "business must be good for these delivery services", to which she replied "We're all working for these guys now".
freddie_mercury 7y ago
No, not all Unicorns are taking this kind of hit. Most obviously, Zoom was a unicorn before this started and...they are doing fine. I'd expect a fair number of enterprise or B2B unicorns to be okay but consumer-facing ones to be more likely to be hurting. Atlassian just had their earnings call and beat targets, for instance.
- hobs 7y ago
  Yeah, same things with non-unicorn tech, market downturns are traditionally bad for some sectors, but you spend money on automation, reduction in staffing costs to get the same thing done, and reducing waste - software can help you with that.
- dehrmann 7y ago
  I used to work for a B2B fraud detection SaaS provider. I haven't heard about any layoffs, I've heard fraud is up, right now, and your fraud prevention vendor is probably low on the list of services to cut. That said, I'm sure some of their customers were hit hard, and that does ripple down.
- asdff 7y ago
  Zoom is doing fine until a proper company like Microsoft decides to step up to the plate and deliver an objectively better product with more resources supporting it. Sysadmins who've flocked to zoom for lack of a better alternative will gladly flock back to a company that can better support their products.
  - rchaud 7y ago
    Theyve been trying for nearly a decade with little to no luck. Skype was acquired in 2011 and Skype for Business is a joke, even in enterprise settings like my workplace. Everybody has moved on to Zoom, even though SFB is available via our org wide Office365 implementation. I do use it to send quick messages to coworkers in different regional offices, as their online/offline status is a useful indicator of their availability since it's connected to their outlook Calendar. And the screen sharing feature is good, there are never any compatibility issues. But as a voice or video call system, it's not great. Zoom has had far lower switching costs.
deleted 7y ago
[deleted]
rvz 7y ago
> Is the writing on the wall? Not yet. The earnings call in Q2 (Not Q1) will be the true writing on the wall. > are all unicorns taking this kind of hit right now? Not just unicorns but also other startups that are unprofitable and have a high burn rate are taking a critical hit.
- SketchySeaBeast 7y ago
  Which seems to indicate it's not COVID, it's the end of easy money that's causing these issues. I'll bet any other recession would leave the same footprint as far as crushed startups.
  - erik_seaberg 7y ago
    Lots of tech depends on ad revenue, but that's way down because nobody can buy (or make) nonessential goods during the coronavirus lockdown.
lmeyerov 7y ago
A lot of us are holding our breaths. First travel related companies, which is mostly consumer, like tourism (flights, ...) and in-person services (house cleaners, ...). In parallel, weaker companies in general (enterprise startups that raise megarounds wothout megarevenue). Scarier is 1-2 financial quarters later. No clue yet, but as the b2b's relying on b2c's start missing their numbers for more than 1qtr, who knows. Can they just reduce by say 10% + consumer divisions, or were too exposed? A big saving grace is, in bigger co's, annual budgets mostly passed in dec--feb, so a lot of flex time ahead. So if commerce starts thawing , there will be cuts, but not so bad. Long-term, whole tourism etc sectors hurt, more about reshuffling for everywhere else. A silver lining is for startups: this is a time of chaos, agility, big moves, digital, and soon, m&a. I have a talk on Friday w 200+ people registering last minute - in our industry, we are lucky to be quite busy, but every week is a surprise right now! More importantly, we are volunteering on health interventions and people are sick: $ is useful but not #1.
leonidasv 7y ago
Not all of them. Unicorns dealing with logistics and e-commerce are having a good time, for example.

Well, it makes a lot of sense that companies that make money in hospitality and transport would be taking a big hit. Other unicorns like Dropbox, Stripe etc that work pretty much exclusively online, however, are doing fine.

johntiger1 7y ago
Dropbox cancelled its internship program, so not sure if they're doing "fine"
- CydeWeys 7y ago
  That may have more to do with the difficulties of hosting remote internships though.
- whafro 7y ago
  Is that because of financial straits, or because they didn't think they could support an impactful and valuable internship program remotely? I could certainly understand the latter...
- robjan 7y ago
  I doubt Dropbox have seen a significant drop in paying subscribers or increase in costs in the wake of the coronavirus.
ssharp 7y ago
Stripe is a different situation than Dropbox. Besides being predominantly online, Stripe is also directly involved in online transactions, including ecommerce. Shopify, which is 100% ecommerce, just reported record numbers. With quite a bit of retail shutdown as well as many people not wanting to leave their home, lots of money is shifting online, and these ecommerce enablement companies are going to benefit a lot.

munchbunny 7y ago

I wouldn't think of it as "all unicorns". Lyft, Airbnb, and Uber are especially exposed to COVID related issues because their revenue sources, like the travel industry, are directly affected by all of the COVID countermeasures. However, I think you can make a pretty good argument that it's going to turn into a general economic depression, which means pretty much every company is going to take a hit sooner or later. Millions more people (in the US) will be struggling to make ends meet over the next few months, and that's going to have bad ripple effects.

CydeWeys 7y ago

Airbnb is the only unicorn in that list. Lyft and Uber are publicly traded corporations now.

albertshin 7y ago

No - just the ones that focused on physical services. e.g. Notion (valued $2b) just raised an addl $50m and no major news on layoffs

newacct583 7y ago
Not even them. Amazon and Grubhub sell "physical services" and seem to be doing great. I don't know that this is so mysterious at all: Uber and Airbnb sold transportation and travel, which are two segments disproportionately affected by the pandemic. It has nothing to do with their "Unicorn" status at all. Uber is suffering for the same reason taxi cabs are. Hotels are getting pinched along with Airbnb. But taxis and hotels suffer in traditional ways, whereas startups show up on HN. But there's no "startupness" to this analysis at all.
- rswail 7y ago
  Exactly. Not all tech darlings are in the same industry. The "disrupters" disrupt oligarchic industries with stagnant business models. They don't "disrupt" the actual industry they're in. Anything travel related is going to be screwed for the foreseeable future. There will be very little international travel for at least another 6-12 months. Cross-European travel restrictions are already being talked about. The US will continue to have community transmission in their "open" states. There is no business travel. Things are moving (food etc). People aren't. Australia and New Zealand have discussed opening their travel and perhaps expanding that to the Pacific nations, which have been mostly spared due to isolation.
- eternalban 7y ago
  "We're all working for these guys now". That was the astute remark of the cafe/restaurant owner when I asked her how the business is going. (It's a lovely cafe/little hole in the wall in Brooklyn selling Brazilian fare.) She first expressed gratitude for having an understanding landlord and the arrangements they have made. "And we were already set up for delivery unlike some others", she said. I remarked "business must be good for these delivery services", to which she replied "We're all working for these guys now".

freddie_mercury 7y ago

No, not all Unicorns are taking this kind of hit. Most obviously, Zoom was a unicorn before this started and...they are doing fine. I'd expect a fair number of enterprise or B2B unicorns to be okay but consumer-facing ones to be more likely to be hurting. Atlassian just had their earnings call and beat targets, for instance.

hobs 7y ago
Yeah, same things with non-unicorn tech, market downturns are traditionally bad for some sectors, but you spend money on automation, reduction in staffing costs to get the same thing done, and reducing waste - software can help you with that.
dehrmann 7y ago
I used to work for a B2B fraud detection SaaS provider. I haven't heard about any layoffs, I've heard fraud is up, right now, and your fraud prevention vendor is probably low on the list of services to cut. That said, I'm sure some of their customers were hit hard, and that does ripple down.
asdff 7y ago
Zoom is doing fine until a proper company like Microsoft decides to step up to the plate and deliver an objectively better product with more resources supporting it. Sysadmins who've flocked to zoom for lack of a better alternative will gladly flock back to a company that can better support their products.
- rchaud 7y ago
  Theyve been trying for nearly a decade with little to no luck. Skype was acquired in 2011 and Skype for Business is a joke, even in enterprise settings like my workplace. Everybody has moved on to Zoom, even though SFB is available via our org wide Office365 implementation. I do use it to send quick messages to coworkers in different regional offices, as their online/offline status is a useful indicator of their availability since it's connected to their outlook Calendar. And the screen sharing feature is good, there are never any compatibility issues. But as a voice or video call system, it's not great. Zoom has had far lower switching costs.

deleted 7y ago

[deleted]

rvz 7y ago

> Is the writing on the wall? Not yet. The earnings call in Q2 (Not Q1) will be the true writing on the wall. > are all unicorns taking this kind of hit right now? Not just unicorns but also other startups that are unprofitable and have a high burn rate are taking a critical hit.

SketchySeaBeast 7y ago
Which seems to indicate it's not COVID, it's the end of easy money that's causing these issues. I'll bet any other recession would leave the same footprint as far as crushed startups.
- erik_seaberg 7y ago
  Lots of tech depends on ad revenue, but that's way down because nobody can buy (or make) nonessential goods during the coronavirus lockdown.

lmeyerov 7y ago

A lot of us are holding our breaths. First travel related companies, which is mostly consumer, like tourism (flights, ...) and in-person services (house cleaners, ...). In parallel, weaker companies in general (enterprise startups that raise megarounds wothout megarevenue). Scarier is 1-2 financial quarters later. No clue yet, but as the b2b's relying on b2c's start missing their numbers for more than 1qtr, who knows. Can they just reduce by say 10% + consumer divisions, or were too exposed? A big saving grace is, in bigger co's, annual budgets mostly passed in dec--feb, so a lot of flex time ahead. So if commerce starts thawing , there will be cuts, but not so bad. Long-term, whole tourism etc sectors hurt, more about reshuffling for everywhere else. A silver lining is for startups: this is a time of chaos, agility, big moves, digital, and soon, m&a. I have a talk on Friday w 200+ people registering last minute - in our industry, we are lucky to be quite busy, but every week is a surprise right now! More importantly, we are volunteering on health interventions and people are sick: $ is useful but not #1.

leonidasv 7y ago

Not all of them. Unicorns dealing with logistics and e-commerce are having a good time, for example.