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A few random observations I found interesting: - Looks like they are significantly leaner now as a result of COVID. Cost of revenue is at an all-time low in Q3
by carlineng 6y ago
A few random observations I found interesting:
- Looks like they are significantly leaner now as a result of COVID. Cost of revenue is at an all-time low in Q3 (17% of revenue on p164). There's a lot of focus the drastic cuts to Sales and Marketing, but it looks like there's a fair amount of increased discipline across the board.
- It's interesting that Operations and support looks to be very similar in both the first 9 months of 2019 and 2020 despite having drastically different revenue numbers. They had to spend roughly the same amount (600 million) to support 30% less revenue
- Looks like China is a huge part of their future strategy, so much so that it is explicitly called out in their Executive Compensation bonus calculation (p271). I can think of exactly one other American consumer tech company that has had success in China.
- edoceo 6y agoWho's the other one? Microsoft?
- apocalypses 6y agoApple
- svbanker 6y agoApple probably
- pdxandi 6y agoI would guess Apple.
- deleted 6y ago[deleted]
- finolex1 6y agoApple. Tesla too, if you're willing to stretch definitions a bit.
- tenpies 6y agoDid they? Not only is national demand nowhere near enough to use up the Shanghai production, but they're having to export MIC vehicles and adding Model Y production. All of this with strong government backing of Tesla (as Musk said "the same as any Chinese company") and Chinese banks being told to accept any loan for a Tesla vehicle. Despite that they've had more price cuts than quarters and demand does not show any signs of improvement. This also on the back of the ticking time bomb that is their Shanghai contract. We should probably wait until the end of 2023 to see if Tesla "succeeds" in China.
- deleted 6y ago[deleted]
- sudosysgen 6y agoWell, it seems that they just can't compete, then. If what you are saying is true, then Tesla is in imminent trouble everywhere and needs to step their game up.
- adventured 6y agoThere are a few others beyond Microsoft and Apple. Intel has made a huge amount of money from China. Google's Android positioning in China has made it a lot of money as a defensive position for the rest of Asia. By conquering China with Android, it delayed the inevitability of China having their own domestic dominant mobile OS (which will push into other countries in Asia as well at least, harming Android elsewhere). And while not in China, Facebook makes a lot of money from China.
- estomagordo 6y agoWould you call Intel consumer electronics though?
- elpakal 6y agoI'm curious why you think AB&B qualifies as a "tech" company
- conroydave 6y agothey dont own the assets, their product is their booking technology
- dragonwriter 6y ago> they dont own the assets, their product is their booking technology No, their product is their booking service. The technology is capital (means of production), not product.
- mym1990 6y agoAirbnb's main offering is its software and its ability to create a market between consumers and producers through that application. I imagine it is also a company that is heavily invested in its software engineering workforce and all the resources that support/flow from that. To note, it feels like 'tech company' is a bit ambiguous these days and doesn't necessarily have great clarity.
- jbay808 6y ago> Airbnb's main offering is its software and its ability to create a market between consumers and producers through that application. Is Expedia a tech company?
- ch4s3 6y agoYeah, they were definitely part of the first wave of bing name internet tech companies. I expect that in 10 years AriBnB will be similarly boring.
- nemothekid 6y agoExpedia is literally a dotcom that was spun off from Microsoft.
- elamje 6y agoA fun anecdote about AirBnB in China: 2 years ago I travelled to Beijing and Shanghai and intended to stay in an AirBnB. AirBnB had tons and tons of listings in both places, all of which had specific instructions to tell the neighbors you were “a friend” and not staying there with AirBnB. At the time, and possibly still so, AirBnB was not operating legally in those particular places, and I presume most of the country, but it’s such a good booking platform people used it anyways. Long story short, I doubt China is not going to copy AirBnB, unless they can find a nice revenue share model with AirBnB the platform. P.s. There is ripe opportunity to make apps that interface China to westerners traveling there. There was literally no way to hook into the QR payment system, get a Didi, navigate, or get good translations just 2 years ago. Good luck to those of you building products to help non Chinese people in China. You’ll do well.
- SilasX 6y agoI had that exact experience in the famously non-corrupt Netherlands (2017). It’s not a China thing.
- seanmcdirmid 6y agoDoes the Netherlands have a rule that you register with the local public security bureau for wherever you are staying? I really don't see AirBnB working in China because of that.
- cheriot 6y agoSmall, family run hostels in China manage to figure it out. AirBnBs in middle income countries operate much more like hotels than the empty apartments they're known for in the US and Europe.
- seanmcdirmid 6y agoThey do, the owner or someone with “works here” goes down to the station to register them; if they are a hotel they’ll be able to fax/scan it to the PSB. It isn’t self service.
- hn_throwaway_99 6y ago> It's interesting that Operations and support looks to be very similar in both the first 9 months of 2019 and 2020 despite having drastically different revenue numbers. They had to spend roughly the same amount (600 million) to support 30% less revenue That's not surprising to me at all. I'm sure their support and operations teams have been working insane hours during Covid dealing with cancellations, unclear lockdown/quarantine policies, more guest/host disputes, etc.
- sjtindell 6y agoIt could have also been a business decision right - let's not layoff all that support staff or spin down all that infrastructure because eventually the business will come back. So costs are mostly the same.
- throwaway4good 6y agoThere are plenty of US tech companies that have success in China. For example I often use Agoda or hotels.com when I travel in China. I think AirBnB will have plenty of competition in China and broader Asia from well-established players such as CTrip, Agoda or Rakuten. The "social network" (rating your visitors etc.) aspect of AirBnB I think will matter less in those parts of the world ... but maybe I am wrong and things will change.
- mrkwse 6y agoThe usage you're describing doesn't equate to success in China, you're still a customer outside of China even if they're working with businesses in China. I'm not saying the two services you referenced do or do not do well with the Chinese market, but it's a different proposition to actually capture a massive distinct market vs expansive options for the existing customer base.
- throwaway4good 6y agoI don't have the numbers but my impression is that in particular Agoda is very popular.
- powerapple 6y agoI see Agoda as a competitor to booking.com, I can see they always have a price advantage against booking.com. All these services are not pleasant to use. People normally spend quite a bit time in searching for places to stay. I wish there is more personalized service. I find it is painful to go through reviews and list of properties.
- throwaway4good 6y agoAgoda is owned by booking.com. Do you consider AirBnB to have more personalized service?
- 6y ago