7 ms·

Playing on Hard Mode

109 points by zwieback 6y ago

orliesaurus 6y ago
I never used doordash and yet they own 50% market share. How? That's incredible... In big cities I always hear of people Uber-ing food, and never once I heard people doing a door dash? Is dashing a verb? In the article it highlights how airbnb-ing is part of our vocab. For example you say "I am just gonna airbnb it", so that really tells me that airbnb have done their marketing well... Unlike doordash, "uber it" and "get it on uber eats" is commonly heard...so I wonder...playing in hard mode is great but only when you win. Who's truly winning?
- deleted 6y ago
  [deleted]
- molsongolden 6y ago
  Interesting! I’ve never used Uber Eats and friends do say “let’s just Doordash something”. Popularity around here seems to be Doordash > Caviar (acquired by Doordash) > GrubHub. My area of reference is SF & Oakland, California.
  - azinman2 6y ago
    These things tend to be highly regional. I laughed when I read the “brand affinity” part of doordash’s S1. That’s completely in their own heads. These products are beyond commodity — the only brand that matters is the restaurant; no one cares what company brings it to you as long as it’s the cheapest/fastest, and MAYBE the most reliable.
    - mod 6y ago
      Agree; in fact, I'd prefer the restaurant was bringing it themselves, so I only have to deal with the one entity.
- snazz 6y ago
  We all live in a bubble. Your experience isn't invalid, but lots of other people have very different experiences, so it's difficult to draw conclusions from what you hear about in your daily life.
- jimmaswell 6y ago
  I'm also surprised because in my experience Ubereats is always cheaper and lets you wait to tip until afterwards. Horrid Door Dash drivers wore my generosity thin real fast, but with Ubereats it can actually be performance based as it should be. It reflects in how unprofessional and entitled some Door Dash employees are. I wrote simple steps for getting tto my door and they'd tend to not read it, with one even saying something like "wah wah I'm not reading this huge paragraph" (it was maybe 15 words total). I should've been able to leave a negative tip for that one. The most basic inklings of work ethic seem to be lost on this doomed generation, or at least whoever is in the range of 20 years old right now.
  - AlexandrB 6y ago
    1. You sound like an asshole, who probably doesn't tip his waitstaff if they don't kiss your ass all night. 2. Door Dash drivers are not employees of Door Dash, and thus are working a precarious "job" with no health coverage. You should expect poorer service - you get what you pay for. As these gig companies continue to squeeze out more margin from their contractors expect service to get worse.
    - dang 6y ago
      Yikes, attacking others like this will get you banned on HN. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.
      - jimmaswell 6y ago
        To AlexandrB, I tip 20% unless the person does something outrageous like the guy who said it was too much effort to follow a delivery note I spent time writing.
      - AlexandrB 6y ago
        Ugh. Thanks for the reminder :( And my apologies to jimmaswell. Something about that comment got under my skin, but I extrapolated an entire persona based on - effectively - a tweet's worth of text. I was wrong.
- avernon 6y ago
  The article did say that Door Dash has focused on more suburban areas while Uber focused on more urban areas.
rcoc 6y ago
I can't remember which thread it was, but there was a lengthy discussion about what qualifies as a tech company and whether something like AirBnB was a "tech" company. It was a distinction I had also struggled with, but this article provided clarity for me. What these companies deliver for their customers may not necessarily be traditional tech (lodging, delivery, etc) but the way they accomplish this is definitely a technical achievement.
- zwieback 6y ago
  Yeah, as an engineer it's hard for me to think of anything that doesn't have motors or sensors or at least PCBs as "tech". But I've also been a programmer for 30 years so I can appreciate pure SW projects that are hidden from the end-user as technical achievements. So at first things like AirBnB or travel search engines don't seem very techy but once these apps or websites are past their initial clunky releases there's a lot of hard work in the background that makes for a pleasant user experience.
- tmh88j 6y ago
  Isn't the term for that a tech enabled company?
an_opabinia 6y ago
Smartphones are definitely hard mode and they were the focus of the major tech companies those years. So the more important takeaway is that Google doesn’t really care about deliveries. Looking at stock market charts and saying, oh so and so event affected price, oh here’s a “low price” as defined relative to now... is still drawing on charts with crayons. Anyway, in terms of the substance of what is being said here - success is always obvious in hindsight. Probably the focus of incumbents plays a much bigger role than anything in particular Facebook or Booking.com were doing. For example, for those years after the Facebook IPO and for the “crayon says low price” part of Booking’s chart, Google kept doubling down on Android, paying 12.5x more for Motorola than Facebook paid for Instagram. How many operating systems are there? They clearly won that market, even despite disasters like the Motorola acquisition. They have an ads business, and they also acquired ITA (a Booking competitor?) but mobile is where they put their big bucks. Just the Motorola purchase probably exceeded their combined spending on Google+ by 20x. Likewise Microsoft was spending on... again, mobile, with a Nokia acquisition. Amazon was... developing the Kindle Fire line. And then, nowadays, when Microsoft paid $22b for LinkedIn when it could have bought Instagram for less. This analysis isn’t bulletproof either, it tells you what a giant company was interested in but not if it was a good decision. Listen, I think it’s fine, drawing crayons on charts. But if you evaluate Facebook based on its acquisitions you should evaluate everything based on acquisitions. And the sort of obvious conclusions are that while big money was focusing on mobile and eliminating all other upstart competition, other upstarts had lucrative opportunities obviously underpriced by the markets.
- sjg007 6y ago
  LinkedIn is probably ripe for disruption. I am not sure what that is right now but the coming recession means it's probably needed. It would probably be something of a cross between a temp agency and LinkedIn.
triangleman 6y ago
Did DoorDash end up figuring out how to pay their drivers a normal wage without confiscating their tips? If so, how? Seems like it would have tremendous downward pressure on their profitability.
- jonsno56 6y ago
  They figured out how to pass Prop 22!
- Spivak 6y ago
  Yeah, DD and others figured out that customer acquisition is where the value-add is for restaurants so they take ~30% gross from each order as commission . Being the "first place" people look when they're hungry gives them pretty okay leverage. In non-pandemic times this is actually a sweet deal for restaurants that don't want to do their own delivery because food and the marginal cost of labor is cheap and your goal is to reduce kitchen idle time as much as humanly possible and another source of orders is a positive. It cannibalizes take-out orders a little but opens up people who would do delivery but not take-out.
  - sjg007 6y ago
    Well the future is all take out. The play here is cloud kitchens which is sort of door dash/uber eats 2.0.
    - sitkack 6y ago
      And CK will deliver themselves as leverage to entice a sweet deal from Lyft or Uber. They will edge out DD. To the point where pre-made items will be sitting in warmers at strategic locations (ML) or delivered on a recurring basis in bulk (like a newspapers or milk).
slg 6y ago
This doesn't mention the legal and regulatory issues involved. Airbnb, Uber, and the like benefited by basically ignoring the law. People were free to run hotels without any of the oversight or become cab drivers without having the proper insurance. If something went wrong, the financial and legal liability often rested with some other party besides these companies. That is one of the primary differences between the easy and hard mode categories that were defined here. Booking.com only had so much inventory because it was operating within the legal definition of travel destinations. Airbnb invented new inventory by lowering the barrier to entry by giving people the freedom to ignore the law. I am not even necessarily saying that is a bad thing or that these laws were just, but it is clear that lots of laws were broken in Airbnb's path to their eventual IPO.
- fractionalhare 6y ago
  In the context of the article, the contrast between easy and hard mode seems to be Google and Facebook vs Airbnb and Booking, not Airbnb vs Booking. What you're talking about supports this: yes, Airbnb and Uber flouted the law. But the very fact that there was regulation they had to bypass implies they were playing in a harder game, from Ben's perspective. Airbnb had to choose whether to ask for permission or beg forgiveness and chose the latter. Google never had to think about this problem.
  - slg 6y ago
    I disagree. He defines Booking (as well as both Google and Facebook) as easy mode. From the article: >the biggest takeaway from my perspective is that Booking was drastically undervalued circa 2011...The truth is that, as I just explained, the company was playing in easy mode... Google, the Super-Aggregator, has been extracting an ever greater share of OTA margins. Indeed, that’s the downside to having a business built on easy mode: anyone else can play the game just as easily. The key difference between easy and hard mode seems to be layering on top of an existing business, service, or relationship versus creating a new business role, service, or relationship. Booking was simply a new middleman between consumers and old businesses. It was just a travel agent, but online. There was nothing unique about it or any type of moat to protect it once a bigger competitor like Google decided it wanted that market. Airbnb was connecting consumers to new businesses that wouldn't have existed without Airbnb. This was done in large part through ignoring the law and it allowed Airbnb to ramp up a business that is much harder to usurp by the likes of Google or Facebook.
xibalba 6y ago
It is very hard to believe that the implied size of Door Dash's market (vis-à-vis their valuation) is realistic and/or sustainable given their business model. Said another way, it seems improbable that there is a large market for unsubsidized food delivery given the very high level of unsubsidized costs/prices and the improbability of reducing the largest costs (the delivery person). And, of course, the subsidies will eventually end. Then again, what do I know? Circa 2012, I was certain Facebook would eat Twitter's lunch.
- fractionalhare 6y ago
  The logical next step for Doordash is to transition from a food delivery company to a last mile logistics company for all kinds of packages. If that model proves out the market would be considerably larger.
  - sjg007 6y ago
    Groceries would be a good start.
- sjg007 6y ago
  >Circa 2012, I was certain Facebook would eat Twitter's lunch. I think they serve different markets. Twitter is more public facing and basically ephemeral status updates. That and you can follow almost anyone and ignore the trolls, retweets. Facebook has more personal information, pictures and friend relationships. You don't really want trolls spamming your FB visible to everyone. In fact that's what makes FB unattractive.
useful 6y ago
I love the concept of uber and yelp, I've used them a lot. But once I could price compare them via google maps they became un-investable to me because they can only compete in 2 areas, people and policy. Once you lose control of the sales channel your business is commoditized and pricing pressure will remove all margin. Competing on price is a losers game if you want margin and growth. You can make a niche by having a better experience or better refund policies but the value competitor will drive the price down and steal marketshare. Airlines and hotels are perfect examples, now ridesharing is little different. If Airbnb can continue to control the experience then I think it is a great company to invest in. But if you can buy an airbnb on expedia and see the prices of nearby short term rentals from other competitors like vrbo then they are toast. Aggregators are easy-mode tech, you are transferring wealth by taxing margin of other companies that have operational efficiencies or deficiencies.
arbuge 6y ago
> Amazon, in contrast, has played on a much higher difficulty setting from the beginning, selling and shipping physical items, with all of the marginal costs that entails. If anything the company has doubled down on the physical world, investing billions to deliver items in one day; I don’t think it is a coincidence it is Amazon that is Google’s true competitor. I have believed that about Amazon being Google's true competitor for many years now, ever since it became clear that many people were starting their online shopping trips. Those shopping trips are far easier to monetize via search than search queries unrelated to items which can be purchased, which meant Google was being increasingly left with traffic that was hard to monetize. I interviewed at Google for a PM job a few years ago and tried making this point to several of the interviewers when the conversation wandered towards dealing with potential Google competitors. All of them without exception looked at me as though as I was crazy. And I didn't get the job :-)
- hammock 6y ago
  Outside of Google's walls (which can be full of navel-gazing or worse, competitive copycat-ism), your idea is something that's been talked about for a decade. Amazon today is the #1 search engine for product searches, not Google. And excluding YouTube, Amazon is the second largest search engine (all searches). Worldwide.
  - ansible 6y ago
    So, on the one hand, just about any common product that can be bought online, can be bought on Amazon. So, good for them. However, given the horrendous search UX with Amazon, you'd think there would be more competition in this space. I'm always leery of buying big ticket items through them, for fear of counterfeits, or restocked items, and such. Not that Google is any better. I occasionally do product search with Google, but it ends up showing me all kinds of crap only vaguely related to my search terms, apparently in an effort to be "helpful". For anything computer related, I'm still using Newegg or Microcenter, just because I can filter results much more easily. Though even there, there is much that could be improved. Just like with price, I'd like to be able to set a specific range for weight, when searching for a laptop, for example.
shock-value 6y ago
Can someone explain what if any differentiators or advantages AirBnB has over its actual or potential competitors? What's their moat? I recently rented a house for a weekend which was listed on both AirBnB and VRBO. I looked at both listings to get a more thorough feel for reviews etc. After a few days of contemplating whether to select this particular property, I ended up booking it on VRBO and I don't think there was even a reason why I picked one site over the other. If a butterfly had flapped its wings in China I'd have picked AirBnB. I don't recall the user experience being much different on either site, and it seems like any property these days gets listed everywhere, so why is this particular market and AirBnB in particular such a darling?
- dsizzle 6y ago
  The trust network? You have a rating history of the renters, not just the merchants. It wouldn't be the same if people starting renting at these properties via Booking. If you never rented before (I'm guessing this is true for you?), it's still the case that you will establish a history and that you would be incentivized to behave differently because of it.
  - Judgmentality 6y ago
    I've always found this bizarre. In my anecdotal experience, and that of almost everyone I know, most people agree you cannot trust AirBnB and it's very obvious they have a financial motivation to lie to you. Their reviews have similar issues of misaligned incentives as Yelp, Glassdoor, Amazon, etcetera. https://qz.com/410264/you-should-never-trust-an-airbnb-review/ https://qz.com/410264/you-should-never-trust-an-airbnb-revie... https://www.vice.com/en/article/43k7z3/nationwide-fake-host-scam-on-airbnb https://www.vice.com/en/article/43k7z3/nationwide-fake-host-... As a product I prefer everything about AirBnB to hotels except for the fact that I don't trust AirBnB at all, so I never use AirBnB unless I have to.
    - dsizzle 6y ago
      I agree there are reasons to not trust these reviews at face value, but to say you don't trust it all seems extreme. You're saying reviews have no value whatsoever?
lmeyerov 6y ago
I wasn't sure what the point is here.. the classic race seems to be: 1. easy mode first-to-market => lock in monoply (network effects, ...) + use warchest + continued high margins to stay ahead of competitors (e.g., FB can buy upstarts) 2. invest in hard stuff others can't/won't do => benefit as in #1. Either start on this part (sweat equity, VC), or after war chest from 1 (ex: Google -> Waymo)
lifeisstillgood 6y ago
I have learnt over the years that Using global successful companies to extrapolate something actionable usually means you have missed the boat.
- simonebrunozzi 6y ago
  Your comment deserves way more upvotes than just mine.
  - lifeisstillgood 6y ago
    :-)
ijidak 6y ago
The AirBnB analysis is spot on. Barring the unexpected, the network effects of AirBnB are going to be soul-crushing for competitors for the foreseeable future. The DoorDash analysis though seems rushed. I'm not convinced DoorDash has a maintainable moat. They've taken a unique angle, but easily repeatable with adequate funding.

109 points by zwieback 6y ago

I never used doordash and yet they own 50% market share. How? That's incredible... In big cities I always hear of people Uber-ing food, and never once I heard people doing a door dash? Is dashing a verb? In the article it highlights how airbnb-ing is part of our vocab. For example you say "I am just gonna airbnb it", so that really tells me that airbnb have done their marketing well... Unlike doordash, "uber it" and "get it on uber eats" is commonly heard...so I wonder...playing in hard mode is great but only when you win. Who's truly winning?

deleted 6y ago
[deleted]
molsongolden 6y ago
Interesting! I’ve never used Uber Eats and friends do say “let’s just Doordash something”. Popularity around here seems to be Doordash > Caviar (acquired by Doordash) > GrubHub. My area of reference is SF & Oakland, California.
- azinman2 6y ago
  These things tend to be highly regional. I laughed when I read the “brand affinity” part of doordash’s S1. That’s completely in their own heads. These products are beyond commodity — the only brand that matters is the restaurant; no one cares what company brings it to you as long as it’s the cheapest/fastest, and MAYBE the most reliable.
  - mod 6y ago
    Agree; in fact, I'd prefer the restaurant was bringing it themselves, so I only have to deal with the one entity.
snazz 6y ago
We all live in a bubble. Your experience isn't invalid, but lots of other people have very different experiences, so it's difficult to draw conclusions from what you hear about in your daily life.
jimmaswell 6y ago
I'm also surprised because in my experience Ubereats is always cheaper and lets you wait to tip until afterwards. Horrid Door Dash drivers wore my generosity thin real fast, but with Ubereats it can actually be performance based as it should be. It reflects in how unprofessional and entitled some Door Dash employees are. I wrote simple steps for getting tto my door and they'd tend to not read it, with one even saying something like "wah wah I'm not reading this huge paragraph" (it was maybe 15 words total). I should've been able to leave a negative tip for that one. The most basic inklings of work ethic seem to be lost on this doomed generation, or at least whoever is in the range of 20 years old right now.
- AlexandrB 6y ago
  1. You sound like an asshole, who probably doesn't tip his waitstaff if they don't kiss your ass all night. 2. Door Dash drivers are not employees of Door Dash, and thus are working a precarious "job" with no health coverage. You should expect poorer service - you get what you pay for. As these gig companies continue to squeeze out more margin from their contractors expect service to get worse.
  - dang 6y ago
    Yikes, attacking others like this will get you banned on HN. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.
    - jimmaswell 6y ago
      To AlexandrB, I tip 20% unless the person does something outrageous like the guy who said it was too much effort to follow a delivery note I spent time writing.
    - AlexandrB 6y ago
      Ugh. Thanks for the reminder :( And my apologies to jimmaswell. Something about that comment got under my skin, but I extrapolated an entire persona based on - effectively - a tweet's worth of text. I was wrong.
avernon 6y ago
The article did say that Door Dash has focused on more suburban areas while Uber focused on more urban areas.

rcoc 6y ago

I can't remember which thread it was, but there was a lengthy discussion about what qualifies as a tech company and whether something like AirBnB was a "tech" company. It was a distinction I had also struggled with, but this article provided clarity for me. What these companies deliver for their customers may not necessarily be traditional tech (lodging, delivery, etc) but the way they accomplish this is definitely a technical achievement.

zwieback 6y ago
Yeah, as an engineer it's hard for me to think of anything that doesn't have motors or sensors or at least PCBs as "tech". But I've also been a programmer for 30 years so I can appreciate pure SW projects that are hidden from the end-user as technical achievements. So at first things like AirBnB or travel search engines don't seem very techy but once these apps or websites are past their initial clunky releases there's a lot of hard work in the background that makes for a pleasant user experience.
tmh88j 6y ago
Isn't the term for that a tech enabled company?

an_opabinia 6y ago

Smartphones are definitely hard mode and they were the focus of the major tech companies those years. So the more important takeaway is that Google doesn’t really care about deliveries. Looking at stock market charts and saying, oh so and so event affected price, oh here’s a “low price” as defined relative to now... is still drawing on charts with crayons. Anyway, in terms of the substance of what is being said here - success is always obvious in hindsight. Probably the focus of incumbents plays a much bigger role than anything in particular Facebook or Booking.com were doing. For example, for those years after the Facebook IPO and for the “crayon says low price” part of Booking’s chart, Google kept doubling down on Android, paying 12.5x more for Motorola than Facebook paid for Instagram. How many operating systems are there? They clearly won that market, even despite disasters like the Motorola acquisition. They have an ads business, and they also acquired ITA (a Booking competitor?) but mobile is where they put their big bucks. Just the Motorola purchase probably exceeded their combined spending on Google+ by 20x. Likewise Microsoft was spending on... again, mobile, with a Nokia acquisition. Amazon was... developing the Kindle Fire line. And then, nowadays, when Microsoft paid $22b for LinkedIn when it could have bought Instagram for less. This analysis isn’t bulletproof either, it tells you what a giant company was interested in but not if it was a good decision. Listen, I think it’s fine, drawing crayons on charts. But if you evaluate Facebook based on its acquisitions you should evaluate everything based on acquisitions. And the sort of obvious conclusions are that while big money was focusing on mobile and eliminating all other upstart competition, other upstarts had lucrative opportunities obviously underpriced by the markets.

sjg007 6y ago
LinkedIn is probably ripe for disruption. I am not sure what that is right now but the coming recession means it's probably needed. It would probably be something of a cross between a temp agency and LinkedIn.

triangleman 6y ago

Did DoorDash end up figuring out how to pay their drivers a normal wage without confiscating their tips? If so, how? Seems like it would have tremendous downward pressure on their profitability.

jonsno56 6y ago
They figured out how to pass Prop 22!
Spivak 6y ago
Yeah, DD and others figured out that customer acquisition is where the value-add is for restaurants so they take ~30% gross from each order as commission . Being the "first place" people look when they're hungry gives them pretty okay leverage. In non-pandemic times this is actually a sweet deal for restaurants that don't want to do their own delivery because food and the marginal cost of labor is cheap and your goal is to reduce kitchen idle time as much as humanly possible and another source of orders is a positive. It cannibalizes take-out orders a little but opens up people who would do delivery but not take-out.
- sjg007 6y ago
  Well the future is all take out. The play here is cloud kitchens which is sort of door dash/uber eats 2.0.
  - sitkack 6y ago
    And CK will deliver themselves as leverage to entice a sweet deal from Lyft or Uber. They will edge out DD. To the point where pre-made items will be sitting in warmers at strategic locations (ML) or delivered on a recurring basis in bulk (like a newspapers or milk).

slg 6y ago

This doesn't mention the legal and regulatory issues involved. Airbnb, Uber, and the like benefited by basically ignoring the law. People were free to run hotels without any of the oversight or become cab drivers without having the proper insurance. If something went wrong, the financial and legal liability often rested with some other party besides these companies. That is one of the primary differences between the easy and hard mode categories that were defined here. Booking.com only had so much inventory because it was operating within the legal definition of travel destinations. Airbnb invented new inventory by lowering the barrier to entry by giving people the freedom to ignore the law. I am not even necessarily saying that is a bad thing or that these laws were just, but it is clear that lots of laws were broken in Airbnb's path to their eventual IPO.

fractionalhare 6y ago
In the context of the article, the contrast between easy and hard mode seems to be Google and Facebook vs Airbnb and Booking, not Airbnb vs Booking. What you're talking about supports this: yes, Airbnb and Uber flouted the law. But the very fact that there was regulation they had to bypass implies they were playing in a harder game, from Ben's perspective. Airbnb had to choose whether to ask for permission or beg forgiveness and chose the latter. Google never had to think about this problem.
- slg 6y ago
  I disagree. He defines Booking (as well as both Google and Facebook) as easy mode. From the article: >the biggest takeaway from my perspective is that Booking was drastically undervalued circa 2011...The truth is that, as I just explained, the company was playing in easy mode... Google, the Super-Aggregator, has been extracting an ever greater share of OTA margins. Indeed, that’s the downside to having a business built on easy mode: anyone else can play the game just as easily. The key difference between easy and hard mode seems to be layering on top of an existing business, service, or relationship versus creating a new business role, service, or relationship. Booking was simply a new middleman between consumers and old businesses. It was just a travel agent, but online. There was nothing unique about it or any type of moat to protect it once a bigger competitor like Google decided it wanted that market. Airbnb was connecting consumers to new businesses that wouldn't have existed without Airbnb. This was done in large part through ignoring the law and it allowed Airbnb to ramp up a business that is much harder to usurp by the likes of Google or Facebook.

xibalba 6y ago

It is very hard to believe that the implied size of Door Dash's market (vis-à-vis their valuation) is realistic and/or sustainable given their business model. Said another way, it seems improbable that there is a large market for unsubsidized food delivery given the very high level of unsubsidized costs/prices and the improbability of reducing the largest costs (the delivery person). And, of course, the subsidies will eventually end. Then again, what do I know? Circa 2012, I was certain Facebook would eat Twitter's lunch.

fractionalhare 6y ago
The logical next step for Doordash is to transition from a food delivery company to a last mile logistics company for all kinds of packages. If that model proves out the market would be considerably larger.
- sjg007 6y ago
  Groceries would be a good start.
sjg007 6y ago
>Circa 2012, I was certain Facebook would eat Twitter's lunch. I think they serve different markets. Twitter is more public facing and basically ephemeral status updates. That and you can follow almost anyone and ignore the trolls, retweets. Facebook has more personal information, pictures and friend relationships. You don't really want trolls spamming your FB visible to everyone. In fact that's what makes FB unattractive.

useful 6y ago

I love the concept of uber and yelp, I've used them a lot. But once I could price compare them via google maps they became un-investable to me because they can only compete in 2 areas, people and policy. Once you lose control of the sales channel your business is commoditized and pricing pressure will remove all margin. Competing on price is a losers game if you want margin and growth. You can make a niche by having a better experience or better refund policies but the value competitor will drive the price down and steal marketshare. Airlines and hotels are perfect examples, now ridesharing is little different. If Airbnb can continue to control the experience then I think it is a great company to invest in. But if you can buy an airbnb on expedia and see the prices of nearby short term rentals from other competitors like vrbo then they are toast. Aggregators are easy-mode tech, you are transferring wealth by taxing margin of other companies that have operational efficiencies or deficiencies.

arbuge 6y ago

> Amazon, in contrast, has played on a much higher difficulty setting from the beginning, selling and shipping physical items, with all of the marginal costs that entails. If anything the company has doubled down on the physical world, investing billions to deliver items in one day; I don’t think it is a coincidence it is Amazon that is Google’s true competitor. I have believed that about Amazon being Google's true competitor for many years now, ever since it became clear that many people were starting their online shopping trips. Those shopping trips are far easier to monetize via search than search queries unrelated to items which can be purchased, which meant Google was being increasingly left with traffic that was hard to monetize. I interviewed at Google for a PM job a few years ago and tried making this point to several of the interviewers when the conversation wandered towards dealing with potential Google competitors. All of them without exception looked at me as though as I was crazy. And I didn't get the job :-)

hammock 6y ago
Outside of Google's walls (which can be full of navel-gazing or worse, competitive copycat-ism), your idea is something that's been talked about for a decade. Amazon today is the #1 search engine for product searches, not Google. And excluding YouTube, Amazon is the second largest search engine (all searches). Worldwide.
- ansible 6y ago
  So, on the one hand, just about any common product that can be bought online, can be bought on Amazon. So, good for them. However, given the horrendous search UX with Amazon, you'd think there would be more competition in this space. I'm always leery of buying big ticket items through them, for fear of counterfeits, or restocked items, and such. Not that Google is any better. I occasionally do product search with Google, but it ends up showing me all kinds of crap only vaguely related to my search terms, apparently in an effort to be "helpful". For anything computer related, I'm still using Newegg or Microcenter, just because I can filter results much more easily. Though even there, there is much that could be improved. Just like with price, I'd like to be able to set a specific range for weight, when searching for a laptop, for example.

shock-value 6y ago

Can someone explain what if any differentiators or advantages AirBnB has over its actual or potential competitors? What's their moat? I recently rented a house for a weekend which was listed on both AirBnB and VRBO. I looked at both listings to get a more thorough feel for reviews etc. After a few days of contemplating whether to select this particular property, I ended up booking it on VRBO and I don't think there was even a reason why I picked one site over the other. If a butterfly had flapped its wings in China I'd have picked AirBnB. I don't recall the user experience being much different on either site, and it seems like any property these days gets listed everywhere, so why is this particular market and AirBnB in particular such a darling?

dsizzle 6y ago
The trust network? You have a rating history of the renters, not just the merchants. It wouldn't be the same if people starting renting at these properties via Booking. If you never rented before (I'm guessing this is true for you?), it's still the case that you will establish a history and that you would be incentivized to behave differently because of it.
- Judgmentality 6y ago
  I've always found this bizarre. In my anecdotal experience, and that of almost everyone I know, most people agree you cannot trust AirBnB and it's very obvious they have a financial motivation to lie to you. Their reviews have similar issues of misaligned incentives as Yelp, Glassdoor, Amazon, etcetera. https://qz.com/410264/you-should-never-trust-an-airbnb-review/ https://qz.com/410264/you-should-never-trust-an-airbnb-revie... https://www.vice.com/en/article/43k7z3/nationwide-fake-host-scam-on-airbnb https://www.vice.com/en/article/43k7z3/nationwide-fake-host-... As a product I prefer everything about AirBnB to hotels except for the fact that I don't trust AirBnB at all, so I never use AirBnB unless I have to.
  - dsizzle 6y ago
    I agree there are reasons to not trust these reviews at face value, but to say you don't trust it all seems extreme. You're saying reviews have no value whatsoever?

lmeyerov 6y ago

I wasn't sure what the point is here.. the classic race seems to be: 1. easy mode first-to-market => lock in monoply (network effects, ...) + use warchest + continued high margins to stay ahead of competitors (e.g., FB can buy upstarts) 2. invest in hard stuff others can't/won't do => benefit as in #1. Either start on this part (sweat equity, VC), or after war chest from 1 (ex: Google -> Waymo)

lifeisstillgood 6y ago

I have learnt over the years that Using global successful companies to extrapolate something actionable usually means you have missed the boat.

simonebrunozzi 6y ago
Your comment deserves way more upvotes than just mine.
- lifeisstillgood 6y ago
  :-)

ijidak 6y ago

The AirBnB analysis is spot on. Barring the unexpected, the network effects of AirBnB are going to be soul-crushing for competitors for the foreseeable future. The DoorDash analysis though seems rushed. I'm not convinced DoorDash has a maintainable moat. They've taken a unique angle, but easily repeatable with adequate funding.