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For some reason, I just feel this price is too high for them and that it will fall in the coming 2-3 months. Then again, I think about their business model and
by ricotico060 6y ago
For some reason, I just feel this price is too high for them and that it will fall in the coming 2-3 months. Then again, I think about their business model and there’s a lot to like: the don’t own any real estate and if they really wanted to, they could likely let go most of their staff and have a team of maybe 60 - 100 people run the bussiness as it mostly revolves around simply managing the app and keeping it running. I’m curious how “Moated” their bussiness will turn out to be. I don’t really see competition will cut in that much as Airbnb has such an head start and established brand. The only big question I have left is legality. My family works in the hotel bussiness and is required to do fire alarm checks and all sorts of other checks to prove that he is safe to customers. Will Airbnb one day be required to do this? Only time will tell.
- loufe 6y ago60-100 staff? Sorry but that's very naïve. Think about how many core services this takes: -finance -payment -HR -management -verification of hosts / properties -scam detection and moderation -legal -dispute arbitration -programming -infrastructure -projects -building management for properties like HQ they own -customer service -etc. They'd be lucky to get away with a couple multiples of your guess. This isn't netflix, there are far more facets to operations.
- sida 6y agoI agreed with everything until Netflix. Netflix is incredibly complex. But yes, we can all agree that these take a lot of people to run
- borroka 6y agoNetflix is complex and they also have entire teams whose effect on the product or business is zero or negative. Almost all companies are inefficient in different ways.
- burkaman 6y agoAlso monitoring laws and taxes in every municipality in the world. Maintaining the app is by far the simplest and easiest part of their business.
- thebean11 6y ago> This isn't netflix, there are far more facets to operations. With Netflix I think you need to count the content creators, since first party content is the majority these days.
- polote 6y ago> 60-100 staff? Sorry but that's very naïve. Think about how many core services this takes: I agree, but the engineering department could be handled with less than 50 people. Most of the work they do is linked to operation stuff and not engineering
- patothon 6y agothe parent explained how it was impossible to get to that low of a number: -finance -payment -HR -management -verification of hosts / properties -scam detection and moderation -legal -dispute arbitration -programming -infrastructure -projects -building management for properties like HQ they own -customer service -etc. This represent so many people.
- jbverschoor 6y agoBut they don't even have "customer service"
- AnimalMuppet 6y agopolote said "engineering". You responded by listing a bunch of non-engineering jobs that need done. OK, but you're arguing with something that is not what polote said.
- patothon 6y agothese are not non-engineering jobs to be done, these are internal and external products to build.
- sida 6y agoThis comes up a lot (ohh it is a just a crud app and you just need a couple of people) This is fine and it is common misconception about how large app businesses work. (kudos to airbnb for making complex things look so simple) Here is a great post about Uber and why Uber gets complex (once you have many product lines across hundreds of cities, each with their own subtleties and rules/regulations) https://news.ycombinator.com/item?id=25376346 https://news.ycombinator.com/item?id=25376346
- victor106 6y agoAswath Damodaran's analysis. http://aswathdamodaran.blogspot.com/2020/12/the-sharing-economy-come-home-ipo-of.html http://aswathdamodaran.blogspot.com/2020/12/the-sharing-econ... TLDR;The per share value based upon the latest share count is about $54/share.
- treis 6y ago>For some reason, I just feel this price is too high for them and that it will fall in the coming 2-3 months. They've got a lot going for them they are: A verb now like Google or Zoom. The dominant player in a global 2 sided market Potential major competitors (i.e. AirBnB by Marriott) are blocked by legal complications They're going to be very profitable for a long time. A 100billion valuation is a tall order as it implies that, at some point, you start generating 10 billion a year or so in cash flow. But I can see them doing that.
- giarc 6y agoBecoming a verb can be hit or miss. Take for example Kleenex. If I say to you, "can you grab me a box of Kleenex at the store" you don't instinctively buy Kleenex brand, you buy whatever is on sale/stands out/is your regular brand.
- treis 6y agoKleenex has been the leader in their segment for a century now and has half the market.