4 ms·

>and Airbnb, the home rental service, will be worth more than $200 billion by 2020. How is this influenced by city regulation? There are several cities that a

by zatkin 11y ago

>and Airbnb, the home rental service, will be worth more than $200 billion by 2020. How is this influenced by city regulation? There are several cities that are now taking measures to ensure that homes cannot be used in an Airbnb fashion and it hurts Airbnb business.

adventured 11y ago
Here's how that works. You're Airbnb, you jump out to a fast lead, and dominate your segment across the whole of the US market. You move so fast that regulations and politics trail years behind you. You operate in every major city in the US, 300-400 of them. Out of hundreds of cities, two dozen cause you serious problems, such as bans or hard restrictions. Now, even if six of the 24 that cause you serious problems are major cities (NY, SF etc), you've got 90-95% of the market (along with the rest of the world to go after) that isn't causing you problems. With your new vast scale, and large pile of cash, you triple down and go to work on the politics in SF or NY or wherever else you're having problems. There is no scenario under which, assuming you keep your 90-95% rest of the market, that you can lose. With enough time, you wear down SF and buy enough politicians to squeak back into the market. Your network effect instantly brings you back up to dominating in SF upon being allowed back into that market. It's a form of the little bighorn market attack. The only variable is time, and that will give way eventually, so long as you don't lose a massive portion of the US market (which is extremely unlikely in Airbnb's case). Meanwhile, they can attack the rest of the planet, and pull off the same jump-out-in-front move, and then lean on their vast scale to go to work on the problems. In total, you end up with no terminal risks to the whole system, merely a few broken bones.
- zatkin 11y ago
  I'm loving the response, but can you provide a company that did this in the past?
  - ekanes 11y ago
    The way Microsoft handled being a monopoly is admittedly different but feels relevant. The consequences years later of their actions didn't slow them down much. Perhaps cigarette companies too?
    - zatkin 11y ago
      Yeah, cigarette companies would work. Like how they were really popular, but then they got a smack on the wrist by health specialists who found out that cigarettes causes cancer.

by zatkin 11y ago

adventured 11y ago

Here's how that works. You're Airbnb, you jump out to a fast lead, and dominate your segment across the whole of the US market. You move so fast that regulations and politics trail years behind you. You operate in every major city in the US, 300-400 of them. Out of hundreds of cities, two dozen cause you serious problems, such as bans or hard restrictions. Now, even if six of the 24 that cause you serious problems are major cities (NY, SF etc), you've got 90-95% of the market (along with the rest of the world to go after) that isn't causing you problems. With your new vast scale, and large pile of cash, you triple down and go to work on the politics in SF or NY or wherever else you're having problems. There is no scenario under which, assuming you keep your 90-95% rest of the market, that you can lose. With enough time, you wear down SF and buy enough politicians to squeak back into the market. Your network effect instantly brings you back up to dominating in SF upon being allowed back into that market. It's a form of the little bighorn market attack. The only variable is time, and that will give way eventually, so long as you don't lose a massive portion of the US market (which is extremely unlikely in Airbnb's case). Meanwhile, they can attack the rest of the planet, and pull off the same jump-out-in-front move, and then lean on their vast scale to go to work on the problems. In total, you end up with no terminal risks to the whole system, merely a few broken bones.

zatkin 11y ago
I'm loving the response, but can you provide a company that did this in the past?
- ekanes 11y ago
  The way Microsoft handled being a monopoly is admittedly different but feels relevant. The consequences years later of their actions didn't slow them down much. Perhaps cigarette companies too?
  - zatkin 11y ago
    Yeah, cigarette companies would work. Like how they were really popular, but then they got a smack on the wrist by health specialists who found out that cigarettes causes cancer.