a friend of mine who recently interviewed at airbnb said that the employees have a personal barista that they can sign up to take lessons from, so at least you know that money is getting put to good use
As long as these types of perks continue to get shared in conversation and affect where an employee chooses to work, they will continue to be offered and will grow even more extreme in terms of catering to the needs of employees.
> A $30 billion valuation would make Airbnb the second-highest-valued start-up in the United States behind Uber, which is now valued at $62.5 billion, according to a list compiled by CB Insights.
Is there an age limit to being called a startup? Is there a valuation limit? Revenue limit?
I guess the line used to be when a company went public, but that's not really cool anymore.
Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?
Private company is objective but requiring no outside funding is a function of not only the current financial situation of the firm but also its intended growth trajectory and associated costs. As long as companies like Uber and Airbnb believe that it makes more sense to use funding to capture opportunities not possible through organic self-funded growth, we have no choice but to use terms like unicorn and startup.
> Is there an age limit to being called a startup? Is there a valuation limit? Revenue limit?
This has become a problem lately with companies remaining private longer. You could consider it a start-up because it still aims to grow unprofitably by relying on private capital
> Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?
I completely agree. Having multiple office locations, billions of dollars in funding and lobbyists doesn't really fit with the perception of 'startup." But it makes for more sensational copy.
As long as you're growing fast you are a startup http://www.paulgraham.com/growth.html Size is irrelevant, you can be a small restaurant and not be a startup if you're not growing fast anymore.
Start-up means getting started, starting up something, early into the formation, a young entity, etc. To claim a massive 40 year old business - with many old products - can be a start-up, would be to intentionally obfuscate the historical use of the term. There's no good reason to declare that Apple was a start-up when it was growing fast, it makes no sense. What would be the purpose of contorting the language for that? It's a: "fast growing company," that's all the description that's necessary for any older business that grows quickly.
I'm not sure what their growth rate was at the time. There is no set number, but if you're tripling in people every year it tends to feel like a startup.
Being profitable and requiring no outside funding is probably somewhat negatively-correlated with being a startup (because growth is often - though obviously not always - slower).
I've always just used "startup" to mean a private company that hasn't exited yet. You just have to qualify this futher. So Uber, Airbnb, Dropbox, Pinterest, etc. are all categorized as "large pre-IPO startups."
In my mind, "startup" implies that there is still risk that the company will cease to be a going concern in the near to medium term. The transition from "startup" to "former startup" is more of a process than an event. The magnitude of exit for companies like Uber, Airbnb, Dropbox, etc. may still be in question, but the chance that any of them will fail, go bankrupt, firesale, etc. seems very remote at this point.
I have personally swapped AirBnB for the entire hospitality industry in my mind. The only times I end up in hotels now are when I'm booked into one by my employer. I wouldn't, for pleasure, stay in a hotel or motel unless I really had no other choice. I was very happy to discover that AirBnB has a significant presence in Japan which made my recent trip there more pleasant and saved me money.
Hmmm...are you mostly using the private room or entire home/apt?
I've found that if you are looking for just a private room, you can get a deal. But then you are also in a stranger's house, which as a 30-something I'm not always that comfortable with. When I travel with my wife, it's not even an option.
When I look at entire home/apt listings, the prices are often very comparable to nearby hotels, and often I can get a cheaper hotel using an "opaque" service like Hotwire or Priceline. As between the two, I'd much rather stay in a hotel, since they are set up for travelers and I can get whatever extra towels, amenities, etc. that might be missing from an AirBnb.
I used to think that, but I've since gone back to mostly staying at hotels.
AirBnBs are absolutely more unique than hotel rooms, but that isn't always a good thing. I've had too many late nights sat outside a property waiting for the owner to turn up, too many broken fixtures (including heating) with no-one to repair.
And (as the other poster mentioned) I've been very surprised to find out that these days AirBnB rates for "whole property" aren't even competitive with hotel rooms, especially when you factor in the "cleaning fee" and other such spurious fees that seem designed to make it difficult for you to calculate a total easily.
That they don't need inventory or more than a few hundred employees makes me wonder what their real value is. Is the brand alone worth $30B ? You could have the same office staff running airBnb and uber.
edit: I'm also thinking of the non existent switching costs for customers.
Uber is far more complex than airbnb. Airbnb makes money today (I assume), uber has an issue where they are in a highly competitive space, where technology matters (GPS, matching, etc.), And can't really even be profitable yet.
Either User's business model works or it doesn't. Either they're profitable or they're not. It doesn't matter if they're in a competitive space. Businesses are supposed to make a profit, and anything else is just a wall of bad excuses to protect their valuation.
Not super familiar with this space, but is there a way to look at 'franchised' hotel brands vs. owner/operator brands? This would seem like a better comp. for Airbnb
I mean I know the stock answers and so on already, but seeing these kind of articles makes me wonder why the hell companies that are so mature, and theoretically at least should be spinning off tons of operating cash, feel the need to raise these really astronomical sums of money.
It's hard to see why the savviest long term strategy isn't just to keep booking billions of dollars worth of lodging bookings, keep their cut, and use it to grow the company.
The last time I saw financing in the tech industry seem so out of step with basic economics was 2001. Not for startups in general necessarily, but for these super-giants like Airbnb and Uber something seems really wrong.
When exactly do they have to start acting like normal boring businesses that are supposed to be good at something, and then make their money doing that thing?
Because they can raise a large amount of money at a modest dilution, it's really that simple. It's a way of guaranteeing their seat at the table, whether that's in regards to hiring or acquisitions or otherwise. When you're going up against huge companies like Priceline.com ($60b market cap, $3.3b cash, $9b sales, $2.5b profit) and Expedia ($15b market cap, $2.1b cash, $6.6b sales) - the more cash the better. Further, who knows if these relatively easy capital raising days will last (for Airbnb types at least), or whether we're rolling into a recession.
Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years based on comparables to either Priceline or Expedia.
> Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years
Indeed. And therin lie the seeds of a problem that could literally destroy the company, or at least incinerate the stake of the current founders and major shareholders. Hence the question.
If the goal of Airbnb's investors/BoD was to grow a viable business, this would be a reasonable question - but their job is to increase the value of their (and their LPs') existing investment as much as possible, usually within a fixed time window.
For employees in the tech sector, this misalignment of incentives is one of the ugliest lessons to learn.
Every person I know, young to old use airbnb now. I can't say the same for uber. Plus, as mentioned in a comment, although it would be have a higher market cap than Hilton, Hyatt, etc. They also have no inventory, employees, property tax, and so on.
I see this valuation being low in a few years. Instead, of thinking of them as a hotel chain (or something similar), we should think of then as an insurance and travel company
For personal travel, I tend to hear the same. But for professional travel, the people I know still seem to be fairly traditional. It is not a good risk/reward balance to allow the possibility of a business trip being disrupted because of a bad host, or a surprise cancellation.
I wonder if these terms account for the potential impact on Airbnb's growth that all of the new regulations being proposed in places like NY and Europe could have. A lot of effort is being put forth to curtail full-time entire apartment listings in several of the company's largest markets, and there is good reason to believe that those listings contribute significantly to their revenue.
For example, a study put forth by housing advocacy groups recently identified over 8,000 "impact listings" in NYC alone, which are essentially entire apartments being operated on a close to full-time basis. [1]. Certainly these groups are biased, but their methodology for finding full-time listings looks sound. I'll do a little quick math to consider the revenue and fees Airbnb may be collecting from those:
200 days a year rented (total guess on my part) * $120 (somewhat less than the average shown for a one night stay) * 8000 (full-time listings) = $192M total revenue
Or maybe around $19M in total fees collected from both hosts and guests. Granted, I could be way off here, but I think it shows how much money is potentially at stake in these listings that, if the current legislation on Cuomo's desk passes, could go away nearly overnight.
My point is that these new regulations appear to represent a substantial risk to Airbnb's continued growth. It makes me wonder how much this new raise might be earmarked for fighting cities on regulations and conducting an aggressive PR campaign to sway public opinion in their favor.
and also to fund their legal proceedings against the city of San Francisco. I really do not like that they're suing the city because a consequence of them winning seems to be more stifling of housing in the city available for those who live in the bay.
54 comments
[ 2.5 ms ] story [ 106 ms ] threadIs there an age limit to being called a startup? Is there a valuation limit? Revenue limit?
I guess the line used to be when a company went public, but that's not really cool anymore.
Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?
This has become a problem lately with companies remaining private longer. You could consider it a start-up because it still aims to grow unprofitably by relying on private capital
> Maybe the new definition of a unicorn should be a private company that is profitable and requires no outside funding?
You could call it a grown up unicorn
https://www.cbinsights.com/research-unicorn-companies
Start-up means getting started, starting up something, early into the formation, a young entity, etc. To claim a massive 40 year old business - with many old products - can be a start-up, would be to intentionally obfuscate the historical use of the term. There's no good reason to declare that Apple was a start-up when it was growing fast, it makes no sense. What would be the purpose of contorting the language for that? It's a: "fast growing company," that's all the description that's necessary for any older business that grows quickly.
It makes no sense, and is largely the way it is for PR reasons.
I've always just used "startup" to mean a private company that hasn't exited yet. You just have to qualify this futher. So Uber, Airbnb, Dropbox, Pinterest, etc. are all categorized as "large pre-IPO startups."
I've found that if you are looking for just a private room, you can get a deal. But then you are also in a stranger's house, which as a 30-something I'm not always that comfortable with. When I travel with my wife, it's not even an option.
When I look at entire home/apt listings, the prices are often very comparable to nearby hotels, and often I can get a cheaper hotel using an "opaque" service like Hotwire or Priceline. As between the two, I'd much rather stay in a hotel, since they are set up for travelers and I can get whatever extra towels, amenities, etc. that might be missing from an AirBnb.
AirBnBs are absolutely more unique than hotel rooms, but that isn't always a good thing. I've had too many late nights sat outside a property waiting for the owner to turn up, too many broken fixtures (including heating) with no-one to repair.
And (as the other poster mentioned) I've been very surprised to find out that these days AirBnB rates for "whole property" aren't even competitive with hotel rooms, especially when you factor in the "cleaning fee" and other such spurious fees that seem designed to make it difficult for you to calculate a total easily.
Hilton Worldwide, 160k employees, 11.3b revenue, 4660 properties, 21b market cap
Hyatt, 97k employees, 4.4b revenue, ~600 properties, 5b market cap
My guess is they have their valuation about right, assuming they continue to grow for the next 3 or 4 years
edit: I'm also thinking of the non existent switching costs for customers.
I guess it works for credit card companies
It's hard to see why the savviest long term strategy isn't just to keep booking billions of dollars worth of lodging bookings, keep their cut, and use it to grow the company.
The last time I saw financing in the tech industry seem so out of step with basic economics was 2001. Not for startups in general necessarily, but for these super-giants like Airbnb and Uber something seems really wrong.
When exactly do they have to start acting like normal boring businesses that are supposed to be good at something, and then make their money doing that thing?
Imagine if Apple announced today it was "taking on funding to raise its valuation to $800 billion." What a thought!
Oh yeah, and because they wouldn't be worth $30 billion if they were publicly traded. They're raising money far beyond what their business is going to be worth at any point in the next five years based on comparables to either Priceline or Expedia.
Indeed. And therin lie the seeds of a problem that could literally destroy the company, or at least incinerate the stake of the current founders and major shareholders. Hence the question.
The second is that businesses face a sudden jump in their need for capital as they shift focus to their global operations.
For employees in the tech sector, this misalignment of incentives is one of the ugliest lessons to learn.
I see this valuation being low in a few years. Instead, of thinking of them as a hotel chain (or something similar), we should think of then as an insurance and travel company
For example, a study put forth by housing advocacy groups recently identified over 8,000 "impact listings" in NYC alone, which are essentially entire apartments being operated on a close to full-time basis. [1]. Certainly these groups are biased, but their methodology for finding full-time listings looks sound. I'll do a little quick math to consider the revenue and fees Airbnb may be collecting from those:
200 days a year rented (total guess on my part) * $120 (somewhat less than the average shown for a one night stay) * 8000 (full-time listings) = $192M total revenue
Or maybe around $19M in total fees collected from both hosts and guests. Granted, I could be way off here, but I think it shows how much money is potentially at stake in these listings that, if the current legislation on Cuomo's desk passes, could go away nearly overnight.
My point is that these new regulations appear to represent a substantial risk to Airbnb's continued growth. It makes me wonder how much this new raise might be earmarked for fighting cities on regulations and conducting an aggressive PR campaign to sway public opinion in their favor.
1. http://www.sharebetter.org/story/housing-report-short-changi...
http://www.nytimes.com/2016/06/29/technology/airbnb-sues-san...
Not really much of a surprise as you're a young, white male working and living in the SF bubble.
We detached this comment from https://news.ycombinator.com/item?id=11997359 and marked it off-topic.