Gotta love the accounting practice of putting coupons/discounts in the Sales and Marketing Expenses. I saw the same thing in Doordash's S-1. I wonder what their true gross margin is.
Airbnb S-1
161–170 of 471 posts
Re: Airbnb S-1
#162Earlier quoted context omitted.
Airbnb'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.
> 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?
Yeah, 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.
Re: Airbnb S-1
#163A 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 firs…
I'm curious why you think AB&B qualifies as a "tech" company
It's a marketplace business, all internet marketplaces are tech companies because they simply aggregate buyers and sellers while owning none of the assets/inventory/risk being transacted on the platform. Airbnb is just a website with a ToS. There is zero marginal cost to Airbnb for servicing a new listing.
Do you also question whether Ebay is a "tech" company?
Re: Airbnb S-1
#164Earlier quoted context omitted.
I think the number is bullshit. They can't tell the difference between a room and a full home. At least that's my experience when I was trying to search on the site. There was little filtering available and the owners were listing their properties as anything.
Really? I’ve never had this issue and I’ve stayed in dozens of listings. I’m sure this could vary by price/location though.
My experience is that you have read the listing extremely carefully trying to devise what is it about.
Is it a whole flat, or a room in a property with the landlord living in, or a room in a property fulled rented on airbnb (how many people?), or a bed in a bunk of beds (yes that's a thing). There's listings for everything and quite a few are misleading. It doesn't help that you have no idea what is the normal price range when traveling abroad and may not speak the language very well.
If you're interested by the way. My counter experience renting a flat on airbnb over the summer, is that guests are evaluating everything they could use including beds and couches and ground space. The guest renting a one bedroom could be anything from a person or a couple to a family (maybe with extended family/cousins joining in) to a group of many friends. It's always a surprise whether there will be 1 or 6 people showing up.
Re: Airbnb S-1
#165In my view, AirBnb made the travel pie substantially larger. More people can afford to travel when rooms in far away places can be rented for small amounts. If the choice is not traveling at all vs. putting up with the friction of finding the property and getting the key, reviewing the house rules and then stripping the bed and taking out the trash before you check out, many people will choose the convenience hit and take more trips. Such as 260 entire place stays in London for under $60/night.
Put that together with some ridiculously low international air fare, like, RT SFO LHR for $700, pre-pandemic, and many more people will travel.
Re: Airbnb S-1
#166Earlier quoted context omitted.
No, money is the thing you use to allow yourself to spend 200% of your time at work. Private tutors to school your kids so you don't have to. Cleaning services so you don't have to spend time cleaning. First class plane tickets so you can relax, sleep or work on the flight. Private driver or Ubers so you can work while driving places. A personal assistant to book travel, appointments and everything else mentioned so…
None of the items you mentioned cost much
> None of the items you mentioned cost much
The average private driver salary's in NYC is about 60k a year according to Google btw[0]. The average yearly -household- income in the US is 68k.
It's a massive luxury to be able to afford such a thing.
[0]: https://www.quora.com/How-much-does-a-full-time-driver-cost-...
Re: Airbnb S-1
#167Earlier quoted context omitted.
Easiest solution is to force new hosts to provide a "surety bond" to basically be an honest host. Maybe make them pay 10-25k lump-sum in cash. After a certain amount of guests have visited the offering then the money can be returned. If the host is a scammer then the money can be used to reimburse the guests for their troubles. The risk vs rewards under this system would discourage bad hosts from joining the platform…
That would almost completely rule out people renting out a room in their home
Considering they’re borrowing at 10%, they could pay good interest on that money and both sides would come out ahead.
https://www.businessinsider.com/airbnb-paying-10-percent-int...
Re: Airbnb S-1
#168Earlier quoted context omitted.
A 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…
I had that exact experience in the famously non-corrupt Netherlands (2017). It’s not a China thing.
Does 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.
Re: Airbnb S-1
#169It is so frustrating with all those recent tech startups how much they're spending on sales and marketing: https://www.sec.gov/Archives/edgar/data/1559720/000119312520... How does one figure whether the business will keep growing without blasting people's faces with ads? If so much spend on ads is required to generate revenue growth then there will either never be profits or the revenue growth will stall (and thus th…
The general idea here is that there will only be one major winner who will capture the market due to network effects.
So scaling as fast as possible is the #1 goal, because if you don't someone else will and you'll go out of business.
Therefore sales and marketing is a huge factor in growth. Then the idea is, once you've grown as much as you can and it's too hard for others to compete because of your entrenched network effects, you can reduce sales and marketing to a a reasonable, highly profitable level.
That's it in a nutshell and it works in any market with strong network effects, which AirBNB strongly fits into, in facts it's a poster child for the concept. Yelp is another good example -- sign up all the restaurants before a competitor does.
There are a lot of different business models out there, which you can study (and MBA programs teach you). This is just one model, and it's a legitimate one. Google, Facebook, Microsoft and Apple all have different models from it (and all drastically different from each other as well).
Re: Airbnb S-1
#170The seesaw in revenue over the last 3 quarters is insane: 841M, 334M, 1.3B in Q1, Q2, Q3. They even posted a profit last quarter. I've gotta say, the S1 looks appealing considering how few profitable silicon valley companies there are these days. On the other hand, I have a hard time interpreting whether this is truly a profitable company since the numbers are all over the place. It also looks like Q3 tends to be the…
Q2 saw all travels being cancelled due to lockdown across the world. It's surprising the activity bounced back this quick, back to normal in Q3.
People still travel within their own country instead of abroad