Playing on Hard Mode
stratechery.com
stratechery.com
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.
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.
>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.
If by that you mean Google's OTA business, sure, but Google totally had to think about this problem in the context of their original core search engine business.
They did not ask for permission, they begged for forgiveness too, if you remember the early days.
They copied data from every website in existence to populate their search engine despite copyright laws, encouraged some sort of robots.txt opt-out mechanism while also ignoring the (AI-hard) need to parse legal terms of use on each website which may not have allowed their access.
Later on some laws were passed to justify what they did but it was not legally a settled matter when they (and other search engines) started. Copyright is not "opt-out" process; the RIAA doesn't publish a robots.txt with their content and if they forget you have a free pass for copying some song for yourself. Copying every single word on a webpage to make money is not so clearly "fair use".
I think it worked out OK, but Google totally thought a lot about this problem early on and they and other search engines tried hard to make everyone really comfortable with their approach.
The court ruled that players of the game weren't owners, merely license holders. By copying the game to ram, you were bound to the Terms of Use.
Replace game with website there and there is a pretty strong case for downloading, parsing (copying) and storing portions (or all of) said site, then displaying portions at a later date alongside advertisements constitutes a ToS violation, and willful infringement on Googles part.
In a parallel world where yahoo, lycos, etc rules until 2010 and google is getting started, I think they get into a lot of legal trouble.
As did every other search engine, and a good thing too. In general the principle of “if you don’t want people to see something don’t post it publicly” is a good principle that predates computers.
As for robots.txt: don’t forget that it predated Google, even when g was just a grad school project. Nothing weird about it: we also specify how the http protocol works. Humans use “AI-hard” adaptive protocols and there’s no reason computers won’t in future, but they can’t yet and it’s not unreasonable to have to adapt to that.
There are many many reasons to criticize Google but I think your argument is not one of them.
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?
https://qz.com/410264/you-should-never-trust-an-airbnb-revie...
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.
AirBnB won because they made a slicker website, advertised more with their VC money, ignored the law, and spammed Craigslist until they built up a larger network.
VRBO can theoretically compete by being cheaper but comparison shopping between apps is a pain (there's no kayak or google maps aggregator).
Also even though I know Airbnb isn’t perfect, I understand at least some of its weaknesses and how I can mitigate some of the risks. With a new service I’d be starting from scratch.
Some theories think that sequence of events and experiences that led to your decision, along with all states of all butterflies in the wold at the moment, that sequence was predetermined at the moment of the big bang (and likely before it too), just like position of billiard balls after the strike is predetermined before the strike if all forces and angles of the strike are known.
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 :-)
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.
It's a million times easier for, say, Patagonia or another single-brand retailer to accurately and robustly catalog their own merchandise.
The multi-brand retailers that do it well invest huge amounts in their buying and merchandising teams, which allows them to do independent ratings of, e.g. the clothing fit, etc. I'm thinking of Nordstrom.
When you are an Amazon or a Walmart, not only is the number of SKUs you are dealing with magnitudes larger, but often you are a few degrees separated from what those SKUs even are, when you open up your platform to third-party sellers.
Unfortunately for them.
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.
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.
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.
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.
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.
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)
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.