Playbook

1. If you can create value for all sides in a market ("expand the efficient frontier"), you really can’t help but be successful.

• Born out of the 2008 financial crisis, Airbnb was able to fundamentally change the nature of the travel market and provide guests with more quality for less money, while also enabling hosts to earn meaningful extra income during a very difficult economic period. This led to incredible market adoption of the service, at times almost despite the company's own actions and activities.

2. When you create a market, you have an opportunity to set the terms.

• By virtue of creating a whole new class of supply that had never participated in the travel market before, Airbnb was able to enact much more platform-favorable payment terms versus the hotel industry. Unlike Booking.com and the OTAs, guests pay Airbnb at the time of booking, and Airbnb keeps that cash (including fees) until after check-in — which could occur weeks or even months later.
• This created an enormously beneficial cashflow dynamic for Airbnb that allowed them to grow while burning much less cash than otherwise would have been required.

3. When you don't fly low to the ground, you aren't forced to operate at the lowest level of detail.

• Unlike DoorDash which needed to create an enormously efficient operational machine just in order to survive, Airbnb's capital-light business model, low operational intensity and favorable cashflow dynamics meant they've never had to operate in a particularly cost-disciplined or product-focused manner. While the core business has been insulated from competition due to its global network effects, the company has missed or poorly executed on Amazon-like opportunities to expand into adjacent markets and services that could have continued to drive new growth.

4. Relying solely direct/organic traffic is both a gift and a curse.

• Undeniably, direct/organic customer acquisition is a wonderful goal for any business to strive for. Who wouldn't want to acquire customers without paying for them? However, if you don't also build the muscle for profitable and reliable growth through paid channels, you can be left vulnerable vulnerable when organic growth slows, as it inevitably will.

Carve Outs

• David: San Francisco Ballet's Nutcracker
• Ben: Star Wars Lofi HipHop