Not so long ago the notion of hopping into a stranger’s car or sleeping in their home would have been barely conceivable. Yet in a few short years, two US start-ups – Airbnb, for room rentals, and Uber, for ride-hailing – have transformed the hospitality and transportation industries, and millions of people around the globe have embraced the “sharing economy”. Airbnb, founded in 2008, had by the end of last year more listings than the top three hotel chains combined.
In The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley are Changing the World, released in January, author Brad Stone turns his attention to how these two companies rewrote the traditional rules of business. (Stone has previously written The Everything Store: Jeff Bezos and the Age of Amazon).
The first chapters, suspenseful and gripping, relate how the companies came into existence – from how the founders met, to the genesis of an idea, to the first customers and tentative investors. Stone, who has covered Silicon Valley for more than 15 years as a writer, conducted extensive interviews for the book, including with Airbnb co-founder Brian Chesky and Uber chief executive Travis Kalanick, as well as current and former employees and many tech industry scions.
There are some great vignettes. In one, the struggling founders of Lyft, another ride-sharing service, lived next door to the future Yahoo boss Marissa Mayer. “At night, sitting alone, they would hear Mayer’s loud outdoor parties and awards ceremonies. When the names of people were called out, they would rush to Google and type in the names to see who they were.” Stone is adept at conveying the excitement, idealism, passion and determination of the characters involved.
Later chapters cover the companies’ growth and tribulations: how Airbnb had to fend off competition from the sinister Samwers, the German brothers famous for cloning successful US tech firms; and the high-profile PR crises after an Airbnb host’s house got trashed and a young child was killed by an Uber driver. The author also recounts in detail the regulatory battles both firms have faced, which while important are dry.
A small criticism: Stone is perhaps too much of a cheerleader for the firms he is writing about but, on balance, this is a fascinating account of two companies that have changed the way we live.
q&a unicorns pursue glory
Lianne Gutcher offers more insights into Uber and Airbnb’s rise to unicorn status:
What is a unicorn?
A “unicorn” is a start-up valued at more than US$1 billion.
And what is the “global mega-unicorn death match”?
The death match refers to Uber’s decision to go head-to-head with its main competitor in China — Didi Chuxing or “honk honk commute” — in the battle for the world’s largest transportation market. Didi and Uber are both unicorns. The Chinese market is notoriously difficult for US internet companies to crack — Google, eBay, Amazon, Facebook and Twitter have all tried and failed. Uber was undeterred and the ensuing contest escalated until both companies “were burning through a billion dollars a year in China” in unprofitable subsidies.
How did it all end?
Uber agreed to leave China and surrender its operations in the country to Didi in August 2016, in exchange for a 17 per cent stake in the firm.
What does the future hold for Uber and Airbnb?
The two firms are identifying new opportunities. Uber is not yet globally profitable — it lost $3bn in 2016, according to Bloomberg. This will become an issue for investors if they start to believe Uber will never be profitable. Uber is also investing heavily in driverless car technology. Airbnb became profitable for the first time in 2016. The firm has launched a new service called Trips, allowing users to book travel experiences and adventures.
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