The Four

While they both are global and enjoy access to cheap capital, their
product has substantially different variance. NYU Stern Professor of
Management Sonia Marciano (clearest blue-flame thinker in strategy
today) believes the key to establishing advantage is finding points of
differentiation where there is large, real or perceived, variance. If
you’re a decathlete, the key is to find the event with the greatest
variance in performance and own it. Uber is a great product, but I’d
challenge you to identify (without knowing which ride-sharing
platform you booked through) the difference between Uber, Lyft,
Curb, and Didi Chuxing.
The category is a 10x improvement over cabs and black cars, but
there is an increasing sameness among ride-sharing players. This has
likely been the case for a while, but Uber’s CEO frat rock (that is, shit
for brains) behavior has prompted people to discover on their own
that Lyft is the same thing. The Airbnb platform takes on greater
importance as an arbiter of trust, as there is greater variance in the
product—a houseboat in Marin vs. a townhouse in South Kensington.
United Airlines has more differentiation than Uber right now, as they
can drag someone off a plane (due to their fuck-up), but if you need to
get from San Francisco to Denver (United hubs), you’re going to
forgive, because that United flight is highly differentiated (only
choice).
In addition, Airbnb has another moat regarding product.
Specifically, the liquidity of their product. Liquidity translates to
having enough suppliers and customers who can be matched to make
the service viable. Both have achieved this. However, the liquidity
Airbnb has garnered is more impressive and harder to replicate. Uber
needs a mess of drivers and people looking for rides to build a
business in a city. Uber’s cash hoard gives them the ability to ramp up
a city, as can other ride-hailing firms with sufficient capital. However,
Airbnb needed to achieve a critical mass of supply in one city and
demand (awareness) in many others—people visit Amsterdam from all
over the world. There is competition for Uber in every major city, as a
firm only needs to establish liquidity in one market. Airbnb needed,
and reached, scale on a continental and then global level.
Airbnb’s and Uber’s valuations (at time of this writing) are $25
billion and $70 billion, respectively. However, I believe Airbnb will