surpass Uber’s value by the end of 2018, and Uber will register the
mother of all write-downs as word spreads regarding their lack of
product differentiation and regional competitors take an awful income
statement ($3 billion in losses on $5 billion in revenues in 2016) and
make it worse.
Airbnb is the most likely “sharing” unicorn to become the Fifth
Horseman. Their weakest point is their lack of vertical integration
(they don’t own any apartments), meaning Airbnb doesn’t have the
same degree of control over the customer experience as the Four. This
warrants a hard look, by Airbnb management, at allocating some of
that cheap capital toward greater control of the channel—long-term
exclusives with properties and consistent amenities (wireless, docking
stations, local concierge in each metro, etc.).
IBM
Before Google, before Microsoft, before some of the readers of this
book were even born, there was one company that mattered in tech.
Big Blue was technology, the de facto standard for Corporate America
and, after joining with Intel and Microsoft, the dominant firm of the
first quarter century of personal computers.
But IBM isn’t on this list for nostalgia purposes. Even as its
revenues continue the long, slow decline from their majestic heights
(nineteen straight quarters of declining revenues as of Q1 2017), the
company still recorded $80 billion in revenue in 2016, and every year
the mix shifts from legacy computer hardware toward high-margin
services and recurring relationships.^40 IBM’s vaunted sales force can
still get meetings with every Fortune 500 CTO, and the company is a
serious player in the race to get corporate America into the cloud. IBM
has a new, more handsome lead character in their story: Watson. The
firm is global and (arguably) vertical. However, the movement up the
food chain to services puts them in a business that trades at a multiple
of EBITDA vs. revenues, limiting access to cheap capital, and they are
seen as a safe place to get a job vs. inspiring. The kids at IBM are the
ones who got second-round interviews at Google, but didn’t get an
offer. IBM is no longer seen as the career accelerant it once was.