From an investor’s perspective, do you like the
founding team of Airbnb? Why and why not?
they were not the best candidates in terms of experience. They had some
understanding of the start-up business since they launched their publicity
materials of the two lead candidates with success. This initiative demonstrated
comprehension of the consumer´s wants,
flexibility and creativity. But an investor is also looking for the founder´s commitment
in the long haul. The team´s achievements depend on the well-defined definition
of the functions and if they are able to work together efficiently. At the end of the day, the idea of changing the traditional
accommodation rental sector was
great and innovate, but also very ambitious and time consuming. In this case,
the roles of the team were clearly defined, and they have been working together
for some time, reflecting a clear commitment to the company.
If you were a founder of Airbnb, what would you do
with the offer from Sequoia (610 k for 20%)? Please explain why.
Sequoia`s offer of 610 k implied that the company`s valuation was approximately
$3 MM. Although in 2008 nobody could have predicted the company`s
future growth, it is true that it was easy to expect that disrupting a sector
would exponentially grow the firm`s estimation. With all the work that was
required from the investors in the short and medium term, they were only
injecting additional cash flow for the next months. Therefore, this offer was
significantly lower that the company`s real value. Nevertheless, from my point
of view, it is not as important the amount of money for the offer but the
investor´s track record of beating the market. Having Sequoia as a stakeholder,
such a big player in the venture capital world, lead to open many doors of
further opportunities. In addition, the founders did not have a profound knowledge
of the market and Sequoia had a deep understanding of the sector`s specialised laws.
In general, what are the major barriers to the sharing
(on-demand) economy? How to overcome them?
in traditional sectors are a big barrier for new businesses in the same sector.
In addition, consumers do not consider sharing economy´s platforms reliable and
safe. They believe that they do not have guarantees of “returning what I
bought”. The solution is to develop
and upgrade the service´s security.
also consider a barrier understanding the business model and making money to
the company. I think that many start-up business esin the new sharing economy
tend to develop business models without profitability.
biggers players that normally are big in the area.