Perhaps Airbnb's problem is... Airbnb? I mean, it's awful. I've had so many bad experiences with Airbnb hosts and Airbnb itself that I've written it off and gone back to a combination of booking.com and Bonvoy (aka Marriott).
The idea of Airbnb seems like it should be profitable, if only it were better managed.
The metric you really want to follow in these cases is revenue growth over time. Cloudflare is a great example. They run a very successful business while still technically "at a loss". However, with numbers showing almost 50% rev growth since last year.
If you clicked the article, you would see that it is in the first few paragraphs in bold: marketing and sales. Pretty much what most growth companies have to spend on in the earlier stages.
Airbnb has done a good job at defending their platform while uber/lyft has not. The best example of this is how you can compare prices on google maps for ride sharing, flights, and hotels but not for home sharing.
They have no immediate pricing pressure, they control the margins and the advertising. As long as they spend on marketing and avoid creating channels in aggregators they will be ok.
My only worry is that they do 5-10B/year revenue? So maybe they become a 30B company. It already looks like they will IPO above that, which will be unfortunate for any retail investor.
It seems like there are a lot of these IPOs lately. The article mentions Uber and Lyft, but there are others. Peloton is a recent one. WeWork had to shelve its IPO. Pure Storage is still losing money. How many of these companies can never make enough money to justify their IPO price, and how many are wisely investing in growth and market dominance. How long does it take to tell? Amazon took over a decade to show profits, if memory serves.
This is absurd to me. They are bordering on having a total Monopoly and everyone knows about them. I can't imagine they are getting good returns on that spend.
I almost suspect that they actually think its a good look to go into the IPO losing money because it's a trend right now. Nobody wants profit they want growth potential so it's easier to sell that narrative while leaking money but growing sales.
I wonder, if Airbnb is going to turn out like Groupon if/when it files for IPO that we're going to find out funky accounting and revenue bookings not in accordance with GAAP.
Basically counting all rental as revenue and not just their fees. Or, something like that.
The idea of Airbnb seems like it should be profitable, if only it were better managed.