Once upon a time, “full stack” meant coverage of the technical layers, from server to user interface. That’s gotten too easy.
Chris Dixon and Balaji Srinivasan recently explained that the new full-stack approach is to build a complete, end-to-end product. One that covers all aspects of an industry: Technology, design, marketing, supply chain management, sales, partnerships… The best way to disrupt an industry is to rebuild it. New startups must go for the full Apple.
4/The reason to do full stack is that it's hard to replace just one layer of an outdated legacy stack. CAC & integration costs can kill.
Airbnb is becoming a hospitality company, a standardized service that aims to control the customer’s travel experience from touchdown to departure. Other examples cited include Tesla, Warby Parker, Uber, and Nest. These are all clearly lifestyle companies. A full stack startup controls how customers live their lives.
Next month: Full stack startups control customers’ bodily functions.
Public hotel chains including Hilton, Marriott, and Wyndham are now implementing franchise growth strategies to ramp up a pipeline of new hotels and rooms in response to the strong recovery in the travel industry.
This recovery has been underway since 2009.
Industry disruptors like Airbnb and HomeAway spent the last five years eating the hotel industry’s lunch while hotel chains were still loading their muskets.
Construction takes time, and hotels can’t move that quickly. Crowdsourcing provides a highly-liquid, dynamic supply. Travelers don’t have to wait half a decade for Airbnb hosts to build new rooms to meet their needs. In times of low demand, hosts take their rooms off the market while hotel chains go through bankruptcy and consolidation.
People have made noise about Uber’s surge pricing and Lyft’s Prime Time price increases, but this is how the principle of supply and demand works. How much would someone have to pay you to schlep passengers on New Years’ Eve? Or in the aftermath of a hurricane?
By providing higher incentive to drivers during times when they would probably rather be doing other stuff, supply increases to match the number of passengers needing rides. With a potentially limitless source of drivers, we quickly find an efficient market.
Regulations that cap prices or artificially limit supply enforce an inefficient market where supply and demand never meet.
Cities like San Francisco and NYC are finally issuing more taxi medallions for the first time in years. At the same time, GDP data show that prices for traveler accommodations are falling, and we’ll soon see a glut of empty hotel rooms. It’s hard to create an efficient market when moving at Gatling-gun pace.
Once upon a time, Silicon Valley was a safe haven for socially subpar tech people. They lived in humble garages in the South Bay and built cool things for the sake of building cool things. The transistor. Apple I. Netscape.
The world loved the cool things they built. The geeky kids of Silicon Valley made money, lots of it.
Then the beautiful people showed up. MBAs and smashmouth capitalists. They wanted to build cool things too. Not for the sake of building, but to make money. They didn’t live in garages, because beautiful people don’t hide in garages. They live in high-visibility metropolises at the top of the peninsula.
More than 1,200 of Google’s 47,500 current employees formerly worked for one of the top 10 global investment banks, according to LinkedIn. The top banks also incubated at least 750 current Apple employees, 175 Facebook employees, and 260 Yahoo employees. Travis Kalanick, chief executive officer of the ferociously expanding Uber, has said that between 10 and 15 percent of his hires come from the financial services industry, with a full 5 percent coming from Goldman Sachs alone.
The new businesses don’t make users fall in love with their products. They churn out slick consumables that evoke the emotional connection of a quick handjob in a truck stop bathroom stall.
The Valley really is not so different from Wall Street. The core business model involves gambling with rich people’s money under the guise of wealth management. The startup founders, they’re just junior traders. They work 14-hour days and spend $2000 a month to carve out some sleeping space in a shared building.
And sooner or later, something will pop and the money will vaporize, because that’s what happens when everyone gets greedy. The Wall Street immigrants will return home, the San Francisco natives will get their rent-controlled apartments back, and it’ll only be a matter of time before the next hot spot emerges.
I’m an Uber driver now! I activated my account at the Uber office this afternoon.
I was expecting to find a cadre of Aryan gods dressed in designer suits at the office, just like the ones pictured on Uber’s home page. What I encountered was most disappointing.
About a dozen and a half other Uber drivers came and went during my visit. Except for two middle-aged females and myself, every driver in the waiting area was an older immigrant male.
I spent a good 45 minutes waiting my turn, during which time a potato-shaped driver sat next to me and introduced himself as Dario. Dario had been driving for Uber for 4 years, and before that spent over a decade driving taxis. He lived in Redwood City, and made very little as a taxi driver.
He had come to Uber today to register his new Toyota Prius as a driving vehicle. Uber drivers can switch between multiple personal cars for providing rides.
During Dario’s Uber career, he bought three Toyota Priuses and registered them all as Uber vehicles. He couldn’t drive three cars at once, of course. He rented two of the cars to friends who did not have California licenses, and let them drive using his account. Uber didn’t know, or maybe didn’t care. They simply assumed that Dario was putting in 24-hour workdays in three different cars.
Dario actually no longer spent much time as an Uber driver. Rather, he managed the cars that his friends drove for him.
As I was leaving the city, Uber sent me a text message reminding me that I could stop by to pick up flowers to put in my car for Valentine’s day. I considered swinging by, not because I plan on picking up any Valentine’s Day riders, but to maybe make the boys jealous.