False economy What’s in it for me? Understand what makes the

The term “upstart” is used for mega start-
ups like Airbnb and Uber.
Companies like Airbnb and Uber that have 
grown rapidly to become phenomenally 
successful are hardly start-ups anymore. 
They’ve shown they like to tussle with the big 
boys, and they’ve paid scant respect to the usual 
ways of doing business. We can call such 
companies upstarts.
Both Airbnb and Uber are renowned all over the 
world and business is booming. And that’s 
despite the fact that unlike many other major 
companies, they don’t actually have any physical 
assets.
Airbnb might at first glance appear to act like the 
world’s largest hotel company. Except, of 
course, it doesn’t own the rooms that get rented 
out.
Equally, we think of Uber as the world’s largest 
car service. But it doesn’t even have its own 
fleet.
In part, the freedom granted by this lack of 
assets helps explain how these companies have 
been able to expand so far and so quickly. In the 
world of tech, speed and flexibility are crucial to 
success.
We also shouldn’t underestimate just how 
massive these businesses are. They’re what are 
known as unicorns, start-up giants worth more 
than a billion dollars.
In 2016, Airbnb was valued at $30 billion, and 
Uber at $68 billion.
Airbnb’s meteoric rise was largely assisted by 
venture capital firm Sequoia Capital, one of its 
first big investors. In turn, Sequoia Capital has 
reaped huge returns. In fact, the amounts it 
earns from similar investments in Google and 
WhatsApp are chickenfeed in comparison.
But of course, to become this successful 
requires a lot of effort and sometimes a rather 
ruthless approach to business.
Uber’s constant reinvention has made it a 
global success, even when it doesn’t win