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Brian Chesky, founder of Airbnb, has recently commented on the fall of WeWork.

I agree that tech business models should be seen as a continuum, but that some models are simply better than others. Not all tech companies are created equal!

The key differentiator, as Chesky points out, is gross margin:

“The best way to understand the continuum is your gross margins or what is your gross profit. Some [companies] like Microsoft and these really big tech firms have really high margins and other companies [have] really low margins. And I think that’s the first lesson of WeWork,” Chesky said.

So if you like it or not: the question of whether your business model (see my other post on “non-obvious business models” is this: Think hard about whether the intrinsic economics can really deliver a sustainable profit, in the long-term.



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