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.
