03 May Can South African businesses learn from the tech world’s flipping of the business rule book?
I have just finished listening to the scintillating Secrete Sauce podcast series on the founding and explosive growth of Airbnb.
The lessons shared in the series got me thinking.
Airbnb defied the odds
Since the co-founders – Brian Chesky (current CEO), Joe Gabbia and Nathan Blecharcsky – founded this home rental business in August 2008, incidentally three months before I founded eNitiate, they have dealt with many challenges; from investors who did not believe in their idea, misbehaving guests that trashed hosts’ apartments, legislation that has tried to crush their business based on the allegation that it is promoting illegal hoteling, to racist White hosts who did not want to confirm bookings by Black guests.
So far, this unicorn has continued to defy the odds, and the latest milestone was the successful listing on the Nasdaq in early December 2020, valued at an initial $47 billion – the largest valuation of 2020, and which quickly rose to $100 billion by the end of its debut day.
Airbnb Inc shares more than doubled in their trading debut, propelling the home-rental company to about a $100 billion valuation and one of the biggest first-day rallies on record.Source: Businesstech
Consider that Airbnb’s Nasdaq listing happened in the year of COVID-19 – the year when they [Airbnb] had to refund guests who canceled bookings to the tune of $1 billion, and lay off a quarter of the staff in order to keep the company afloat.
How did Airbnb flip the business rule book?
The co-founders stumbled on an idea that initially sounded unreal to some of the biggest players in the investment community – to build a business based on an internet platform that can connect home owners (and renters) with spare beds to rent out, with those looking for a temporary place to sleep without paying an arm and leg, for a cut of the booking fee.
Thanks to Airbnb, I do not sleep in hotels and related establishments anymore when I travel. I now sleep in other peoples’s homes, and occasionally meet the owners, eat home-cooked meals and have humane conversations.
In the process, the three Airbnb co-founders built a multi-billion dollar tech company that has become the envy of the investment community, including those who initially refused to invest in the business during its startup phase!
My definition of flipping the rule book?
I am talking here about a business that disrupts the status quo; making the existing rules redundant and thereby rendering the gate keepers irrelevant.
Any relationship between technology and flipping of the business rule book?
Maybe I am biased, but I cannot help noticing the close relationship between the two in the modern-day digital world.
Here are a few recent examples:
- Netflix – the first company to earn major Emmy nominations without a single cinema screening
- Amazon – the world’s most successful retailer that started as an online bookseller
- Space X – when this private space company was established, industry experts thought the founder was another bored millionaire with lofty ideas who will not stay the course
- Tesla – a successful electric car company that was founded by someone with no automotive background, and who has since become one of the leading voices in the self-driving car technology developments
- Coinbase – first cryptocurrency trading platform to be listed on the Nasdaq
- Uber – the most successful transport business that does not own a fleet
Notice what is different about the businesses in the list above? They come from a variety of industries.
And what is common about the businesses? Technology is their nerve centre.
Something else that is common about the founders of Airbnb and the six companies above is that they all came from outside the industries that they disrupted.
By all means. Feel free to add your own names to the list.
Any South African companies that have flipped the rule book of late?
Note that I have dropped “tech” in my question, so as to broaden the possibility of finding candidates.
Well, maybe I am captured (#ZondoCommission).
Maybe I am ignorant.
Maybe I suffer from the colonised mindset that blinds me from recognising South African businesses that fit the criterion.
Not even Capitec, Yoco or Takealot have flipped the business rule book in my view.
But, could this be the answer for Black businesses across the spectrum, most of which are battling to break into the big league based on the current rule book anyway?