from the interesting-strategies dept
There's been a ton of buzz lately around the startup Airbnb, which a lot of investors apparently weren't impressed with early on, but which has been able to build up pretty massive adoption pretty quickly, leading to stories of it apparently being about to raise $100 million on a staggering $1 billion valuation. That seems a bit rich, but in the world of Winner Take All economics, you can see how it could make sense for some early investors.
What seems like a bit more of a head-scratcher is when a brand new clone in the space then raises $90 million just a few months after launching... and hires 400 people. This company, Wimdu, seems to be focusing on Europe. If it can pull that off, that's something, but this sets off basic alarm bells. It sounds like a company and investors just throwing money after a problem, rather than actually innovating. Historically, just throwing money after a market tends not to work nearly as well as people expect. Airbnb is apparently worried about this particular clone, but I think it may be overreacting. Money isn't everything, and a company that focuses on providing a better overall experience, rather than worrying about clones, seems like it'll be better positioned to succeed long term.