[GekkePrutser]

I wonder if it's possible for these concepts to really go big.

The problem is, there's a lot more lemons on the market then there's great deals. Nobody wants the car that doesn't start twice a week or that's been in an accident and has its chassis skewed.

These sites start out by promoting seller karma or something but even the best sellers have lemons to get rid of. At the start they probably just sell them elsewhere to keep their rating high. Eventually as these sites get so big you can't avoid them, the quality will inevitably drop because they capture too big of a market which just includes a lot of crap.

At the same time investors will want to see that exponentially skyrocketing line continuing so they'll be pushing to cut corners left right and center just as things get difficult.

I don't know Carvana as I don't drive much anymore but I assume the same story supplies here at least in some ways.

[ethbr0]

Aka the AirBNB problem. In a nutshell, that you can't have a high quality growth company forever in an industry with a fixed supply of high quality items.

Initially, you grow like crazy and with great user reviews, as you're able to pick and choose the highest quality items.

Unfortunately, at some point you exhaust the supply at a given quality level, but your valuation mandates continued growth.

So you lower your quality requirements to obtain more supply, which only buys you a bit more time until you hit the next supply limit.

The only winning move seems to be stay private and accept there's a near-term cap on your revenue growth, after which you will grow much more slowly (at the natural supply expansion rate).

[ncallaway]

> The only winning move seems to be stay private and accept there's a near-term cap on your revenue growth, after which you will grow much more slowly (at the natural supply expansion rate).

Or go multi-brand, and introduce cheaper brands for the lower quality properties, to maintain the goodwill for the higher quality brands. Many hotels do this with many different brands under the same organization that segment their customers on price and quality expectations.

I always thought that Uber/AirBnB etc should be more aggressive in creating more brand separation between their cheaper options and their higher quality options.

[vel0city]

I recently stayed in a hotel that was an example of how extreme the brand split of various hotels was. It was one building with three different brands operating out of it. One check in counter, one guest lounge, one gym, etc. Three different elevator groups though; one for each brand. Ultimately all the rooms were practically the same, but the trim was a little different between the brands.

But hey, if you feel that attached to a Hampton Inn as opposed to a Home2 or a Hilton Garden Inn I guess it makes sense. It's all the same to me though and seems like just a waste of paperwork and administrative tasks to continue the facade of three brands in the same building.

[ghaff]

I just saw that for the first time with a Residence Inn I booked where they said to check-in at the adjoining Moxy. In that case though the rooms probably are different.

[ethbr0]

Uber and Lyft essentially did that (Black/Lux).

AirBnB absolutely needs to, given the vast quality range of their current supply.

[GekkePrutser]

> So you lower your quality requirements to obtain more supply, which only buys you a bit more time until you hit the next supply limit.

And at the same time you start burning all the goodwill that make you so popular to begin with.

Thanks for explaining it more clearly, I don't really have a business head.

[ipython]

Uber is the same way. At first it was novel and driver pay was heavily subsidized so you had high quality drivers with nice cars. Over time the price for riders increased, driver pay decreased, and driver quality also decreased.