Juggernaut: “a huge, powerful, and overwhelming force or institution.”
There are three private tech companies — Airbnb, Uber, and Dropbox — which are on a path to go public. In this environment, they also benefit by staying private longer, and that extra time can help each company fortify reserves, address weaknesses, and plan for the future. It wasn’t too long ago when, on the verge of a huge IPO, Facebook made a bid for Instagram. Facebook didn’t perform well in public markets initially, and many attributed that to the company’s slow transition to mobile. While it took significant work for Facebook to rebuild its native iOS app, having Instagram in its back pocket has proven, over the years, to give the company yet another dangerous weapon in their mobile arsenal.
What could the three big companies listed above (Dropbox, Airbnb, and Uber) learn from Facebook as they wait in the stable? And, could those companies actually use this precious time as a private company to join forces with other high-growth, private companies to create not just durable public companies, but to create global powerhouses on the level of Facebook and become a $100B+ institution?
Or, put another way:
What could transform Airbnb, Uber, and Dropbox from epic companies they are today into multifaceted global juggernauts?
<Disclaimer> Below is just something I’ve been thinking about for fun. A few disclaimers: I’m not suggesting any of these services as targets because of weaknesses, but because I think they’re strong companies and teams and would add tremendous long-term value. Second, many of the companies I’ve listed below could well remain independent for a very long time — this post is just more of a thought-exercise around wondering, “what if they joined forces?” There’s also an international angle here in Europe and Asia, but I’m not sure that makes sense pre-IPO. I may also have a small interest in a few of the companies listed below, but it’s really so small it doesn’t make much of a difference — this post is mainly for fun, not to suggest a serious strategy for any company moving forward. </Disclaimer>
Dropbox – I drafted this up before Microsoft came in and scooped up Sunrise, after buying Acompli (Exchange email) a few weeks earlier. While Drobpox has big ARR and operates at a very strategic layer between computing, network, and storage, if we assume the cost of storage is on a path to $0, how does Dropbox fortify itself for the eventual scorn of public investors? And, especially so, after the ups and downs that enterprise-focused competitor Box went through?
So, I’m thinking aloud now. What if they merged with Box and both co-owned this layer, with Box focusing on enterprise, expanding to verticals (like health/IT), and Dropbox continued to foster an ecosystem of apps on top of its cloud platform? In addition to Sunrise (whoops), Hackpad, Mailbox and a few others, what if Dropbox acquired or commissioned other products to reinvent excel, accounting, and other traditional MS offerings reimagined for a mobile & cloud native world? Dropbox has the opportunity to be a $100B company, and it will be interesting to see if they can do it.
Airbnb – This is the one “startup” that, to me, is the most defensible of them all. I mean, what can stop Airbnb at this point? Unstoppable, it has the best network effect in the world and is in one of the largest market categories.
So, Airbnb will likely be fine, but why not arm itself with strategic assets while its value climbs in private markets? My personal favorite idea is acquiring Lyft: Airbnb benefits by deepening travel-related ties in key cities, and Lyft benefits 10-fold by finding a home in a rocketship (and getting pre-IPO stock for themselves and their investors!), by leveraging the Airbnb network effect to launch more cities faster. Other acquisitions could be Couchsurfing, home services (like Handy and Homejoy) and Foursquare, to control their places database and API (which is used by Instagram, Uber, and others).
And, finally, we have the Big Kahuna, Uber – I believe Uber will be a bigger company by market cap than Google, largely because the market it addresses (transport and logistics) is just so damn enormous. I do not mean this as a slight against Google. Today, Uber is turning the corner to be on a collision course with Amazon and Google — for instance, in a few cities, all three services will deliver you basic items within a few hours.
Uber’s big investors — they’re holding the biggest convertible note in the history of notes — are also expecting more than UberX and Uber Kittens. What else could they do? First, buy Postmates, and — boom — now they can provide not just rides, but couriers who can deliver food. (They could also acquire DoorDash for the backend and routing technology; and OrderAhead for the menu and payment integration.) Next, buy Instacart, which gives them the staple household activity of ordering and delivering groceries (and Costco, Petco, etc.). Then, scoop up HotelTonight to offer users who are traveling the seamless option of booking transport and lodging effortlessly.
(When I drafted this earlier in the week, I listed “a mapping solution” to liberate itself from Google Maps and “an autonomous navigation technology” (like Cruise?) to liberate itself from Google’s self-driving solution. Well, it was an interesting week with Google announcing a self-driving taxi plan, which Uber of course countered with a university partnership around self-driving.)