The Upstarts summary

Companies like Airbnb and Uber that have grown rapidly to become phenomenally successful are hardly start-ups anymore. They’ve shown they like to tussle with the big boys, and they’ve paid scant respect to the usual ways of doing business. We can call such companies upstarts.

Both Airbnb and Uber are renowned all over the world and business is booming. And that’s despite the fact that unlike many other major companies, they don’t actually have any physical assets.

Airbnb might at first glance appear to act like the world's largest hotel company. Except, of course, it doesn’t own the rooms that get rented out.

Equally, we think of Uber as the world’s largest car service. But it doesn’t even have its own fleet.

In part, the freedom granted by this lack of assets helps explain how these companies have been able to expand so far and so quickly. In the world of tech, speed and flexibility are crucial to success.

We also shouldn't underestimate just how massive these businesses are. They’re what are known as unicorns, start-up giants worth more than a billion dollars.

In 2016, Airbnb was valued at $30 billion, and Uber at $68 billion.

Airbnb’s meteoric rise was largely assisted by venture capital firm Sequoia Capital, one of its first big investors. In turn, Sequoia Capital has reaped huge returns. In fact, the amounts it earns from similar investments in Google and WhatsApp are chickenfeed in comparison.

But of course, to become this successful requires a lot of effort and sometimes a rather ruthless approach to business.