The New Era of Economic Abundance
Airbnb and Uber are achieving accelerated levels of value creation as they defy traditional economic principles of scarcity. Under our new laws of “Copianomics” (the science of choice under abundance), the following two economic forces act as growth catalysts:
- Long Tail of Supply: Building Inventory with No Time or Capital Constraints
Airbnb is forecasting $10 billion in revenue by 2020 and in order to achieve this, we calculate it needs to add 12 million accommodation listings, the equivalent of 12,000 hotels. This would take a traditional player like Hilton Worldwide nearly a century to achieve at a cost of $170 billion.
- Blue Ocean of Demand: Expanding Total Addressable Market (TAM) Beyond Traditional Categories
Uber is not only disrupting incumbents, but also gaining access to new tiers of non-customers. In San Francisco, Uber is generating driver revenue of $500 million a year, in excess of three times the $140 million revenue of the taxi market industry as a whole.
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