In the eyes of Silicon Valley venture capitalists, nothing is worth more right now than rooms and rides. Airbnb (the rooms) and Uber (the rides) are the two most highly valued private companies in startup land, with Airbnb's price tag at $10 billion and Uber's reaching $18.2 billion.
Now, all they have to do is earn their massive valuations. That's why they're now going after the world's corporate workforce, following the path through the back door laid by Apple.
This week, Uber and Airbnb announced almost simultaneously that each was releasing ways to easily funnel receipts and reservations through Concur, the widely used corporate software for filing expenses. By smoothing the way for business customers, the companies are signaling a desire to chase bigger game than they have to date. Helping tourists find places to stay or ferrying bar-hoppers from one spot to the next is fine. But fickle, price-conscious consumers pale in importance next to the dependable revenue of the deep-pocketed corporate customer.
>Instead of an intense business-to-business effort, Apple let consumers act as its sales force.
Under the traditional tech industry model, acquiring enterprise business is mainly a function of large sales teams. Back-office giant Oracle, for example, became dominant on the strength of its aggressive dealmaking as much as its software. But the rise of the iPhone pointed to a radically different strategy. Instead of an intense business-to-business effort, Apple let consumers act as its sales force. People who bought iPhones as their personal devices began bringing them to work and using them in spite of whatever hardware corporate IT supplied. Eventually, companies had to acknowledge that the happiest, most productive workers were those who could use the tools they liked best, spawning the "bring your own device" movement.
That shift led to many other variations on the "bring your own" paradigm, notably "bring your own app," which has worked to the advantage of 21st-century cloud software makers like Evernote and Dropbox. As with the iPhone, these apps' sheer accessibility makes them obvious productivity tools for the office, and they don't require any licenses or proprietary servers to set up. Dropbox in particular---the third-most highly valued startup after Uber and Airbnb---is seeking to capitalize on its own end-run around IT by trying to sell corporate customers on the fact that their workers are using Dropbox already.
For Uber and Airbnb, the way past corporate gatekeepers is already well marked. Their usefulness to business customers is plain---often easier to use, often cheaper, and often more versatile. Corporate accounting departments are no doubt swimming in printed receipts and PDFs from individual employees' accounts with both services. Much as Dropbox for Business lets individual employees keep using the service while giving corporate managers oversight for business use, Uber and Airbnb are seeking a way to let employers feel like they're in control while employees feel like they get to keep using the services they like. If it works, look for ever-more startups seeking the path to billions from the bottom up.
