The government is also involved in lots of other things without exploding costs. I’d say the common thread is the combination of these factors: 1) the service is considered essential by consumers and 2) payments are deferred (by insurance or student loans). So consumers never say no due to rising prices.
The housing crisis is that there is less housing than people who want housing. Whether the homes are rented or owner-occupied has nothing to do with it.
No, the fiduciary duty is not that prescriptive. The courts aren’t going to second-guess whether a corporation is taking the profit-maximizing action at all times.
I don’t understand, how would AirBnB segmenting their marketing cause it to cost twice as much?
Imagine AirBnB and the low cost company both exist as you imagine. Now suppose AirBnB buys the low cost company and doesn’t change their marketing at all. Of course marketing ROI for each of the two segments doesn’t change. Compare this to the case where AirBnB operates in the two segments without buying low cost company. How are these cases different?
Furthermore, many of the major hotel chains have a bunch of brands, each of which caters to a particular demographic. Usually one or more of the brands cater to the price conscious and others are higher-end. If anything, there's an argument for AirBnB to have come up with more distinctive branding for a new product.
When a marketing budget that once served a uniform segment splits to serve multiple segments, you must either divide the budget amongst segments or increase the budget to support the previous standard of marketing activity for a segment.
Yes but, if you serve multiple segments vs. just one, you presumably can amortize your marketing dollars over more volume. (And if you're not increasing volume by going after more segments, those new segments obviously aren't working out for you.)
In this case the low end market becomes a drain on AirBnB because the ROI is not nearly as high as their high end market. However the ROI would be acceptable to a smaller player. Is it worth for AirBnB to dilute their brand at this critical juncture just to hold on to as wide a market as possible?
There are lots of devs who live in the East Bay (I used to live there myself), but most don’t. The more successful devs (who you are looking to poach) generally live on the other side, and they live there because they don’t want to drive across the bay twice a day.
It’s more of a Moneyball move - go for the underappreciated talent you can get cheap. There are companies doing that, but it’s not for everyone. If you get specific with the location, you realize Oakland and Pleasanton, Walnut Creek and Hayward are pretty far apart, so you don’t even get great access to the whole East Bay. You might as well move to Austin, Denver, or Detroit at that point and pay the same price for a better location.
Although you might see major companies open offices if there is a critical mass eg. maybe it would make sense for Google or Facebook to open a satellite office in Newark if enough employees are commuting across the Dumbarton.
Uber was going to make a big office in Oakland, but apparently canceled those plans.
