AirBnB couldn't have imagined a worse disaster for it's business than COVID-19.

This time last year, they were growing 31%. Unheard of for a company making $9B in bookings. They were slated to go public by the end of they year to turn some of their equity into fat piles of crisp dolla' dolla' bills y'all.

Then came their worst nightmare.

Over the past two months alone, they've racked up hundreds of millions in losses.

To make sure they had enough cash to weather this economic shitstorm, they raised $1B  in debt at 11-12% interest.

AirBnB was a price taker. They had no leverage. They needed the money. Desperately.

Meanwhile, the story of Slack during these times couldn't be more different.

Their stock price increased 15% after posting strong user growth numbers.

As a result, they recently raised $750M at 0.5% interest.

Slack was a price maker. They had leverage. Financiers were probably lined up at their door competing with each other on Slack's terms.

Chamath Palihapitiya sums it up nicely (note: Chamath was on Slack's board until recently):

Chamath Palihapitiya @chamath

A tale of two loans:Slack: $750MAirbnb: $1BSlack: 0.5% interestAirbnb: 11-12% interestSlack: loan convertible to equity at +24% premium ($31/share)Airbnb: 1% in equity at -49% discount to last private valuation ($18B valuation)Slack: price makerAirbnb: price taker

April 7th 2020

888 Retweets5,047 Likes

This situation is a useful analogy when thinking about your career. When shit hits the fun, are you a price maker or price taker?

Price Makers vs. Price Takers

In careers, if somebody can be trained to do your job in a few months, you're a price taker. If your job can be outsourced to another country, you're a price taker. If you don't help a company increase revenue or lower costs, you're a price taker.

So, who are price makers? Price makers have a specialized skill set. Price makers have strong relationships with people in the industry. Price makers may also combine skills in a unique way.

Early in our careers, most of us are price takers. Hell, we're just happy to tell mom we have a job with health insurance!

But as you progress throughout your career, you and your colleagues will begin developing certain skills and experiences that begin to separate you.

Think long and hard about whether you're on track to become a price maker or price taker.

To be a price maker, there are two paths. One path is to go deep on on skills that can't be trained. This could include mastering a technical subject like machine learning. Or building a robust network. Or learning how to write in an engaging way.

The more common path to becoming a price maker is to combine skills in a unique way. Maybe you're an okay writer. But you're kinda funny. And you sorta know how to draw.


You can be a pretty damn good comic.

Or maybe you enjoy high fashion, streetwear, and hip hop. If so, you could start the next huge clothing brand like Virgil Abloh.


So first, consider your current trajectory on the price taker / price maker spectrum. Then, consider whether you want to go deep on one skill or combine skill sets.

"The world rewards that which it wants, but doesn't know how to get" - Naval Ravikant

Apr 12, 2020

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