Airbnb, the craziest and most unbelievable business model of the century – yes, someone will rent his room to a stranger for peanuts – has reached the mountaintop. Airbnb has gone public, and is now worth over $100 billion, and possibly by the end of next week, would have a market cap that is bigger than $111 billion IBM. How do you explain turning a lemon into a lemonade through the combinatorial power of software?

Hail the innovators who can find value in anything. The Airbnb business model on paper would have scored “D” from me, but people, it is an A+ company, in the real world. Nations advance when innovators rise! America creates many of them at scale.

Shares of Airbnb soared in their debut Thursday, closing slightly lower than their opening price at $144.71 in the home-sharing company’s IPO. Airbnb’s market value shot past $100 billion and makes Airbnb the 10th best debut in 2020 based on price gain from its IPO, CNBC reports. It’s the latest sign of 2020’s hot IPO market as Airbnb follows DoorDash, which began trading Wednesday. While the pandemic has decimated the travel industry, Airbnb posted a $219 million profit in the third quarter due to an uptick in local bookings. Airbnb acknowledges local laws and opposition from neighbors could slow its growth. Cities like Boston, Denver and Santa Monica, California, have tightened rules on vacation rentals. (LinkedIn)

Airbnb is an aggregator and runs a potent business model of the 21st century.

Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and customers, the advertises focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible.

Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.

In the hospitality industry, Airbnb reduces the friction between the landlord and renter by using software to build trust and remove information asymmetry. More than 80% of the leading technology companies in the world run a bit of aggregation.

Airbnb Hits $101 Billion In IPO, In A Big U.S. Flotation of 2020

The #3 rarely makes money in most economies. But economies need them to keep #1 and #2 under checks. Yes, in the global telecommunication industry, you need a fairly strong #3 if you want to keep the price of telecom services to be optimal. In U.S., Verizon and AT&T ruled the domain but the old Sprint and TMobile were there, and can now become a combined stronger #3.

In Nigeria, there are fairly strong three players in MTN, Airtel and Glo. And even the presence of #4’s 9Mobile cannot be discounted. The implication is that price stays fairly optimal.

So, when you have strong two players and your laws are open and free, allowing market forces to run the system (in other words, you cannot rule by fiats and mandates), lack of a strong #3 will hurt.

That is what is happening in South Africa where data cost is out of order. Vodacom holds close to 43% of the market. MTN follows at 29% while Cell-C is at 17%. The implication is that Vodacom cares about MTN. See the distribution on click https://www.tekedia.com/cost-of-data-the-irony-in-south-africa/ In Nigeria, MTN has to track Airtel and Glo at the same time as both are largely strong #2 and #3.

Every market needs competition. Yes, it is a big irony that the most developed economy in Africa is the one that seems to have data cost which is out of order.

The Egypt data is not a typo.

As one of the largest economies in Africa, Lagos is a heart of the African continent, and most of our members in Tekedia Mini-MBA have activities therein. In our program, feedback does indicate that a tax paralysis is evident. So, to do something on it, we are introducing a course on Tax Law & Compliance in Lagos State.

We are honoured that Abimbola Abdur-Rahman Lekki, a Tax Attorney, and Head of Station in Lagos State Internal Revenue Service (LIRS), is developing a course on Tax Law & Compliance in Lagos State. My desire is that after this course, our members will understand Lagos and its tax systems, and together everyone will do his or her part to advance the economic center and the continent.

Of course, the Federal Inland Revenue Service (FIRS) through one of its managers is also helping. But we are focusing on Global Tax Treaties and Benefits, primarily to educate and inform innovators and builders in Nigeria, Africa and globally, on how tax treaties could be used strategically.

Tekedia Institute is a modern school and we teach relevant things. Visit our new classroom: http://school.tekedia.com/

Thank you the Nigerian Society of Engineers. I am proud to serve the world as an engineer. It remains like yesterday when my mathematics teacher, Mr Bukar, in JSS3, asked “what would you like to be?” I said: “an electrical engineer; I like the electricity part of Integrated Science”. We build nations.