Episode Summary
Executive Summary: In this episode of This Week in Startups, host Jason Calacanis is joined by Alex Wilhelm (TechCrunch) and Beth Kindig (tech stock analyst) to discuss the recent blockbuster IPOs of DoorDash and Airbnb, which both roughly doubled on their first day. The conversation covers the sustainability of their high valuations (30x+ revenue), the role of retail investors, and comparisons to other recent IPOs. The panel then debates the post-pandemic prospects for Zoom and DoorDash, and delves into several emerging companies like C3.ai, Fubo TV, and Twilio. The episode concludes with a broad discussion on U.S. vs. China competitiveness, the state of capitalism, and the importance of maintaining technological and moral leadership.
Main Topics: DoorDash and Airbnb IPOs: Valuation and Performance (Priority: 5/5): Discussion of the massive first-day pops for DoorDash and Airbnb, with valuations reaching $59B and $100B+ respectively, and debate on whether these are sustainable or artificially inflated. Beth Kindig warns these stocks tend to trade back to their IPO price after the lockup period, while Alex Wilhelm argues the brand appeal and supply/demand imbalance may be driving short-term overvaluation. The Role of Retail Investors in IPO Frenzy (Priority: 4/5): The hosts explore how the wave of new investors on platforms like Robinhood, motivated by brand familiarity, is contributing to the outsized demand for high-profile IPOs, regardless of traditional valuation metrics. Post-Pandemic Outlook for Zoom and DoorDash (Priority: 4/5): The panel assesses which pandemic-driven companies will retain their gains. Zoom is seen as more defensible due to its 'just works' reliability, low price, and enterprise stickiness, while DoorDash faces risk from pent-up demand for dining out and high delivery fees. SPACs, Direct Listings, and IPO Mechanics (Priority: 3/5): Analysis of different paths to going public, including the pros and cons of lockup periods, direct listings, and SPACs. Alex and Beth express skepticism about many SPAC offerings, comparing them to ICOs and noting high variability in quality. Geopolitical and Economic Competition: U.S. vs. China (Priority: 4/5): A wide-ranging debate on which country is better positioned to win the economic and technological 'war' of the 21st century. All three guests express strong bullishness on America, citing its innovation ecosystem, free press, and the authoritarian risks within China. Bullish Bets: C3.ai, Fubo TV, Twilio, and Luminar (Priority: 3/5): Beth highlights specific companies she's investing in, explaining her thesis for each: C3.ai (enterprise AI), Fubo TV (sports streaming + betting integration), Twilio (pivot to data platform), and Luminar (LiDAR via SPAC). Alex agrees on Twilio and also likes UiPath and Stripe. Accounting Standards and Creative Metrics (Priority: 2/5): Critique of how public companies can use non-GAAP metrics and selective retention rates to obscure their true performance. Alex and Beth discuss the importance of focusing on GAAP numbers and adjusting for company age when comparing growth rates.
Key Arguments: DoorDash and Airbnb are overvalued at 30x+ revenue, and will likely drop post-lockup (Beth). Brand familiarity and retail investor demand are creating artificial short-term price inflation in IPOs (Alex, Jason). Zoom has strong moat due to product quality, low price, and consumer habit change; it will retain users even after pandemic ends (Beth, Alex). DoorDash faces revenue risk as people resume dining out; its delivery fees and 'junk fees' dissuade even affluent users (Jason, Beth). SPACs are risky and often promote low-quality companies; Luminar is an exception but still speculative (Beth, Alex). The U.S. will win the economic competition with China because of its technological leadership, free press, and ability to adapt (all three). China's authoritarianism, including yanking Ant Financial's IPO, makes it less competitive in the long run despite GDP scale (Alex). Creative accounting, like cherry-picking net revenue retention, misleads investors; GAAP numbers are more reliable (Alex, Beth). Twilio's pivot from cloud communications to a data platform is underappreciated and will drive growth (Beth).
Data Points: DoorDash Market Cap: $59 billion - At time of podcast, with $1.9B revenue, representing ~30x revenue multiple. Airbnb Market Cap: $100+ billion - At time of podcast, with ~$3.5B revenue (annualized), representing ~30x revenue multiple. Slack Acquisition Price: $27.7 billion - Salesforce acquisition, ~30x revenue, reflecting pressure from Microsoft Teams. Snowflake Revenue Multiple: Extremely high, second only to C3.ai - Noted as having one of the highest valuations seen in public markets. FuboTV Forward Revenue Growth: 70% next year - Guided growth, with current market cap of ~$2B, or 10x run-rate revenue. C3.ai Recent Quarterly Revenue: $41 million - Flat for three sequential quarters, but 70% year-over-year growth; $12B market cap. Zoom Paid Account Growth (10+ employees): 400%+ growth - Indicated strong enterprise adoption during pandemic. Zoom Operating Margin: ~20% - Rare for high-growth tech companies, noted by Beth. China's GDP vs. U.S. GDP: U.S. may lose total GDP race but win per capita - Context from discussion on long-term competitiveness.
Pivotal Quotes: "I don't think any of these IPOs have gotten much larger. So we're seeing probably a greater imbalance in supply and demand in these early couple of trades. So I'm very sympathetic to what Beth said about let's see where we are in six months. I don't think these companies left 50% of the value on the table. I think they're just artificially inflated in the short term." — Alex Wilhelm: Discussing the first-day pops for DoorDash and Airbnb, and cautioning against extrapolating long-term value from initial price jumps. "If you're not willing to put your morals where your money is, fuck you." — Jason Calacanis: During the segment on China and human rights, expressing strong sentiment about not supporting companies that enable an oppressive regime. "The reason why I'm more bullish on Zoom is my family has had a chat on Zoom on Sundays every single day, every single week, sorry, since the start of the pandemic. And we don't use a personal paid account, we use my wife's work account. Hopefully that won't get her in trouble. And so, I think a lot of the consumer behavior is going to stay because my parents aren't going to move 3,000 miles closer to me." — Alex Wilhelm: Explaining why Zoom's user habit changes are stickier compared to food delivery services like DoorDash.
Implications: Investors should be cautious of IPO euphoria; wait for lockup expirations. Pandemic winners like Zoom may have staying power; food delivery faces headwinds. SPACs are high-risk; focus on fundamentals, not hype. The U.S. retains a significant edge over China in innovation and freedom. Be mindful of moral implications when investing in companies tied to authoritarian regimes.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.