Item — HN Reader

I think people on HN sometimes underestimate the importance of the middleman in economic life. You don't have to be B2C or B2B with a direct product or service. Often the most profitable position is as the switchboard.

www.airbnb.com

www.taskrabbit.com

www.twilio.com

I think we understand very well that running the marketplace is where its at. Remember, we're trying to be the middleman, just much more efficient than the incumbents.

1 comments

Can you elaborate on how market inefficiency is the issue? It seems others have tried similar schemes (Virgin America ran a private jet website with the same intentions), or attempted to open the market through smaller "taxi" planes (Embraer Phenom) or wholly regional airlines (Independence Air), but the cost of fuel and labor prevented increased adoption.

The private jet market is scheduled at the last minute and filling unused seats (or return segments) seems to be quite challenging, even if offered as one way last minute deals to consumers. Is the goal to have a Southwest like "Ding" fare alert for subscribers?

Unused capacity is a market inefficiency. If you've got a jet deadheading somewhere empty, or have extra seats when someone hasn't bought out the whole cabin, that's an opportunity to offset your costs or even profit depending on the situation.

If your app knows where people want to go to, knows their location, knows their spend willingness, etc, you can capture that additional revenue you might've never known about.

Yep. Selling unused capacity, even at low prices, represents pure profit when your variable costs have already been met.