How powerful a tool can IT infrastructure be? Potent enough to create a restaurant industry giant that is valued at over $1.6 billion despite not owning a kitchen or a dishwasher. That’s GrubHub’s valuation after a bang up 4th quarter sent their stock skyrocketing. The company’s profits were up 57% in 2015 compared to the previous year.
While harnessing infrastructure to this extent is not an easy task, GrubHub is not a unicorn. Other market leaders dominate industries in a non-traditional, infrastructure-centric way.
Uber is steamrolling the taxi industry, with a valuation of over $60 billion in a recent round of funding. They don’t own a vehicle.
Airbnb’s most recent round of funding was at a valuation larger than any hotel chain. They don’t own a single property nor do they operate any of the rooms they rent, yet investors see them as being worth over $25 billion.
These new market leaders are creating new business categories, or at least wildly improving on previous industries on the strength of their infrastructure. The marketing/sales platform is most obvious, but financial operations, e-commerce, and logistics for each of these companies are fueled by extensive IT architecture that needs to be actively engineered for flexibility and scalability as the companies grow.
They are fascinating businesses to study.
An in-house technology blog, nerds.airbnb.com details the infrastructure innovation that is driving Aibnb’s growth. You won’t find many organizations sharing this level of detail, serving to both impress investors and end users, as well as attracting engineering talent.
Uber, on the other hand, may be struggling with their growth even as their business grows rapidly, with reports of a lack of agreement internally on infrastructure and engineering issues as they struggle to create the IT environment for their explosive growth.
Formerly just an ordering platform, GrubHub is expanding their ability to provide delivery service, eliminating a logistical and operational need that restaurants are probably thrilled to outsource. Already in 2016 GrubHub has expanded their delivery service to the Washington DC, San Francisco, Los Angeles, and Philadelphia markets. It takes a strong infrastructure backbone to handle a continually growing demand to support logistics, marketing, payment processing, and other areas of the businesses.
These companies are working hard for their engineering to provide the scalability required for such massive growth. They face monumental tasks. But founders of these organizations are becoming billionaires by leveraging infrastructure to build businesses from scratch in categories that didn’t previously exist.
While your company may not aspire to become a GrubHub, Uber or Airbnb, their stories are inspirational and instructive. A question to consider: are you “thinking big” when it comes to using infrastructure to meet your ever-changing business needs? If you get your infrastructure right, does that prepare you to enter new markets that can expand your business? Who knows, maybe you can even create your own industry subcategory by using infrastructure to leapfrog your competition.