Sofar Sounds vs. Airbnb

The case explores the collaboration and subsequent rivalry between Sofar Sounds, a platform offering intimate, curated live music experiences, and Airbnb, a tech giant in the hospitality industry. In 2017, Sofar Sounds partnered with Airbnb to launch "Music Experiences," allowing users of Airbnb access to Sofar's unique concerts. However, the partnership soon dissolved once Airbnb launched its own competing platform, "Airbnb Concerts," leveraging its vast resources to directly challenge Sofar Sounds. This left Sofar, a smaller, community-driven business with limited staff and resources, fighting to survive against a well-funded competitor.

The case highlights (i) the pros and cons of collaborating with a large firm for innovation (i.e., the Big Tech “kill zone”), (ii) innovators’ moats (here network effects) and complementary assets, (iii) sources of inertia and barriers to innovation in a large firm.