Opendoor isn't the first technology company to attack a massive market with a presently unsustainable business model. The more auspicious parallel would be to a peer in the retail space that initially pursued a high transaction volume, low margin entry point, as it built critical infrastructure to turn cost centers into revenue generators, cornered the market, and achieved escape velocity.
The real estate engine Opendoor is building gets more lucrative as it scales. Fixed costs per unit decrease, data insights on everything from home prices to rehab assessments get more insightful, and more gross profit can be reinvested in new products and new market launches, all of which feed a virtuous flywheel. As it accumulates more of the market, it's not crazy to imagine a future where the primary business model revolves less around buying and selling, and more around other aspects of the real estate market.
To buy into this narrative, you need to really trust the management and team. The team at Opendoor appears top notch with a diverse and seasoned background in real estate and technology. High profile investor partners like Keith Rabois and Chamath Palihapitiya will help to continue to attract the market's top talent to the project.
That is to say, the trajectory for Opendoor is not simple. The flywheels for Opendoor are its biggest asset, but the business is extremely fragile. For now, it's an optimist's gamble.