Airbnb and WeWork are collaborating in 6 cities where travelers can first book an apartment with Airbnb and then a desk at the closest WeWork. This type of partnership makes a ton of sense and I’m very excited to see them expand the program to more cities.

To get a sense of scale — Airbnb is valued at $31 billion while Marriott has a market cap of $41 billion. WeWork is valued at $20 billion while CBRE has a market cap of $13 billion. I’d argue that Airbnb and WeWork are just really getting started as both of them have unique scalable advantages over their older counterparts.

Airbnb is a decentralized/distributed hotel with zero cost of supply. They have successfully convinced mainly younger people (millennials) to volunteer as part time hotel workers and supply their apartment as the room. Unlike Marriott or Hilton — Airbnb doesn’t incur any cost if a room is vacant — and their inventory is limited only by the amount of hosts who can sign up for free. Those number of hosts are growing as people are looking at Airbnb as reliable rental income for an investment property. The risk is entirely on the host while Airbnb aggregates that free supply of rooms in their marketplace. Their software is currently the discovery, trust, and payment layer of short term apartment rentals.

Airbnb recently announced their next move: become an ‘experience’ company. Want to book an apartment, a city tour or a class? You can Airbnb all of that today. Soon, you’ll be able to book a restaurant and a desk at a co-working space. Airbnb’s potential is far greater than any traditional hotel company. Their scalable advantages are their apartment marketplace, great software tools and a network effect of hosts.

WeWork is an office space as-a-service company with some supply costs like the commercial lease, office buildout, manager salaries and furniture but they can extract much more profit per square foot than any traditional office space management company. WeWork is creating a global, on-demand, well-designed workplace for millennials. WeWork’s feel like being in a Facebook or Google Office without any of the upfront costs for the entrepreneur. Medium sized startups can also rent private office space which enables them to grow without the risk of signing a long term office lease with large up front costs. Startups are defined by hyper growth and they’ll grow out of any original office space fairly quickly if they succeed at all.

WeWork’s tried micro-apartments, which failed miserably, but if they stick to offices their advantages are: lower costs as they can buy at scale and they’ve created a global network of office spaces you can rent on-demand. I signed up for a WeWork in Williamsburg, Brooklyn and it was truly an amazing experience. Within an hour of arriving — I was able to get access to their Wifi and begin working. All I needed to do was put down my credit card and create a profile in their app. That’s another under appreciated and under reported scalable advantage: WeWork’s network of entrepreneurs is becoming a discovery network of startups.

When I created my WeWork app profile — I claimed Nooklyn as my company. A couple days later, someone in California asked a question about moving to Brooklyn and someone left a comment that mentioned Nooklyn. Within seconds I received a push notification that someone mentioned my company and I should probably respond to that conversation. I did — and was able to rent an apartment for that person through Nooklyn. The profit of that single transaction paid for 3 months of a WeWork for me.

The people who underestimate Airbnb or WeWork simply do not understand the power of software. Their software provides them with scalable advantages that their older counterparts simply cannot replicate. This is disruption at it’s best.

If you combine Airbnb and WeWork: the companies can enable people to travel, book apartments, and work from anywhere. They can enable entrepreneurs to get their business off the ground with less up front costs and property investors to reliably make rental income. Airbnb and WeWork are already disrupting the traditional firms in their space like Marriott and CBRE — but if they can successfully collaborate, they can multiply their valuations.