Hi Alex how are you? Thanks so much for participating
in the Secret Sauce of Large Property Managers. We are very curious to hear the Secret Sauce
of Guest Ready. Alex: Vanessa, I’m excited to be here.
Vanessa: Brilliant. Let’s launch straight into it, no small talk on this podcast. What
were you doing before Guest Ready and what are you doing now at Guest Ready?
Alex: Before Guest Ready I was in a very different industry, which is the food delivery
industry. I was working for a company called Foodpanda and we were helping restaurants
to get bookings, to get orders for their food, and then also we were delivering this food.
A very different industry but in the end we were doing something similar which is basically
using technology to coordinate a lot of offline processes in a seamless way.
I [inaudible 00:02:00] inspiration from Foodpanda for Guest Ready, where I am the co-founder
and CEO now. We started it three years ago and the goal is to help property owners unlock
the value of their real estate. We are managing all the processes that are required for our
running such a short [inaudible 00:02:19] for them and we’re building out in-house technology
to be able to do this in a seamless way. Vanessa: Great. You touched on lots of things
that I want to dive deep into. But only three years? How many properties do you manage?
Alex: By now we’re managing about 2500 properties. Vanessa: Oh my good God, you scaled really
rapidly, right? Alex: Yes. Actually, it’s been a pretty good
journey here. Vanessa: Tell me about the scaling process
because in three years 2500 properties, what’s the key to scaling so fast? How have you
done it? How did you do it? Alex: I would say we did something pretty
unusual from the beginning on that we started in several cities at the same time. We started
at six cities when we launched, which was pretty crazy I would say. Because, usually,
you just build this sort of business from one city and then you go from there you maybe
add another city and it just grows organically. We started in six cities, which meant that
initially we just had one person per city which then also meant that I started in London
and I needed to run all the operations, get the first homes, clean those homes, hand over
the keys and all of that. I’m quite happy that that we moved on from those days but
it was also a good learning experience to really know the business from ground up.
I think this laid the foundation for our scaling across different markets, which I think is
a hard part of our business. That, in one sense, it’s very global. If you think about
distribution or what guest wants, the guest expectations, those sorts of things are all
very global. But when you think about the supply side to property owners, the local
circumstances those are actually hard for local.
I think this starting from several cities at the same time really gave us a good foundation
for scaling across different cities. Vanessa: These different cities are where,
the initial ones? Alex: Those different cities, we are now
in the UK, in France, Portugal, Dubai, Hong Kong, and Kuala Lumpur. The original cities
were actually Hong Kong, Kuala Lumpur, London, Paris, and we also had a trial in Amsterdam
and in Singapore which in the end didn’t last. We didn’t get the traction that we wanted
to see and that’s completely fine. We just focused on those cities where we saw the best
traction. Vanessa: Why didn’t it work? What’s the
learning from– Alex: We had from the beginning this approach
where we said, okay let’s try this in a few places. Because in the beginning also, three
years ago, we weren’t that familiar with the whole industry with each single market.
So we looked at mostly the market size, where do we see a lot of properties … on platforms
such as Airbnb. And then we said if there’s a lot of properties then there must be demand
for our services. But in some places like Amsterdam or Singapore
we just didn’t really quite get the traction so we said, well, already we don’t have that
much resources, let’s focus on those markets where we get the best traction.
Vanessa: So that’s how you are going to scale in the future? You’re going to continue becoming
number one in those cities or trying at least or are you going to open you cities?
Alex: Going forward, we are of course much more– we analyze much more each single market
before we enter a new market. So, it’s different from the very early days when we just launched
a business and just jumped into it. Now we know what’s required. We look at a lot of
different factors for each single market and make much more rational decisions when opening
a new market. I think that approach worked pretty well for us. We opened Lisbon Porto
with this approach, we opened Dubai with this approach those markets are doing really well
for us. Vanessa: Well done. I actually skipped a question
that I wanted to ask you. What is the Guest Ready brand? Is there– because I’m sure,
not I’m sure. Hopefully everybody knows about you but there might be some that don’t
know about you. What does it stand for? What does the brand stand for?
Alex: We actually did analyze the next size internally where we were thinking what we
really stand for and on the one side we have company values but more for the brand is ‘What
do we stand for as a brand towards the outside?’And we said it’s mainly two aspects. The first
is related to performance and the second one is related to delivering a personal service.
For the first one that is more performance is about getting the best renter returns for
owners, being tech savvy, having the best tools, dynamic pricing, optimization, automated
payments, mobile apps for managing the operations, these sort of things. On the other side, completely
different on the on the spectrum, is providing personal hospitality service both to hosts
and to the guests. We want to use technology to actually provide this service at scale.
We see that each of our hosts has a unique property, they have unique circumstances,
and the same for the guests. Each of them is looking forward to a unique stay and we
want to be able to provide this hospitality experience for them. This is the two sides
of the spectrum of our brand and we are trying to combine those two sides in in our brand.
Vanessa: So technology helps with both sides but I want to hear more about that. Because
as soon as you say you want to taste the unique and personal, how can tech help do that? But,
we’ll come back to that. Since we’re on the subject of brand, is brand
consistency imposed. This is one question that I had for all my interviewees. We have
different– we have mixed feelings about that also because when you talk about having these
properties in different cities, and different owners, obviously how do you keep the brand
consistent? Do you have something like a brand stay offer? It would have multi-family units
etc, they would– as you go into the apartment you would recognize it it’s a [inaudible
00:09:03]. That’s much harder to do for a brand like Guest Ready. How do you do it?
Is it important? Alex: Yes. Actually, for Guest Ready we have
two sides of the brand. I would say so far we focus mostly on one of those two sides
which is the side towards the owner, our brands towards the owner. There, I think it’s about
just having really good operations and being able to show that to the owners with past
experiences, with reviews. We also got some good exposure and media like The Times or
Tech Ranch or FOLPS or some of the regional newspaper.
This helps all to build up this trusted brand towards owner. We also won service department
awards. We were named one of the top start-ups in the UK and in Switzerland as well. These
things really help for this brand and this brand is. I would a bit more like a B2B brand
because owners really inform themselves before they come on board with the property manager.
They’re really involved. I think it’s a bit different than the other
side of the brand which is just the brand towards guests. I think that’s also the side
that decided you were talking about before where you’re coming to a property as a guest
and you actually recognize the property. For us that’s harder to do because we work with
individual hosts and they have each unique tastes. And we actually feel that’s okay because
also our guests have unique tastes. I think that’s also what the sharing economy and [inaudible
00:10:42] is about. That it’s not just a hotel where each hotel looks the same.
Each of our properties might be different. What we want to make sure, though, is that
towards the guests we have a consistent brand in terms of the experience. So, you can expect
that you have 24/7 somebody that you can call if something is not working well. You have
you know you have Wi-Fi that is standard probably not in every property, on airnbbbooking.com.
You have as a spotless clean apartment, hotel quality linen towels, all sorts of things
that you would expect from a professional state but it doesn’t mean that each property
looks the same. Vanessa: Very good. So you’re mainly a B2B
brand. How do you make sure, because a lot of competition out there. In all the destination
that you mentioned it’s pretty out closer. How do you make sure– and also new entrance,
I keep on hearing US or a fellow US spokesman just coming over and we need to take over
Europe. How do you how do you make sure that owners sign up with you as opposed to with
the competition? Alex: I think it’s about already proving that
this operation capabilities during the sales process. We make sure that we always have
somebody available to talk to the owners, that we’re reactive, that we’re on the ball
when it’s about questions that a lot of owners have. We also have people on the ground in
each city. I think that’s something that not everyone
in our industry has but for us it’s important from a commercial site to understand the market,
to understand which areas can work well, which areas maybe don’t work, what sort of interior
is required and just understanding the local circumstances such as the legal laws as well,
the requirements that differ city by city. We’ve been able to build up this local expertise
nothing costs, recognize that when they are in the sales process who knows the local circumstances,
who doesn’t. That’s been working pretty well for us to expand.
Vanessa: Let’s move onto the topic of scaling internationally. You say you have people on
the ground. How does that work? How do you employ really good people to represent you?
Is that a challenge to find good teams on the ground? And is that one of the challenges
for scaling internationally? Alex: I would say people are at the core
of our business and our success is driven by our team. So, it’s very important to have
good people and team. And, of course, for every scaling business that’s one of the challenges
to find the people. So far we were pretty lucky and I think we were also able to rely
on our network to find some of the people. If not then we were actively going out scouting
the market for people that could be a good fit.
Because one thing that is a bit unique about our industry, I would say, is that there’s
not a long history. There’s not that many people that know this industry for such a
long time already. We need to look at similar businesses that have similar types of experience
where we can recruit from and that’s worked pretty well for us. We looked at other companies
for example food delivery where I’m from or more operations as start-ups, hospitality
industry overall and looked find talents there. Vanessa: Did you acquire– at all if you remember
did you acquire any other company? Alex: Yes we– actually that’s also a good
way to scale for us. Origin we just said we want to build that the best product, the best
technology and scale organically but we had pretty early on an and opportunity to acquire
a competitor called Easier Rent and Services. That worked out pretty well for us I think
for both Easier Rent and Services but also for us. Since then we’ve been more open to
such opportunities and have done two more acquisitions with a focus city flats and also
being [inaudible 00:15:23] last year. Vanessa: So that’s three acquisitions so far?
Alex: Yes, correct. Vanessa: How many more next year?
Alex: Actually the news go around and we’ve also announced those acquisitions so what
we see now is that we get quite a few smaller and mid-size property managers reaching out
to us and seeing if there’s an opportunity for them to join Guest Ready. We’re looking
into those opportunities carefully and I think we’re quite open for such opportunities in
future. Vanessa: [laughs] laughables– please [laughs]
what makes a good property management acquisition? How do you evaluate if they’re good?
Alex: I think it just– it really depends if it’s in new markets I would say that the
team is really important because we’re going into a new market with this team. If it’s
an existing market, sometimes it’s much more about the portfolio that they manage. In
some cases, technology could be interesting but we have our in-house technology. So, usually
that’s not really something that we look at but there might be some good learnings
also from that side. It’s really different aspects that can be interesting [inaudible
16:49] acquisition. Vanessa: You talked about technology, that’s
exactly where I want to head to. Tell me [laughs] I’m a really tech girl. Tell me what have
you built and what do you outsource? How many programmers do you have?
Alex: We have a tech team of about 20 people and what we’ve learned pretty earlier on
is two things: that there are a lot of good solutions already on the market so from the
beginning we don’t need to build everything in house. But also we learnt that if we want
to be adaptive and scale fast then we do need to have our own in-house technology.
Vanessa: What have you built? You said earlier, dynamic pricing, mobile apps, which of these–
give me a list. What is it that you’ve built and what is it that you outsource?
Alex: From the beginning we said that the solutions that we don’t see that much out
there is everything– for everything that comes after the booking. So for everything
that is more operational related to running the underground operations, the task management
what we call the payment processing for example, the relationship with the owners. And that’s
actually the core of what we started and where we started to build our in-house technology.
By now we have everything in-house except of the channel management.
Vanessa: That’s great [laughs] because channel management is very hard, isn’t it? Leave
that to the experts. Alex: Yes I think that’s right. It’s also
something that there are some good solutions out there so we are happy to work with them
and then focus on the other tasks on the other sides too to get that in-house.
Vanessa: Great. I hope you include me in that pack. Talking about distribution, since talking
about channel management, how does distribution work for you? How do you choose your channels?
How many– are you on old or big OTAs, is it that you cherry pick. Do you just want
to be seen as much as possible or do you make these decisions very carefully.
Alex: We had a few shifts during our strategy. I think initially we started just from Airbnb
which was due to operational complexity we just said starting a business from zero, let’s
keep it simple we need to learn a lot about our operations so let’s just focus on one
channel. I would say Airbnb is a channel that works pretty well and that have a lot of technology
already to automate or to help property owners to rent.
For example, payments is something that Airbnb does and there other parts are also quite
easy. We said up our vision actually for Guest Ready is to help owners to unlock the value
of real estate. We can’t do that if we’re just on one channel so we need to be on all
the channels out there. We went to beat the other way around and we just listed as many
channels as possible and then again a shift happened where we realized that we’re on a
lot of channels but some channels don’t get us that many booking so it’s not really worth
it. It’s better to focus on a few channels, do
them really well and understand exactly how to work with them and get most out of those
channels. We cut them back a bit so we’re now in between. I would say we focus on handful
channels. The biggest one plus we also add a few niche channels that have a good booking
potentially that are more regional or more focused on a specific niche market.
Vanessa: Would you mind sharing the niche sites that you’re working with?
Alex: Yes. For example, we’re working with Plum Guide, we’re working with Homelike. Those
are two good examples where they curve out specific segments from– Plum Guide is a bit
more upmarket and Homelike is a channel that is more focused on mid-term land lease. That
works pretty well for our strategy. Vanessa: Great. You’ll be very happy to know
that I’m creating the little sister of the [inaudible 00:21:33] with only channels. I’m
researching. I’ve already got a hundred channels, those two that you mentioned are
in the list. And I’m researching the best niche sites to advertise on. I’m going to
include the– how much they charge and where they are strong etc, which travel trend they
look at. I’ll send you that as soon as I have it.
Alex: Looking forward to that. Vanessa: I just want to quickly come back
to owners because I know that something that other property managers are very keen to hear
about. How do you market to them when it comes to the organic marketing? When you don’t
acquire, how do you manage to market to owners? Because there is also distribution, right?
You’re saying that you’re more of a B2B brand so most of your marketing money goes to owners.
How do you do this as well as you have given the scale?
Alex: What we realized is that because it’s more of a B2B market, owners actually inform
themselves about ‘Who is out there? What solutions exist?’ Therefore it’s important
to just be present online and be easily be findable by those owners when they do their
research. That’s something that we focused on a lot. Actually most owners just find us
and then reach out to us rather than the other way around.
But, also, what is happening now is that it is more– as our portfolio grows we have more
owners, there’s more word of mouth, there are more referrals coming from existing owners
and also from other players in the industry that are referring new clients to us. I think
those are the main two channels for us. Vanessa: I know I’m jumping around a bit
but one last question about technology. You build most of it yourself apart from channel
management. Are you planning to outsource this technology to other property managers?
I know it’s a question I’ve asked you before but our listeners don’t know the
answers though. Alex: You will be pleased to hear that we
have one step ahead now. We have already a few property managers that are using this
system that, again, this grew organically so that whenever we told other property managers
in the market about what we have in-house, they were pretty open to this and were excited
about the opportunities that this could give them.
We were working on ways that could give this technology also to other property managers
and now we have already several clients or several partner property managers that are
working with the same system and it’s working really well for them. I think they get the
same benefits that also we had to be able to scale and to have more free time thinking
about this is development and to have the operations more optimated.
Vanessa: That’s wonderful. So you confirm the trends that I announced that [inaudible
0:24:49] there’s going to be more and more PMs selling and reselling that tech. You didn’t
tell me then and now you’re going to– Tell me about your predictions for next year. What
do you think is going to happen? Are there new thoughts on consolidation– is a word
that we hear constantly. Is the market going to consolidate as soon as next year or is
it ever going to consolidate? Alex: I think this consolidation already started
in 2019. I think it’s going to continue in 2020 as well. In 2019 we saw that few players
came together. I already mentioned that we bought a few players– exited the market like
B-sitter and Anchel unfortunately. And also Altido, for example, is an example where a
few property managers came together. I think this trend will continue. I still
believe there are many opportunities for smaller property managers that are doing a really
great job locally. We also see that there might be some more hybrid models where it’s
not a full on acquisition but where smaller property managers piggy back on the technology
of bigger property managers like Guest Ready. This is another way how actually you could
really leverage the local expertise and the strong setup out of some local property managers
that know those markets for many decades but are maybe not the most tech savvy or have
the best operational set up so they can actually also leverage that by joining the technology
solutions of Guest Ready for example. Vanessa: So Multi lease, for example, in the
multi-unit service apartment, how many units–what are other names you give them. Are they a
threat because you are only urban? Alex: I don’t think that’s a threat. I think
that’s an opportunity, that’s also something that we’re looking into I think in some markets
this works pretty well but I think it’s just much more risky business. So, each opportunity
needs to be evaluated really carefully and if you go into a high with your must-lease
lease agreement on what you pay to the owners then you might pay for that later. So I think
it’s just something that needs to be about just carefully. I do believe in this model
where on a case by case basis and in some markets it works better than in others.
Vanessa: Everything remains to be seen. Now we’re going to do the game show. It’s a quick
true – false and the ideas is that I say a sentence and then you go either true or false.
You’re ready? Alex: All right, let’s do it.
Vanessa: The vacation rental industry will topple the hotel industry next year.
Alex: Not quite yet. Vanessa: So, false?
Alex: False, yes. Vanessa: Voice activated travel assistance
are a must. Alex: Also false, I would also say it’s not
quite there yet. Vanessa: Google will become the only OTA.
Alex: False. Vanessa: Consolidation in the tech industry
is bad for property managers in the tech industry. Alex: False. I keep saying on false.
[laughter] Vanessa: Let me get one true. Consolidation
of property management companies is bad for guests.
Alex: False too. Vanessa: Vacation rental growth in urban areas
will continue despite regulations. Alex: True, there we go.
Vanessa: Yes. We got one. [laughter]
Alex: Finally. Vanessa: All good. You have to invest in technology
because guests needs a changing. Alex: True. It doesn’t necessarily mean that
you need to invest yourself but you definitely need to invest in technology overall either
through partners or by doing it yourself. Vanessa: Killer looks are a must.
Alex: True. I would say true but it’s good to have– there are ways without it but it’s
good to have. Vanessa: US brands will have a hard time implementing
in Europe. Alex: True.
Vanessa: Last one, when space travel becomes available, you’ll scale into Lunar territory.
Alex: Absolutely. [laughter]
Vanessa: Go for it Alex. Alex: The sky is the limit right?
Vanessa: Exactly. Wonderful, great. Thanks so much. It’s been great having you. We got
it together. We’re trying to get together for a while. Thanks so much for saying sharing
the Secrets Sauce of Guest Ready. I’ll be in touch. Thanks so much.
Alex: Yes. Thanks very much for having me. Vanessa, it’s great to see all your initiatives
that brings industry together such as this podcast or your VR tech initiative it’s just
amazing. Thanks very much. Vanessa: Thank you, cheers. Cheers Alex take