Latest / Hospitality Daily Podcast / Applying Growth Lessons to Hospitality - David Rust, Sagra

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Applying Growth Lessons to Hospitality - David Rust, Sagra · Hospitality Daily Podcast

• 0:24
  Josiah: David Rust was one of the very first employees at Lyft, which went on to achieve a $24 billion valuation at its IPO and was named to Forbes' 30 under 30 list.
• 0:35
  Josiah: Yesterday we learned about the hospitality company he's starting to introduce more people to sustainable farming (Sagra) and in this episode, you'll hear what he's learned about building companies that you can apply to your business.
• 1:10
  David: Starting a hospitality business is so different from starting, maybe, a traditional tech venture business.
• 1:17
  David: I think we do need a lot more innovative models in hospitality.
• 1:23
  David: I would love to see many more hospitality startups, but you don't see them that often, I think for a good reason.
• 1:29
  David: You have these major hospitality brands.
• 1:31
  David: If you're trying to own real estate as a hospitality business, how do you go, raise the money to do that out of the gate?
• 1:37
  David: If you want to be a brand, how do you convince property owners to put your brand, which is brand new, on their product?
• 1:45
  David: These are very real barriers to having new hospitality businesses start.
• 1:49
  David: I do think, especially coming from having been at a venture studio background, where you can create an environment that can inspire creating new businesses.
• 1:58
  David: I do think there's a lot that could happen that, even like the large hospitality brands, could help set certain environments, context, put certain funding together, put certain expertise together, own parts of these new hospitality businesses just to get more out there.
• 2:13
  David: Otherwise, I think stuff just starts to get tired after and old after a bit of time.
• 2:20
  David: It's like, okay, I love going to some of these well-known brands, but we need new, innovative models and it is quite difficult to start them, but there's some very real ways we could make that easier.
• 2:32
  Josiah: What have you found useful from your time at Lyft and other venture backed startups and then running this incubator that you've applied now as a founder that you found to be useful in building a hospitality company?
• 2:44
  David: The first and foremost thing is just rapidly test and iterate on things as you're going and view everything as an opportunity to learn Whether that's feedback that you're getting from a guest, whether it's how your website works, whether that's a confirmation email and how that can tweak or a marketing message.
• 3:03
  David: Constantly test and iterate.
• 3:05
  David: The other thing I think a lot about is just how do you get a brand to be well known.
• 3:13
  David: That's where, depending on the industry and the space that you're in, there's different models for that.
• 3:19
  David: I think with Lyft, what I saw is that having a pink mustache on the front of the car and having a bunch of really unique stories to tell about drivers allowed us to get a lot of media.
• 3:28
  David: The primary way that we get the word out about Saga these days is just by telling the stories of the farmers, because it not only drives people to go visit those farms, but it helps people learn about Sagra.
• 3:38
  David: That then allows them to go find other farms or maybe inspires them to create locations on their own.
• 3:43
  David: That's been.
• 3:45
  David: Another big piece is that if you have some really interesting stories to tell, just lean in heavily on press, which can be a very cheap / free model.
• 3:52
  David: That also just feels very authentic.
• 3:55
  David: You're not having to pitch people, you're just inviting people in.
• 3:57
  Josiah: What types of media have you found to be most effective towards the goals of what you're?
• 4:03
  David: building, honestly, a lot of just broad lifestyle media.
• 4:08
  David: People who are looking to travel, people who are interested in food, showing up in places like Travel and Leisure magazine or showing up in Wall Street Journal or showing up in Sunset Magazine from a West Coast focused view, those are perfect places where people who are genuinely curious about travel and food are looking.
• 4:25
  Josiah: Sunset loves you
• 4:28
  David: You know what's funny is Sunset Magazine.
• 4:29
  David: t heir original HQ it's not there anymore was in Menlo Park.
• 4:33
  David: I remember driving by and being inspired because they would have these beautiful gardens out front.
• 4:38
  David: I remember when Sunset first wrote about us I was like this is amazing.
• 4:42
  David: I remember as a kid going to Sunset magazines and walking through the gardens with my mom.
• 4:47
  Josiah: It's so funny.
• 4:48
  Josiah: My cousins are from Menlo Park and I would go there so often with them as well and go walk around the gardens.
• 4:53
  Josiah: It was kind of the thing that we would do.
• 4:54
  Josiah: It's so frequently.
• 4:56
  Josiah: It's so funny to watch this stuff come full circle.
• 4:58
  Josiah: It's such a California West Coast brand.
• 5:01
  Josiah: But to your point of media, I think it's such an important piece.
• 5:03
  Josiah: But it's both elements of the equation.
• 5:07
  Josiah: Going back to your lift example, you had both the externally visible things like the pink mustache, the more meaningful, human driven stories there.
• 5:16
  Josiah: But you had to have that.
• 5:18
  Josiah: You could only manufacture press to a certain point.
• 5:21
  Josiah: You need to actually be doing interesting things.
• 5:24
  Josiah: Then that's where you get the best media publications wanting to cover you.
• 5:28
  David: Right, because the way it works with media is you can reach out and share stories with people, but the writers have to be genuinely interested.
• 5:35
  David: You can imagine how many pitches they get about a new restaurant opening, a new hotel opening.
• 5:40
  David: They're getting this information all day thrown at them and they have to decide what's actually worth writing about.
• 5:46
  David: At least, what we've seen is we're just telling very genuine stories about here's a new farmer, here's a new farm, here's what they're doing, here's what the experience would be.
• 5:56
  David: We think it's worthwhile for people to know about this.
• 5:59
  David: That's very different than, maybe, a hospitality brand showing up, where it's about new design or new interiors, which I'm not saying is bad.
• 6:07
  David: I think there's been a lot of variation on that.
• 6:12
  David: To a large extent, what brands have been in hospitality is different paints and furniture.
• 6:19
  David: That's great.
• 6:21
  David: I enjoy those experiences, but I also think there's so much more opportunity to have models that are truly different experiences.
• 6:27
  David: We're starting to just see that where, when you book a stay, it's like okay, what type of?
• 6:34
  David: Is it a wellness-oriented offering?
• 6:36
  David: Are you doing the Canyon Ranch style, where it's all about deep health and wellness exploration?
• 6:41
  David: That's very different than any other type of experience out there.
• 6:45
  David: I just hope we keep seeing more and more of that.
• 6:47
  Josiah: If you saw the amount of pitches I get every day that was new openings or people being hired into a new role, your eyes would bleed.
• 6:56
  Josiah: And the thing is like, I don't care and, more importantly, the community of hospitality daily doesn't care either.
• 7:01
  Josiah: They care about interesting people doing interesting things, and that's why I wanted to talk with you.
• 7:06
  Josiah: Is you're out there building something differentiated and I also get the sense, talking to you, where hospitality is deeply important to me.
• 7:14
  Josiah: I know it's important to you as well, but it's actually not.
• 7:17
  Josiah: It doesn't even seem about that.
• 7:19
  Josiah: It seems like there's something bigger.
• 7:20
  Josiah: You wanna take care of the earth.
• 7:21
  Josiah: You wanna transform the lives of these people.
• 7:23
  Josiah: You're using hospitality as a way to do that, but it's almost like a.
• 7:27
  Josiah: It's a stage that you're performing on.
• 7:30
  David: Yeah, no, I always love I talk with friends about like Trojan Horse business models, and I love those because it's like you think about this.
• 7:38
  David: If you think about what we're doing as a Trojan Horse, it's like, hey, you can come book a stay.
• 7:42
  David: It's very familiar booking flow.
• 7:44
  David: It looks kind of like booking a hotel and you come in and, oh, it's a beautiful place and it's in nature, and then you get there and then you get to the end of the road and the guidebook that you're reading is talking to you about the health of the soil and how farming can mitigate climate change, and you're reading about food in a different way and you're meeting a farmer and you're, and then you leave being like, okay, I got here because of hospitality, but I don't really know.
• 8:05
  David: That felt like a very different experience and it was totally on their terms.
• 8:09
  David: Like none of this is being force-fed, but it has some opportunity to be deeply impactful for people, and that.
• 8:15
  David: I love those Trojan Horse business models because I think change doesn't happen because they want to or they're inspired to, and so we need to just create environments where people feel called to do things in a different way.