Latest / STR Unpacked / Marcus Räder: The Road to Building a Unicorn
Transcript
- Ben: Welcome to Short Term Entals Unpacked at Scale Espanol. I'm joined by Ben Marcos who needs no introduction obviously, I'm supposed to be. Thank you so much for joining me here. Well, thank you for inviting me. It's pleasure, obviously a legend of the industry. I just kind of wanted to start because I think obviously you've been a very known face in the industry for quite a while now. And I just kind of wondered how you got into it. What took you from, guess, like... your starting point to where you are now? Yeah, so when we started 10 years ago, last year we celebrated our 10th anniversary, good timing with becoming a unicorn at the same time. We were the first unicorn and so far the only one in the vacation rental tech space. But when we started, we looked from an outsider inside the space and we actually knew nothing about vacation rentals. That was really exciting for us because what we noticed that it was that almost every single company that builds technology in this space, they're not built by technology people, they're built by either real estate or travel or vacation rental people. Yes. And we noticed that as these companies scale, they made some basic mistakes because they made some assumptions based on their own experience. And we thought we can... Actually, we see those pitfalls. We know them because we've been in many tech companies before. So we can just start up and we'll have much easier time scaling up. Yeah. Because we are not being held back by any preconceived notions of what we think we know about the vocational mental industry. ⁓ That being said, it's pretty hard to be an outsider coming into an insider's world and pretending to be somebody. So what we started immediately was ⁓ managing a couple of properties. Okay. And we wanted specifically to do it remotely. Okay. So my co-founder who was in Finland was managing one in Toronto where I lived at the time. And I was managing one in Finland from Toronto. Okay. Yeah. We were renting them out and then we had each other as local backup. I remember one Sunday morning, the cleaner didn't show up and I went and cleaned. And so yeah, we have literally been scrubbing toilets for to make this business successful. I think it took two or three years before we were finally able to let those go. But what we learned there was that our lessons were not applicable to everyone. ⁓ It was an incredibly fragmented market and it still is. The way you manage things is just different in different locations, in different business models. And that's really exciting. And ⁓ we just wanted to build a scalable software and we succeeded in that. More than succeeded, I would say. mean, when you originally took on those two rental properties in Toronto and Finland, were there any pre-assumptions that you had that you thought you needed to build in one way and then actually managing it yourself meant you needed to take like a completely different direction? Well, nowadays you can just ask AI, but we had to do all the research on how to do it the good way and the bad way. And we did it the good way. Nice. So it worked. quite well, but it was it was some work. But ⁓ even today, our company culture is pretty much based around that. So when we hire experts, we don't hire people typically from the industry, we hire people who are experts at vertical B2B SaaS, because that's what we do. Our software is we sell to businesses. It's a software as a service product. And it's vertical. That means that it focuses on one industry. A bit like, like Uber Eats focuses on the restaurant industry and the livery. So it's a vertical platform, unlike Amazon that sells pretty much anything. Okay. That makes sense. And so I guess, you've obviously, I would say arguably, you are one of the two biggest PMSs in the space right now. You obviously got valued ⁓ a billion, you're now a unicorn company. Was this your first attempt at entrepreneurship or did you have anything in your past or have you just done it first time and got it right? I think everyone's always trying something. I wouldn't say, yeah, I've had some failed attempts in the past and also some successful. There was a real funny one when I was 16 years old in the summer in Finland. There's a lot of music festivals. And those are usually arranged outside the cities because they're so big and people sleep in tents and so on. So I came up, or a friend came up with this great idea. Why don't we get like these plastic cell phone chargers that you hook a 9-volt battery into and it charges your cell phone. Nice. So we went there and sold them. Turns out they didn't actually work. So it shows charging, but when you try to make a phone call, it doesn't work. But it didn't harm business. But we really hit the jackpot because for some reason we brought like a hundred ⁓ rain ponchos. Yeah. And ⁓ it started raining. Nice. Nobody was selling those. Nobody had umbrellas because it wasn't supposed to rain. Yeah. Everyone wanted one. We started selling them for one euro and then eventually The price went up and up as we got lower in stock and were selling them for 10 euros each and it was crazy successful. It's a great way to learn as a 16 year old the basics of supply and demand. Exactly. I don't know how I pulled this off, but in high school we had a cafeteria that was open between classes. When I saw that, thought that's so cool. The students are running it. I want to run it. So eventually I managed to run it. It was great. ⁓ Business was so-so, but eventually the teachers were unhappy that we were selling just candy because that's what kids want. They just want candy and they wanted us to sell something healthy. the problem was nobody wants to buy anything healthy. But I made a lot of friends by giving out free candy. That was really awesome. So I guess you'd say you're probably like a born entrepreneur, like it's kind of within you since an early age, right? I'm a big fan of Megadeth. Very against anti-establishment, against the system. I never quite managed to find a job. Actually, I hated school. And then I was told that if I just study well, and I studied really well, like I went to the top schools and got top grades and so on, then you won't have to go to school anymore. Okay. Because in school, they tell you sit here, read this, learn it. And when I ask you questions, then you need to know what you actually read. Yeah. So I was really happy to get out of school. But then I found out the work is exactly the same. Like my first day at the office, I started working at an affiliate network. was you sit here, you read this, and then I come and ask questions. You need to know what I said. And I went to my dad and I asked him, when the hell does this stop? Like, I can't do this. I just did 15 years of school. I thought it was over and now it's all the same. And he said, stops when you retire. It never stops. I thought there's got to be a better way. Like one where I get to set the rules, where I get to do stuff. And yeah, that's starting your own business. And sometimes we have employees who are usually really popular among their colleagues. They're also seemingly productive, but they are more good at the idea. So they come up with a great idea, but they can never really execute because they lose interest. So they can't run a project from beginning to end. They're more the initiator, but everyone loves them because they help out and they have all this knowledge. But usually they end up not working out because if you give them a task, they can't actually do it. So I always have a one-on-one chat with them. think we've got 300 employees now in 51 countries. I think I've seen five of those examples where I tell them, look, you will never be happy at any job. You have to start your own business. Yes. You will never fit in. there's just a distinct type of people that will never fit in, never be able to work in a system unless they create their own. And I'm one of them and I can identify the others. I truly believe I'm one as well. With my own experience, what you're saying rings a lot of bells. I've always said that I would just make a crap employee. And the main reason I've worked for myself is for that reason that no one would have me. So I needed it for myself, right? Yeah. And I think that's so true of so many very successful entrepreneurs is that you have to carve your own route, right? Exactly. It's almost the only option, either out of boredom or out of passion or out of desperation. So like you said, you're obviously 300 employees, 51 countries. I think from the outside looking in, it seems that you guys, even though you're one of the biggest, always been a bit of a disruptor. within the industry and I think maybe with what you're saying and your approach of like taking people not from the space, but it doesn't feel like you're slowing down at any point. It doesn't feel like you're plateauing at all. Like, so what's next for you guys? Well, right now it's really exciting in the tech space with all the AI coming in and especially for property managers, there's so much room to be more efficient. just, I'll give a practical example from just this stay here in Madrid, I booked something on Airbnb and I learned my lessons. There's just one thing that I really need and that's coffee. So I have my own travel Nespresso machine and milk foamer that I bring with me, they're pretty heavy. So I prefer not to bring them. So whenever I book a place, I ask, do you have an espresso machine? And it took this host yesterday, I started packing and I realized He hasn't answered. It's been eight days. Like it's a simple yes or no question. And I was just thinking back to our own AI. It would have answered in 30 seconds instead of delay because people get really freaked out when the answer comes immediately. So you delayed by 30 seconds. But that's just one example of how AI can help and just answer those simple questions that guests may have. Are you concerned in any way that AI from companies like you is a bit of a double-edged sword? Because on the one hand, it gives you all of these abilities to build stuff very quickly, but on the other hand, your average person with no coding experience can start to learn the early stages. I mean, we're not a stage where you can vibe code a PMS, but there are elements and features that people We actually encourage our customers to build their own stuff and experiment because it's It's easy to get started, then, and some things work, but other things don't actually scale. They got a new appreciation for things that are designed well end to end. And that's something that ⁓ AI can't really do. And I think it never will. If you look at image generation, like if you ask, give me a picture of a coffee cup, then... It will give you exactly a picture of a coffee cup, but you don't know what's in the background unless you tell it specifically what should be in the background. Yeah. And so there isn't any kind of autonomous thinking there. And the same thing, if you ask it to build any piece of software, you need to give the context of, okay, what's going to be the next step? Yeah. What's going to break first and how do we prevent that from breaking? The challenge is you don't know that until you actually build it. mean, we built it and we know exactly what breaks and what fails and what needs to be improved and we learn. now when we launch a new feature, it works for people with one property, it works for people with a thousand properties. And it works in many languages, many regions, different legal environments. And that's just through experience. But if you're building your first thing, it's going to be very hard for you to know exactly which questions to ask the AI. Exactly. And I had something the other day, which I hadn't thought about, which is sure you can go ahead and build it, but you have no idea what that code is. The code you're looking at, you can't read it. So you have no idea if it's secure or not. Exactly. The security aspect. There was one big code builder. Well, not one of the biggest. I forgot the name. Yeah. And they had a data breach. So basically all the tools that were ⁓ built by that, all the data on them were suddenly publicly available. Yeah. And that's pretty bad in the vocational rental industry because we deal with a lot of sensitive data. We got names, we got passports, we've got credit cards, we got birth dates, we got names of family members. There's a lot of really confidential information that shouldn't get in the wrong hands. exactly. So I had one more question from me, which is more something that I've noticed on how you guys advertise. I've always just been curious to ask you, which is if I search guestly, hostfully, logify any of those other PMS brands. you have a page on your website which is essentially why you should use Hoaxaway instead of these guys. That's fine. But some of the answers on there can be pretty direct, shall we say. And the reason I ask this is that I started my life in sales and I was always told the worst way to sell is to basically slate your opposition. You always want to do it in a kind way. Now that might just be the Britishness in me, but I wondered, I guess, two questions like have you... Do you consider that point of view and does it actually get results? Absolutely. ⁓ we actually, there's a couple of our competitors that are, their entire success is based on just bad-mouthing others. Okay. So there is a psychological aspect there because if you're making a tough decision, especially if you got a bigger business and you need to make a critical decision, ⁓ hearing someone say, well, you got A and B and B sucks. You should never even talk to them. That helps you. So it does work. But we as a company really try to step away from that and highlight how good our competitors are. Now those competitive landing pages, unfortunately, they're a necessity because that's what our competitors are doing. ⁓ really? Yes. So if you go and ask any AI how is competitor X? better than HostAway, then they'll read the pages there. Sometimes the pages are hidden. That's pretty interesting. So you as a user can't find it the day I can. And it has a bunch of false information there. Some competitors don't use false information, but a few really big ones have only false information. And then when you ask how is HostAway better than this competitor, then it says, well, I don't really know. So we have to have those. Yeah. So it's more about... It's more than meeting. ⁓ That's interesting because I don't need to stick with you guys, but I, fairness, I had it pointed out to me. I haven't ever tried it. Go and ask any AI model next time and you'll be surprised to what you find. Excellent. Interesting. Well, thank you so much for taking the time. Pleasure as always. Absolutely. Thank you very much. I'll see you soon. Yeah. Thank you.