Latest / Pillow Talk Sessions / Building on Water: The Next Frontier of Hospitality with Brian Meyer (FLOHOM)

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Building on Water: The Next Frontier of Hospitality with Brian Meyer (FLOHOM) · Pillow Talk Sessions

• 0:00
  SPEAKER_00: I discovered a houseboat in another waterway in downtown Annapolis one day, and it was an older houseboat, 1970s houseboat.
• 0:06
  SPEAKER_00: Didn't really look great from the outside, but it looked interesting.
• 0:09
  SPEAKER_00: There was something there that piqued my curiosity.
• 0:12
  SPEAKER_00: So one day I actually just paddled up to the houseboat.
• 0:14
  SPEAKER_00: The owners happened to be home.
• 0:15
  SPEAKER_00: I introduced myself and they let me inside, and that was the light bulb moment.
• 0:19
  SPEAKER_00: As soon as I walked inside, they had spent the last year and a half redeveloping, redesigning the interior to look like a million-dollar waterfront home.
• 0:27
  SPEAKER_00: And I was like, well, this is how I would love to live.
• 0:29
  SPEAKER_00: There was no insurer who would insure it, no bank or lender would finance it because it was an older asset.
• 0:35
  SPEAKER_00: I was constantly going on at Airbnb, scraping the data of all the houseboat listings on Airbnb, and I was seeing a similar trend.
• 0:43
  SPEAKER_00: I think I can do this, but better.
• 0:50
  SPEAKER_01: Welcome to the Pillow Talk Sessions podcast.
• 0:53
  SPEAKER_01: My name is Jessica Gillingham, and today I am joined by Brian Mayer, who is one of the co-founders and the president of Flow Home.
• 1:03
  SPEAKER_01: Flow Home is redefining waterfront living through real estate and hospitality.
• 1:09
  SPEAKER_01: And in this episode, we talk about what it's like to build a brand new category, what it means to bring a whole experiential offering to the market that's just that little bit different.
• 1:22
  SPEAKER_01: We talk about their commercial model, how they see tech as they grow and expand and scale, and then also the challenges and opportunities that they face by bringing this completely different category, which is living and hospitality on water.
• 1:39
  SPEAKER_01: So I really hope you enjoy this episode.
• 1:43
  SPEAKER_01: There's loads in it.
• 1:44
  SPEAKER_01: And I enjoyed so much my conversation with Brian.
• 1:48
  SPEAKER_01: Brian, welcome to the Pillow Talk Sessions podcast.
• 1:52
  SPEAKER_01: Thank you so much for agreeing to be a guest on the show.
• 1:55
  SPEAKER_01: I'm really looking forward to this conversation because what I think you're doing is something really unique and quite special with Flow Home.
• 2:03
  SPEAKER_01: So I'm sort of excited to get under the covers, if you like, of what you're doing, why you're doing it, and how you're doing it as well.
• 2:10
  SPEAKER_01: But before we get into the nub of the conversation, perhaps you could introduce yourself, give the audience an overview of Flow Home, and then also about why you started Flow Home and what the kind of the impetus was to develop Flow Home.
• 2:27
  SPEAKER_01: So over to you.
• 2:28
  SPEAKER_00: Well, great.
• 2:29
  SPEAKER_00: Well, I appreciate you inviting me on your podcast, Jessica, and sharing my story with your community.
• 2:33
  SPEAKER_00: I'm a lifelong waterman.
• 2:35
  SPEAKER_00: I grew up on the eastern shore of Maryland.
• 2:37
  SPEAKER_00: I grew up on the river.
• 2:38
  SPEAKER_00: As soon as I got my driver's license, I was headed to the beach surfing.
• 2:42
  SPEAKER_00: I was a professional lifeguard for several years and then ended up actually going to college at the University of Hawaii, which really expanded my love for the water and and different water sports disciplines.
• 2:54
  SPEAKER_00: You know, I had the amazing opportunity after graduating college to find my birth parents.
• 3:00
  SPEAKER_00: I was adopted as a newborn, and my my parents that raised me, my mother, uh inspired me to reach out and find my birth parents, which I did.
• 3:09
  SPEAKER_00: And uh after meeting them, they both live in Annapolis, Maryland, which is on the western side of the state.
• 3:15
  SPEAKER_00: And I ended up uh packing up and and moving, basically restarting my life in Annapolis in 2012.
• 3:23
  SPEAKER_00: And uh, you know, spent a year about you know meeting my new family, the both very two large families, so a lot of people to meet.
• 3:30
  SPEAKER_00: And uh after after about a year and a half here, I started to get the entrepreneurship bug.
• 3:36
  SPEAKER_00: So I started a little paddleboard shop in downtown Annapolis, and you know, we didn't know at the time how much impact we would have in the community, but in Annapolis, in a lot of waterfront areas, and this attributes to what we eventually have built with Flow Home, is that there's really not a lot of waterfront access for the general public to get on the water.
• 3:56
  SPEAKER_00: You know, at the time at the business, you know, it was it was a seasonal business, you know, weather dependent, and uh and it just got to a point where I was ready for something else.
• 4:05
  SPEAKER_00: And so from there, uh I moved on and actually during my time at Capital Sut, built a nonprofit as an extension of that business where we started teaching the local veteran communities how to paddle, getting them out on the water.
• 4:18
  SPEAKER_00: We did the same with underserved youth communities.
• 4:20
  SPEAKER_00: What's interesting in Annapolis, which is more of like a high wealth kind of area, is that there are several kind of public housing developments that are very close to the water, and none of these kids knew how to swim or never out in the open water.
• 4:33
  SPEAKER_00: So we started, you know, teaching them how to swim, taking them out paddling.
• 4:37
  SPEAKER_00: Um, and then we did a bunch of clean water activation, helping clean up our local waterways.
• 4:42
  SPEAKER_00: Um, but during that time is you know, we were fortunate to be able to live at the marina where my business was.
• 4:47
  SPEAKER_00: And the marina was always going to be redeveloped, and at the time that it came to, you know, everything was gonna get bulldozed over, we had to move.
• 4:55
  SPEAKER_00: And I wanted to continue that lifestyle, but I couldn't afford a waterfront home at the time.
• 4:59
  SPEAKER_00: And so my wife and I started thinking about how we, you know, alternative options.
• 5:04
  SPEAKER_00: And I discovered a houseboat in another waterway in downtown Annapolis one day, and it was an older houseboat, 1970s houseboat.
• 5:11
  SPEAKER_00: Didn't really look great from the outside, but it looked, it looked interesting.
• 5:14
  SPEAKER_00: There was something there that piqued my curiosity.
• 5:16
  SPEAKER_00: So one day I actually just paddled up to the houseboat.
• 5:19
  SPEAKER_00: The owners happened to be home.
• 5:20
  SPEAKER_00: I introduced myself and they let me inside, and that was the light bulb moment.
• 5:24
  SPEAKER_00: As soon as I walked inside, they had spent the last year and a half redeveloping, redesigning the interior to look like a million-dollar waterfront home.
• 5:32
  SPEAKER_00: And as soon as I walked in, saw the floor-ceiling windows out on the creek, the modern kitchen, I was like, well, this is how I would love to live.
• 5:40
  SPEAKER_00: And, you know, stayed in touch with them, actually convinced them to sell me the houseboat.
• 5:45
  SPEAKER_00: And from that personal journey, I ran into the limitations of trying to acquire on-water real estate at whether it be a houseboat or a floating home.
• 5:55
  SPEAKER_00: This specific example, since it was a 1970s houseboat, there was no uh no insurer would insure it, uh, no bank or lender would finance it because it was an older asset.
• 6:04
  SPEAKER_00: And so I ended up walking away from the opportunity.
• 6:07
  SPEAKER_00: I just started thinking about what I ultimately wanted to do in life, and I just came back to this houseboat concept.
• 6:13
  SPEAKER_00: During this time, was actually one of the marinas in Annapolis had purchased a houseboat and started renting it on Airbnb.
• 6:21
  SPEAKER_00: And so I started tracking that on Airbnb, and it was getting over$500 a night.
• 6:26
  SPEAKER_00: It was pretty much completely occupied year-round.
• 6:28
  SPEAKER_00: Now, granted, this was during COVID, so everything was a little inflated, but still, you know, there was something there.
• 6:33
  SPEAKER_00: And I was like, I think I can do this, but better.
• 6:36
  SPEAKER_00: And that kind of set off this journey of developing the concept, ideating, and ultimately meeting my two business partners.
• 6:44
  SPEAKER_00: I have two business partners, and the three of us started the company in 2022, and our first Flow home opened in 2023.
• 6:53
  SPEAKER_00: So, what essentially Flow Home is, is we're an experiential hospitality company, vertically integrated, where we design, build, deploy, market, and operate luxury houseboats that are floating suites and premier waterfront destinations.
• 7:08
  SPEAKER_00: We're based in Maryland, so most of our fleet is around the Mid-Atlantic Chesapeake Bay region.
• 7:14
  SPEAKER_00: We have 17 flow homes today, open today in five different states.
• 7:18
  SPEAKER_00: And um, you know, we're kind of finishing up what we would call phase one of proving the unit economics of operating these houseboats.
• 7:26
  SPEAKER_00: And now we're about to enter into phase two, which is accelerating the deployment of more flow homes.
• 7:32
  SPEAKER_00: And I'm sure we'll talk about kind of the other kind of business models we have within the company.
• 7:37
  SPEAKER_00: So I'll kind of just stop there because that was kind of the setup to you know my personal story, how I started Flow Home and where we are today.
• 7:43
  SPEAKER_01: That's brilliant, Brian.
• 7:45
  SPEAKER_01: Thank you so much for running us through all of that.
• 7:48
  SPEAKER_01: And I guess my my first question to you actually is I came across you in the vacation rental, short-term rental circles.
• 7:56
  SPEAKER_01: Like it was a post that somebody put on LinkedIn, and I was like, I really like the look of that company.
• 8:02
  SPEAKER_01: One of the topics that we talk about on this podcast is broadly the hotelization of real estate, like how assets are being turned into hospitality assets, or you know, whether that is living or or or or um hotel short-term rentals, that kind of thing.
• 8:19
  SPEAKER_01: And I just thought the concept of what you're doing with flow home was really interesting.
• 8:24
  SPEAKER_01: But do you and I sort of found you in vacation rental, short-term rental circles.
• 8:29
  SPEAKER_01: Do you consider yourself in that as that kind of an asset class?
• 8:34
  SPEAKER_01: Is a flow home a short-term rental operations or product, if you like, or do you consider yourself something completely different?
• 8:43
  SPEAKER_00: That's a great question.
• 8:44
  SPEAKER_00: You know, how I usually explain it to people is we're kind of a hybrid of a short-term rental, vacation rental, and a hotel.
• 8:51
  SPEAKER_00: So from like a concierge standpoint of just the communication, the offerings outside of just, you know, the place to stay, I think we sit in the realm of more of like a luxury hotel category.
• 9:05
  SPEAKER_00: But from an asset and the amenities that we provide on our flow homes, we're more of a vacation rental where we provide robust amenities where essentially people just need to show up.
• 9:16
  SPEAKER_00: We provide basically everything for them.
• 9:19
  SPEAKER_00: And, you know, I say that confidently because that's a lot of the you know the feedback we get from our guests.
• 9:24
  SPEAKER_00: So I would say it's a hybrid, both from an experience, but also from like a business classification license standpoint.
• 9:31
  SPEAKER_00: Um, because we're a boat, uh, there are no kind of black and white regulations in how we're able to operate, especially in different jurisdictions.
• 9:39
  SPEAKER_00: One jurisdiction we're licensed as a hotel, another jurisdiction we're licensed as a short-term rental, another one we're licensed as a boat charter.
• 9:48
  SPEAKER_00: Some jurisdictions, there's just no rules, so we're exempt, although we pay the proper taxes and stuff like that.
• 9:54
  SPEAKER_00: So it's kind of an interesting, you know, we're kind of in this complete gray area, which definitely has its challenges.
• 10:00
  SPEAKER_00: I mean, the work that's involved to, you know, get into some of these jurisdictions and and operate it is challenging, but we've developed through experience a really robust process, which now I believe is our competitive advantage.
• 10:12
  SPEAKER_01: And so when you're picking locations, do you have that as a consideration when you're looking at a new location for a new flow home?
• 10:20
  SPEAKER_01: I imagine absolutely.
• 10:22
  SPEAKER_00: Yeah, absolutely.
• 10:23
  SPEAKER_00: Um, you know, we kind of just stumbled on this just by just the fortune of the some of the connections that we have, where we're at we're able to place these in in urban areas in these downtown areas.
• 10:34
  SPEAKER_00: And it's it's one thing where, especially in the unique state category where you have tree houses, cabins, a frames, where they're great, but you actually have to leave the city and they're kind of more in remote areas, which is nice.
• 10:46
  SPEAKER_00: But in our standpoint, like you can get away, but you don't actually have to leave the city.
• 10:51
  SPEAKER_00: And it's interesting because we do have many examples of people that literally live in a place like a condo in the city where they can see the flow home from their home, but they'll still book the flow home for a couple days to get away.
• 11:04
  SPEAKER_00: Because being on the water, it's just a completely different experience and a different way to explore the city.
• 11:09
  SPEAKER_00: So yeah, it's it's it's interesting, and that's kind of where we've doubled down on looking at locations that are more in these urban areas because one, we provide a luxury experience, but the fact that our guests can walk out the flow home outside of the marina and walk around in the different urban waterfront areas where there's a plethora of restaurants, experiences, activities, that only adds to the experience, it adds to the value of the stay itself.
• 11:35
  SPEAKER_00: And we've found a ton of success with that.
• 11:38
  SPEAKER_00: And we've just been doubling down and really focusing on locations and these premier waterfront destinations that are walkable, that have restaurants nearby, you know, nice set of amenities, and that just adds to the overall experience.
• 11:50
  SPEAKER_01: And it really is that experiential hospitality where the the property is the experience as much as the service delivery.
• 11:58
  SPEAKER_01: So the product is the experience as much as so I I also I want to talk to you about how common this is.
• 12:04
  SPEAKER_01: So I'm obviously in the UK.
• 12:07
  SPEAKER_01: Houseboats to either live on or stay on is a is a relatively normal thing.
• 12:12
  SPEAKER_01: My husband, actually, before we got married, lived on a riverboat.
• 12:16
  SPEAKER_01: I've taken my kids to and stayed, and you know, we vacationed on a on a um canal boat in Holland, let's say.
• 12:24
  SPEAKER_01: So so it's relatively a sort of a known thing, not branded.
• 12:28
  SPEAKER_01: There's no branded company as far as I know.
• 12:31
  SPEAKER_01: But in the US, how common is living and vacationing on boats like this?
• 12:38
  SPEAKER_01: Like as a concept?
• 12:39
  SPEAKER_01: Is it are you bringing a relatively new concept or how are you thinking about the concept itself in the US?
• 12:46
  SPEAKER_00: Yeah, I mean, there are some niche examples of floating communities in the US.
• 12:51
  SPEAKER_00: Like one great example is in Sausoled, right outside of San Francisco, which I've been to and it's an amazing location.
• 12:58
  SPEAKER_00: Uh there's a few other locations in the Northwest.
• 13:01
  SPEAKER_00: There's also uh a floating community actually in in Washington DC.
• 13:05
  SPEAKER_00: But other than that, um it really doesn't exist.
• 13:08
  SPEAKER_00: And a lot of the reason is just the negativity, the historical negativity around houseboats and floating homes in the marina industry.
• 13:19
  SPEAKER_00: Specifically houseboats, um, you know, a lot of the houseboats that exist or have existed, typically marinas didn't want that type of vessel in their marina.
• 13:29
  SPEAKER_00: One from an aesthetic standpoint, because it didn't look like the other boats.
• 13:33
  SPEAKER_00: And secondly, typically the people that own the houseboats were living on them, so classified as liveaboards.
• 13:40
  SPEAKER_00: And the marinas have this historic pushback about live aboards, which for good reason, you know, there's been many cases of just the types of people that were living on their houseboats weren't really the types of people that the marinas wanted.
• 13:52
  SPEAKER_00: So at the end of the day, the marina makes the decision what you know who's allowed in there or not.
• 13:57
  SPEAKER_00: And it's historically, they haven't allowed houseboats.
• 14:00
  SPEAKER_00: In our case, not only is it a houseboat, but we're also operating it as a short-term rental.
• 14:06
  SPEAKER_00: I we don't really classify ourselves as a short-term rental, but obviously people attribute what we do to that.
• 14:10
  SPEAKER_00: So I'll just use that just for like reference.
• 14:12
  SPEAKER_00: So, you know, short-term rental Airbnb obviously has its own polarization, just about place to parties and things like that.
• 14:19
  SPEAKER_00: So when you put a houseboat and Airbnb short-term rental together, you've got a double whammy of bad reps.
• 14:26
  SPEAKER_00: It is a recipe for disaster, and you know, people that have tried this in the past, um, you know, they've you know designed the operations and experience around that, and they weren't in business too long.
• 14:36
  SPEAKER_00: And so um, you know, we've had to overcome that.
• 14:39
  SPEAKER_00: We have, and the our ability to be able to get into marinas now is much easier than when we started, where we really had to prove ourselves.
• 14:49
  SPEAKER_00: But um, yeah, I mean that that's the exciting thing for me is you know, we're essentially building our own category where there really is, there isn't a recognizable brand in this this niche category that we find ourselves in.
• 15:02
  SPEAKER_00: And so that's really our focus is you know, one growing as fast as possible to build the brand, to to build the category, but also two, you know, change the cultural and societal shift around what it means to live on the water.
• 15:16
  SPEAKER_00: Like you said, it's it's very common in Europe, it's common in Asia, India, for example, I've seen concepts.
• 15:23
  SPEAKER_00: And so in America, it hasn't yet.
• 15:25
  SPEAKER_00: And you know, we're trying our to do our part to help modernize that because life on the water is amazing.
• 15:32
  SPEAKER_00: What I've found with the company is that there is a true nostalgia about houseboats, about being able to be on the water.
• 15:38
  SPEAKER_00: You know, our guest avatars are all over the place from late 20s to like late 70s because people have always had this vision of wanting to live on the water, and we're giving them the opportunity through access to these premier waterfront destinations, where right now we're focused on you know experiential lodging from a commercial standpoint, but there's going to be a future where there are floating residential communities.
• 16:00
  SPEAKER_01: Perfect.
• 16:01
  SPEAKER_01: I want in a moment to talk about the commercial model, but before we get there, you talked about you know building a brand and your background is brand marketing.
• 16:10
  SPEAKER_01: How are you building the brand?
• 16:12
  SPEAKER_01: Like from your perspective, what's really important as as the Flow Home brand?
• 16:18
  SPEAKER_01: What are the elements of it that makes you special and different and that will that is part of that category creation, if you like?
• 16:25
  SPEAKER_00: Yeah, great question.
• 16:26
  SPEAKER_00: I mean, the brand to me is at least for Flowm, it's a little bit of everything where it's it's the quality of the asset, it's the experience we provide our guests, it's the team that is building Flowm.
• 16:40
  SPEAKER_00: But really how we've become such an identifiable brand is how we market and advertise and where people can find us.
• 16:48
  SPEAKER_00: I've always been a huge fan of social media.
• 16:50
  SPEAKER_00: I love it.
• 16:51
  SPEAKER_00: You know, I use it constantly personally, I've used it very successfully in business.
• 16:56
  SPEAKER_00: And from the very beginning, I knew the playbook to build a brand in the modern era is social media.
• 17:03
  SPEAKER_00: Um, you know, in three years, we've built a social media following of over 500,000 people across our platforms.
• 17:10
  SPEAKER_00: That's been a mix of organic, high-quality video content, visual storytelling, what the experience is like.
• 17:16
  SPEAKER_00: And then we also have our paid advertising, our email.
• 17:19
  SPEAKER_00: So it's all that combined where, you know, I always tell people, it's very simple.
• 17:24
  SPEAKER_00: What do most people spend all most of their time on during the day is this device right here.
• 17:29
  SPEAKER_00: And when they're on that device, where do most people spend most of their time?
• 17:33
  SPEAKER_00: Well, it's on social media.
• 17:35
  SPEAKER_00: So anytime anyone opens their Instagram or Facebook or whatever platform you use, you're very likely going to see an organic or paid advertisement for Flow Home.
• 17:45
  SPEAKER_00: And that's how that's how we market, that's how we built the brand.
• 17:49
  SPEAKER_00: Uh, it shows up in our rental performance.
• 17:51
  SPEAKER_00: We averaged, we've been averaging about 70% direct booking since we started the company.
• 17:55
  SPEAKER_00: And uh yeah, I mean, that's just the way you market and build brands nowadays, and we're you know, all in on it.
• 18:02
  SPEAKER_01: I I came across you on social media on LinkedIn.
• 18:06
  SPEAKER_01: So so there you go.
• 18:07
  SPEAKER_01: But in terms of the brand standards, so being able to offer when you have a guest come along and they're they're experiencing a flow home, how are how have you built processes, I guess, or or developed your brand standards for each different home that you have, each different boat, you know, houseboat that you have, especially when they're not in the same place.
• 18:30
  SPEAKER_01: So they're not all sitting next to each other in one marina, you do have a dispersed inventory.
• 18:36
  SPEAKER_01: So, how are you getting across that challenge and what's important to you for that brand standard piece?
• 18:42
  SPEAKER_01: So when a guest is actually in the property, what they're getting, and they might be getting all across the planet.
• 18:49
  SPEAKER_00: It's funny you mentioned that, you know, at the beginning, you know, the brand standards were kind of built upon what I thought would be a great experience for our guests, and it it worked, and we've kind of continued to iterate that.
• 19:01
  SPEAKER_00: But actually, earlier this year, we went through this really robust brand standards workshop to really define and structure what truly our brand standards are, not just the way the flow home is designed and where the placement of the amenities and the furniture in the flow home, it also includes our cleaning protocols.
• 19:25
  SPEAKER_00: It also includes how we communicate with guests.
• 19:28
  SPEAKER_00: Because you're right, like we're operating these in different markets, not all in the same area.
• 19:33
  SPEAKER_00: So it's very challenging, both you know from an operational perspective, of maintaining consistent brand standards across the entire fleet.
• 19:41
  SPEAKER_00: We've implemented processes like uh our designer who helps us design the boats and picks the FF and E selections.
• 19:49
  SPEAKER_00: She has a team that they do bi-monthly QAQC checks, unannounced checks on the boats that they go in, they have a full report that they fill out, gets submitted to us.
• 19:58
  SPEAKER_00: And so we're constantly making updates, making improvements.
• 20:02
  SPEAKER_00: Because you know, these flow homes get a lot of wear and tear because they are very high occupancy stays.
• 20:08
  SPEAKER_00: And so we constantly have to stay on top of that because you're right, like if we don't, the the brand standards, the brand deteriorates.
• 20:14
  SPEAKER_00: And uh, you know, I think we've done a really good job, definitely still areas of improvement which we're working on, but you know, I feel really good about what we've built so far, and we're at to a point now where we have a playbook that we can really take and scale, and you know, that's what we're in the process of doing now.
• 20:30
  SPEAKER_01: And I guess the big question here also is with the technology, because I know one of the things about Flow Home is that you are AI native, is is one of the things that you are.
• 20:41
  SPEAKER_01: How are you using technology to ensure that that operational delivery is there and it's consistent?
• 20:49
  SPEAKER_00: Yeah.
• 20:49
  SPEAKER_00: So when we first started the business, like AI kind of had just come out, so we weren't really focused on AI at that time.
• 20:56
  SPEAKER_00: You know, I'm a very tech-enabled person.
• 20:59
  SPEAKER_00: I don't build technology, I use it constantly.
• 21:02
  SPEAKER_00: I'm very familiar with it.
• 21:03
  SPEAKER_00: I know what I like, I I know what I don't like.
• 21:05
  SPEAKER_00: And so, you know, at the beginning, you know, trying different softwares, demoing them and and figuring out which which software stack is going to allow us to build the brand, to build the company to our standards.
• 21:18
  SPEAKER_00: And so we built a stack starting off, but again, this is this is part me and my vision for building the company and part luck, where we started to bring on team members on the team, so especially on our guest relations team, that had the skill sets and the curiosity to start learning how to use AI to start developing our own tools.
• 21:40
  SPEAKER_00: And so over the last we really started this in December of last year, is uh I have several members of my team that have become experts in Claud Code and have literally over the last you know half year spent time rebuilding most of our.
• 22:00
  SPEAKER_00: Software stack as internal tools built for our business, not taking off-the-shelf software and changing our business to meet its functionality.
• 22:11
  SPEAKER_00: And so we're not replacing our entire software stack.
• 22:14
  SPEAKER_00: Like I don't envision us replacing our property management system, but like, you know, our guest experience guides, apps, our cleaning tasks that we were using.
• 22:24
  SPEAKER_00: We've built all that in-house.
• 22:26
  SPEAKER_00: We've also built our own flow AI concierge, which we've been training it as basically our company brain and all things flow home, where we have that that our team uses both internally and externally, where we're not using AI to automatically communicate with people.
• 22:43
  SPEAKER_00: Um it's still done being done by humans, but because we're able to leverage the AI using knowing and reading and understanding the whole communication history we've had with guests, it's able to recommend how to respond.
• 22:58
  SPEAKER_00: And that's kind of where how we're using it today.
• 23:01
  SPEAKER_00: You know, we're in the process literally right now of rebuilding our website, all custom clawed code, no more WordPress.
• 23:08
  SPEAKER_00: And so it's it's a really exciting time because of you know, of AI and how we're able to use it.
• 23:15
  SPEAKER_00: And now, you know, I I tell my team and people, it's like any company now can be a technology company.
• 23:21
  SPEAKER_00: Technology has become democratized.
• 23:23
  SPEAKER_00: There's obviously skill sets that are needed to learn how to build it.
• 23:26
  SPEAKER_00: So it's not to a point yet where someone without you know limited knowledge can just start plugging away, but it's become much easier and the cost to build technology has dramatically decreased.
• 23:37
  SPEAKER_00: And so I'm just really excited about being able to build the company with internal tools that are built for our business.
• 23:44
  SPEAKER_00: And we're already, you know, we've deployed a handful of tools and features within Flow Home that myself and other members on the team use on a day-to-day basis.
• 23:53
  SPEAKER_00: And I'm I'm excited to see the future of what we can do just for the simple fact that the cost to build technology is is basically you know not gone to zero, but it's not like it costs thousands and thousands or millions of dollars to build you know something nowadays.
• 24:08
  SPEAKER_00: It's it's a fraction of the cost.
• 24:10
  SPEAKER_00: And um yeah, it's just it's an exciting time.
• 24:12
  SPEAKER_01: I think a lot of software companies will be very afraid listening to you say say this.
• 24:17
  SPEAKER_01: Very, very afraid.
• 24:19
  SPEAKER_00: Well, yeah, you know, to to that point, it's it's interesting you say that.
• 24:23
  SPEAKER_00: And yes, they should be.
• 24:25
  SPEAKER_00: However, you know, I think we're on kind of the leading edge where we're the creators and the curiosity company that are like, why don't we just go build this ourselves?
• 24:34
  SPEAKER_00: There's so many companies out there that just don't have the time or the knowledge to do that.
• 24:39
  SPEAKER_00: So they'll be fine.
• 24:40
  SPEAKER_00: But what's interesting is like some of our software providers are very open to it and open up their API to allow us to integrate.
• 24:47
  SPEAKER_00: There are others that have closed the closed framework, which we're like, sorry guys, like you know, you made the decision to be closed and you know, we just went out and built our own thing.
• 24:57
  SPEAKER_00: Um so you know, it it is gonna be an interesting time for software companies.
• 25:01
  SPEAKER_00: You know, I think the ones that adapt and and open up, you know, kind of their their foundational framework to allow companies like us to share data and that, I think they'll be fine.
• 25:12
  SPEAKER_00: But you know, who knows what's gonna happen over the next few years?
• 25:15
  SPEAKER_00: I mean, there's so many different ways it can go.
• 25:16
  SPEAKER_00: I I'm not gonna sit here and predict what's gonna happen.
• 25:19
  SPEAKER_00: I'm just you know trying to stay on top of it on a day-to-day basis to make sure that you know we're on the leading edge of what we're doing.
• 25:24
  SPEAKER_01: And that's a really good point that you are a very early adopter for for AI tools and and you know, in that you're also in that buy-build kind of continuum on the build side.
• 25:36
  SPEAKER_01: But it's an interesting point that you said about your tech partners because it's partner being the operative word there.
• 25:42
  SPEAKER_01: So the ones that are working with you as partners as you build your own tech that suits you, but they you know, you're working together as partners there rather than ones that perhaps are seeing you more as a as a revenue line for themselves rather than as a as a true partner.
• 25:59
  SPEAKER_01: But with building your own software elements and and your own kind of AI native elements, do you see yourself able to scale?
• 26:07
  SPEAKER_01: It sounds like you absolutely do that this can scale your own software, can scale with yourself, you know, with the business as it grows.
• 26:16
  SPEAKER_01: You're not seeing any limitations there might be.
• 26:18
  SPEAKER_00: Not yet.
• 26:19
  SPEAKER_00: No, we're I mean, what we've built is designed to allow us to scale from operations to guest communication.
• 26:27
  SPEAKER_00: Yeah, no, it's it's without it, not that we wouldn't be able to scale, it would just we wouldn't be able to go as fast.
• 26:33
  SPEAKER_01: Yeah, absolutely.
• 26:34
  SPEAKER_01: Now, can we Brian talk about the commercial model?
• 26:38
  SPEAKER_01: So just earlier in the conversation, you and there's a few questions I want to ask here.
• 26:42
  SPEAKER_01: You said when you were doing your kind of due diligence, you were seeing that actually boats as a as a rental class can make a lot more on a nightly basis than a property on land.
• 26:54
  SPEAKER_00: For sure.
• 26:54
  SPEAKER_00: So um, you know, when we first started the business, you know, our original goal was to basically own all of the units ourselves and run them corporately.
• 27:04
  SPEAKER_00: What started to happen about four months in starting the business is we started having guests reach out to us and tell us how amazing their stay was and that they were interested in owning a flow home themselves.
• 27:17
  SPEAKER_00: Which we're like, interesting.
• 27:19
  SPEAKER_00: So, you know, you kind of go where the wind blows, and you know, I created a what's now called our fleet partner program where it allows individuals to own the flow home as an investment, and that then flow home is the property manager and we manage the bus rental business for them end to end.
• 27:35
  SPEAKER_00: So there's a couple things here.
• 27:37
  SPEAKER_00: Uh one is, and I didn't know this going into building the company, I've learned it along the way, but from a tax uh strategy benefit benefit perspective, since flow homes are Coast Guard registered vessels, they're classified as capital equipment.
• 27:52
  SPEAKER_00: And in the United States, uh there is a federal tax bill that was passed last year that brought back a hundred percent bonus depreciation, which means someone like yourself, if you lived in the United States, could purchase a flow home and that you would be able to write off 100% of the purchase price in the year that you purchase the asset to um you know eliminate uh your tax burden, whether it's W-2, passive active, you know, there's a lot of details in there.
• 28:19
  SPEAKER_00: And there's details of how you qualify for that.
• 28:21
  SPEAKER_00: It's not as easy as you just buy it and you get it.
• 28:23
  SPEAKER_00: Like there's a lot of details within that.
• 28:25
  SPEAKER_00: But where I'm going with that is most of our fleet partners that have invested in flow homes, one of the main reasons they did that is because of the tax benefit.
• 28:33
  SPEAKER_00: So they can um, you know, decrease their tax burden, whether it's passive or active.
• 28:38
  SPEAKER_00: Now, once they get past that, is the rental performance of the flow homes themselves overperform pretty meaningfully of what a standard short-term rental investment does.
• 28:49
  SPEAKER_00: I would say from a fleet partner perspective, these are the fleet partners.
• 28:53
  SPEAKER_00: Some of them may have debt service, some of them may not, but you know, we're seeing cash on cash returns anywhere from 15 to 24 plus percent, which is incredible.
• 29:04
  SPEAKER_00: And, you know, it depends on the location, depends on the model.
• 29:08
  SPEAKER_00: Uh, you know, we have we have four models.
• 29:09
  SPEAKER_00: Uh so we have two smaller units.
• 29:11
  SPEAKER_00: We have a suite, which is kind of like an open hotel room kind of floor plan, and we have a uh one bedroom, and then we have two larger models, both they're called our C Lux, C Lux one bedroom, C Lux two bedroom, 53 by 16, 800 square feet, eight, 720 square feet of interior space with the decking that's 850 square feet on the first level.
• 29:33
  SPEAKER_00: On the second level, which is a fully decked out rooftop with 360 degree views, that's in another 850 square feet of space.
• 29:40
  SPEAKER_00: And so those are our most popular models from just a general rental performance standpoint.
• 29:45
  SPEAKER_00: Like our Sea Lux models, our annual ADR historically has been in the high 400s to high 500s year-round.
• 29:53
  SPEAKER_00: Our occupancy can vary anywhere from like mid-70s to 90 percent, depending on the location.
• 29:59
  SPEAKER_00: Uh, so they performed extremely well.
• 30:01
  SPEAKER_00: And uh, so that's our fleet partner program, which we're still expanding.
• 30:04
  SPEAKER_00: What we're also developing right now is a license program because it's not just for individuals, it's actually more for marina owners.
• 30:14
  SPEAKER_00: There's thousands and thousands of marinas across the United States.
• 30:17
  SPEAKER_00: They're all trying to figure out how to modernize their marinas.
• 30:20
  SPEAKER_00: Boat sales are declining, the younger generation aren't buying as many boats.
• 30:25
  SPEAKER_00: So these marinas, they're not losing the number of slips.
• 30:28
  SPEAKER_00: So they're having to figure out how they continue to increase their revenue per slip.
• 30:33
  SPEAKER_00: And this is where we can come in providing not just lodging amenities.
• 30:37
  SPEAKER_00: I'll get to kind of some of the other floating amenities that we're developing, but you know, putting a lodging unit, that marina owner, just a rough example here, is you know, they may make you know$7,000 a year renting out that slip to a traditional boat, pleasure boater that keeps his boat there, takes it out handful times a year.
• 30:57
  SPEAKER_00: Where if you put a flow home in that same slip, now you could be making anywhere from$30,000 to$40,000 plus thousand dollars of NOI after expenses in that same slip, even more than that, depending on the location.
• 31:08
  SPEAKER_00: And so we're starting to get a lot of interest from marinas to start adding these assets in the marina, whether we manage the asset for them or in this license program that they would self-own and self-manage because they already have the operational staff there where we can teach them how to operate, not just for marina owners, but there's you know, roughly 80 to 90 waterfront hotels with marinas in the United States.
• 31:33
  SPEAKER_00: There's also plenty of waterfront RV campgrounds with dockage.
• 31:37
  SPEAKER_00: And so any of these types of businesses can realistically deploy flow homes and add them to their business.
• 31:44
  SPEAKER_00: And so, as a licensed program, you know, where flow home comes in, is we have now our booking platform where they'll be able to utilize and be able to list on as well as the other OTAs as well.
• 31:55
  SPEAKER_00: They'll be able to leverage our brand and our marketing to help drive direct bookings, and then we also have all of our operational SOPs of how to operate this business.
• 32:03
  SPEAKER_00: It's not easy.
• 32:04
  SPEAKER_00: Operating on the water is challenging.
• 32:06
  SPEAKER_00: There's so many variables at play.
• 32:07
  SPEAKER_00: And you know, while we're still developing our SOPs, we've have robust SOPs on how to operate this business.
• 32:15
  SPEAKER_00: And so that's what we're working on right now.
• 32:17
  SPEAKER_00: And then we also have our uh floating amenities.
• 32:20
  SPEAKER_00: So lodging has primarily been kind of the main amenity that we've been operating, but we're now starting to explore other floating amenities.
• 32:28
  SPEAKER_00: One of the projects I'm working on right now is a floating sauna.
• 32:31
  SPEAKER_00: It's going to be called Flow Sauna, where it's a it's a dual sauna, two sauna room cold plunge on the first level with a rooftop wellness space on the second level, and we'll be able to deploy these in the same arenas where the flow homes already exist.
• 32:45
  SPEAKER_00: So this is an exciting new model that we're in development right now to deploy early next year.
• 32:51
  SPEAKER_00: And honestly, there's it's endless of what you can build on the water, whether it's a wellness studio, floating office.
• 32:58
  SPEAKER_00: Um, you know, some of these marinas need to upgrade the your utilities or shower houses or bathhouses, and to be doing able to do that on land, it's costly.
• 33:07
  SPEAKER_00: It takes a long time because of the permitting.
• 33:09
  SPEAKER_00: And on the water, it's a different framework, so it's it's a bit easier and less costly to do it on the water.
• 33:16
  SPEAKER_00: So those are kind of the business models today, but where all this kind of ends up at and what we've already started to do is the acquisition or leasing, master leasing of the marinas themselves.
• 33:27
  SPEAKER_00: You know, there's I'm just gonna roughly 13,000 marinas in the United States.
• 33:32
  SPEAKER_00: You know, private equity, permanent capitals probably are behind a lot of the acquisitions of kind of the big, most premier marinas, which we're not we're focused on as deployment of flow homes, not necessarily from an acquisition standpoint.
• 33:45
  SPEAKER_00: We're more focused on the small boutique marinas that are still owned by mom and pop families that don't have the capital to modernize a marina.
• 33:54
  SPEAKER_00: They don't really have an exit strategy because you know, savvy investors aren't going to be buying their marinas because the traditional marina model, boats and slips, maybe they have some service, some fuel, doesn't really work anymore because of the limited number of slips.
• 34:06
  SPEAKER_00: And so, you know, we see that as a huge opportunity to deploy both in amenitized marina where it's you got lodging and other commercial assets.
• 34:14
  SPEAKER_00: And in the future, too, you also have you know residential floating communities, you know, to be able to live on the water for half or a third of the cost of what it would cost on land is very appealing to people.
• 34:23
  SPEAKER_00: And uh and so that's ultimately what we're building towards.
• 34:27
  SPEAKER_01: I've got to say, Brian, I absolutely love your vision.
• 34:30
  SPEAKER_01: It really is incredible what you what you've got planned and what you're thinking.
• 34:35
  SPEAKER_01: I think it's interesting, you know.
• 34:36
  SPEAKER_01: You say I mean there's loads I could say on on what you've said, but that comp the software, being able to have software that can manage all of that is is a challenge.
• 34:47
  SPEAKER_01: So so being able to kind of build build bits of it yourselves and having that open API, because if you think about it, you know, it's not just revenue per available night or revenue per available room, it's revenue per slip.
• 35:00
  SPEAKER_01: And having a PMS that can that that can kind of manage all those different assets within the the offering that you've got is just something that came to mind as well, which which is definitely a challenge, but an interesting one.
• 35:13
  SPEAKER_01: Um something I think we should just note here for our audience is that you you build the homes from scratch.
• 35:21
  SPEAKER_01: So when you say you've got the suite that's like a hotel, you've got a one-bedroom and the two different kinds of two bedrooms, that's across the board.
• 35:28
  SPEAKER_01: Am I correct to say that on flow home?
• 35:30
  SPEAKER_01: So when it's it's not they're not individually like created assets, you're following a playbook with the actual building of the houseboat, the flow home.
• 35:41
  SPEAKER_00: That's correct.
• 35:42
  SPEAKER_00: Yeah, we have we have four base models for our flow home lodging units.
• 35:45
  SPEAKER_00: Like I said, we other we build other floating amenities as well.
• 35:48
  SPEAKER_00: You know, we got into this business not necessarily um wanting to be the builders, we ended up being the builders out of necessity just because we couldn't find a company out there that could build to the quality and scale that we needed to.
• 36:00
  SPEAKER_00: So luckily, I'm not I'm not a builder, but luckily my business partner, uh Marcellus is he's been in commercial residential uh building development for over 30 years, and so he put his tool belt on and got to work, and you know, kudos to him for for doing all that and has really you know helped us get to where we are today.
• 36:18
  SPEAKER_00: Um because it is very important just to be able to control that side of the business, both from cost and just projections of when you're gonna get assets, which is is very uh is very important.
• 36:31
  SPEAKER_00: And uh yeah, so yeah, vertically integrated again, lots of challenges with that, but you know, we're we're making it work.
• 36:38
  SPEAKER_01: But you can manage your own pipeline, but that's sort of an important part, as you say.
• 36:42
  SPEAKER_01: You're not waiting on anyone else.
• 36:44
  SPEAKER_01: Which brings me to where where are you at on an investment journey and a funding journey?
• 36:49
  SPEAKER_01: How are you kind of in like paying for all of this and and what's behind all of that?
• 36:55
  SPEAKER_00: Yeah, great question.
• 36:56
  SPEAKER_00: Um, you know, when we started the company, we raised a friends and family uh seed rounds.
• 37:00
  SPEAKER_00: We raised uh two and a half million dollars to get the business started, prove, prove the concept.
• 37:05
  SPEAKER_00: We've actually kind of in a in a scenario where we've you know uh we've kind of surpassed that that seed round and we're preparing for our our next round, our series A round.
• 37:15
  SPEAKER_00: And you know, the benefit of you know the fleet partners and the retail sales is you know those help you know capitalize the business as we're continuing to prove the model.
• 37:24
  SPEAKER_00: Again, this business has been quite a journey.
• 37:27
  SPEAKER_00: It's not been easy, and there's things that happen that have delayed us in certain moments of the business.
• 37:33
  SPEAKER_00: And so we've strategically held off on raising our next round until we are planning to by the end of the year, just to make sure that you know we have our ducks in a row, we're in a good position, which we are.
• 37:44
  SPEAKER_00: And uh, you know, so you know, we're the business has been capitalized just from the the um you know, from the retail sales from our fleet partners and also from the short-term rental business, which you know, we're in end of July, so it's it's the prime season right now.
• 37:59
  SPEAKER_00: So, you know, so we're we're doing really well on on that aspect.
• 38:03
  SPEAKER_00: But um, yeah, I mean, we're gonna be raising our next round.
• 38:05
  SPEAKER_00: It's gonna be a mix of equity and debt.
• 38:07
  SPEAKER_00: The debt is gonna be production line of credit to fuel um our production.
• 38:11
  SPEAKER_00: And uh, yeah, so I mean the the benefit to Flow Home, especially is my other partner, Jerry, legendary entrepreneur, started a parking concession valet company here in Annapolis and scaled it to one of the largest parking concession companies in the entire country.
• 38:28
  SPEAKER_00: Uh, sold that company in 2014 to private equity.
• 38:32
  SPEAKER_00: So he's been to the top of the mountain.
• 38:33
  SPEAKER_00: He's sold a massive company.
• 38:35
  SPEAKER_00: He doesn't need to be working right now, he just loves being an entrepreneur, he loves the game of business.
• 38:40
  SPEAKER_00: And I'm very fortunate to have him as a business partner and mentor.
• 38:43
  SPEAKER_00: So, from a capital strategy and a capital standpoint, like, you know, I really rely on him to help drive that direction, which he does.
• 38:50
  SPEAKER_00: And that's just another exciting thing about our business is, you know, I have an amazing team of entrepreneurs that have all built and scaled and exited businesses that one are my partners, but two are my mentors at the same time, so that I can really focus on what I'm best at, which is building the brand, building the company, you know, running the company day to day, you know, managing the team.
• 39:12
  SPEAKER_00: And um, you know, it's it's been a it's been a fun journey.
• 39:14
  SPEAKER_00: It's you know, building being an entrepreneur, it's it's it's lifelong learning.
• 39:18
  SPEAKER_00: I'm always constantly learning, constantly getting better.
• 39:21
  SPEAKER_00: You know, I'm one of those people that really don't think I'm great at anything, even though I probably am in some areas, because I'm always trying to get better.
• 39:29
  SPEAKER_00: Um, and that's really the life of entrepreneurs, is just constantly learning and getting better.
• 39:34
  SPEAKER_01: Absolutely.
• 39:35
  SPEAKER_01: And what would you say is the the biggest lesson that you've learned over the last four years?
• 39:40
  SPEAKER_00: Well my it it's uh I would say problem solving, the ability to solve hard problems quickly.
• 39:48
  SPEAKER_00: It, you know, there's some great stories that, you know, hopefully one day there'll be a book about just the journey of Flow Home and how we got here, and I'm sure there'll be more to come.
• 39:57
  SPEAKER_00: But, you know, it's it's been it's been challenging, just you know, whether it's navigating regulations, operating, but the ability to, when a problem comes about, the ability to come together, problem solve quickly, efficiently, and implement solutions has been critical to our success.
• 40:15
  SPEAKER_00: Because if we did not have that skill set, I don't know if we would be in business today.
• 40:19
  SPEAKER_00: So it is an incredible skill to have, and we have that.
• 40:23
  SPEAKER_00: So, you know, that's why I'm just so bullish on what we're doing because you we've I'm sure there'll be new problems that happen that will come about in the future, but the ones that we've overcome to get to this point, you know, and and we're still here and we're you know, we're doing great.
• 40:36
  SPEAKER_00: And uh yeah, it's just the ability to be able to problem solve.
• 40:40
  SPEAKER_01: Brian, it's been an absolute treat speaking to you.
• 40:43
  SPEAKER_01: I've loved hearing about Flow Home and your plans and your vision.
• 40:47
  SPEAKER_01: So thank you so much for joining me on the Pillow Talk podcast.
• 40:52
  SPEAKER_01: It has been a real pleasure to speak to you.
• 40:54
  SPEAKER_01: So thank you.
• 40:55
  SPEAKER_00: Thank you.
• 40:56
  SPEAKER_00: Thanks for having me on.