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Another Startup Raised on This Week in Startups

It’s been a long journey, but I thought I’d share how Jason and TWiST shaped my evolution from a rice-picking investment banker into a VC-funded startup founder / samurai.

But let’s start with today. I founded Beyond Pricing last June to provide automatic, data-driven dynamic pricing for the huge and fast-growing short-term rental and vacation rental market (think Airbnb, VRBO, etc.). We are now pricing almost $3M a month in bookings, doubling in size every 2 months, and have recently closed a nice seed round from institutional VCs and angels. But things weren’t always rosy. Through all the ups and downs, I’ve turned to Jason and his cadre of amazing guests to help guide me from taking the leap all the way through negotiating term sheets, pivoting, hiring, and every aspect of the startup journey.

Five years ago, I was getting antsy as a management consultant at Oliver Wyman. I was advising gigantic global airline and hotel executives on how to improve their revenue management and pricing. We created “Premium Economy” for some of the largest airlines in the world (you’re welcome). But I couldn’t stand working for someone else and just plugging away in spreadsheets and PowerPoint all day.

One of my friends had left Oliver Wyman to start his own company (which eventually became VideoPixie after going through YC), and it was my first friend to ever take the leap. I became intrigued and I wanted to learn more about startups. I was headed off on a road trip to the Sierras and for the drive, I downloaded TWiST. I think Jason was on Episode 5 with Dan Sacks. I was immediately hooked and downloaded the rest of the episodes back to #1 with Brian Alvey.

Every week, I religiously listened to the gospel of Jason. I absorbed everything.

About 6 months later, I quit my job and joined a fast-growing startup in Kenya. After a couple years abroad, I came back to the US. A recruiter quickly latched on to me and lined up two jobs at major billion-dollar established companies, one in Corporate Development and one as Director of Emerging Markets. Looking for the safety of a “respectable” job, I took the one in Corporate Development at a private-equity owned payment processor.

I lasted 5 months.

I’d been bitten by the startup bug and I couldn’t go back. I had developed that terrible trait that many founders or early startup employees have where they simply can’t go back – they are basically unemployable by a large company.

I quit and tried to work on my own company, which was creating a marketplace for booking experiences (skydiving, kayaking trips, etc). Problem was, I needed a technical co-founder.

Once again, I turned to the wisdom of Jason and learned about all the pitfalls of starting a company with someone you didn’t know. Instead, I simply taught myself to code. After a few weeks, I learned enough to be dangerous and built Wetter Feet myself. It was terribly designed, incredibly slow, and buggy. But it worked and I had a product, users, and even some revenue. This was a huge step for a former Ivy League investment banker who was used to being slotted into a well-oiled machine and just tasked with keeping the profit-making engine keep going.

I had taken the leap. I’d built something.

I bootstrapped the company, but it eventually failed. But I tried again. I met a fantastic co-founder who was passionate about Airbnb and the sharing economy and we built and we marketed and we hustled. We went through a pivot, a founder breakup, and a period of taking no pay to keep the company alive. And eventually, we raised a nice-sized round, partnered with some of the biggest names in the space, and started hiring and growing incredibly quickly.

And it has been a grind. But I didn’t come into it naively. Jason prepared me and taught me that it isn’t some glamorous, cool thing. It’s about persistence and hustle and more persistence.

I thought I’d share that journey for those folks that are part of the Jason-nation who have been sitting on sidelines waiting to jump in. I remember how inspired I was to hear about the success of early listener Don Charlton from The Resumator and that helped me keep pushing.

So keep grinding. Keep hustling. And thank you, Jason, for everything you do for this whole community. Whether or not you realize it, you’ve had a huge impact on a wide swath of would-be entrepreneurs.

Origins

I used to be a very private person.  Things changed.

All the opinions and opining in this blog are my own and no one else’s.  They will often be contrary to what my company, my family, or my fiancee believe.  They will often change and evolve, as I change and evolve.

Enjoy and engage!

Staying Local: Why distributed neighborhood hotels are the future

Reprinted from the original post on Medium.

When you walk around Union Square in San Francisco you notice there are a lot of hotels. There are over 30,000 hotel rooms in this city of 800,000 people. There are also over 220,000 apartments. There are under 2,000 apartments available on Airbnb next month, and most of these won’t actually be booked. That is less than 1% of all apartments and 7% of all hotel rooms. There are more rooms in the Hilton Union Square than on all of Airbnb.

A movement is growing against the gentrification of San Francisco and the lack of affordable housing, as noted in several recent news stories. As incomes rise and more people move into San Francisco, demand for the limited supply of housing is rapidly increasing.

Gabriel Metcalf wrote a great piece for The Atlantic about possible solutions, most of which stem from a need for more supply.

So how do we get more supply?

Most solutions involve more subsidies for affordable housing, more public housing, approving more high-rise construction to take the pressure off of smaller buildings in the neighborhoods.

I have a another proposal.

Legalize short-term rentals of all kinds and let the neighborhoods absorb the 30,000 rooms devoted to transient visitors.

As guests begin to live in our neighborhoods, where Airbnb is strongest, they will reinvigorate the economy in these neighborhoods as they frequent our local restaurants, our local corner stores, our local bars and coffee shops.

We are in a new phase of hospitality. No longer do guests need to stay in huge 2,000 room buildings in order to have a concierge to call them a taxi, a bellhop to bring them room service, or a cleaning staff to turn over their bed.

We have Uber, we have GrubHub, and we have HomeJoy. We have great new services on top of Airbnb and other platforms that make staying local as comfortable and convenient as a hotel.

Staying in someone’s home or apartment is simply another accommodation choice, alongside staying at a traditional hotel, a boutique hotel, a hostel, or a resort. It happens to be an option that is rapidly gaining popularity in San Francisco and across the globe.

So why is a Distributed Neighborhood Hotel better for the city?

One word: flexibility. Apartments that are used for housing tourists are easily converted back into long-term rentals when demand spikes. This is not the case for hotels. As rental prices increase, apartments reach a tipping point where the revenue owners can expect from renting it out long-term is at parity or slightly higher than what they can expect from renting it out to tourists, after all the costs of cleaning, linens, amenities, hotel tax, and the time or cost of managing 6+ guests a month. We have seen this change in San Francisco already, as some of the hosts Beyond Stays works with have opted to switch to renting to long-term tenants, especially in areas with low tourist demand relative to resident demand (e.g. NoPa). This naturally brings supply back on the market when it is needed most. As prices and demand drop, these apartments can then be converted back to accommodations for tourists. Hotels, on the other hand, have thousands of unbooked rooms each night. They are unable to release any of this supply into the long-term market because they lack the amenities needed to house long term renters.

So what will the future of hotels look like?

Just as hotels began building boutique brands (see Starwood’s W Hotels and Marriott’s Edition) as they saw the success of Kimpton and Joie de Vivre, we will see the major brands start offering Airbnb-style accommodation, especially to millennials, families, couples, and groups traveling together who prefer the extra space, cooking facilities, safety and comfort of a neighborhood home.

Front desk staff from places like the Hilton will meet you at one of the homes they manage, a hotel concierge will always be available, cleaners will travel from the “base” hotel downtown and clean and outfit your home. You will have all of the services of a hotel, in a local, neighborhood home.

Cities that embrace this accommodation option will delight the growing number of tourists that prefer a local, neighborhood hotel, and benefit from having a more flexible housing supply.