Jim talks with short-term peer-to-peer rental company Roomorama to find out how you can host or rent an apartment anywhere in the world.
It’s been recently called “The Third Office.” The lines have blurred, as people “work” from their office, their home, and more and more frequently, from a third office, which could be a local coffee shop, an airport lounge, downtown Singapore, or anywhere you can get a mobile signal. Sometimes it’s a coffee shop IN Singapore, minutes after landing in an airport.
One of the companies leading this new “Gig Economy” is Roomorama, a peer-to-peer short term rental marketplace. The concept is simple… anyone can rent out their apartment while they are away and collect income, and they can just as easily stay in one of Roomorama’s 36,000 cities worldwide. The benefit? Usually much less cost than a hotel, while keeping a local flair.
Since I “buried the lead” a bit in the interview, I want to congratulate Roomorama on their breaking news:
This is great news for the team, including my friends and co-founders Jia En Teo and Federico Folcia, who I interviewed way back in Episode 26 in October 2008.
This time around, I sat down with Lindsey Piscitell, Director of Global Marketing, and Nicole Padovano, Manager of Marketing and Partnerships.
Listen to the full interview to get the entire scoop, but here is what we talked about:
- Their expansion from 30 cities to 36,000 worldwide
- Lindsey’s background, including her “big break,” when she went to fashion event and one of the assistants at the event was a no-show, and she jumped in, did well, and ended up getting a job out of it.
- Nicole’s background, including never getting tired of talking about travel, and her would-be rockstar life.
How does Roomorama work?
- Roomorama is a peer-to-peer short term rental marketplace, catering to young, upwardly mobile, educated people who are not looking to rough it, but shy away from the hotel model and want to live like a local.
For the host – it is free to list, the Roomorama team vets the property, speaks to the host to make sure it exists, and then it is open for people to send in inquiries
For the guest – they are informed about inventory, understand it’s not 5 Star hotel, but will interact with enthusiastic people about their city, who are also more likely to show people around
- On the business side, Nicole works for with the perks program, which includes luggage shipping, car service for the airport, restaurants, spas, etc. She works on outreach in acquiring new perks, and also partners with art music and international events. One thing is for sure, people love give-aways, whether it is a tote bag or free concert tickets.
Handling the competition: The question that needs to be asked:
Coke and Pepsi. Apple and Microsoft. Avis and Hertz. Any good business has it’s competitors, and this marketplace is no different. Although they were founded within a few month of each other, Roomorama’s main competitor AirBnb grabbed a lot of splashy headlines when the Silicon Valley-based startup received (according to Crunchbase) $7.2 million in funding in November 2010 and $112 million in July 2011.
So while it might get annoying when people say “Oh! You’re just like AirBnb!” and assume that Roomorama is a new player to the game, the fact is that in many ways this has been helpful. This happens in business all the time, because people want to easily ground what a company does based on a model that they know. For example, “We’re the Netflix for video games” or “We’re like child day care, but for your puppy.” So I asked…
How has the presence of AirBnB affected Roomorama?
Lindsey explained that a great thing is that any press that they get, the benefit comes to them as well. My guess is that whenever a major publication is talking about the new trend in renting out your home, the party line goes “Online sites such as AirBnb, Roomorama, and others…” For example, this New York Times article Surfing for a Vacation Rental.
Additional reading: Is there room for more than one Airbnb?
Lindsey went on to explain that in many ways, the industry is still in a stage where raising awareness is important, so they to make the concept of Roomorama more familiar.
What makes them different?
- 80% of properties are serviced apartments or owned by property managers
- It’s less about sharing bedroom in someone’s apartment, vs. staying in a professionally managed property.
- Roomorama is a bit more premium and higher level service
With their concierge program, Roomorama might also be the better for business travelers, who expect things like wireless internet and a washer/dryer, and they have the people in each city deal with that.
Since Roomorama was bootstrapped by a NYC couple, while AirBnb was a Silicon Valley startup with $120m in venture funding, what differences do you see in how they are run?
There is still that last hurdle to get over… Handing over keys to a stranger. How do you ease that fear?
- Employees and founders do it
- Customer service works around the clock
- Verification process. Doesn’t go live until it has been verified
- Identity checks (since the beginning)
- Cancellation policy
- Certified guest status
How does the money change hands?
- Roomorama takes money and keeps it in escrow
- 6 digit payment code mailed to the guest when they book the location
- Once they go to the property, ensure that it is legit, they hand that code to the host, and the payment is released to the property owner
- Therefore, guest knows that if they show up and the place doesn’t exist or not what promised, they’re not going to hand over the code
- It protects both sides
What trends are you seeing in the marketplace?
- People are latching on to idea of “repurposing their space” (home, apartment, empty office space)
- People want to be tour guides in their city
- The “gig economy” is the future
- The “third office”
Examples of Roomorama clients:
- Some pay their entire mortgage by renting out their place
- A people quit their day job and only rent out their properties for work
- Big example… the co-founders Jia and Fede quit their day job for this company
How can I list my apartment to make it most appealing?
- Photos photos photos
- As much details as possible
The big news: Roomorama is merging with Lofty.com
- Lofty is based in Europe
- Largest aggregator of short term rentals in the world
- $2.1 million funding injection
- New company will be called Roomorama
- Perfect match since Lofty has incredible inventory, Roomorama has a great process
How do they maintain work/life balance?
- Nicole – startups can be hard work and long hours. Try to be out by 630, most likely 730
- Lindsey – often there till 9pm or longer
- Try to make work environment fun with high morale. Just remember because this is something that they care about and believe in and think is fun. Don’t let that slip away. Everyone should work at a startup at one point
How often are they looking at people’s postings?
- Part of the job (“regretfully”) have to pour through gorgeous lofts in Tuscany
- Always looking at cool new things
Favorite travel destinations
- Lindsey got to go to Singapore… then over to Bali for a week
- Nicole’s recent favorite: Spain
- Most popular destinations are global cities:NYC, London, Paris, etc
- On the rise: Southeast Asia and Australia… embracing the idea of opening up their homes
- Wildcard city… Phuket
Most valuable piece of business advice?
Lindsey – trust your instincts. In a startup, not a lot of experience in many areas. Troubleshooting all the time. But entrepreneurs also have something deeper inside. What makes sense to the mass market? Through all the trials and tribulations, trust your instincts and don’t lose site of that.
Nicole – Listened to interview with Ben Silbermann, founder of Pinterest, who said “Don’t take everyone’s advice”