TLabs Showcase on travel startups featuring US-based Evolve, a new sales and marketing support service for vacation rental owners.
Who and what are you (including personnel and backgrounds)?
I’m Brian Egan, co-founder and CEO of Evolve, a new online service that acts as a sales, marketing and service team for vacation rental owners.
We take the hassle (and quite a few of the costs) out of getting a home marketed and booked - creating great listings, reaching the largest network of travelers, and offering seamless booking experience, including full traveler support.
There are no upfront costs to joining our service and we only charge our owners a risk-free 10% booking fee.
We’re just coming out of a two-month beta, but it’s already clear that there’s a big market for our service. In addition to homeowners who were renting on their own or working with a local property manager, we’re excited to see a lot of owners who had not rented before because they viewed the process as intimidating.
The $24 billion US vacation rental market is becoming more complex and competitive, it can be a lot for an owner to take on by themselves.
My background is in travel and vacation rentals. I was one of the first 10 employees at Exclusive Resorts - where I helped build it from a startup into the high-profile luxury destination club it is today. Prior to joining Exclusive Resorts, I was a startup & VC lawyer at Gunderson Dettmer in Silicon Valley.
My co-founder, Adam Sherry, is the COO of Evolve. He was Employee #1 at Exclusive Resorts, where he pioneered a sales process and team that produced over $1 billion in membership sales over 8 years.
What financial support did you have to launch the business?
We closed on $530,000 in seed financing in May of 2011. Our angel investors include entrepreneurs, executives and investors with backgrounds in travel, financial services and technology/consumer web.
What problem are you trying to solve?
Managing the vacation rental marketing and booking process is not easy. Vacation rental has become more popular, and with that we’ve started to see travelers expecting more in terms of communication and service.
Online marketing strategies and prompt response to traveler inquiries are no longer exceptions to the rule, they are required.
Many owners feel trapped. They are forced to choose between the hassle and guesswork of managing this process on their own, against the expense and inconsistent performance of full service property management.
Not surprisingly, this gap in the market has kept quite a few homeowners from renting out their homes at all.
We built Evolve to fill this gap and - quite simply - to make it easier to rent out a vacation home. And of course, part of helping homeowners means helping their traveler guests.
If we provide travelers with great service, for no extra charge, they’ll be more likely to book our homes. And that means more rental income for our homeowners.
Everyone comes out ahead.
Describe the business, core products and services?
Think of us as a vacation rental owner’s personal online marketing, sales and service team. We handle every facet of the marketing and booking process:
Producing high quality listings that really tell the story of a home, including attention-grabbing, SEO-friendly headlines and copy, competitive pricing and promotions, and stunning photography.
We are constantly evaluating listing performance and A/B testing tweaks across our network to ensure we’re getting the most out of a listing.
Reaching the largest possible network of travelers, including placement on Evolve’s site along with the largest vacation rental sites like VRBO, HomeAway, FlipKey and TripAdvisor, as well as promotion via Evolve’s database communications, social media and online marketing campaigns - all at Evolve’s cost.
Creating a seamless booking process, including providing proactive, friendly traveler service, updated availability calendars, click-through rental agreements and credit card acceptance to make it as easy for a traveler to rent one of owner’s homes as it is to rent a hotel room.
For all this, we charge only a 10% booking fee. It’s risk-free - we only make money when our owner’s make money.
That’s it. No cancellation penalties, no hidden charges, and unlike some services, we don’t charge travelers.
We bring all this together to make it easier to be a vacation rental owner. All of the benefits, none of the hassle and at a risk-free cost that pays for itself in additional income earned and time saved.
Who are your key customers and users at launch?
We’ve been in private beta for two months now and we’ve been thrilled with the response. We had a handful of owners join the network pre-launch and we were able to generate bookings for them, and revenue for us, in our first week of operation.
Since then we’ve doubled the number of homes on our site, and our gross bookings, every month.
Did you have customers validate your idea before investors?
As a starting point, we’ve spent a combined 15 years in the industry talking to thousands of homeowners and travelers, as well as developers, property managers and other players in the vacation rental ecosystem.
So we had a pretty good base of knowledge and an intuitive sense of the opportunities in the industry.
Even with our background, we vetted the Evolve model with homeowners and travelers prior to raising money. For that matter, we continue to rely on the market as our sounding board on a daily basis for ideas big and small.
What is the business AND revenue model, strategy for profitability?
There are no upfront costs to join the Evolve network and no cancellation penalties. Homeowners simply pay a risk-free booking fee of 10% when the property is successfully rented.
We wanted to align ourselves as closely as possible with homeowners - we believe a strictly pay-for-performance model is the best way to do that.
SWOT analysis – strengths, weaknesses, opportunities and threats?
Strengths:
- Deep industry knowledge definitely gives us an edge. We’re passionate about the travel and vacation rental market, we’ve got a long history of delivering exceptional customer service, and we truly want to help grow this market and allow owners to earn more income from their properties. We also come to the table with a lot of experience scaling teams and processes from the earliest stages of a startup and understanding how to build the foundation of a high-growth company.
Weaknesses:
- We’ve only been in beta for two months, so our inventory needs to grow to meet high traveler demand.
Opportunities:
- The US vacation rental market is around $24 billlion, and yet most vacation homes are sitting empty each month, not being rented out. That means there is a huge untapped inventory, literally millions of homes, sitting on the sidelines waiting to be discovered. Also, Americans are increasingly seeking out vacation home rentals as a more economical and enjoyable alternative to hotels. Our model makes it easy to move from owning a second home to owning a vacation rental - which will translate into new income possibilities for homeowners and (by default) travel options for vacationers.
Threats:
- We expect increased competition around this model. We saw the same thing at Exclusive Resorts, it’s the hallmark of a successful company. You probably don’t have a very interesting company if no one wants to compete with with you. Competition is a good thing for our company and for the vacation rental market as a whole. The easier it becomes to join the vacation rental market as an owner or traveler, the more the market will grow and the larger the opportunity for all of us.
Who advised you your idea isn't going to be successful and why didn't you listen to them?We came across a few people who didn’t get it, but we didn’t listen to them because they didn’t own vacation rentals and had no real understanding of our customers.
We were very confident that we had clearly defined a pain-point and that we had designed a pain-killer.
We’ve been through this process before - if you aren’t being told "no" as a startup on a regular basis, you’re not trying hard enough.
What is your success metric 12 months from now?
We want to end 2012 with hundreds (and possibly thousands) of happy homeowners who are earning more money, paying less in fees and enjoying the experience of owning a vacation rental more than ever.
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NB: TLabs Showcase is part of the wider TLabs project from Tnooz.