STARTUP STAGE: StayFi enables Wi-Fi marketing for short-term rentals

StayFi

StayFi wants to help short-term rental companies reduce their dependence on online travel agencies by capturing guest data that can be used for direct communications.

Along with providing Wi-Fi equipment, which it says is currently used in more than 5,000 properties, StayFi provides splash pages that operators can use to market directly to guests using their own brand. 

What is your 30-second pitch to investors?

StayFi is building the guest marketing stack for short-term rental companies to reduce their dependence on platforms such as Airbnb and Vrbo and to make them more profitable. The core of our product is data collection through Wi-Fi marketing - where we are the first solution to seamlessly collect valuable data from everyone staying in short-term rental properties. We are currently used in more than 5,000 properties across 200-plus operators.

Describe both the business and technology aspects of your startup.

StayFi sells Wi-Fi equipment to short-term rental operators and then charges them a monthly subscription. We enable operators to collect data from all their guests through captive Wi-Fi splash pages and then help them market directly to those guests with their own brand. In addition, we make it easy to manage hundreds of Wi-Fi networks at scale across properties to ensure seamless connectivity for guests and protect properties with features like occupancy alerts.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

• Strengths
  • Industry-wide recognition that direct bookings are vital to the sustainability of short-term rental businesses
  • Plug-and-play delivery of a product that used to be hard to set up with traditional Wi-Fi marketing tools
  • Our solution is designed for just one vertical - short-term rentals
  • We align with the emergence of strong consumer-oriented short-term rental brands

• Weaknesses
  • Bootstrapped company now raising a seed round is not as well capitalized as potential competitors
• Opportunities
  • Short-term rental industry's approach to brand marketing, direct booking and loyalty is less mature than hotels, so there is a lot of low-hanging fruit that can make a big impact.
• Threats
  • Consolidation of STR tools into one company that out-competes StayFi

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

For short-term rental companies, they have been locked out of their customer data by the online travel agencies for years, and we have a seamless solution to address this. In addition, high-quality reliable Wi-Fi is more important than ever, and we can help our customers maintain that in all of their rental properties. 

For guests, we are helping them identify the brands they love and want to book with again in the future. The reality in the short-term rental (STR) space is that the OTAs obscure who the STR brands are and why they matter. We are bringing transparency to guests so they can pick their stay based on brand and experience. 

So you've got the product, now how will you get lots of customers?

Our go-to-market strategy is primarily through industry conferences, our referral program and marketing through our property management software partners to their user-base. Now that the core product is built and scalable, 2022 is the year to go-to-market hard. 

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

Founder Arthur Colker got into the STR industry through marketing consulting for a property management company called Heirloom. He found that Heirloom’s biggest barrier to deploying a direct booking strategy and marketing program was the complete lack of guest data. After identifying this problem for Heirloom he validated that:

• Almost 70% of short-term rental listings are managed by professional operators, not individual owner-hosts.
• They all have little or no guest data because OTAs do not share this information with them.
• They all want to be less dependent on OTAs to pay them less fees and build a steady book of repeat direct business

We estimate that professional STR operators spend $16 to $24 billion per year on OTA fees, marketing and software (20% to 30% of their total revenue).

How and when will you make money?

We make money by selling equipment and charging a subscription fee to use it. Our revenue in 2021 was almost $500,000 and we continue to grow faster in 2022. This year we will launch additional marketing tools within StayFi to grow our revenue per customer.

What are the backgrounds and previous achievements of the founding team?

• The founder, Arthur Colker, has run marketing/growth at several post Series A and B startups.
• CTO Adam Langsner comes with extensive experience from Betterment, MealPal and Attentive.
• Head of business development Oliver Marczynski was the first business development hire at Price Labs and has experience scaling in the STR industry.

How have you addressed diversity and inclusion within your business?

As an LGBTQ founder, Colker is very conscious of building a diverse and inclusive organization as we continue to scale and build our organization.

What's been the most difficult part of founding the business so far?

Surviving COVID when our customers stopped paying us and many did not return equipment we were renting to them. As a solo bootstrapped founder, Colker had to seriously consider how to handle winding down if the pandemic continued to stop all travel to STRs. 

Coming out of COVID, however, STR companies realized their dependence on Airbnb and Vrbo was a huge vulnerability and more attention was placed how to drive more direct bookings.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

We are helping fight a David and Goliath battle between independent operators who provide the actual hospitality service against the duopoly of Airbnb/Vrbo. While OTAs are necessary and provide a great service, they have too much power in our industry. 

This is not going to be easy - but our driving motivation is to help SMBs become more profitable - and that is where I find my passion. We want to bring transparency to how the STR industry really works. That it is composed primarily of passionate hospitality operators that manage many properties who have their own independent brands - not a marketplace of individual “hosts” who do STRs as a side-gig. 

A year from now, what state do you think your startup will be in?

We will be five to 10 times larger and will be driving a significant number of direct bookings for our customers with clear ROI.

What is your end-game? (Going public, acquisition, growing and staying private, etc).

Different exits are possible from acquisition to going public, but for now our focus is 100% on delivering value for our customers. As part of this, we are allowing anyone to invest in StayFi through Republic - mainly so our customers can own a piece of our growing business.