S. Philip Kennard and Jonathan Fabio possessed little, if any, knowledge about vacation rental properties when they founded Futurestay (Somerset), a free online vacation rental and management startup.
“We were not experts in vacation rentals,” Fabio, Futurestay’s COO, told the audience attending the company’s presentation on “Building a SaaS Startup on the Cloud,” on Jan.14 at JuiceTank Innovation Lab, in Somerset. The talk was part of Launch NJ’s ongoing series of presentations for startups and entrepreneurs.
Today, Fabio and Kennard, Futurestay’s CEO and CTO, are quite knowledgeable about the $100 billion vacation rental properties industry, which is expected to reach nearly $170 billion annually in a few years.
Their business acumen and vision of electronically organized listings for a vast market of millions of vacation rental properties globally — of which 65 percent are run by nonprofessional owners and managers — earned them a $500,000 investment in Futurestay a little over a year ago. The company expects to soon complete another round of financing for $2 million.
The idea for Futurestay was the result of the largely inefficient and haphazard system of booking vacation rental properties. Most of the nonprofessional vacation rentals today are booked manually, similar to how the hotel industry booked rooms a decade ago.
As a result of this outdated method, more than 40 percent of all online vacation rental property bookings are abandoned by people who become confused and frustrated over the process of using multiple sites for bookings.
Futurestay’s founders also discovered that only 9 percent of all vacation rental properties are booked on major online sites such as Airbnb and Booking.com. That was enough to convince the two men, and investors, that the system had to be fixed.
“There is a huge inefficiency in the marketplace,” Fabio said. “This created a really big opportunity for us.”
Since its inception five years ago, Futurestay has had more than 31,000 vacation rental listings on its site, averaging 1,000 listings a month, in more than 110 countries.
It’s a fairly simple process for property owners to list their rentals on Futurestay. They can create a website in only a few minutes on the Futurestay system, which manages and markets rental properties across the Internet at no cost.
Futurestay makes money by taking a percentage of the charges when guests book rooms for a property owner’s site. The company recently added a new system upgrade, referred to as “autopilot,” which automatically lists an owner’s rental property on various other online rental property sites.
The company has been successful in growing its business by partnering with other online vacation-property booking services and with the website builder Wix.com.
Unlike other tech startups, Futurestay has managed to minimize operating costs by not spending money to acquire customers, which helps keep the company’s burn rate “as low as possible,” Kennard said.
Finding investors was a difficult task for the company’s founders. Both Kennard and Fabio didn’t have any strong connections with investors, so they got funding through a different route.
They would ask other entrepreneurs for their feedback on their ideas for the company. This rapport with other entrepreneurs eventually led to a meeting with an investor who decided to help fund the startup.
But Kennard and Fabio aren’t the least bit shy when it comes to hunting for investors, so they can be found at industry events that feature investors as speakers. And it doesn’t matter what kind of event it is, as long as investors are there.
Kennard said that one of the most important lessons he had learned in running the company was the ability to listen to others.
Kennard, who acknowledged that he’s “a big know-it-all,” said, “As a startup CEO, your job is not to know everything, but to keep on finding out about things.”