Vince Breslin, chief executive and co-founder of short term rentals booking and management platform Uplisting, shares his experiences of staying customer-focussed and turning challenges into opportunities
Guest Post: Lessons from building a short-term rental tech business during COVID
It is notoriously difficult to build a tech business without traditional venture capital funding, and even more so during a pandemic.
While the short-term rental industry is currently booming (2021 was the best year on record with revenues up 37.5% compared with 2020 and 25.8% compared with 2019, according to AirDNA), securing funding is still one of the biggest stumbling blocks to getting any business off the ground.
The VC funding dilemma
Many businesses turn to venture capital funding for a cash injection, for good reason; large amounts of capital can be quickly raised, expert guidance can be gained from experienced leaders and other startups alike, and access to risk management support provides extra security.
However, pursuing the VC funding route also tends to come with a long list of caveats. My business partners at Uplisting, Tadej Murovec, Andy Shipman and I, know this all too well. Having all raised VC funds separately in the past, we’ve had mixed experiences.
All of us had to give up control of our own destiny (in part), along the way. This also took us away from our shared priority: building products that people wanted to pay for.
None of us were particularly well-known, which made VC fundraising all the more time-consuming and brutally demoralizing.
Having said all this, VC funding isn’t out of the question for the future of our company. Our preference in the early days of Uplisting was to build the business until we had the upper hand, if we ever decided to raise financing.
I like to have options. Our initial goal was to reach a $20,000 monthly recurring revenue. Now in our fifth year of trading, we are multiples above this target and have reached the point where VCs are now approaching us, which is unexpected but welcome.
The catalyst for organic growth
Fortunately, having three founders with combined expertise has allowed us to build a reliable short-term rental management software product, which gained initial traction through perseverance.
Both Andy and Tadej are brilliant engineers, while I am more of a generalist - involving myself in all aspects of the business, from product to sales and customer success.
For the first two years of Uplisting’s existence, we all had other jobs or contracts to pay the bills.
I spent hundreds of hours talking to hosts and property managers before getting started on building our product. Talking to the right customers, listening to their wants and understanding their needs is crucial.
By applying our learnings, word of mouth has slowly but surely taken over. Reliability, we have found, is key: over the past five years, our average customer’s business has grown from five properties to 50, and our largest member portfolio has grown to over 500 properties.
Knowing when to say no
One major benefit of building a business organically is that every move you make in the early days must result in increasing revenue, which improves the ability to make good decisions.
Poor products are often built without direction - and with large amounts of VC money in the bank, it can be easy to lose focus on building the wrong features.
When direction is laser-focused on helping your business survive, the end result will be a product that is truly value-adding.
For us, this means we have only taken on board feedback from paying customers. Very rarely do we deviate from this, even now. Non-paying potential customers pitch shiny new feature ideas to us every day. We say no a lot.
The vast majority of our features were released initially as a bare-bones first version. We have always asked ourselves: what is the quickest way we can add value and strip away all the bells and whistles? Solving 80% of the problem is often enough.
A great example of this is reaching $1 million ARR without having an automated subscription billing system in place.
Although awkward for admin, we have been able to instead focus development time on a feature that has benefited our members and brought in more revenue.
As we grow and add more engineering and design resources to our platform, we can afford to release more polished features.
Turning pandemic challenges into opportunities
While the pandemic has thrown a number of curveballs to business owners everywhere, identifying opportunities has been key to staying afloat - and even thriving.
In our case, we were able to immediately provide discounts or pause subscriptions to all of our members who were struggling, which not only helped take care of the community we had built but also helped strengthen long-term loyalty.
Fortunately, we didn’t need to lay off any of our team members, so this allowed us to ride the wave much longer than most.
By focusing on building features to help members generate more revenue - for example a click and play direct booking website - we were able to process $2.5 million in booking revenue for our members in 2020, followed by $14.5 million in 2021.
We are now on track to process $30 million in 2022, which feels like a milestone worth celebrating. While many of our members had to cancel or downscale during COVID, most of them are now back and thriving, which has been incredibly rewarding to see.
Opening the door to a membership investment model
After five years of growing Uplisting organically as a self-funded business, we recently broadened our investment horizons by securing $300,000 from Calm Company Fund (with a little help from Twitter), as well as embracing active support from our members.
Using AngelList Roll Up Vehicle, we shared our vision and invited members to invest. Thanks to our strong existing community and great product, we closed $200,000 in membership investment within a few weeks.
Our customers now help us build our product through sharing Uplisting with their networks and providing feedback. They are acutely aware of the landscape and market we exist within, so by watching our continual growth and value-adding, many proactively reach out to invest.
We are enormously proud of securing these additional funds and building our member community.
The sense of achievement gained from starting a successful tech business organically will stay front of mind as we steer the business towards its next growth phase.
As in the early days, our members remain at the heart of our ambitions.