Startup of the Week: Houseys
After a little break we continue our weekly project called “Startup of the week”, and this time we want to introduce you Lithuanian startup and one of Startup Wise Guys accelerator participant – Houseys. In this interview Tomas Grižas, CEO of Houseys reveals more about the challenges while developing a startup and what are their main target.
1. So what is Houseys? How does it work?
Houseys is a short-term rent & revenue management company. We help people owning properties to have no hassle and increased returns on their investments. We provide full service from A to Z: we consult the owners, prepare their properties, launch them on worldwide booking platforms. Also, it all comes with a certain tech-stack: different tech tools that optimize the listings, pricing algorithms and tools for dynamic pricing, platform and an app for housekeeping & maintenance management. On top of that, there are detailed and transparent monthly reports that our clients absolutely love!
2. What are your competitors and competitive advantages?
It depends on how you look at it. There are 3 quite big players in the field – Airsorted, Hostmaker & GuestReady – that were making headlines last few years. Quite recently, TechCrunch and other worldwide media announced 4 other companies from the UK, Italy and Portugal merge to form one. So bigger players are both competition and potential partners.
For now, we’re operating in Vilnius & Kaunas with Riga, Warsaw & some more exotic cities in the pipeline. We look at the CEE region where the market is very underdeveloped and fragmented. The situation with other companies here in the field is similar as with the big ones – they’re both competitors and potential partners. At least this is how we look at it. We’re aiming to be the most tech-savvy in the region as well as developing our own tech products.
3. What were the reasons behind coming up with this idea and launching this product?
This question takes me back a few years when I was living in London (as that’s where most of the ideas come up, ha?) and an investor friend of mine invited me to meet for coffee. He owned properties in London and Berlin and was about to start a short-term rental business. He asked for my help in setting it up & that’s where it all started. After that, I’ve moved back to Lithuania and even before I was back, my long-term tenants were gone from my loft in trendy Uptown in Vilnius & first Airbnb guests arrived. Then our COO Agota joined – with a story of launching what’s probably the first bed & breakfast spot in Vilnius and spending lots of time involved in different aspects of the hospitality business. At some point, we decided to take over the Lithuanian market and expand into other countries.
4. When exactly did you launch, what were the main challenges before launching?
Good question. We were operating for some time before launching our existing company in March 2018. We already had quite a lot of experience in the field so the launch itself wasn’t that challenging. But going further… Just to put it in a bit of perspective – the business we’re in, short-term rent management is, or at least used to be, a simple service business. With not so much tech, either. So what we’re now usually saying is that we’re service business with tech going towards becoming tech business with service. And this is one of the main challenges.
For now, our main clients are families. They’ve invested in real estate, they either have jobs or businesses, kids & other pleasures in life rather than property management. And that’s where we come in. Also, real estate investors, owning somewhere between 1 to 10 and more properties. At least, for now, these were our main clients. But as we’re growing, gathering more and more market insights as well as experience in this particular field, we’re seeing a demand from real estate developers as well as other businesses like ours. Real estate developers are eager to hear our advice on what kind of demand for what kind of properties there is, and will be, in the market. Other short-term rent management businesses are curious to know what kind of technology we use and how it is helping the business to grow.
6. What are the main challenges while working on this product and how are you overcoming them?
As we’re not yet exactly a product company, there are challenges before launching a product and I believe there will be many more of them after launching it. For now, most of the companies similar to ours – at least the ones that are focusing on efficiency and growth – are having a challenge of understanding what kind of tech stack to use. There are different products out there tailored for such businesses. Companies can develop products themselves. So there are at least two challenges: understand what kind of products are needed to run the business smoothly and efficiently as well as where do these products come from – existing from the market or developed in-house.
How we’re overcoming those challenges ourselves? Out of 5 tech tools that we use, we’ve developed 3 ourselves, use 2 from the market and constantly scan what’s out there. Talking to other software providers (as well as understanding whether we could cooperate or not) also helps to clarify, and find, the best way to go.
7. How are you funded? Do you seek extra funding?
We’re about to finish what’s not only one of the best startup accelerators in Europe – Startup Wise Guys – but also having them as our first investor. We will be raising an investment round in the upcoming 6 months and I’d be happy to share details about it a bit later.
8. Please introduce your founders, your core team and your broader team?
I’m the CEO of the company and I come from the background of real estate & hospitality. Our COO Agota was running family bed & breakfast as well as traveling the world on different business assignments. Eduard is looking after the tech side of things as is someone who could definitely be called a serial entrepreneur. We also have a brilliant admin & guest support person Ieva and our housekeeping department supervisor, Loreta. Also, recently we’ve started practicing remote work and have our part-time guest support person Agne working remotely. Plus, a small development team, of course.
9. How has business been so far? Could you share some numbers to illustrate this (users, sales, etc)?
Yes, of course. As mentioned, we’re operating in two major cities in Lithuania – Vilnius & Kaunas. So far, generating roughly 10K MRR and managing a portfolio of 65 properties. We’ve seen quite a steadily growth of portfolio at about 15% MoM and we’re not planning to stop. Talking further numbers, in the upcoming 18 months we’re planning to expand our portfolio up to 400 properties, enter 4 new markets and generate 100K MRR. So that gives a little insight into what’s next.
10. Future plans, ambitions? Simply speaking – what’s next?
I’ve already mentioned our planned growth numbers as well as some of the locations we’re targetting. In total, we’ve looked into 6 key cities in the CEE region – Vilnius, Riga, Tallinn, Warsaw, Prague & Budapest. With some more exotic ones, like Tel Aviv & Marrakesh. However, we’re also working on an online management offer for businesses like ours (which we will start piloting this week) so that would change our expansion plans as we’ll then be able to target businesses / potential clients pretty much anywhere in the world. We’re very much looking forward to this – being B2B SaaS business – field and are very happy to have support from Startup Wise Guys in this journey of ours.
A few closing notes.
The market we’re in – short-term rent management – is very interesting. And I would even allow saying that it’s also new. At least the way companies are operating, or are starting to operate: as very much tech-driven rather than managing everything on the phone and Excel sheets. It is also consolidating which is good for the end user – all of the companies are trying to be as efficient and as hospitable as possible. Only a boutique company like ours is welcoming on average about 1200 guests a month. We want their experience to be as great and as smooth as possible. Real estate developers are seeing another trend or another shift, that is happening in the market: more and more people want to rent vs. buy. And I believe this will have an interesting impact on the market with various real estate development projects aimed at being fully rented rather than sold one by one. All of this is an exciting shift that’s happening all over the world and these are the exciting times to live and develop business.
Thank you for your answers!