Show Notes

In the startup world, there’s no substitute for working with the right co-founder. That’s exactly what Henry Bennett and Paul Loram have found in one another. The two have worked together on multiple startups over the past 15 years. Their latest venture, YourWelcome, is a POS tablet for rental properties that enable property managers to sell their own services, moving short-term rentals into a space that was previously only occupied by hotels.

Henry and Paul joined scaleup ally Roland Siebelink on this week’s episode of the Silicon Valley Momentum Podcast. They shared their secrets to a successful co-founder relationship and how they’ve been able to find success in multiple startup ventures:

• How an old house gave Henry the idea for YourWelcome.
• Why constant dialogue is crucial for any startup partnership.
• The importance of having an end goal in mind during fundraising.
• Why startups shouldn’t forget to approach different customer segments in different ways.
• Why some startups will have a second chance to sell to their target group coming out of the pandemic.

Transcript

Roland Siebelink: Hello, and welcome to the Silicon Valley Momentum Podcast. My name is Roland Siebelink and I'm a scaleup ally for tech founders. So excited today because we have with us Henry Bennett and Paul Loram of YourWelcome dialing in from the UK. Hello, guys.

Henry Bennett: Hey, how are you doing?

Paul Loram: Hey, good to meet you.

Roland Siebelink: Hey, thank you for joining this podcast. This is amazing. We found a lot about YourWelcome having a lot of traction in the travel market. But it's always better to have founders explain themselves exactly what the product does and who it solves a problem for. Henry, do you want to give it a shot first?

Henry Bennett: Yeah, absolutely. YourWelcome is a point of sale for vacation rentals and short-stay accommodation. What that means in practice is we're a SaaS-based business. We give away a free tablet device that's installed in short-term properties, such as vacation rentals, Airbnbs, et cetera. And what the tablet does, it enables property managers at scale to be able to sell their own services such as late checkout, additional cleaning, in a contactless and frictionless way. And then we also - because of the amount of distribution we now have - we are able to do deals with big partners in the food delivery, grocery delivery space, a touristic space. And every time it gets purchased, ourselves and also the property managers are able to make an additional revenue. Our product essentially is really driving short-term rentals into a space where hotels operate, where they're not just relying purely on occupancy but they're also looking to increase their service revenue.

Roland Siebelink: Right. Okay. It's very, very interesting. How did you even find that niche or that market, as we should properly call it, I guess in that new space of holiday rental that has emerged?

Henry Bennett: It's actually quite a funny story, actually. Paul and I had just sold our previous business, which was a media-apps based business. Just as Airbnb was becoming bigger in London, I actually put my house on Airbnb, even though I've got three young kids, much the state of my wife at the time. It was a hassle cause my house is very old too, nearly 50 years old. Essentially, what would happen is particularly American families would actually love coming there. But basically, they would come in and they would just be like, "This is a problem. We don't know how to make an open fire. How do the doors work?" Cause obviously everything's old. Instead of doing what most people do, which is engage a property management company to deal with that, Paul and I discussed the solution would be that we could develop a very simple application, had seven or eight videos. I could describe how to make a fire in video format and how the doors that don't work but how do you get them to work. And I just left it out on a pretty crappy old Android device in my property and basically said to my guests, "If you phone me and you haven't watched the video, I won't speak to you." But what was quite interesting, having done it a few times, was the phone calls stopped. We realized that was pretty interesting. But more interesting was that guests didn't clear their cache. Basically, I could see that while they're in property, they were searching for tourist tickets to, for example, the London eye, which is a big tourist attraction here. And it sparked an idea of me and Paul that actually, because all short-term rentals are private residence, if you're able to install a physical device as search capability in some form of USP for property owners to want to do it, we're gonna have access to a whole wealth of data and we could then put together what is a highly-engaged spend the audience with services and actually create a pretty interesting transactional business. And that's where it started from.

Roland Siebelink: Wow. That's really awesome. And it's so good to see that often the best startups start with a founder trying to scratch their own itch, if you will, right? Paul, can you tell us a little bit about the business that Henry and you were involved in before and how good of a co-founder relationship must that have been to decide to go in business again together?

Paul Loram: Yeah. Henry and I have been in business now together for about 15 years. This is probably our fourth or fifth startup for us. The last one, as Henry mentioned, was an app development agency, which gave us a real background in how to develop this kind of a product. It was a logical thing for us to move on to, as Henry mentioned, putting together a little app. That's not something that the average person could potentially do just as a throwaway idea to help reduce call-outs. But because we had a background in it, it was a fairly easy thing for us to pull together. And like Henry said, it fulfilled a need, which we realized would obviously be something that other people may also benefit from. As a relationship, we've always worked together incredibly well. We're very aligned in what it is we're trying to achieve. We have regular meetings. We sit next to each other in the office and are constantly talking all day long about product ideas, feature ideas, what customer feedback, things like that. And that's been true across all of our businesses. And I think that's why it's worked so well between us. There's just a constant and open dialogue.

Roland Siebelink: Okay. I'd love to delve into this a little bit, primarily because I often have founders come to me and say, "Oh my God, I have so many problems with my co-founder. What do I do about it?" Let's start from this best practice here, if we may. Paul, sticking with you for just a little bit, without going into the detail of every single business that you had over the years, is there a red thread that you can identify that comes back time and time again? The way you work with each other. Maybe the roles you play.

Paul Loram: We have a fairly clear division in terms of how we split things. And that's what's always worked very well is that Henry is very focused on ensuring sales work and I'll take over where it comes to the product and the detail around how we actually implement the ideas that we've come up with. And that's always worked very well for us. In terms of a thread across everything we do, I think it's just ensuring that we're both in the loop on everything that's going on. But yet, there's a clear divide and a clear responsibility as to who it is that's actioning any particular part of it.

Roland Siebelink: Okay, Henry, over to you, your side of the coin.

Henry Bennett: I think essentially Paul and I have always been of the opinion that we want to make money. I think that's not always true with startups. Pretty much everything we've done, for example, if you take YourWelcome, we had sold a hundred subscriptions without - we didn't have a product. I'll tell you how early it was. We basically developed the app but had spent no money or no real thought process at this point about the backend portal of which you would upload all this information. Essentially, a property manager would have to go around to each of his properties and individually type in on each tablet. But the moral of that story was, from our view, was if I can't sell at least a hundred subscriptions within the first two or three weeks of this becoming something, then we probably would have gone on to something else. Because the reality is that, in our view, any startup founding team on their own should be able to go and find customers. Because if you can't find 100 customers in your existing network, within your existing city, within someone you can quickly go very limited money other than what you’re going to put in yourself, I think you're gonna have a problem going forward. I do think that it gave us a confidence thinking, "God, this product is not even a product. It's really an idea. That we turned into basically an app that didn't really work. But yet, there's clearly some interest.

Roland Siebelink: It brings me to the side question. How important is it to have that strong, broad vision for actual product development work? It's a question I hear from founders a lot. They get bogged down in so many requests and so many bug reports. The typical story is a startup that runs really fast when it's five people and slows down to zero around 50 people. Is there something in that strong vision, that broad picture, that really helps get things unstuck?

Henry Bennett: As you go through the rounds of funding, I think, unfortunately, you have to focus very much on where do you want to get to. Sometimes what that means is that fixing problems sometimes for early customers or customers that are paying a lot less, you, unfortunately, have to prioritize the forwards. But there's obviously challenges with that because you might have some customers that really have helped define your product in some respects. And I think we all struggle with that a bit in that we see a customer, they've been with us for four years and they got maybe 10 properties, they've got a problem, for us, Paul and I, emotionally you want to fix it for them. Because clearly, they've really stuck with you, been advocates for you. But actually the end goal is, unfortunately, you have to focus on the future for new customers, bigger customers, customers scale, et cetera. That's one of the challenges.

Roland Siebelink: Paul, what about you? Does it help to have that strong vision to prioritize issues within the engineering pipeline?

Paul Loram: Absolutely. I think having a three-month, six-month, and 12-month plan that you can stick to, having a team who you can trust, who will also move along that journey with you in order to make sure that you hit. Not obviously, as you correctly identified, you can easily get bulked down in bugs and various different things that you want to fix or improve. But as long as you have that vision of this is where we ultimately want to be at this point, you can then schedule things around that. And we try various different things, like we only do bugs on Thursdays and Fridays, which frees up the first part of the week to really soldier on with the ground division. We try various different things. But I think that having everybody aligned in that and being able to communicate that across your team is what's held us through.

Roland Siebelink: It sounds like, Henry, you are absolutely an example of somebody who has no problem finding an initial market just among your network. As you said, just pitching and hustling to get these people together. But when you do find your product-market fit at some point in time, this needs to become more scalable, right? How do you guys think about scaling up your go-to market? What are some tricks and tips that have worked for you? And are you focusing primarily on just one way of getting new customers or is it a mix of multiple channels that you have competing against each other?

Henry Bennett: We're now in 18,000 properties globally. We're not at scale, but we definitely aren't streetfighting to get customers, I think it's fair to say. I think the particular audience that we're targeting is actually very difficult because the main acquisition channel - and if you talk to vacation rental tech businesses, they'll all say the same to you - there's a huge amount of physical conferences. We normally attend - what'd you think, Paul - 30, 35 conferences a year, all over the world from Tel Aviv, West coast, East coast, Mexico everywhere, right? What that does is you get face-to-face with these customers, you get a huge lead list. We had a conference that was run by VRBO and I think over two days with credit cards, we took over 50,000 sales at the actual conference. And then a whole of leads. One of the challenges, particularly with COVID, is that actually we're all now trying to find ways of doing this. But one of the problems that you have when you run a property management business is it's a nightmare, right? It is a nightmare because you wear so many hats. Often, what property management companies are not doing is Googling for information. Therefore, digital marketing has varying degrees of success. For example, keyword search is challenging. We've done a lot with SDRs, literally cold calling, get them into the funnel. But obviously, committing to a demo is now becoming a new purchase. It's a huge commitment of time to do a 45-minute demo for someone you're not actively looking for. I think it's a constantly evolving feast and we talk all the time between the vacation tech business, how best to target these. And I think that for us and many other companies, we really need to see a return of physical conferences. Cause that is without doubt the biggest acquisition funnel or way of getting people in the funnel you're going to see. It is a challenge for everyone.

Roland Siebelink: In terms of the go-to market, you said that it's primarily traditional sales methods. I'm guessing, Paul, that means this is not really a product-led-growth model that you see in so many other SaaS businesses where it starts with trial and then you just keep trying to upsell?

Paul Loram: Correct. As Henry identified, our tablet is our hero product. We do have a secondary product that sits alongside it, which is called YourWelcome Advance, which is an advanced check-in tool. That has enabled us to open up slightly new avenues. That enables us to go back and remarket to our existing customer base to try and upsell to them. It's a complementary product that sits alongside it but that isn't the same thing. We're constantly looking for new ways with which to expand our offering but also prove our worth to our customers. Ultimately, a lot of this comes down to conversations with customers at conferences about where their pain points set and how we can solve them. Sometimes we come up with concepts that don't fit in with our ecosystem and we haven't pursued those. And we're sticking with our core offering and things that do complement it. It definitely isn't a traditional way of doing it. It's just about looking for opportunities and helping our customers.

Roland Siebelink: Paul, getting back to you a little bit, how do you measure the product success after it's sold? Do you look at usage? Do you look at people being engaged with it? You have, of course, your users and your property managers as two different target groups, so it's already getting pretty complex. How, in your team, do you guys look at, this is what makes a good job for us. This is what makes us want to correct ourselves because we're not doing that well.

Paul Loram: Usage is definitely one of our key metrics, for certain. Back in the days when Henry and I used to run the mobile agency we talked about earlier on, we used to measure usage of apps in seconds. If you were getting 20 to 30 seconds of daily usage, you consider what you'd built a success. We're very fortunate that as a hardware business, especially as our product is used for people to physically check in with it, that means that they're having to pick up the guests who come to use our product, having to pick it up to interact with it, so we're able to upsell the benefits. Now we look at success in number of minutes of usage rather than seconds. That's been a great metric for us to keep ensuring that we're offering value and that people are using it for more and more. I also find that the different customer bases take our product for different reasons. Some people are looking at it because they want to monetize better. They want to monetize their guests and offer upsells. We're also able to throw that in as a metric that we track. But we segment our customers into groups or buckets, as we call them, to look at what their motivation is behind having the product in their properties. And then have an individual metric based on those buckets.

Roland Siebelink: Oh, interesting, so you know what they want to get out of it. And then you track that metric for that specific segment. Is that what you're saying?

Paul Loram: Precisely. Yeah. If somebody is not so interested in usage time but is interested very much in monetization, then obviously for us that's the only driver for ensuring that they've had a successful product from this. We then optimize and look at how we're positioning the banners on the tablets and how the journey is to ensure that if they are advertising a late checkout or equipment hire, or whatever it might be while the guest is in the property, that that is visible to them at all times to ensure that they're getting the most from the platform. Whereas other customers are less interested, not more interested about just getting their brand awareness out there. Again, we just look at how can we optimize ensuring that their products - sorry that their own brand - is visible on the device at all times.

Roland Siebelink: Can I just say, Paul, that that's actually, while it sounds straightforward, it's actually quite brilliant. And I think really rare to see that kind of customer focus and segmentation be fully immersed in the product organization, even where you're able to look at what the different segments want out of this product and optimize for it separately. Whereas I see most product organizations obsess, really obsess, over what's the one metric that will always be our North Star for every single customer out there.

Paul Loram: We ditched that right at the very beginning. I think because I come from a retail background and because as we talked about our former businesses, it was very much a case of how can we ensure that people will renew when it comes to their annual renewal date. And the way to do that is to ensure they get what they want from it. And because it serves so many needs, the only way to do it was to compartmentalize the customers. And then, like you say, you just focus in on each of their individual needs and insure that they're getting what they need.

Roland Siebelink: We had some good news this week, without trying to be too specific about the time when this recording gets up, but that vaccines are in the offing. Maybe there's some light at the end of the tunnel regarding COVID. Where do you see YourWelcome grow when all this gets a little bit over, more under control and, what's the big milestone? Where do you see yourselves in three to five to maybe even 10 years?

Henry Bennett: I think one of the things that I'll say about this is we were lucky in that we we've got funding. We've got a good runway. I think one of the advantages of this challenge for all businesses is that some competitors are going to struggle to come out of it just purely on a runway, cause raising money for a travel business right now until we know everyone's coming out, is going to be very challenging because we obviously know. And I think what's going to happen is there's a massive pent up want to go traveling. Everyone is fed up with not being able to go away. I think we're going to see a huge boom. And I also think, the other thing is quite interesting, which is the other way to look at this is that a lot of customers say no to us for various reasons, every product. But they might no longer be in business. Actually, with all these properties coming back on the market, you get another go at them and it's happened across the world in every market. There's basically all these properties that were closed to us for whatever reason, maybe a private equity group or whatever just be like, "We just don't want to do this. We're looking just to save costs or whatever." They're now back on the market. I think there's quite a positives around this. And I think for Paul and I, typically we look to a cycle somewhere between three to five years for exit. I think that our ultimate aim, and I think we all know this, particularly in anyone's listening in the vacation rental space, it's such a fragmented market. And this is why there's been a big roll up that already happened within vacation rentals. The second one, I think, imminently happening. I think that for us, the main focus is distribution, distribution, distribution. But however, what COVID has done to us is that we flipped from a pure growth business to a profitable business. The last year become profitable. And I actually think that, for Paul and I, we're not 25, we've got big mortgages, we got kids. And I think actually running a profitable business to us is more appealing. But I think also to a future acquirer, it's never been more appealing to have a huge acquisition, no future potential of profitability against a market leader that's profitable. I think that that flip has happened with COVID. I think we see a pretty bright future for YourWelcome.

Roland Siebelink: What other advice would you give to younger, maybe first-time founders, Paul, that people are listening to this podcast who are on their first or second startup and want to be as successful as you are?

Paul Loram: I think you touched upon it earlier on, actually, which is not being rigid about your North star. What our vision was for this on Day One is not what the product is today. And I believe that the product is significantly better because we were flexible. And actually, when we came to raise money initially for it, virtually all of the people who we spoke to, to try and raise money from, were saying, "Just forget the hardware. Make it an app. Make it an app." Because we'd had this prior background, we were able to say, "Well, no guys, we think you're wrong." And maybe we burned some bridges by telling people that we thought they were wrong. But equally, we proved ourselves right, to this point, five years later now in a strong enough position. But I feel like, know what it is you're trying to build. But equally, stay flexible enough and listen enough and get out there with your product. As Henry mentioned, we'd sold a hundred units before we probably should have done. Getting to that first landmark for us was a real point of going: "Okay. we know that there's a demand for what it is we're doing. But we'll stay open enough to be able to work out how can we improve this to a point where it's just continually getting better."

Roland Siebelink: Okay. I do have to delve into that a little bit more if you won't mind, Paul. On the one hand, you're saying, "Look, if people don't get your vision, just seek someone else, even if you have to burn some bridges." On the other hand, you're saying, "Listen enough, be open to feedback." Who do you listen to then?

Paul Loram: Well, you trust yourself, right? It's a case of going, "I believe this is what - or we should I say, as a collective - but this is what we believe and this is where we think the product should go." However, while you're on that journey, you're going to get thrown some things. And I'm talking about from customers. I'm saying the influence of people who are dangling money in front of you, which early stages you may or may not need. I think because we were fortunate enough to have exited a prior business, we were able to stick to our gumption, which obviously first-time founders might not be able to be in the luxurious position if someone is offering them funds to do that. But I think it's a case of knowing where you think the right place is to go. There's many different splinters of this universe, where we would have made our product into very different things than it is today. But each time we've done it, we've done it because we've discussed it at length, going: "Is this the right way for the product to now go?" Ultimately, it has come from our view on what our customers are saying, not from where the finance is coming from.

Roland Siebelink: That's what I really get out of it, Paul, that you gotta stay true to your vision in the big ballpark. But in terms of its seeds and implementation, do listen, particularly to customers not to investors. Is that what you're saying?

Paul Loram: Correct. Yes, definitely.

Roland Siebelink: Almost the last question, but, you did mention your typical exit horizon of three to five years. Is that something you recommend that other founders also follow typically?

Henry Bennett: No. Every circumstance is different. For Paul and I, when we first started, if you would have talked going into - we went into an accelerator – if you would have talked to them early, we were very clear. We're like, "We don't want to change the world. We want to deliver a quality product. We want to deliver a big old return on our time investment. And then we want to do something else." We've got a lot of ideas and things that we do we want to do. We've run the business in that way. To give you a classic example, if you talk to our staff, we spend no money. For example, if Paul and I travel, which I used to go to America once every three weeks, I'm staying in $70 a night hotels. The main reason why that is, is because the end goal is I know that if we suddenly spend a huge travel budget, if someone comes on with an exit, we're going to get less value because they'll look at it and your costs are higher. Whereas other startups, things going quite well, I can stay in a $500. That is not us. It never has been. That's one of the frustrations some of our staff probably have is unfortunately, we put that onto them as well. I do think as long as you know what you're going to do, then you stick to it and you don't go off course. I think if you start by going, "I want to change the world," and suddenly I want to exit, but you suddenly got a massive high cost of acquisition of customers, no future profitability, huge staff bill, uncertain economic circumstances, suddenly your business didn't look too good. Whereas you were a darling of VCs six months ago, right? I think it just depends on what you want to do and where you are in life.

Roland Siebelink: Yeah. Yet another example, I think, of how beginning with the end in mind really helps make you all these tactical decisions day by day to actually get to that end point. This was really good. If somebody wants to know more about YourWelcome, maybe see what jobs you have open at some point in time, or I won't intro investors to you - but maybe property management companies that like to check you out, where do they go?

Henry Bennett: They go to yourwelcome.Com. Y-O-U-R-W-E-L-C-O-M-E.com. Particularly, we're looking for a great digital manager. Anyone listening, get in touch, definitely.

Roland Siebelink: Excellent. Okay. Well, very good. Thank you so much, Henry Bennett and Paul Loram, CEO and COO, respectively, of YourWelcome joining the Silicon Valley Momentum Podcast. This was a great interview. Thank you so much for joining.

Henry Bennett: Thanks very much.

Paul Loram: It's been like a little mini therapy session. It's been brilliant. Thank you.

Roland Siebelink: Oh, really appreciate that. That's what coaching is for, right? Thank you all the listeners and we'll hear you back next week.

Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.