Helping You Book Vacation Rentals: FlipKey CEO T. J. Mahoney (Part 3)

SM: What was your strategy for entering a market that was already dominated by HomeAway?

TM: Before leaving Compete, I had actually asked them if they would help sponsor some research for the industry. They helped conduct some surveys for us, and we released some market research for the vacation rental industry. I came from a research consulting background, and I felt that the reports were useful. They ended up catching the eye of a couple of companies, one of which was TripAdvisor.

They began to see that what we were creating was not just another listing site, but rather a new fundamental layer of user-generated content to develop trust in an industry that was relatively new and immature. TripAdvisor was the largest social travel community in the world had no vacation rentals on their site, and they certainly had no reviews of rental properties.

As we looked at how large HomeAway was, and how powerful and trusted TripAdvisor was, it clearly seemed like a good fit to us to team with TripAdvisor. We could take the 32 million people who already trusted and accessed TripAdvisor every month and introduce them to a whole new category of lodging. That affords people a cheaper stay with more amenities. It was a clear win for TripAdvisor members and visitors and strategically a great fit for us because we needed a mechanism for more people to find our content.

SM: When did you have your conversations with TripAdvisor?

TM: We began speaking with TripAdvisor in 2007. We had began speaking with them even before we launched the site publicly. We launched the site and service in March of 2008. TripAdvisor acquired a majority stake in our company in August of 2008.

SM: Where did your vacation rental listings come from?

TM: For us, the market is composed of two different user types. One is rent by owners where there is an independent owner who lists his one property; that is, lists his own home by himself. The other is property managers. A lot of people who own vacation homes live thousands of miles away from the property. They cannot manage it, so they use a property manager to find guests and take care of logistics.

We chose to identify the property managers. Property managers are established, trusted businesses that represent multiple homes. They also typically have their own website. We created free accounts for them through a targeted, automated synchronization process with their website. If they wanted to begin trying our service, we could automatically create listings for them and allow them to create reviews without their being required to do anything.

SM: How did they find you, or how did you find them?

TM: We found them through crawling the Internet. We found companies that represented properties in every state. We then pulled the contact information and sent out bulk invitations informing them that we had found their website, that we had created an account for them, and we provided them a user name and password that they could use if they wanted to try the service. We took the investment of creating all the accounts for them. As long as 50% of the people were willing to try it, we were confident that we could get them to use it.

When we launched the website, we already had 50,000 homes on the site, and we had thousands of reviews coming in each week because we had already created the service. Property managers did not have to do anything because we did it all for them.

This segment is part 3 in the series : Helping You Book Vacation Rentals: FlipKey CEO T. J. Mahoney
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