Helping You Book Vacation Rentals: FlipKey CEO T. J. Mahoney (Part 5)

SM: What were your statistics after you had completed your deal with TripAdvisor and gained access to 32 million users?

TM: As of today there are 110,000 properties on the FlipKey TripAdvisor vacation rental network, and over 150,000 guest reviews. We have by far the largest collection of authentic reviews in the industry. We are growing quickly from a traffic perspective. Compete.com has us at 230,000 unique visitors a month. In terms of traffic directly on TripAdvisor, it is typically triple the traffic that is on FlipKey. Collectively for FlipKey and TripAdvisor, it is close to 1 million unique visitors a month. Our growth is between 10% and 20% monthly.

SM: Aside from TripAdvisor financing, do you have any other financing or are they the majority owner at this point?

TM: We had a group of 20 friends and family that helped to fund the company privately. Those investors had their debt converted into equity and they are now minority owners. We are considered part of the TripAdvisor Media Group now and very much function with TripAdvisor. I spent a lot of time at their offices. We do make a lot of decisions here, and technically we operate independently with a very influential hand from our friends at TripAdvisor.

SM: It seems that you should be at a $2.5 million a year run rate by now?

TM: We don’t disclose the exact numbers for competitive reasons, but I will say our forward-looking business is very healthy and optimistic.

SM: In the early stages, how did you get the business developed? So far you have spoken only about two people.

TM: We initially were working out of a house. Including the interns, there were six of us working there.

SM: It is very generous of an investor to let you all work out of his house!

TM: Very generous. He has a nice house. I say he was very generous because he was a large cash investor and then let us work out of his house free of charge. We are forever indebted. Matthew Berkeley is that investor.

SM: How did you meet him?

TM: I grew up with him. He was the founder of Zefer, which is the business that motivated me to move to Boston to begin with. He is a friend, mentor, and former boss.

SM: Does he maintain a board seat in your company?

TM: None of our angel investors maintain a board seat. The board is occupied by Expedia, TripAdvisor, and me from FlipKey.

SM: What is the total amount of money you have raised?

TM: I contractually cannot release that information, but I will say it is a lot less than the $450 million that HomeAway raised.

SM: You now have 110,000 properties. Are they starting to see value out of your value proposition? If they have to make a choice of marketing their property on TripAdvisor, which way will they go?

TM: The challenge of our business is that HomeAway is so large and influential. They deliver value to a lot of people. The last I heard, they have 450,000 listings on their network of sites and attract the largest amount of traffic in the industry. With a lot of people connected to them, our challenge is to show that there are newer and additional ways to market a property. We also have to show that there is value to marketing a property on different networks and on multiple websites.

Providing property managers access to an affiliation with TripAdvisor is very powerful. The guest review system we have built is unique and very powerful. Once we are able to communicate that to people, it is a very easy sell and we have very happy clients. People have been marketing their homes for 10 years, so to introduce something new and different will take some time. The TripAdvisor brand has been a major catalyst for us in that regard.

This segment is part 5 in the series : Helping You Book Vacation Rentals: FlipKey CEO T. J. Mahoney
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