Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson (Part 4)

Sramana Mitra: So far, what I’ve gathered is that you pretty much self-financed the business and grew organically. You started in Oregon within a range where you and Eric could service all of the work and gradually built out the service provider network to scale it. Can you talk about the ramp? How many properties were you managing in, say, 2010 to now? How did the inventory of properties evolve or grow?

Cliff Johnson: Right now, we manage approximately 2,300 homes. We started with one back in March of 2010. We’ve consistently grown at least two to four times every year. At the end of the first year, we were at a point where we had grown to have 56 properties. At that point, we knew we were viable. One of our goals when we started the company was to have 50 full-service properties. Once we hit that point, we had built our business model off of getting the revenue from 50 properties and being able to staff according to that. That first year was about building out the model and the viability of the business. After that, we were ready to take off. It pulled us away from having to do all the day-to-day tasks.

Within the next year, we grew all the way to 216 properties. Then in 2013, we were up to 542 and roughly over a thousand in 2014. We have been able to continue the rate of growth. When you start from zero, it’s pretty easy to grow quickly in comparison. It becomes more challenging as your numbers get higher. That’s something that I’m particularly proud of – our ability to adapt and change our model and support the growth.

Sramana Mitra: Talk to me about your business model. You said you first built your numbers and revenue models on 50 properties. Talk to me about how you make money and how the money flows.

Cliff Johnson: We work with individual home owners. We don’t own any of the properties that we manage. Eric and I, personally, own a couple of properties. We collect rent from the guest. Out of that rent, we pay the home owner a portion. Our current commission rate is 35% but that’s something that has evolved over the years as well. We found new marketing channels that allowed us to provide a better return to owners. As we’ve done that, we’ve made some adjustment to the commission. With the other amount that we have, we focus on taking that money and allocating it across our departments. We also look at business development.

This comes up with a lot of businesses where they’re too focused on maximizing profits in the sense that they cut back on services to do that. Often times when you do that, you miss out on the opportunities to grow. We never built our model with the idea that we were going to make a lot of money off any one individual property. It was always focused on building a sustainable model where every property was profitable for us. Our revenue source is primarily the commission that we get. We also charge a cleaning fee which essentially covers the cost of our housekeeping.

This segment is part 4 in the series : Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson
1 2 3 4 5 6 7