Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson (Part 6)

Sramana Mitra: To net it out, you have about $100 million topline, $50 million gross margin, then about $5 million operating margin, and you’re funneling that profit into growth.

Cliff Johnson: That’s a good general way to look at it without getting too specific.

Sramana Mitra: I want to switch gears a bit and understand how you fit in the vacation rental industry in general. There’s a lot going on in the space. There’s Airbnb on one end where people are listing their properties. Airbnb is not even just vacation rental. Then there are other vacation rental listing sites. On the other end of the spectrum is you who’s doing a lot more than just listing. You’re doing actual property management. Is that a good representation of the spectrum?

Cliff Johnson: Definitely. You summarized it quite well. It’s a common misperception that we have to fight in getting people to understand the difference between our model and Airbnb or HomeAway. HomeAway is actually our largest advertising channel. We work very closely with HomeAway. With Airbnb, we do work with them. It’s a little more challenging because there’s not a direct API to their site. We can’t automatically update the listings on their site. Therefore, we have to update everything manually. They also keep all of the client information, which makes it difficult to really service the guest as well.

Sramana Mitra: HomeAway, however, provides you an API to directly integrate with them?

Cliff Johnson: Yes, that’s been extremely valuable on both sides. We provide inventory and market for them. On the other side, they own quite a few brands like VRBO, which is the premiere place to go for the longest time. It was the first real vacation rental site out there. There’s a lot of loyalty to those sites. They have a lot of organic traffic that flows through them. We’re able to launch a region pretty early just by leveraging all of these marketing channels that are out there.

Sramana Mitra: Are there other players like HomeAway who do let you integrate and have this bidirectional win-win happening?

Cliff Johnson: We work with FlipKey and TripAdvisor as well. The service models vary from company to company. I would say, so far, HomeAway has been the easiest to work with in terms of developing a streamlined process and having API that is consistent and functional. We’ve had success working with other partners that way as well.

One partner that is really interesting for us is Dwellable, which is a company based out of Seattle. They basically run all of our hubs through their site as well. Dwellable is focused on mobile traffic. A lot of their traffic comes through their app, which is an interesting look into the future of travel. More and more, we’re seeing that people are looking on their phones, which is in line with other industries as well right now. We have to direct more time and attention to that segment.

This segment is part 6 in the series : Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson
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