The Exchanges

Q Yeah. So a couple of quick questions here that I think other people will be curious about. And then I want to get more into your story and the book, um, uh, source of truth. I mean, is this just a web scraper that's hitting Airbnb or are there other sources you're pulling in?

A There's lots of sources, you know, it did start off as a scraper. Um, but then, you know, as we had all this great data, we were able to sign partnerships with other software providers. So we'll sign deals with that channel managers or large property managers. Uh, to help give us data and we'll give them some free data in exchange. Um, so, and we're starting to get data from individual users too. So you'll see a lot of things rolling out on the website where somebody can give us a, an iCal or their login credentials and in exchange, they'll get some free insights. And so we want to get data from as many channels and, and, and streams as possible.

AI assessment note: “There's lots of sources, you know, it did start off as a scraper.”

Q Based off your data, when you select smart pricing on the backside of Airbnb, is that actually like Uber surge pricing, the perfect price elasticity, or are they leaving margin on the table?

A Yeah. I mean, the pricing is, is, is a kind of a joke in the industry, to be honest. It's a, it's significantly underpricing properties. You know, their interests aren't really aligned with their host right now, which is kind of surprising to hear, but they are really taking the side of the guests and they want the guests to have a great experience. And the way a guest is the happiest is when they get the best deal and they always come back. They're like, Oh God, I got an amazing deal. And I'm always going to use this platform. And so they're going for maximum occupancy at the cheapest rate for all their properties across the city or across the country. And so they're not really looking out for the host and how they should be making the most money. Our general kind of analysis shows that, you know, they're underpricing properties by about 20 to 25%.

AI assessment note: “they're underpricing properties by about 20 to 25%.”

Q Yeah. How accurate is your data? I mean, are you pinging, for example, your only way to know what's open in Austin this upcoming weekend is for you to go on and basically ping the calendars of all the things on Airbnb and see if it says booked or not, right?

A Yeah, that's right. I mean, so we're scraping every property every single day. So we're looking at that calendar. So, you know, at most you're going to be 36 hours out of date on what's available in the market at that time. Um, but you know, we're scraping, you know, over five, well, about ten million properties almost every single day, so it's a no small feat, and this is kind of a global tool. Um, so yeah, the accuracy is, is, is, is, is accurate, right? And that's what we spent all our time doing, is perfecting our algorithms, which basically look at your calendar and say, He's blocked out three days here, Thursday through Sunday. You know, is that him staying at his property or is that somebody actually booking that property? And so we look at like the time of the booking, the booking window, your host activity, what your rate was, you know, 12, 14 different signals actually to say whether it's a booking or a block date in your calendar. So that's kind of the core of our technology that we've been, we've been working on for, you know, nearly four years now.

AI assessment note: “we're scraping every property every single day... at most you're going to be 36 hours”

Q I could say, wow, there must not be demand. There's no events. I should take the price down for the weekend to try and book it over the next three days. Or I can say, no, the person that's about to book is actually gonna be very desperate. There's no inventory. I should actually jack up the price for this upcoming weekend. Which one should I go up or down?

A I mean, it depends on what the supply in the market is. Right. And so, you know, in that market minor tool, there's a pricing component, which shows you exactly how many properties are still available for those date and that date range. And so, you know, that's what we're trying to help people do is get smarter. Uh, you know, how, how to capture that value from that last minute booker that has no price sensitivity and is just going to, is going to pay for whatever the property that's available and is available last minute. Right. And so, uh, there's no easy response to that. You know, typically, you know, if you're not booked seven days out, most people are doing the fire sale. And then, you know, if you do get 24 to 48 hours out, you know, some guys are doing that sort of, let's, let's go up 50%, because, you know, hey, like, what do I have to lose? If there's a limited supply in the marketplace at that time.

AI assessment note: “I mean, it depends on what the supply in the market is.”

Q That's okay. That's pretty healthy. So 50 bucks a month, and you launched it in 2014. What do you have today? I mean, are you sole founder? What's the team look like today?

A Yeah. Uh, you know, I actually found this thing with my father. He's been a computer engineer for, you know, there we go. It's nice to be able to lean on him for the original scraper and database and stuff. Uh, you know, now we're about 34 people, uh, you know, spread out between our headquarters here in Denver and about 20 people in Barcelona, um, Spain. Um, so yeah, I mean, it's been, it's been a great ride. I mean, growing quick, and we got all the tailwinds from the growth of the short-term rental industry, and really this, uh, So many ways to take this data company, right? You know, when disruption happens, when disruption happens, there's a lot of winners and there's a lot of losers. And, you know, we're kind of in the middle, you know, sort of like Switzerland of data, like hotels, you want to learn, like, why are you getting beat up? You know, come to us, you know, real estate investor, you want to see where to go buy properties. You know, come to us. So we're really filling this nice niche or kind of how the world is changing in real estate hospitality, uh, you know, with the growth of Airbnb.

AI assessment note: “found this thing with my father... now we're about 34 people”

Q If you're optimizing for cash on cash returns, have you found leasing is still the way to go or because interest rates have been so low over the past few years, have you actually started buying a few of these, the mortgage is low enough where it makes sense?

A Yeah. I think it's interesting, you know, in, in the very expensive markets, you know, like a New York, San Francisco sort of markets, you know, leasing, and there's a lot of money to be made leasing. Um, but you know, in those cheaper markets, uh, let's call them like, you know, Nashville places in the South, you know, where places are still, or in the Midwest, you know, buying is, is definitely the way to go in those, in those markets. There's a great blog post on our website just recently posted best place to invest. And it sort of breaks down, you know, what are the best cities for buying, Leasing and even sort of subsidizing your rent by running out a second bedroom. Um, and so, uh, you know, it's very market specific right now, but in that there's There's still a huge opportunity, man. More people are choosing to travel on Airbnb than there are places coming on the market every single day. And so we just see this sort of trend and this transition from people, you know, really wanting a bigger place and a bathroom and a washer and dryer and all the amenities and stuff that Airbnb brings, uh, you know, more than a hotel. So, you know, we don't see this trend ending anytime soon.

AI assessment note: “in the very expensive markets... leasing... in those cheaper markets... buying is definitely the way”