Here’s what I learned this week

This is going to be a different kind of email.

I’m going to outline how I approach strategy for a new brand.

Go to market strategy is the most sought after skill that no one talks about openly.

The vast majority of brands just don’t have the inherent skillset to look for and spot opportunities around strategy.

DTC is a lot of brute force business building rather than strategic alignment of goals.

It’s always the quick win, least amount of effort.

I hear, “Can we just increase our ad spend? Try advertising on a new channel?”, way too much.

This is perpetuated by agencies that only understand one channel for growth.

So today, we’re going to do something different.

My buddy Younes is working to build up a bedsheet company.

Rather than just answer his questions and provide him with strategy, I’m instead taking this opportunity to use it as a teaching lesson in go to market for a new upstart brand.

What is the product, why does it matter, why should anyone give a f*ck?

Younes sells high end Egyptian Cotton Bed Sheets.

Even though my wife and I do pretty well, getting us to spend $400 on a pair of bedsheets is a stretch and we’re better off than a lot of people out there.

So he’s got a tough sell to a consumer. Not impossible, but tough.

There are cheaper alternatives, the benefits can’t be experienced until used, the company has no brand or track record.

Story only goes so far with this one.

Understanding Market Dynamics

What’s the market for bed sheets?

We actually work with a few bedsheet companies so I do have some real data around this.

2-5 sets of sheets and a purchase cycle of every few years.

I don’t hate it as a business, though one question not being asked by these companies via their forms is how many beds do they have in their house.

Would be a good question to collect some data from.

The number one factor for purchasing sheets is feel according to answer provided by consumers.

Ok so the picture is starting to be created.

If our product is great, we’ll sell up to 5 sets of sheets over a 3 year period of time.

Maximum LTV anticipate is $2000.

A good set of sheets should last a long time and should get better with washes.

To compete in the market we need emphasize the feel and the longevity of the products.

Understanding Consumer Behaviors

How do people experience new bedding?

1. Purchase something new / online research and reviews

2. Hotels

3. Stay with friends or family

4. Airbnb, VRBO, and other short term rentals (more on this section later)

Ok so people are hesitant to try something new with large price tags from companies they have never heard about.

Online research and reviews

The only way to overcome this is to have experts in the field that test this stuff, give your product a try and align their opinions and publications distribution to push traffic and vouch for your products.

This is tough, doable but tough lots of leg work, then you’re product has to live up to the expectations.

Then we look at other places where people could experience products like yours, this is where things get interesting.

Hotels

Large hotels and hotels generally go to a wholesaler to get all their linens when possible, boutique ones these days are usually run by larger chains and commoditized, in fact you can buy bedding directly from the hotels.

Ok so hotels are a long sales process, you might get some boutique style ones but this isn’t likely the right path to go, too much bureaucracy unless you already have a relationship with someone, it’s going to be a waste of time.

Staying with Friends and Family

This is typically how we find bedding we like honestly, house sitting and then actually taking a picture of the brands that they bought, you need to feel stuff then you do research, it’s found us pillows we like, sheets, blankets, etc.

We ended up getting a blanket when we were in Australia that the Hotel we were staying in had in the room from a local shop, we flew it back with us.

Ok so there’s no real way to target this market other that direct to consumer and from there, it’s the same slog, it’s a tough sell at these price points.

You can’t scale it either.

Which takes us to our last route.

Airbnb, VRBO, and other short term rentals

Why I like this market for the go to market strategy.

There’s 7.7million listings on Airbnb.

These listings rely on creating a great place to stay where people sleep in beds that aren’t as consistent as say a hotel.

They all have sheets.

They are all independent listings.

There are property managers for large blocks of these.

448,000,000 stays all of which would be better on high end sheets.

1. They are a write off as a purchase

2. They improve the quality of the stay

3. It’s a very manual process to go after this market currently

Side note on this, if I were Airbnb I’d be working out incredible deals and offers from home good brands, not sure if they do yet, but this seems like low hanging fruit which improves the experience for all guests.

Ok so not knowing anything other than the financial alignment that is above, I see a decentralized listing situation with easy inroads to property management companies with something that is universally used by all guests and something that can improve their customer experience.

Is anyone at a competing company going to go through the effort to reach out to all these people directly? Nope.

Ok but we need to find a better way to get in front of this audience.

Google search for Property management companies, youtubers talking about running Airbnb properties, and bloggers that talk about how to run Airbnbs.

This market is huge.

If you sell 1,000,000 sets of sheets you have a company that can do $400M in sales.

Let’s math this, 2 sets of sheets per bed average of 2 beds per listing, we’re at 250,000 customers in total.

Now remember the stats from above, 2-5 sets of sheets, purchased every few years.

This is going to be more for an Airbnb, you’ll probably want to cycle out linens every few years, but depending on the turn over of your units, you’ll need 2 sets of sheets per bed.

It all starts with a search.

This was Chatgpt

Here are some of the top Airbnb property management companies in the USA:

1. Vacasa: Known for its comprehensive services including cleaning, guest communication, dynamic pricing, and marketing on top booking sites. Vacasa offers 24-hour guest service and no fixed contracts, making it a popular choice for hosts looking for a reliable brand name​ (Hostaway)​​ (Weekender Management)​.

2. Awning: Highly regarded for its full-service management which includes everything from guest communication to property maintenance and price optimization. Awning's fees start at 15% of the generated revenue​ (Lodgify)​​ (Weekender Management)​.

3. Evolve: Focuses on marketing, booking management, and guest support. Evolve charges a low 10% management fee and provides liability insurance and damage protection. This company is ideal for hosts who need assistance with listing and pricing management only​ (Lodgify)​​ (Hostaway)​​ (Weekender Management)​.

4. Casago: A franchise company with over 50 locations across the US and Mexico, Casago offers mixed rental property management services, making it suitable for investors with both long-term and short-term rentals​ (Lodgify)​​ (Weekender Management)​.

5. SkyRun: Manages over 900 properties across the U.S. with a rental fee of 15% of the rental income. SkyRun offers no additional charges for start-up, onboarding, or ongoing services​ (Lodgify)​.

6. Rabbu: Provides full-service management, maximizing returns by creating short, medium, and long-term listings. Rabbu handles all aspects of property operations, including guest communication, maintenance, and payment processing​ (Hostaway)​.

7. Onefinestay: Known for its high-end property management services, focusing on luxury rentals with comprehensive guest and property management services​ (Lodgify)​.

8. Air Concierge: Offers flat pricing options, making it an ideal choice for hosts preferring a predictable fee structure. Services include guest communication, cleaning, maintenance, and listing optimization​ (Weekender Management)​.

9. KeyBee: Popular in San Francisco, known for its flexibility and transparency. KeyBee focuses on providing comprehensive services while allowing homeowners significant control and insight into their property management​ (Hostaway)​.

10. Belo: A boutique management company specializing in Airbnb listings, managed by a former Airbnb employee. Belo manages up to five listings at a time, focusing on automation and guest experience improvement​ (Hostaway)​.

These companies provide various levels of service, from full-service management to more specialized offerings, helping property owners optimize their rental income and maintain their properties efficiently. For a deeper dive into each company's services and to find the best fit for your needs, you can visit their respective websites.

I would never advocate for scraping data from a website that requires you to be logged into access it because you’re likely going to violate the terms and service as they are laid out, but you’re also not building a competing product.

Check individual terms.

Let’s just say though, if I was building a business, the grey area for advantages is where I would look.

Understanding and Building a Go to Market Strategy by doing things others aren’t willing to do

Ok so we have our stats, we have our figures, we’re using Formtoro to collect more data, we’re building out our spreadsheets for youtube influencers that directly speak to our audience of Airbnb and short term rental companies and aspiring entrepreneurs.

More chatgpt:

Here are some of the top YouTubers who provide valuable insights into managing Airbnb properties:

1. Sean Rakidzich (Airbnb Automated): Sean shares his extensive experience in the short-term rental market, covering topics like rental arbitrage, pricing strategies, maximizing occupancy, and property management.

2. Levi Kelly: Known for his stunning videography, Levi showcases unique and inspirational Airbnbs worldwide. His channel offers insights into creating memorable guest experiences and effective property marketing.

3. The Real Estate Robinsons: Tony and Sara Robinson focus on smart property investments and setting up successful Airbnb businesses. Their channel also co-hosts the BiggerPockets Real Estate Rookie Podcast.

4. Lydia Patel: Lydia offers straightforward advice on running short-term rental properties, covering financing, designing, and scaling a vacation rental business.

5. Sean Pan (Sean Loves Real Estate): Sean combines his expertise in finance and real estate to provide comprehensive content on managing and scaling a successful Airbnb business.

6. Kristen and Michael: This couple shares their journey in the short-term rental market, offering practical tips on property management and renovation projects.

7. Noelle Randall: Noelle's channel is packed with actionable advice on buying the perfect vacation rental and creating a profitable Airbnb business.

8. Robert Abasolo (Robuilt): Robert specializes in tiny homes and unique vacation rentals. His channel covers a wide range of topics, from property design to business management.

9. Kylee and Steven: This duo offers candid discussions on the challenges and successes of hosting and managing short-term rentals.

10. Matt Caissie (Airbnb Uncovered): Matt provides a comprehensive guide on getting started with Airbnb, platform updates, and achieving top search results.

These YouTubers offer a wealth of knowledge and practical advice for both new and experienced Airbnb hosts, helping you navigate the complexities of short-term rental management and maximize your business success​ (Hostaway)​​ (Turno)​.

We write up how bedding can make or break an experience and opportunity to surprise and delight guests that usually wouldn’t spend that much on bedding in their own home without experiencing it in person.

I think you can see where this is headed.

We team up with this group, they get a discount, share of the profits via an affiliate relationship, they get to take the purchase as a write off against their rental income to their property.

Asset Building 101 and why most people suck at business

Most people would run this play to reach out to these groups and just go for the sale, this is not what you want to do.

The long term play for this is data and analytics. You collect data from people in exchange for offering up the deals etc.

You build your own asset of airbnb hosts complete with contact information, you then have an asset to market other brands products into this audience.

You’ll probably make more money at scale from distributing access to other products than you will selling your own products.

So scrape, build, enrich, and distribute.

Taking things a step further

Allow hosts to login with their Airbnb credentials as a host to access deals from a list of upstart brands.

This is why I prefer technology.

You have a subset of an audience that is actively looking to increase their income by renting out their homes or collection of homes and managed properties.

It’s really a win win, they get a tax advantage for improvements and costs associated with running the property as a business, then you’re giving them a kicker if they want to purchase any of the goods they like in the Airbnb with a discount as part of the “House Rules” or catalogue.

This sounds like more of a structured marketplace though where you scrape all the Airbnb listings, then build up deals with other brands for hosts to feature your products in their spaces.

Just make it super easy for the purchasers to remember that it’s a tax write-off.

This is a positioning that I don’t really see used enough.

The Takeaway

Would love some feedback on what you thought about posts like this, it’s a little different in that it’s less my observations and more just public client work on strategy.

The post was written in one go in less than an hour with no prior research conducted.

I don’t publicize this often, but I am available for private strategy sessions where we’ll create something like what’s in this email.

Have a great week!

-Jon

Catch up on past posts: https://ecomwithjon.beehiiv.com/

You can learn from me: jonivanco.com