As a follow-up to his company pitch (LocalBigwig: 8/9/10), StartUp Beat reconnected with Local Bigwig founder Ray Madronio, the company’s founder and CEO, about the private home rentals business, its budding online community, funding, and advice for entrepreneurs based on his experience.
SUB: Who do you see as your primary competition?
Madronio: There are the established hotels and motels that have been providing the bulk of both business and holiday travel accommodations for years. Naturally, all legislation that they endorse to limit types of private home rentals would limit our business.
Second, other online communities that offer short-term home rentals are another source of competition. We know we need to continue to evolve our site and highlight our positioning to be the top-of-mind online destination for short-term accommodations around the world.
SUB: The site has been self-funded to this point, but are you seeking or do you plan to seek outside funding in the near future?
Madronio: We realize that additional funding can help fuel a much faster rate of growth. Even though the company has been self-funded to this point, we are very open to outside funding so we can pursue our other great ideas sooner rather than later.
SUB: How many people are currently members of Local Bigwig?
Madronio: There are currently 11 total members of Local Bigwig. This is comprised of both local and offshore resources.
SUB: You went into this a bit in your pitch, but can you expand on what differentiates Local Bigwig from other short-term home rental websites?
Madronio: We are passionate about creating an online community with the best set of higher-end home rentals and infusing relevant, fresh content to highlight the local life within the neighborhoods where our home listings are located.
A couple of similar websites only want their members to communicate within their systems. However, we encourage transparent and meaningful communication outside of our site. If our members want to chat via Facebook or personally meet over coffee to discuss, we are all for it. We know that this helps both parties be more comfortable with the transaction.
We have a flat-free subscription-based model as opposed to one that is commission-based. This will lead to a more engaged group of members and a fresher set of home listings. For other websites, their inventory of homes is stale because they are not deactivated after a certain time period.
We offer a set of complementary services to homeowners that make it easier and safer to rent out a private home. For example, if a homeowner is out of town and cannot meet their guests to hand over the keys, we can do it for them.
Travelers are also pursued on our site. We have borrowed from the model used by dating websites and leveled the power between both parties. It shouldn’t just be the travelers searching and inquiring with the homeowner all the time. Travelers represent significant rental revenue and can fill available slots within the calendar. We thought that it is time to allow homeowners to do some searching as well.
And most importantly, we infuse hyper-local content throughout our site. Homeowners can pinpoint their local haunts near their home. Hyper-local news sources depict what’s hot around the neighborhood. At Local Bigwig, we know that it’s not just about the specifics of the apartment, it’s also about the people and the neighborhood.
SUB: What have some of the challenges been to getting the website off the ground and running?
Madronio: The biggest challenge on the technical side has been finding the best people to build our site. We have worked with a few teams offshore and have hired several technical resources onshore. The biggest hurdle has been finding the right team to deliver results as quickly as possible. It hasn’t been easy but we feel that we are at a good place now with our technical team.
On the business side, it wasn’t easy to initially attract homeowners and travelers to our site. We knew that we had to offer the right blend of site design, credibility and traffic to make it worth peoples’ time to sign up. It has become easier to attract more members each day but we know we have to keep highlighting what makes our online community a compelling destination for short-term rentals.
SUB: I’m interested in how you use other social media services to grow your membership. How is Yelp (as you mentioned in your pitch), for example, used by Local Bigwig?
Madronio: We use Yelp to share local discoveries that are worth sharing with other members of our site. In all cities, including New York, there are those treasured, hard-to-find local haunts that when experienced, adds a special dimension to the overall city experience.
We use other social media channels such as Foursquare, Twitter and Facebook in a similar manner.
SUB: Where do you see Local Bigwig in a year from now?
Madronio: In a year from now, we plan to have opened a couple more local offices in key cities. This will position us to provide operational services to homeowners who want to share their local lives with other global travelers.
We have partnered with several companies as their preferred accommodation portal for business travel around the world.
Also a year from now, our market is much more educated about the concept of short-term rentals of private homes and more people prefer it.
SUB: Finally, a question I always ask: as an entrepreneur who has weathered the down economy, what advice do you have for those just starting out—especially in an economy that remains less than dynamic?
Madronio: One bit of advice is to pursue your startup no matter how impossible it may seem to make it work. Even during times where your concept seems hopeless (and there will be those times), one thing will lead to another and your venture will weather several rough patches in its growth.
A second piece of advice is to talk to people who are doing similar work. There is something that you can learn from everyone and you will meet a few more experienced people who will want to help you out.
Local Bigwig LLC – www.localbigwig.com