Leading up to February 2010, many Canadians were going online to Craigslist to find a place to stay in Vancouver for the Winter Olympics. However, renting from someone on Craigslist can be a risk. How can travelers make sure that the homeowner is trustworthy? Likewise, how do you as a homeowner guarantee that the people that rent from you will actually pay you for their stay?
Toronto start-up iStopOver.com learned a lot from the challenges faced by travelers seeking accommodations at the Vancouver Olympics in February 2010. They were then able to develop a very successful business model for the FIFA World Cup 2010 games in South Africa this summer.
Anthony Lipschitz, COO of the newly formed iStopOver Inc. mentioned in a press release on their website that iStopOver “facilitated bookings valued over $1.25 million dollars” as a result of the FIFA World Cup event and “proved the iStopOver model in the process.” They are now targeting a number of international events in 2011 including the Super Bowl in Texas, the Rugby World Cup in New Zealand, and even the Royal Wedding.
iStopOver Inc. is a newly formed company which combines the strength of two organizations – iStopOver Inc. and PlanetEye Inc. The company announced their merger in August 2010. At the time of the merger, iStopOver announced that they had closed a venture financing round to provide the company with up to $3 million in venture funding led by JLA Ventures and GrowthWorks Commercialization Fund Ltd. to fuel further growth.
It is free to list and/or rent a place on iStopOver.com. They just charge a small transaction fee on every booking. iStopOver differentiates itself from Craigslist by handling the money side of the transaction. They hold the guests’ money in escrow until they have arrived at their location. Once the guest confirms that they like the place, they release a unique code to the host that is then submitted to iStopOver. At this point, iStopOver can then release the funds to the host. iStopOver also builds up trust between users through reviews and social networking.
I asked the new President and CEO of iStopOver Inc., Jonah Sigel, a few questions about their strategy and how they got started.
What was the motivation to combine forces between PlanetEye and iStopOver?
Going it alone isn’t easy these days. With PlanetEye, we had a really strong team with online travel expertise and a very experienced technology team in place. iStopOver had a unique product offering. The two companies were good on their own but combined were something really special. It was the quintessential peanut butter and chocolate marriage.
What do you think it takes for two start-up online businesses to form a great partnership?
The most important thing is the ability to check your egos at the door, to recognize strengths and weaknesses and just get the job done. Anthony and I got along right from the start. We both over communicate with each other. Each of us knows what the other is doing and we don’t have to worry about each other. More importantly, we look at things differently which is really important as there are always three sides to every challenge.
Tell me a little bit about the first two events that you targeted – the Vancouver Olympics and the FIFA World Cup in 2010? What did you learn from those events?
They were real proof of concepts. First, and most importantly, people are willing to open up their extra space to potential guests, to act as ambassadors to their cities, their countries and the events that are being hosted. Secondly, there is a significant group of travellers who are looking for something unique when they travel. They want to know where the great coffee houses are – not the local Starbucks. They also want to know where the locals go, etc. Where we really excel is in helping to connect the great ambassadors from a location with those who are looking to stay with that local expert.
Sigel explained that the key to renting out your place is highlighting the attractions that are close to your location (i.e. transit, galleries, etc.). Also, list some of the basic perks that make travelling easier like wireless internet, cable TV, and proximity to the airport – the same things that many hotels list to sell themselves.
What you want to avoid is being too greedy over the price of your home. Sigel says that the market will dictate what they want to pay for renting your place. iStopOver learned during the FIFA World Cup that it is better to price your place slightly lower and get multiple bookings – rather than pricing too high and not getting any bookings at all. Remember that the people looking on these sites are the everyday person who is looking for deals.
Hear from recent iStopOver.com hosts and why they list their place for rent on the website: