Marcus Räder of Hostaway on Backing into a Business and Attracting VC Capital
Marcus Räder is the Founder and CEO of Hostaway; A technology company that provides software solutions for short-term vacation rental property managers. Marcus is a passionate traveler with 10 years of experience in online marketing at various start ups. Originally from Finland, Marcus is on a mission to help Airbnb hosts improve their businesses.
Looking back five/ten years, where did you think you'd be by this point in your career? How did you get here?
I’ve always had a very pragmatic approach to work. Initially I wanted a laid back job where I could enjoy my life, save money and do something that I found interesting. Starting my own company wasn’t on my mind when I first started out. Two things that I’ve always looked for in a job is being able to work with great people and also, having the ability to travel and I’ve been thankful that the 10 plus years of start up experience I’ve had before starting my own company has allowed me to do that. The last job that I had before starting Hostaway actually came about as a result of me seeking out the company that I wanted to work for and then pitching them on what I wanted to do for them.
Tell me about Hostaway. What gave you the big idea to start the company?
Hostaway came about as a result of noticing that there was a big opportunity in the travel industry in general, and it honestly evolved over time. I saw that as a whole, the travel industry was attracting a lot of investment from VCs and I started researching where the most attractive areas were. Short term rentals stood out as an area to focus on so I started to get my head around that. The next step was to think of a product. I didn’t have any ideas for a product at the time so I went around and started interviewing people from the travel property management industry to see what they were lacking. I’ve done market research throughout my career and that skill really helped me. Eventually, that led us to build a full service solution for vacation rental property managers. We didn’t start off with an idea; we took a bit of a backwards approach where we looked at an industry that was growing and attracting capital and then went out to understand how we could build a business based on developing a great product.
You just raised a big sum of money, tell me about that process. What did you learn? Anything unexpected?
What we’ve tried to do is put ourselves in the position where investors want to come to us to invest rather than going out to seek investment. If you are a company who looks to be doing the right things, it becomes much easier to get capital if people are coming to you as opposed to the other way around. The ideal state is that the VCs start asking themselves why they aren’t already invested in your company. That is what happened in our last round. To get to that point however, you need to go out, build a network and paint a picture of what you are looking to accomplish over the next year. Once you have accomplished those things, then it becomes a question of going back to those same VCs and showing them what you’ve done. To actually secure the investment though, having the right protection from an IP perspective becomes very important, and making sure that customer contracts are sound is critical.
What is the most important business lesson that you had to learn the hard way?
It really pays off to be self-aware. If you are a founder, you’ll eventually need to make the transition from being a founder to being a CEO and leader. I believe that a lot of companies fail at the start because the founders are not able to transition themselves out of the founder role. For example, while I used to run sales, I can no longer swoop into a sales meeting and close the deal myself because we have a sales team whose responsibility it is to do that. Making that transition is hard, but it’s critical. As a leader, your people watch what you do and you need to be an example for others. I’d also say that the way you hire carries major implications. Whenever I hire someone, I always ask if that person has the ability to teach me and others at the company new things that will ultimately make all of us better.
What would be the one piece of advice you'd give to someone in the workforce to get ahead and find work that is fulfilling?
I’d say that first, it comes down to understanding your priorities and what you want to accomplish. Everyone is different in terms of what they want out of work and what success means to them. If you take the time to understand what is important to you, you are more able to find work that is fulfilling because you understand what you care about and what matters to you. I don’t believe in the concept of “the perfect job”. In every job there are going to be things that you don’t like doing or things that don’t make you happy. The important thing is finding out what does matter to you and making sure that you get that. You need to be clear about the trade offs that come about with every job.
I’d also say that those who are looking for the right job should start thinking about how they can help the organization’s customers be happier. We often think a lot about “how will joining this company benefit me” as opposed to, “how can what I know benefit the lives of those whom this company serves”.