If there’s one thing you should never do in an interview it’s turn up late. And yet there I was, arriving twenty minutes after the designated start time to meet with David Kelso, the new CEO of Beyond Pricing. To make matters worse, I was slightly out of breath and more than a little sweaty after running from Montgomery up the hill of Second Street. So, how did this inauspicious start end with me joining the Beyond family as their first VP of Marketing? To answer that question, it’s worthwhile zooming out a little first.
Beyond Pricing originally started as a property management company in 2013, offering their services to homeowners in San Francisco who wanted to list their place on Airbnb but didn’t want the hassle of managing the day to day. As part of the service, the BP team developed an algorithm that adjusted pricing automatically according to supply and demand, based on factors such as day of the week, season, local events, and even weather forecasts.
The team realized that although the property management business was viable, the real value was the dynamic pricing solution. They quickly pivoted, as in David’s words “we recognized that our core competency was not logistics and hospitality but building great software to help them make more from their homes.”
Jump forward to 2020 and Beyond Pricing has now grown from two to 75 people (of which I am one!), has 10 offices in different countries and has acquired $42.5m in funding along the way. Today we serve nearly 11,000 cities around the world and have handled over $2.5bn in bookings. So, what’s driving this growth?
1. The vacation rental opportunity
When we think about large-scale B2B SaaS opportunities, most people think that a horizontal market approach is obligatory. But this philosophy is being challenged. Brian Feinstein, General Partner at Bessemer Venture Partners, argues that vertical markets are ripe for disruption with executives increasingly ready to ditch legacy software and migrate to the cloud as they understand that technology is a critical source of competitive advantage. This creates a “winner-takes-most” dynamic as industry peers typically buy what their peers buy. Once established as the “gold standard”, the door is open for the leaders to cross-sell additional applications.
And this thinking plays out beautifully in the vacation rental market. Swept by the “Airbnb effect”, what was once a relatively quiet sector has exploded. According to VRMA, property managers grew inventories 30% in the last 12 months in North America and growth is expected to continue at 25% in the next 12 months. Today there are nearly 300 million vacation rental users worldwide.
With more customers comes increased competition. There are more property management businesses than ever before - some 115,000 globally, and a vacation rental owner in today’s market is much more actively engaged, informed by the transparency brought by access to new technologies. Property managers are therefore having to work harder to satisfy their owners and are looking to technology to ensure they remain competitive.
2. Beyond Pricing is perfectly positioned
With the introduction of dynamic pricing into the vacation rental market we are directly addressing this need. Traditionally pricing was either set at a flat rate, changed a few times a year around seasons, or adjusted manually, often subjectively. By drawing on billions of data points and offering the ability to connect directly to Airbnb, VRBO and numerous Channel Managers and Property Management Systems, we go beyond just recommending the ‘right price’ to optimize revenue, we automatically update pricing as well.
Delivering a 10-40% revenue lift, it’s a game-changer for vacation rental businesses.
Nor are we stopping there. Built from the ground up as a digitally native business powered by data, we are looking to expand into adjacent solutions for vacation rental managers that leverage these core competencies. From marketing to distribution to website optimization there are more levers than just price that you can pull to drive more demand and more revenue.
We also obsess over our customers, delivering positive outcomes for their businesses. Here are just a few of the quotes I found on Capterra:
“Uncovered hidden revenue: …once we turned it on and trusted Beyond our April came in DOUBLE what it had the previous year”
“Helps us stay competitive: …I no longer have to constantly change rates for different seasons for over 50 rental properties.”
“Raising the bar: From top to bottom Beyond Pricing is a first-class organization”
And if you’re left in any doubt here’s an outstanding customer video endorsement.
The reason many customers love the company so much is that it isn’t just about the software. Instead, at Beyond Pricing we are methodically building a world-class team that understands that people are equally important.
3. Beyond software – the BP team
Ultimately any company is about the people. And the culture of that company can either be left to accident or it can be deliberately formed. In the case of Beyond Pricing, it’s very much the latter. Every Monday we walk through the core values, which always starts with “We care”. We are a team of people who are directly connected to and enthused by our customers. In the short time that I have been here, I’ve been struck by the deep knowledge of the vacation rental market that exists across the board. This is evidenced at a high level by the number of times we’ve been asked to speak at conferences, and on a daily basis by the way the team interacts on prospect and customer calls. The approach is always to educate and guide, never to ‘sell’.
At Beyond Pricing we also know how to have fun. The office is always lively and when time permits, we escape and enjoy ourselves. Look no further than my day one activity - “Segway polo”.
Finally, it’s a team that is supported by focused and thoughtful investors, led by Bessemer. As a start-up, you’re always looking for investors that provide so much more than just funding. With Bessemer’s approach to vertical-specific opportunities, Beyond Pricing will continue to flourish under this partnership.
So, there you have it, the reasons I chose to join BP. And before I sign off, back when I turned up late for that interview with David. When I look back on the experience I can appreciate that it was the perfect introduction to Beyond Pricing. It involved a last minute decision to meet in person, because we see the value in connecting face to face whenever possible. And it really drove home the importance of developing hyperlocal knowledge of a market, starting in my own backyard of San Francisco - something that BP excels at!