‘Home is where the heart is’, or so the old adage goes. Yet, from time-to-time occasion demands that we leave our slice of sanctum and head out to the big wide world, either for business or pleasure. Often that will entail checking into a hotel, which, however impressive, is by its very nature impersonal. It can take days to make yourself at home and you begin to feel you’re getting under the feet of the concierge team with your questions about things to do, places to eat and attractions to visit.
London-headquartered onefinestay alleviates this pain. For less than £500 a night (which is considerably less than what a suite at one of the capital’s top hotels would set you back) customers can luxuriate in the surroundings of someone else’s opulent home with all the frills of a high-end hotel experience – luxury linens and toiletries, a 24/7 concierge service and even an iPhone to use for the duration of their stay.
“I always describe it as being halfway between a boutique hotel and a holiday letting business,” says Greg Marsh, co-founder and CEO of onefinestay. The premium accommodation is booked online, meaning technology is an absolutely key enabler of the business – something the company’s CEO has always had a keen interest in.
The son of two lawyers, Marsh describes his childhood as rather uneventful. “Unfortunately, it was fairly prosaic, as much as I wish there was a great overarching narrative of overcoming adversity,” he jokes. In fact, the investor-turned-entrepreneur says the most interesting theme of his childhood was the keen interest he took in technology. “At the age of seven my dad brought home a computer,” he recalls. “It was just simply the most incredible thing in the universe and I fell headlong in love with computing at that stage and started programming on my own.”
His passion for technology lasted throughout his early teens and he jokes that had he not discovered girls, he may well have lived out a career as a developer. But thanks to “a succession of charismatic English teachers” he was “lured” away from technology for a short period to read english and philosophy at Christ’s College, University of Cambridge.
After university Marsh’s interested in tech wizardry was reignited when he spent time at tech-focused private equity group Apax Partners, before going to work at GF-X, a trading exchange for airfreight capacity. With the company’s focus on tech and co-founder Demetrios Zoppos’s background as a consultant for McKinsey & Co, Marsh felt as though the opportunity perfectly balanced entrepreneurial flair and enthusiasm with a culture built on a professional services background.
In 2004, after four years of working at GF-X, Marsh went off to Harvard Business School in Boston to complete a two-year residential MBA. “I’d jumped pretty much into an entrepreneurial culture straight after university so I felt a little bit self conscious about never having had a more conventional training background – perhaps a blue chip company or a large professional services firm for example,” Marsh explains. For him, studying an MBA gave him the theory around the practical skills he’d learned thus far in his career. “I wanted a way of framing and contextualising the very hands-on management experience I’d had quite early in my career.”
He was also gaining more practical experience: in the summer of 2005 he worked in the London offices of technology-focused VC firm Index Ventures, joining full-time in 2006 after completing his MBA. But Marsh was never set on a permanent career in investment: while it was a stimulating experience, he yearned to be on the other side of the table. “I was looking to investment as a way to learn and understand the start-up community better so I could take a leap into starting my own business as soon as I found the right combination of team, timing and opportunity,” he explains.
That opportunity came in 2009 when a trip to Pisa left Marsh with a slightly bitter taste in his mouth. “I had a great holiday, but the hotel was terrible,” he recalls. Luckily a friend of a friend hailed from Pisa and gave some advice on things to see and do. But this got Marsh thinking about how local knowledge was always superior, and then upon returning home was mulling over the fact that his apartment had lain vacant while he was away. Perhaps he could build a business that would marry the two: homeowners could get an extra revenue stream from their unoccupied properties, and visitors would get the unique experience of living like a local.
But it wasn’t just the idea that was the focal point for Marsh – it would be all about execution. “In investment there is a saying that ‘ideas are cheap’. And there is some truth in that: there are lots of ideas for businesses. What there aren’t is people who want to go and make those things happen, and are willing to devote their lives to it. For me I wasn’t just looking for a clever idea, I was looking for an idea that made sense, that solved a need I’d experienced and that I had some ability to execute.”
Next on the to-do list was building a strong founding team; Marsh asked DF-X’s Zoppos to join him at the helm, as well as Tim Davey, co-founder of SnapTalent – one of of Index’s portfolio companies in California.
Marsh left Index Ventures in mid-2009 to work on onefinestay full-time. In its early incarnation, the business ran on very little money. The founders were keen not to take VC cash too early, so ran a friends and family round at the end of 2009 raising around £250,000 from 25 of their nearest and dearest.
This was enough to set the wheels in motion and a prototype of the site launched in May 2010. It gained traction quickly, says Marsh. “We had just enough early success from that launch to prove the business model worked.”
And that proof was enough to stir interest among the VC community too. “It gave us a very difficult decision to make: do we grow this company in a cashflow-positive sure-and-steady way or grow it aggressively, raise a lot of money and do a deal with the devil?” Marsh explains.
They plumped for the money. “We decided this partly because I did have a background in finance and I felt comfortable that I knew what the risks were.” Zoppos had a lot of experience in raising finance too: DF-X raised over £50m during its growth. Signed, sealed and delivered, onefinestay’s series-A funding round was closed in September 2011: $3.7m from Index Partners. And in 2012 it raised a further $12m in a round led by New York based firm Canaan Partners but including more cash from Index.
Yet Marsh says it wasn’t too bizarre an experience raising money from the firm that had previously employed him. “I wouldn’t have taken their money if I didn’t think they were fundamentally a very decent group of people and have entrepreneurs’ interests at heart,” he explains. What’s more, VC options are limited in Europe. “There aren’t many really good investment firms in Europe. It’s not like Silicon Valley where there are three or four dozen firms you’d feel delighted to have sitting on your board and pumping your company full of risk capital. In Europe there are only really a handful of investment firms in that league – of which Index is one.”
Raising capital, while a complicated and arduous process, was just the beginning. Stark lessons around logistics, and quality of customer service were to follow. “It’s a deceptively complicated business,” says Marsh. “There is of course a website, and that website has to look good and function well, but fundamentally, the hard part of this is all about the infrastructure and the service delivery,” he continues. “What we’ve learned as we’ve got bigger and practiced is how hugely important it is to set the right expectation and then deliver on that promise.”
And onefinestay does set the bar high. When guests arrive at the property they’ve selected they are met by a member of staff who checks their documents and hands over keys, important information and an iPhone for free local calls and containing information and recommendations from the owner.
There’s no doubt it’s an attractive offering for the consumer, but what of the homeowner? “No-one with this beautiful a home is going to do this for themselves – they don’t have the time or the inclination. They’re busy people and they travel a lot. In fact, the people with the nicest homes tend to travel the most.
These are busy people with complicated lives and they don’t want to deal with this hassle,” Marsh explains. “What we have to do as a company is make their participation in onefinestay incredibly easy.”
It’s an approach that seems to be working: onefinestay rolled out in New York in May this year and the company now has more than 750 exquisite homes across its two cities, with further expansion on the horizon.
But success comes at a price. “I knew it was going to be brutally hard work and it has been,” Marsh admits. “I’m still working very long hours and I know that’s not going to end any time soon. I think it does rather take over your life for a few years. And you see very little of your friends and family. It’s hard, but it’s a decision you make. If you want to create something unique and exciting, and you want to create a great business and to change the world, there’s a price to pay.”