“We reimagine the streets of a city like the corridors of a hotel. We believe that every home can be on Airbnb and every host can be ‘guest-ready’. We take the hassle out of hosting. We solve the complex logistical operation of coordinating housekeepers, fresh linen and key exchange. We further add value with our capabilities in dynamic pricing strategies, interior design and hospitality experience that makes a Hostmaker listing on Airbnb stand apart from the rest.” Nakul Sharma MBA’11J, CEO and founder.
Indian born Nakul Sharma was expected to become a doctor, an engineer or a lawyer instead he took a less conventional route by attending hotel school at The Shannon College of Hotel Management in Ireland. “It was the first time that I had left India and the culture shock couldn’t have been bigger. I grew up in Bombay, a city of 10 million and found myself in the small town of Shannon with a population of just 10,000!” It was here that Nakul learnt everything about the complex operations in the hotel industry.
A year later Nakul attended the National University of Galway where he earned a joint First class honours degree in Hotel Management and Marketing, graduating in 2005. He then became a graduate management trainee for the Starwood Hotels Group in London – a fast track 18 month programme where Nakul worked in revenue management dealing with the pricing strategy. With just three weeks’ notice he was then posted to Dubai with the mandate to open two hotels for the Starwood Hotels Group. The experience was invaluable with the many challenges he had to face: “On the first day the hotel opened for business, the pricing went wrong on the website – instead of posting US$200 rooms they had been listed as just US$20 per room leading inevitably to many bookings especially in the peak seasons.”
Despite the numerous teething problems Nakul overcame and the global economic crisis that hit Dubai hard, within six months the hotels were leading its competitors. After a challenging and successful stint in Dubai he decided it was time to make a move from operations to thinking more strategically and applied for an MBA. It was at INSEAD that the seed for Hostmaker was sown in Professor Karan Girotra’s class although it was just that – an idea – and Nakul didn’t really entertain the idea of developing it further at the time.
On graduation from INSEAD in 2011 Nakul worked as Director of Commercial Strategy and Planning for the Intercontinental Hotels Group. While working there he co-wrote a paper on Airbnb’s impact on the hotel industry. Nakul was convinced that Airbnb was an attractive alternative for travellers who were tired of the mediocre offering in the 3 or 4 star hotels and that Airbnb was making homestays a real alternative travel accommodation category. He quit his job at the end of January 2014 to pursue the idea using his own savings for the first six months. Initial clients were generated from Nakul’s conversations on the Airbnb platform. As an Airbnb host himself Nakul could use his home as a test ground for the services he proposed.
Hostmaker is launched
A group of Nakul’s INSEAD classmates flew to London from LA, Seoul and Toronto to brainstorm on the venture – they had previously worked together post-INSEAD on a project to acquire a hotel in London but this had fallen through. Following this meeting Hostmaker was officially launched in July 2014. The group of INSEADers later became some of the company’s initial investors. A first round of funding was closed after winning the INSEAD investor pitch in London in 2015 of £250K.
“We successfully grew in the high double digits throughout 2015 which resulted in a second fundraise of almost £1.5 million led by DN Capital and DSGCP, a Singapore based fund run by Deepak Shahdadpuri, INSEAD MBA ‘98. The investor group now includes five INSEAD MBA’11Js; Professor Girotra and Deepak; together with experienced and successful entrepreneurs. This group are convinced by the project’s ambition; the speed of execution and the quality of the service delivery. We expanded into Barcelona and Rome in 2015 adding Paris at the beginning of 2016 – with more European cities to follow.”
But with the rapid growth come challenges as Nakul explains:
“As it is an operations business it is people heavy and quite difficult to automate aspects of it. However, we are developing proprietary operations and pricing tools that will help create our secret sauce.
I made a conscious choice in the investor note I drew up at the beginning about the housekeeping team. I do not want them to be treated as just a pair of hands. These are the people who bring the home alive and represent the brand on the frontline. The majority of the staff are employed full time and are not contractors – they are paid well over the living wage. We keep them at the heart of our decision-making and are always optimising their daily routines, reducing travel times and making it easy to service the homes with well documented notes about each and every flat.
We also need to attract and employ high quality talent. At the pace we are expanding we need to find people who are inspired and excited about our business proposition and will join the team and stamp their mark on it.”
Nakul is convinced that Hostmaker is the first among many ventures that will be developed using Airbnb’s ecosystem.
“We believe this ‘secret sauce’ of operational excellence is the platform through which we will earn the trust of our hosts and expand into new services and cities. We aim to be the world’s first truly global homestay hospitality management company.
I am truly inspired by leaders who battle against all odds to realise their vision. Sustaining success in the long term is another matter and I tip my hat to individuals who do that in any discipline.”