Look up “entrepreneur” in the dictionary, and you may find a picture of Andrew McConnell (or if it’s not there, it should be). Andrew has been in the business of redefining today’s ideas of property management contracts and fees through rented.com, a world-class marketplace for competitive short-term rentals. As a Harvard and Cambridge graduate with plenty of global enterprise experience under his belt, Andrew is changing the rental management industry and creating a better experience for all. Here’s his story:
As entrepreneurs ourselves, we love knowing how other entrepreneurs start their day. What does your morning routine look like?
Well, my wife and I have a new baby, so our day starts based on her schedule – anywhere between 3:00 A.M. – 6:00 A.M. My wife is an attorney, so it was important that we partner together those first weeks in order to both be able to work. She stayed home with the baby the first six weeks, and then I’ve taken over the last six. So after I feed the baby and get things set up for her, I spend about half an hour catching up on emails and anything that happened to pop up overnight. From there, I bring the baby with me into the home office and start work. Depending on the day, I’ll be in video conference meetings with the team or conducting executive one-on-one meetings. If I’m not in meetings, I typically save my mornings for writing – lately, it’s been a mix between industry-specific topics for our blog and articles drawing a parallel between startups and parenthood. After lunch, I typically head to the gym and then have all my West Coast meetings in the afternoon. Then we have dedicated family time from 6:30 P.M. – 9 P.M. but typically my wife and I both go back online after 9 P.M. to get a few more things done. We try to be in bed by 11 P.M.
Full-time dad and CEO? That’s a lot to fit into one day! Tell me…what spurred you on to create rented.com in the first place?
It was really a single conversation; a light bulb kind of moment. In January of 2012, I was in Turks and Caicos with my family and overheard two vacation property owners telling horror stories of all the time and hassle involved in self-managing their properties. I immediately emailed my now co-founder Mickey Kropf and fleshed the idea out – we thought about what it would look like for managers to bid against each other to buy an entire year from the homeowner for a guaranteed amount. The idea being the homeowners got the highest amount of money without risk, and the best managers would ultimately win once they put their money where their mouth was. Mickey hopped on board and rented was born. rented.com is now in 17 countries, 38 states and over 300 cities around the world.
So, explain your business model to me – how does the rented.com process work? What makes it different from an AirBnB or VRBO?
Those companies are considered short-term rented retail platforms – meaning that as a guest, you or I can book a night or week at a time. rented.com created the wholesale market behind that retail platform. It was a market that didn’t even exist, and there needed to be a way to connect homeowners and professional managers. I would equate Airbnb or VRBO to Publix, and the individual booking a vacation rental to a shopper buying some bananas. Obviously, Publix did not get those bananas directly from the small farmer that grew them in Central America. Rather, there‘s a middleman who buys up all of the bananas from the farmer and then sells them wholesale to Publix, who then sells them at the retail price to us at the grocery store.
rented.com is that wholesaler who gathers up all the rental weeks and homes and connects the owners with the Publix stores of the world who will then rent those nights and weeks out to vacationers. We consider ourselves like eBay; we are neither buying nor selling – we’re just the marketplace. We offer two options for whatever is best for your home: Guaranteed Income or Shared Success. With a guaranteed income, homeowners receive a fixed amount of income each month regardless of occupancy and never have to pay commissions or fees. With shared success, a manager bids to offer homeowners the most competitive rates with the highest ensured standard of care.
Now, I saw that you went to Harvard and worked for McKinsey & Co. as well as Axiom. How does all of that experience play into your business methods?
I took a little bit away from each experience for sure. At both Harvard Law and McKinsey, I learned how to break down business problems into components to better solve them. Because McKinsey was such a large organization, the main thing I took away was how to properly run a business and problem solve. At Axiom, I had a little more freedom to implement my ideas and make an impact.
How was it to go from very cushy jobs at McKinsey and Axiom to a bootstrap startup?
I learned that taking something from 0 employees to 1 employee is a very different skill than getting from 1 to 10 or 10 to 100. Both Mickey and I had professional wives that brought in enough income to allow us to pour our time and finances into rented.com with little risk. My wife and I started our marriage by putting one of our paychecks every month into savings, so when I wasn’t bringing in any income for two years, we weren’t starving.
That’s a really smart financial move. What tools did use to help you scale your business once you got it off the ground?
Honestly, I knew nothing about starting a company, and a lot of it was trial and error. We thought we needed all of these platforms and processes to execute our ideas, but an advisor helped us realize that we did not have to develop every single piece of technology to succeed. Rather, we needed to determine what
our core competency was, and build the BEST technology around that. For most other things, like payment processing, there were great providers already out there. We use Google Apps for most things, but we use HubSpot for marketing automation and Salesforce for our CRM. We started using Acuity for payroll and then payment processing. As we grew, we needed help keeping up with our books. Now we have a part-time CFO and part-time Controller. Acuity has been able to come alongside us every step of the way to be the consistent expert through every stage of growth. They have been an irreplaceable part of our business who has definitely been able to grow and scale with us.
We love hearing that! So now that you’ve been in business for a while, where would you like to see rented.com go in the next 5-10 years?
eBay only became the auction platform they are today when people realized its potential and began using it for everything from selling baseball cards to bicycles. So we want to eventually be a marketplace for future rental rights overall: boats, cars, RVs, commercial and residential real estate, etc. Essentially, any heavy asset you could rent.
What is the biggest risk you have taken in your life or career?
I’d say with rented.com there was definitely a risk either way. There was a risk as an entrepreneur, but to us, the idea just seemed so obvious. We had a lot of validation over ten months which confirmed our idea for rented.com was needed in the industry. On the flip side, there was a risk in not pursuing it at all; it would have been way worse to not take the risk than have to deal with the thought of “it could have been me.”
You’ve been at this for a long time now. What do you find to be the most rewarding part of entrepreneurial life?
Our employees are mainly right out of school and seeing them grow and come up with their own ideas is really cool. But the most rewarding part would probably be the human impact. Getting to hear stories from our customers like “You gave me my second retirement,” and “Because of rented, I was able to send my kids to college,” is so rewarding. We got started not because of the money, but because of the time the rental process was eating up, so to hear that we are making an impact on people’s financial lives is huge. We don’t really have users – we have customers with names, and that allows us to be close to the impact we have on their lives.