Virtually all investors, mentors, and advisors counsel startups to launch an MVP – Minimal Viable Product. There are several good reasons for this advice: startups by definition lack resources, thus they need to put “all their wood behind one arrowhead;” getting a product out quickly enables the founders to learn, priority one for founders; and an MVP minimizes the cost of failure, enabling a startup to try again.
But where is the advice for companies that have successfully launched their product? They have customers, they have revenue – how do they deploy their product or service development resources now? There are a number of options: keep adding features to build out that “minimal” product; bring their product to a new, adjacent market; create another, related product to build a “product line.”
But it pays to go back to the customer – what are they now looking for? The article Vacation rental platform Vacasa raises huge $319M round — here’s how it differs from Airbnb on Geekwire by TAYLOR SOPER & NAT LEVY presents another option: the full stack solution. Vacasa is a great example of a bootstrapped company – it didn’t take any outside investment for six years, but has raised $500 million since 2016 and just closed a $319 million round of new funding. What are they doing with this new round? Two very different things: one, extending their reach in the vacation rental industry and fueling the growth of a new real estate offering.
Vacasa is one of many perhaps better known companies using technology to disrupt the hospitality industry like Airbnd, and HomeAway. But how is Vacasa different from these online marketplaces:
But it’s not just a marketplace — it is a “full-service property management company,” helping homeowners manage the entire booking process from start-to-finish. Vacasa employs thousands of people across its markets for on-the-ground “field-based roles” — housekeepers, reservations agents, local managers, etc.
“Unlike Vrbo, Airbnb, and others, our field staff fully manage every home on our site,” Breon said. “This is a massive difference for both owners and guests. Owners can rent their homes without worrying about the day-to-day complexity of short term rentals, and guests have the assurance that we’re there to help should the need arise.”
Vacasa started out as a point service: solving one problem in the entire booking process, making a reservation. But it realized that its customers wanted more, not necessarily more listings, but more related services: a full stack solution to all the problems both owners and guests have. This is a good example of one way to expand your company once your product or service becomes established in its market.
But in 2018 Vacasa expanded beyond its service of vacation rental management to offer a new network called Vacasa Real Estate to help people through the process of buying and selling second homes. Note that this new offering is not a point service but another full stack solution: helping people through the entire process of buying and selling homes, not just providing listings, as many of their competitors do.
“With our data and expertise, we can help people find the perfect home — be it a pure investment, or a blend of personal use and profit,” Vacasa CEO Eric Breon said. “And with our local teams, we can make the process of buying, furnishing, and renting a home incredibly simple.” said Vacasa CEO Eric Breon
There’s much more to the Vacassa story; I encourage you to read the entire article for more detail, including how they use their proprietary technology to serve property owners.
So, congratulations! You shipped your MVP, attained product/market fit and have serious customer traction. Now what? There are a lot of options, don’t just automatically assume you simply need to add more features. Look at the entire customer process flow to see where else in that process you can provide value. Let the customers’ needs, not a product roadmap you may have developed pre-FCS (First Customer Ship) determine the answer to the “where do we go from here” question. And one final comment: note that the way Vacassa expanded its business also strengthened its differentiation from its competitors – a very good thing!
Mentorphile 