Get Mic’d – Episode 4: How to Build an Entrepreneurial Spirit with Marcus Rader, Hostaway – Transcript

Below is a transcription of Get Mic’d Podcast Episode 4, hosted by Katie Zeppieri featuring Marcus Räder, co-founder and CEO of Hostaway. Listen to the full episode here.

Marcus Räder is co-founder and CEO of Hostaway, the leading all-in-one vacation rental management software. Originally from Finland, Marcus has lived in many countries around the world including Sweden, Poland, and The Netherlands, before settling in Canada. It was this passion for travel and real estate and his dedication to learning about the vacation rental ecosystem that enabled the creation of Hostaway. 

The company quickly grew thanks to the deep technological expertise of its founders, with over a decade of tech start-up success between them. Hostaway gives property managers all the tools needed to compete with hotels and other vacation rentals, including sales channel management, dynamic pricing and hospitality services. It now boasts preferred partnerships with Airbnb, Vrbo and Booking.com, in addition to a marketplace of over 100 integrated software partners. 

With Marcus at the helm, Hostaway has quickly become one of the leading PMS and Channel Management solutions in the market, growing revenue by 175% in 2023 year-on-year. In May 2023, Hostaway received a $162 million growth investment from growth equity firm PSG to accelerate innovation, enhance its platform and expand its offering through acquisitions.

Marcus regularly provides commentary on vacation rentals, travel, real estate, and startups to the press, including Forbes, Washington Post, Skift, BBC, and PhocusWire. He is frequently invited to share his expertise at industry conferences and on webinars and podcasts, such as VRMA International, the Book Direct Show, ShortTermRentalz webinars, the Get Paid for Your Pad podcast and the Vacation Rental Success podcast.

In his spare time, Marcus enjoys following the latest in venture capital markets, playing guitar, and listening to death metal with his daughter.

Learn more about Marcus Hostaway and his work in short-term rental property management on his LinkedIn profile. You can also connect with him on Instagram.

Katie Zeppieri: Marcus! Welcome to Get Mic’d.

Marcus Rader: Thank you very much for having me.

Katie: Thanks so much for being here. I’m really excited to meet you in person. I’ve been reading up about your entrepreneurial journey thus far. You’re currently leading a very successful, fast-growing travel tech company, but you’ve been an entrepreneur at heart. You started your first business when you were 11 years old. How did you stumble into entrepreneurship? How did you know that it was right for you?

Marcus: You know, sometimes I have these employees—we’ve got 200 now—that I hired and had to let go more than I can remember. It gets embarrassing sometimes when people show up on the street somewhere on the other side of the world and say, “Hey Marcus, do you remember me?” And I say, “Not really,” but they used to work for me.

But sometimes there are employees that I just tell honestly, “Look, you’re never going to be happy at this or any other job. The only position for you is to be a CEO.” And I think I’ve had bosses that have told me something quite similar. They said, “Hey, the way you want to run things, that’s great. But you need your own company to run it that way, because we are trying to do our thing here and you’re doing your thing and it’s not really working.”

I think it’s a flaw in the brain. I know a lot of entrepreneurs; there’s always something wrong with them. There are very few that are good at school, good-looking, athletic, and smart. Entrepreneurs are usually not like that. There’s always something wrong with them.

It makes them stand out. And it’s that thing that’s off that makes them succeed. Because if all it takes is to be smart, be charming, be good at what you do, and work hard, anyone could do it. As long as you’re smart. You can’t really change that. But there are a lot of smart people who can never be entrepreneurs because you need something that’s broken right there and you never really know what it is. But other people are very good at seeing that. I’ve always been like that. I always felt like where I am right now is 99% Perfect, but there’s 1% that’s wrong all the time. 

Katie: Even as a kid, you felt that?

Marcus: Yes, especially as a kid, I never fit in anywhere. All my friends had hobbies, and I felt left out because I wanted to hang out with them and play video games. I tried badminton, football, sailing, and skateboarding, but they were incredibly boring. I would say, “You do this every week? Like every Wednesday, you go skating for three hours? How can you live with yourself?

Eventually, I found out that most people in the world have a hobby of some kind, but I just wasn’t that guy. I’m the one who can do one thing all the same.

Katie: So you started your first business at 11? What was that business?

Marcus: I found out that many of my friends and I had a problem. We got money every week from our parents, usually from age 10, to buy comic books or candy. But that money ran out quickly, especially if you received it on Friday after school to buy some candy. This was in Finland, where kids can actually walk the streets alone. I realized I wasn’t that into candy, so I thought, why don’t I help my friends out and lend them money?

I said, “Hey, you want more money for candy? Take my money, and next week, just pay me back double.” So I started a payday loan business and became very rich quickly. Compounding interest works wonders when you double it every week. But then, the teachers found out and said, “This is not cool. We cannot have a loan shark in our school of 11-year-olds.” So they shut me down, and I had to return the $1 they gave me initially, not the $56 they owed. That’s when I quickly realized you need to play by the rules.

Katie: Interesting. So you were the loan shark at 11 years old in your school? How were you in school academically? Did you enjoy school? What were some of your favorite subjects?

Marcus: I absolutely hated school. I was really good academically, though. Whenever I decided to show off and get the best grade, I always did. Even when I didn’t care much, I was still in the top 10%. But I hated the idea of going somewhere every day and being told what to do. I loved science but hated doing other things and having people control my life for so many hours a day.

People told me it would get better in university because you get to choose. But in university, there was no choice either. You had to attend lectures, take exams, and write your thesis. Then they said it would be better when you start working because you’d have freedom. But that wasn’t true either. You still have to go, sit down, and do what they tell you. I didn’t like school or anything that came after, except maybe this job I have now—it’s absolutely fantastic.

Katie: This job is a good fit for you. How do you think you developed that spark? Do you see it as something that runs in your family, or did you develop it along the way?

Marcus: I don’t know where it comes from, but I’ve noticed I tend to take things to the extreme. If I do something, I really do it. For example, I’m into running now and plan to run a marathon. That’s something only 1% of people can do in their lifetime. If you’re going to build a business, you better build it really well.

Another example is from this year. I was in a couple of places that had a severe lack of good Neapolitan pizza, like Southwest Florida and Costa Rica. I realized I should find the best pizzerias. So I googled the best pizzerias in the world and found the top 100. Over two and a half months, I visited 10 of them in Miami, New York, Barcelona, and London. Next, I’m going to Lisbon, Rome, Florence, and Helsinki to try more.

Katie: It sounds like when you find an idea you’re passionate about, you go all in.

Marcus: That’s It! I would like to quote Jason Lemkin from SaaStr: “If your CEO doesn’t seem at least a little bit intense, you should probably find another job.” Intensity and drive are crucial. When you get excited about something, it has to be done 100%.

Katie: Why do you think that’s important?

Marcus: Because for the first six years after starting Hostaway, I thought I was playing a game, trying to succeed. But then I learned a lot and realized the game is rigged. The market forces control it. If you are not willing to go to the extreme to get results for your company, someone else will. Many people who fail blame regulations or shifts in consumer demand, but it’s really the market forces that crush you. To succeed, you need to give 110%, because there are 10,000 people in line behind you willing to give 100%. If you don’t, one of them will take your spot. It’s that simple.

Katie: I like that mindset. You need to bring intensity to what you do and always be thinking that you can’t rest. You can’t sit back and say, “We’ve achieved a good amount of success, so we can just close for today.” You have to constantly be innovating and pushing forward.

Marcus: And you have to be paranoid all the time. Whenever you fail, there is some reason that you don’t know, and you want to find out that reason if you can. Don’t spend too much time on it, but it’s worth it because sometimes it’s an unknown factor that you didn’t consider.

But when you succeed, you also have to remember that there are factors, people, or capital out there to get you. Whether you fail or succeed, there will always be forces you cannot control. You need to be very much aware of them, and it’s the intensity and speed that will determine whether you can succeed or not.

Katie: So your business as a loan shark at 11 years old got shut down. There were market forces and regulations that prevented you from pushing forward. Where did you go from there? What does the next chapter of your professional life and entrepreneurship journey look like?

Marcus: I was in high school, and once again, candy comes into the picture. There was a cafeteria open during lunch hours where they sold candy. The teachers wanted them to sell healthy snacks in case someone was hungry, but they just sold pop and candy, which was fine. I got friendly with the people running it, and when they graduated, I took over the candy store.

It turns out, you can pretty much do whatever you want and make as much money as you want. The best part was giving candy for free to people and getting favours in return or making friends. So, we were making a lot of money, and I hired my friends to work there as well. It was a great business.

Katie: What were some of the things you were getting in return for the free candy?

Marcus: Mostly smiles. I like people smiling. It’s a weird thing, but I was just interviewing a candidate for a sales position, and he said he’s good with AI tools. I told him, in sales, there’s one thing that can tell you whether you’re going to close the deal or not: it’s whether people are smiling. If people smile, we’re going to close the deal. There’s no AI tool for that, but I think smiles are very important.

Katie: Okay, it’s that connection with somebody. So, you’re running a candy business and focusing more on the connections you’re making rather than the revenue at that point. You went off to school, and you have a background in economics and an MBA with a marketing specialization. How was your post-high school journey? Did you enjoy school?

Marcus: School was absolutely fantastic. Our university organized International Days, which was essentially a week where partner universities from around the world sent two students each, and we showed them around Finland and partied with them for a week.

I was in charge of sponsorships and pretty good at selling. So, I called companies asking for free food, free tours of their facilities, and free alcohol, and we got all of that fixed. The best part was when the Warsaw School of Economics sent their top students based solely on grades. One of those students, who didn’t even speak English, happened to be my future wife. We had a long-distance relationship, and after about six months, on our third date, I asked her to marry me. Twenty years later, we’re still happily married.

Katie: That’s amazing to hear. Wow.

Marcus: School gave me everything, including the connections I needed to start Hostaway and find my co-founder.

Katie: Did those connections come from the school environment, or was it also because of how you leveraged the network around you?

Marcus: I did not leverage my connections and network around me at all. I found a couple of friends and stuck to them. I didn’t talk to anyone else. But there were some connections on LinkedIn, people I met once, and through them, I managed to get a job where I met my co-founder.

Katie: Okay, so talk to me about coming to the realization and the spark of an idea for Hostaway. How did that happen?

Marcus: Connections are good, but they only take you so far. We decided to move to Canada nine years ago for no real reason. We had never been here and wanted to visit, but thought, what better way to experience a country than to immigrate there? As tourists, you always get the tourist experience, but if you emigrate, you get the real experience.

When we got here, I realized it was incredibly hard for an immigrant to find a job. So, I used my connections again, from the same school, and found out about a guy who bought the most expensive condo in Canada. He went to my school in Finland and lived part-time here and part-time in Florida. I didn’t know him, but I managed to get an interview.

One reason we wanted to live here was that back in Amsterdam, we watched a TV show called Suits, where they rode bicycles among skyscrapers. The office for the job interview was in the same building where Suits was filmed. The interview went well, but then I got an IQ test that was based on the imperial system. They asked questions like how many ounces are in a gallon, which I didn’t know. I tried to explain that I didn’t know the imperial system, but I didn’t pass the test and didn’t get the job. I thought they really lost an opportunity, so I decided to start my own company.

I got intrigued by how entrepreneurial everyone in the city was. In Finland, entrepreneurship is seen as something you do if there’s nothing else, like the worst option available. Here, it’s encouraged and seen as something good, like a sport.

Katie: So, you’re deciding that entrepreneurship is the road. I remember hearing you speak about attending events and getting a sense of the climate. You heard entrepreneurs raising lots of money and thought, that’s what I want to do next.

Marcus: Yep, that’s exactly it. There’s an accelerator here in Toronto called DMZ, which I highly recommend. We attended their six-month accelerator program, which was extremely useful. They hold founders’ dinners where successful founders speak on stage. I always thought, I’m going to be there one day. That day was last Friday, and it was really fun to finally be there. I ran a completely unscripted 25-minute chat, and many people said it was the best talk they’ve ever heard from a founder.

But there’s a lot of bias in that. Successful people often give advice that is completely useless to young entrepreneurs because they don’t know what reality looks like today. One thing I don’t like is when people say you have to focus on your metrics, build your network, or focus on your health and eat healthy food. No, it’s blood, sweat, and tears that are needed. It’s spreadsheets, long nights, coffee, and cigarettes. That’s what’s needed to succeed. It’s gruesome, gruelling, hard work, not yoga or healthy food. It’s about how many spreadsheets you can analyze per hour, how many hours in a week, how many weeks in a year, and how many years you keep going until you fail. If you keep going long enough, you’re going to succeed, but most people don’t do that.

Katie: It’s less glamorous than the speakers on stage make it out to be.

Marcus: Exactly. Every time there’s an overnight success, you find out they had 20 years of failure before that. Like someone who starts a company and three years later is massively successful. Yeah, they probably started five other companies and stopped after four years, and those could have become successes too, but not overnight. It’s always like that. It’s very rare, and we are one of the fastest to reach this stage. In under 10 years, that’s completely unheard of.

Katie: Yes. You recently raised $175 million for Hostaway last year, a significant investment, especially when venture capital and money are hard to come by for startups.

Marcus: This is what I meant when I said the game is rigged. You think you’re playing by the rules, but the rules are set up by capital, which has no name. If you’re playing a game with friends, maybe Mary is making the rules and you can talk to her, or maybe the rules are written in a book. But that’s not how it works with businesses. What happened last year was that there was a ton of money sitting on the sidelines. Suddenly, someone said it wasn’t cool to invest in bad businesses like in 2021. So all that money went looking for good businesses and couldn’t find any. But the money didn’t disappear. When a good business like ours showed up, the demand skyrocketed, so did the prices. No one tells you that. They just say it’s tough to raise money, but it’s super easy for someone else. Life isn’t fair.

Katie: How do you define a bad company versus a good company from an investment perspective?

Marcus: It’s very simple. You take any metric, like gross profitability, the CAC CLTV ratio, payback time, or ARR per employee, to measure efficiency. Then you line up 100 companies. There’s one at the top and one at the bottom. At one point, you could invest in the top 50%. Today, that bar is probably the top 5% or top 3%. So if you want to know if you’re a good company, look at your competition. What are their metrics? How much does it cost them to bring in a customer? How much does a customer pay over their lifetime? If you’re the best out of 25 companies, you have a good chance of raising capital. If you’re average, now’s not the time to raise money.

Katie: You have a background in marketing as part of your MBA. How did you stumble upon the problem that you realized you could build a solution for with Hostaway?

Marcus: One of my hustles as a kid, which I continued into university, was doing market research. I mean literally going on the streets, stopping people, and asking if they’ve seen an ad on TV. I was even a mystery shopper at McDonald’s, travelling to different locations and checking if they asked the right questions and if all ingredients were there. This practical experience in marketing, talking to people and hearing their opinions, was very natural for me.

When I got interested in the property management space, I found many companies in downtown Toronto doing it. I picked up the phone, called them, and asked if I could come and ask a few questions. One of those questions was about their biggest challenge. Every single one said they needed technology and software. That’s why we built it.

Katie: Was the market research you did a passion project, or were you hired to do it?

Marcus: The Big Mac mystery shopper job was hired work. A company that does market research hired me. Whenever a consumer business like Coca-Cola wants to know how people like their new flavour, they hire a market research company. These companies then hire people like me. Anyone can get a job like that, but it’s not well-paid. It’s something to do when you’re 16, but you learn a lot from the experience.

Katie: Absolutely. What are some of the things you took away from that experience?

Marcus: A smile goes a long way. Getting people to stop on the street during their busy lives is not easy. You have to sell them on the idea that you’re trustworthy, not asking for money, and that it’s worth their time. It requires a lot of sales skills and situational awareness. You need to quickly read people and make up their entire life story in a few seconds to decide if you should stop them or someone else.

Katie: You’re making quick judgments, reading people.

Marcus: Exactly. That’s the number one skill I learned. You don’t learn much from eating a bunch of Big Macs, but you learn a lot from seeing people on the street. Today, one of my favourite hobbies is people-watching in restaurants and cafes, especially outdoors.

Katie: So this market research background led you to want to validate your hypothesis that property managers might have unique challenges you could solve. You started having conversations, meeting with property managers, and asking them what’s preventing them from growing. Because if you can help someone grow their business, they’re going to be willing to pay, right? You heard a repeated theme: “We need tech.” You identified the problem. How did you go about getting started in building the solution?

Marcus: Well, I didn’t start building it immediately. First, I looked into the underlying business climate. Is this something worth getting involved with? For example, I examined the competition, barriers to entry, and industry growth potential. If you’re developing something now for gas-driven cars, that industry isn’t going to grow in the next 50 years. But if you’re working on efficient use of real estate, it was clear to me in 2015 that real estate would be a hot topic in the future. People would be living less in some places and more in others, leading to issues with utilizing real estate effectively. I ensured all the trends were on our side, and it turned out to be a good decision. Investors asked for this research early on too.

After that, it was time to build the product. One thing that excited us was the massive barriers to entry. We had to make friends with companies like Airbnb, Booking.com, and Expedia, which wasn’t easy. If you need to plug into a system like Coca-Cola’s API, they’re not going to talk to you. But that’s why we wanted to do it—if it’s hard for us, it’s hard for everyone else. If we succeeded, others wouldn’t be able to copy us easily. It took four years of knocking on Airbnb’s door before they talked to me.

Katie: Help us understand your elevator pitch for Hostaway. How do you describe what you do and the problem you’re solving?

Marcus: We produce vacation rental software. Anything you need to manage vacation rentals at scale is in one tool. From advertising the property, managing the property owner and guest, to managing the SmartLock and payments. Our software handles everything, including automating guest communications and SmartLock programming. It’s designed to manage not just one property, but 10 or 20 properties efficiently.

Katie: These partnerships with Airbnb, Vrbo, and Expedia are essential to your business. How did you convince a giant like Airbnb to pay attention to you when you were brand new?

Marcus: Persistence. I thought if I kept trying, I’d get a chance to pitch. But that’s not how it works. You knock on doors, and they don’t open. After many years, they might open the door, look at you, and close it quickly. That’s when you know you have a chance. You need to keep knocking, talk to everyone, go to all the events where they might be, and find their people. But you can’t pitch your idea immediately. If someone realizes you’re about to sell them something, they’ll walk away. Eventually, your customers and the value you deliver to them will open the door. That’s what happened to us. After years of persistence, when Airbnb finally opened the door, a customer vouched for us.

Katie: There’s a certain amount of persistence and familiarity that you built over those four years. 

Marcus: Yes. When I got on the first call with Airbnb, I said, “My name is Marcus.” They replied, “Yeah, we know who you are. We’ve seen you knocking on our window for four years.”

Katie: What did that first “yes” look like? Who was it with, and what did it look like?

Marcus: It was insane. When you dedicate four years to a mission likely to fail, it’s crazy when it succeeds. Becoming an official partner with Airbnb changed everything for our business.

Katie: You have two different types of sales: B2B partner sales and direct sales to property managers. How did you build the other side of the business while working on these partnerships?

Marcus: We had two angel investors who were serial entrepreneurs and offered valuable advice and coaching. Initially, we were defensive, thinking our market was unique and their advice didn’t apply. But eventually, we realized our business wasn’t unique. We had to follow the same rules as every other business. This realization opened Pandora’s box for us. We could learn from other companies and apply the same principles. It’s crucial to hire good talent, retain them, ensure customers can find you, and keep them happy. These basic rules apply to every business.

Katie: Talk about your marketing strategy. I have a sense that you were very involved in leading the initial marketing strategy for Hostaway. How did you go about thinking about the channels that you would use to promote the company? What was sort of your vision that you applied to your marketing?

Marcus: I had a lot of theory and practical knowledge and practical skills myself, which I was doing for a long time. But eventually, we stopped doing all of that because it didn’t work. The theory is simple—you have a funnel, and you need to get people in there. There are different stages in the funnel, you refine it to go forward, you measure conversions, and you do A/B testing. All of that is extremely simple. But what’s missing from that equation, which many startups probably get wrong, is that you either have product-market fit or you don’t.

Product-market fit is very easy to determine. If your spreadsheet shows that you’re going to have 10 million in ARR in the next 12 months, or you already have 10 million ARR, you’ve got product-market fit. If it doesn’t show that, if you’re sitting there at 1 million and you think your customers like you, you think you’ve got the right market and the right product, and your NPS is 93, you don’t have product-market fit. It’s that simple. In that case, you don’t need any of those marketing rules because they’re not going to help you. They only help you when you have a product that the market needs at the right price, and you can find the market. But you can’t do that if you’re too small.

So the way you do it before you hit that point is very simple. What we did was we made sure that, first of all, we found the right customers. It’s just like hiring staff—if you have the wrong staff, it doesn’t matter, it’s not going to work. It’s the same thing with building a business. If you have the wrong customers, it’s never going to work. You need to know who the right customers are. We spent two years on a project to figure out who our right customers were because we realized we had some of the wrong customers and some of the right ones, but we didn’t know which ones were which. And even worse, when someone asked, “Can I buy your software?” We didn’t know if we should say yes or no.

Once we figured that out, we made sure they had the best experience in the world. We made sure, first of all, that our marketing promised them exactly what they wanted to hear and exactly what we were delivering—nothing else. And then we ensured that our product and support were the best in the world. That’s our marketing engine. That’s the entire thing. Everything else that comes after is the cherry on top. Then we can talk about social media or different channels, but the hard truth is that a lot of these rules and ideas that work in 99% of the functional companies today don’t work in a startup because you don’t have product-market fit. You’re selling the wrong stuff to the wrong people, it’s that simple. And whether you’re good or bad at marketing doesn’t matter because, at the end of the day, you’re still selling the wrong stuff to the wrong people.

Katie: Product-market fit. I like your strong, hardline on that. It’s like you either have it or you don’t. Someone can sit there with a presentation about how many impressions their post gets or any of these sorts of metrics, but fundamentally, what do the numbers look like? What do the financials look like for your company?

Marcus: It’s super simple. If you’re in our company and you’ve managed to get 3 million ARR, that’s where most companies stop if they get there. They will never get beyond that. Three years later, they’ll still be at 3 million. It’s a nice amount; you can employ 20 or 30 people and stay like that forever, but you will never get to 10 million. But if you keep adding 1 million a month, then yeah, you’re going to get there in seven months. If you have a spreadsheet that shows that, you probably have product-market fit.

Katie: How do you find those first customers? That’s really where I want to dig in because so many startups are trying to find product-market fit. How do you get somebody to even give you a chance?

Marcus: That’s a great question because I’ve got the answer. I wish I had the answer before, or maybe not—maybe the journey is the most exciting part. One thing that a lot of startups get wrong is that there are really only two ways you can position yourself: either you are in a category, or you have to create a category.

A category means, for example, Coca-Cola. The problem they’re solving is that you’re thirsty, but you’re also low on energy. You want something sweet, but it should also be cold and maybe have a bit of caffeine. It’s the perfect solution. But the category there is soft drinks. You go to the grocery store, and they literally have a section called soft drinks. That is the category.

When Salesforce started out, or when Microsoft started out, there wasn’t a category for what they did. Today, let’s say you have a startup that’s Airbnb for pet sitting. Sorry, but that’s not a category. There’s nowhere you can go where you have a list of providers for Airbnb for pet sitting. You can go to Best Buy and they have a section with cell phones. iPhone is its own category; that’s what Apple did.

So that’s the key. You have to know if you have a category or not. One very common thing that I hear when people say, “I do software that does this,” is I quickly google it and find out that’s a category. Then I start asking, “What about these other companies that are in the same category?” The founder says, “Oh, no, we do nothing like they do.” At which point, I just end the conversation because it’s useless. If you want to be found, you’ve got to be in a category. If you’re producing soft drinks, you want to be in a grocery store in the soft drink section. If you’re doing some drink that does something else that nobody’s ever heard of, there’s not a section in the grocery store for you. Then you need to figure out your marketing in a different way. But you’ve got to decide: Do you really want to create your own category like the iPhone did? Because that’s almost impossible. Or can you change your business model, maybe change your product, maybe change your audience so that you can fit in a category? If you can fit in a category, everything gets easier.

That’s how you find the first customers. In our case, it was actually very simple. There was a category; it was called Airbnb software, Airbnb management software. Nowadays, it might be vacation rental software. I just put an ad up on Facebook and asked, “Do you need Airbnb management software?” It started out—it wasn’t a thing, it was a category. We got a bunch of leads. I called them up and asked, “Do you really want Airbnb management software?” They said yes. “Are you willing to pay for it?” While the ad said it was free, that was just an ad. So, that’s how we found our first customers. It’s so important to make that decision. Are you going to create a category, or are you going to be in a category? Because if you’re going to be in a category, it doesn’t matter what your business idea is or how you’re different, you’re going to be compared to the others in the category.

Katie: I like your take on if you are thinking about, or if what you’re trying to build is creating a category, how do you leverage the categories that do exist? And perhaps make some changes to your product or model to try to fit in, in some way?

Marcus: Well, that’s the thing because you can do—just as ChatGPT—ask, “What’s the best software?” or “What’s the best service for taking care of my dog for a week when I’m on vacation?” And you’ll find out that’s a pretty good marketing channel. But you’re going to find yourself in a group of companies that may do completely different things than you. You’ve got to choose: Are you going to satisfy the needs of the average person who is looking at that category? Let’s say the person who is in a grocery store walks to the soda department. Is your drink going to satisfy 5% of them who are only there for a Coke Zero? If you’re not Coke Zero, you only have 95% left. It’s the same thing with software startups in that category. How many percent of the total audience are you going to satisfy with your product? If the answer is 1%, you probably need to expand your offering. If there’s someone out there who can satisfy 90% of the people looking into that category, then whatever they’re doing is right and whatever you’re doing is wrong. You need to copy what they’re doing rather than trying to do your own thing.

In the luxurious position of getting in that category, getting on display, if only 1% of people—that might mean 100 people a year—only one person a year even has a chance to buy your product, then you’re never going to make it.

This is something I definitely studied in school but really haven’t applied at all. I’m very happy with our logo. We bought it on Fiverr for $5. No way. We’re not cheapskates—we actually bought three logos for $15 and then choose the best one. The colour we chose—most of the decisions that we do in business we do by a spreadsheet. Very

Katie: Yeah, a brand is so much bigger than just the logo. I think it helps create a feeling, and that’s what I get when I hear you speak. It’s what I experienced when I tuned in to one of your webinars—whether it was monthly or quarterly—for your customers, discussing product updates and your roadmap. It’s about the overall impression you leave with people. A brand extends far beyond visual elements; fundamentally, it’s the emotional connection you foster with your customers. When people think of your brand, they associate it with specific words and ideas that resonate deeply with them. It’s been incredible to witness what you’ve built with Hostaway. Your dedication to core values, especially customer focus, has truly created something substantial. Your customers become your best advocates, sharing their positive experiences and spreading the word.

Marcus: That’s our marketing strategy in a nutshell. I hope our competitors aren’t listening. Delivering consistently excellent service and products is incredibly challenging, expensive, and time-consuming. It’s easy to think that changing our corporate logo will fix everything, but that’s not the reality. The alternative is putting in a tremendous amount of hard work.

Katie: Exactly, it’s all about those long days and doing the right thing consistently. Every team member must commit to this daily.

Marcus: Building a company culture that supports this is crucial. As companies grow, hiring becomes tricky—what works when hiring a small team doesn’t scale to hiring hundreds or thousands. It’s vital to identify and nurture ambassadors who embody your values in their daily work. If not, a few disengaged team members can disrupt an entire team’s dynamic, leading to significant costs and demotivation.

Katie: I agree, that’s really important. Well, we’re almost at our lightning round questions. Before we get there, I wanted to comment on something you mentioned in another talk about goal-setting as an entrepreneur. You discussed aiming for a $10 million company and the feedback you receive—whether it’s seen as great, good, or sufficient. You highlighted the difference between aiming for $10 million versus aiming for over $300 million and the impact founders can have, whether they sell their company or not, in terms of giving back or investing in the ecosystem. So, what’s next for you? What’s the goal you’re working towards now?

Marcus: Recently, we achieved our goal of becoming the largest property management system in the global vacation rental industry, based on the number of properties our customers manage. Unfortunately, it’s not something we can publicize due to industry practices. We have less than 10% global market share, so there’s still much to do. Right now, our focus is on becoming the first unicorn in our space by the end of the year—reaching that milestone with a valuation that includes a billion-dollar sign. It’s a goal that’s not often seen in our day-to-day life, but it’s where we’re headed.

Katie: You do not. That’s incredibly exciting.

Marcus: Yes, there aren’t many unicorns here in Toronto. They’re called unicorns for a reason. But that’s our next goal. Beyond that, I’m not entirely sure yet. We’ll see where the journey takes us. It’s just incredibly exciting to be on this path.

Katie: Oh, that’s phenomenal. I think this is the perfect moment to dive into our lightning round. I’ve got five quick questions for you to gather some resources and takeaways for our audience. So, first up, complete this sentence: To me, building a notable brand means delivering…

Marcus:…value to your customers. Sorry if that sounds boring; in business, most of the essential things are.

Katie: Yeah, and as simple as it sounds, it’s incredibly challenging to execute. Now, what has been a memorable mic-drop moment for your brand?

Marcus: For our brand, it will be this year. We’re organizing a user conference called Hostchella in Miami. It’s a heavy metal-themed vacation rental software conference, an idea our entirely Canadian Marketing team loves. Originally scheduled for November 5th, we had to move it two days later due to conflicting with Election Day. So, November 7th will either be our biggest success or our greatest challenge; we’re about to find out.

Katie: That sounds like an exciting event to look forward to. Now, Marcus, what’s one brand you personally admire and why?

Marcus: I really admire Harley Davidson. They’ve built a community of enthusiasts so passionate about their brand that they tattoo it on their arms. That level of loyalty is hard to replicate and comes from consistently delivering value to customers. It’s not just about their bikes but the entire experience they create. 

I really like Harley Davidson. I think if you create something that can build a community of people so dedicated that they tattoo your brand on their arms, that’s incredibly hard to replicate. But, again, it all comes down to delivering value to your customers. It’s not just about the bikes they make; it’s about the entire experience they create around their brand. Yeah, if I had to pick one brand to admire, that would definitely be the one.

Katie: What are three resources you’d recommend to someone looking to build their company and looking to build their brand? As an entrepreneur, it can be books, it could be podcasts, apps articles, what are three resources that come to mind?

Marcus: One piece of advice that really resonated with me came from my wife. When I started my company, she suggested I read a book called “The Hard Thing About Hard Things.” I put it off for five years, but when I finally read it, I found myself crying because I realized I wasn’t alone. The book describes how things can seem to be going well until they suddenly aren’t, and the emotional rollercoaster of entrepreneurship. It was incredibly powerful and a relief to read.

Another great resource, especially if you’re in SaaS like us, is SaaStr. They offer podcasts, interviews, and webinars tailored specifically to our industry. They provide practical insights on topics like hiring a VP of sales or optimizing your marketing funnel. It’s invaluable for anyone navigating the complexities of software as a service.

And thirdly, talking to other entrepreneurs is crucial. However, it’s essential to find peers who are at a similar stage and can offer unbiased advice. I learned the hard way that advice from friends, family, or even investors can be biased. You need someone who understands the challenges firsthand and isn’t emotionally invested in your success or failure.

Katie: I like that three great resources. Marcus, what’s up and coming for you? And where can people connect with you?

Marcus: So the best place to connect with me would be LinkedIn. What’s coming up next for us is our journey towards becoming a unicorn and our upcoming user conference. Personally, I’m excited about travelling, especially looking forward to visiting Italy. As for winter, we’re considering spending it in Toronto, where we’re currently renovating a house just around the corner from here. It’s all very exciting. I’m also getting a sauna installed at home, something I’ve been looking forward to for a while. Have you ever tried one? It’s quite an experience. There’s a great company here in Toronto called AutoShape, though their prices, like 65 dollars for a session, are a bit steep, even for me.

Katie: And what about your marathon? When and where are you planning to run?

Marcus: The marathon is scheduled for October here in Toronto. Anyone interested in joining me can reach out on LinkedIn; just search for Marcus of Hostaway.

Katie: We’ll be cheering you on at the waterfront marathon! Marcus, it’s been a fantastic conversation. I’ve thoroughly enjoyed hearing about your journey so far, and I have no doubt you’ll achieve unicorn status. We’re rooting for you. Thank you so much for being here.

Marcus: Thank you very much for having me. It was a lovely conversation.

Katie: Thank you for tuning in. If you enjoyed this episode, please subscribe to the podcast and leave us a review. I look forward to bringing you more insightful conversations with thought leaders and getting their insights on what it truly takes to build a notable brand.