A successful start-up is about the most inspiring place you’re likely to work, in my experience. If you own the growing company, it’s even better:
- A guaranteed corporate nonsense [1]-free workplace.
- Control of your own destiny.
- The slim but real chance to become a millionaire. [2]
Set against those benefits is the opportunity cost [3] of losing your salary [4], impacting on your savings strategy [5].
Crash course in entrepreneurship
One interesting start-up is Crashpadder [6], a London-based web service that hooks up homeowners with spare rooms with those looking for a temporary bed. It’s potentially cheaper – and friendlier – than a budget hotel.
[7]CrashPadder is a matchmaker between property owners and would-be snoozers
While all start-up business have big risks [8], Crashpadder is the sort of clever and affordable idea that’s within the reach of most spare room entrepreneurs. I was curious to know more, and Crashpadder’s Josie Anderson kindly obliged.
Monevator: Who is behind Crashpadder?
[9]Stephen Rapoport: Crash Test Dummy
Josie Anderson:
Crashpadder is:
- Stephen Rapoport, Founder. Background in entrepreneurship having founded two previous businesses.
- Josie Anderson, Communications Guru. I left John Lewis to join CrashPadder back in January having spent a number of years managing content for various big brands. I previously worked with Stephen at a web start-up and we’ve been close friends ever since.
- Daniel Hill, Technical Wizard. Dan taught himself web-design in order to help make ends meet whilst he became a world-renowned classical music conductor, but proved so good that he was soon running his own agency.
What is the business model?
Guests book rooms online, paying in full for the stay. We transfer 90% of this to the host after the stay has taken place. We also earn a £3 booking fee from the guest.
Where did the idea for Crashpadder come from?
Stephen was in Sydney during the Olympics in 2000. He arrived the day after the opening ceremony and couldn’t find a hotel or hostel room for love nor money. When a bed was available, it would cost many times what he could afford.
He ended up crashing with one of my colleagues and contributing a little towards the rent, which worked out well – and the idea was born.
Homestays are commonplace across Asia, and even the UK in the past. We hope that this fun, friendly and affordable way to stay will come back in vogue.
How was the business started?
Working from the British Library’s IP centre in mid-2008, Stephen got a basic website live and a business plan written before taking it to various Venture Capitalists for seed capital, which was secured from a High Net Worth Individual.
Did you all quit work straight away?
Stephen gave up his job immediately. For Crashpadder’s first 12 months he lived on the income he made by offering his house as London’s first Crashpadder property. After a time, additional funding was secured, which enabled him to draw a salary as well as employ Dan and myself [Josie], both of whom had previously worked for Crashpadder on a freelance basis.
How is the business going, and what are your targets?
The business is growing fast, increasing revenues by 100% every four weeks since January 1st 2010. We have growth targets in place that reflect this strong start, but we recognise that this rate of growth is unsustainable in the long-term.
The next big step will be a third (and hopefully final) round of investment.
What have you found hardest about setting up Crashpadder?
As a totally new model and concept, it was hard to establish the business operations in a way that is both efficient and scalable. Another huge challenge is one of marketing and communications – we have a sea change of public opinion to affect before we can be considered a legitimate accommodation choice for some demographics.
I’m pleased to say we seem to be overcoming both of these challenges.
What’s been most enjoyable, from an entrepreneurial perspective?
Walking to work in the morning, knowing that everything that awaits is self-selected. The intellectual and commercial challenges inherent in start-up life have been amplified by the fact that the business model is new.
Do you think the gold rush is over for Internet businesses, or are there still plenty of opportunities?
There are huge opportunities, more now than ever. The Internet as a public-facing consumer medium is still only 15 years old – hardly out of seedling stage. Furthermore it is developing technologically at a tremendous rate, making more and more things possible. The transition to mobile Internet in particular will throw up countless new opportunities.
Any last words of advice for would-be entrepreneurs?
Stop kicking your heels and jump in – you’ll know within a month if it was the right thing to do.
Read my interview with an iPhone app developer [10] for more on DIY start-ups.