I met Michael Joseph well over a year ago now. He’s the co-founder of a company called InvitedHome, which he launched in partnership with Tom Feldhusen. The company rents out luxury vacation homes and cabins in some of the most sought-after vacation destinations in the United States. Places like Telluride, Lake Tahoe, Vail, Park City, Santa Barbara and others.
The company sets itself apart from competitors like AirBnB by taking a fully-managed approach to luxury rentals. These aren’t just your average everyday properties. Some of these are ultra-luxurious beachfront homes, mountain cabins and lake view estates that epitomize the best of the best in the real estate market.
By a fully-managed approach, it means that the company has exclusive control over nearly all the inventory that they rent out. Unlike other vacation rental companies who only provide bookings to shared, non-exclusive properties, InvitedHome has full control over the calendars. That’s important when it comes to ensuring the quality of your portfolio and making sure things like double-bookings don’t occur.
It’s also ideal to find a central repository, or company, responsible for the day-to-day management of its inventory. This is far more akin to a luxury hotel property management business than a vacation rental management business. In fact, they are deeply embedded in the hospitality business and run each luxury home or cabin much like a hotel would run its units.
However, what I found fascinating was less so the company that the pair created, but more so the journey in getting there. You see, I’m fascinated by entrepreneurs who are playing at the highest levels. People like Michael Joseph have weathered great storms to get to where they are.
While most people attribute success in business to luck or being in the right place at the right time, or anything similar, it’s not. It’s about hard work. Yes, you need to know the right people and be ready to seize the opportunity when it presents itself, but you also have to grind and work hard.
It’s not just about working smart. And it’s not just about working hard. It’s about doing both. It’s about working hard and working smart. It’s not just about grinding. Yes, you have to toil away. But you have to do in the right way, building the right team and scaling out the areas of your business as it grows.
InvitedHome: The Beginnings
InvitedHome, the company that Joseph formed with co-founder Feldhusen, was born more as a byproduct than an original intention. You see, the original intention was a software platform. It was software to manage the vacation rental process. Not so much being in the business of vacation rental management.
In fact, Joseph had purchased a home many years back. This was just before the financial collapse of 2008-2009 that obliterated the vacation home market. There was a frenzy back then. If you were at all following the markets, then you know just what happened. The housing price bubble inflated and inflated and inflated some more. Eventually, when it popped, everything came crashing down.
There was a period of extreme loss where bankruptcies and foreclosures were running rampant. Unfortunately for Joseph, he had purchased a home in Lake Tahoe right around the peak in the housing market. Instead of being able to fix up the home and flip it, Joseph was stuck with a property he had purchased, with no possibility of recouping his investment back in the near term.
When faced with a situation like this, most entrepreneurs would give up. They’d throw in the proverbial towel and call it quits. But Joseph was cut from a different cloth. The good news was that he had purcahsed a home in a hot vacation rental market. This was right around the time when vacation rentals were on the rise, and companies like VRBO had been gaining saturation in the market as a vacation home rental listing site.
This was way before AirBnB was ever founded or even a glimmer in the eyes of Brian Chesky, Nathan Blecharczyk and Joe Gebbia. However, Joseph was able to identify the opportunity. He was smart. By identifying the opportunity, he then got to work upgrading and prepping his new home for rentals and simply listed it on VRBO. That was it.
However, something extraordinary started happening. As the calendar filled up, Joseph had too much demand to fulfill and not enough open dates. So he started turning to other owners in the area. As a resident of Lake Tahoe, he started collaborating and communicating with other homeowners to send them bookings. One thing led to another, and eventually he was referring loads of business to everyone in the area.
In turn, he built up a tremendous amount of trust with other homeowners in the area. That trust led to the launch of InvitedHome, a company that was originally intended as a vacation rental software platform as opposed to rental management. But, because Joseph had built up all that trust, he turned to eventually managing the bookings over time. As they realized the potential for profit in the industry, this only made sense.
Now, the company has come a long way since those early days. In fact, InvitedHome was listed as the 28th fastest growing company in Inc 500’s 2015 list and the top hospitality company as well. Those are some substantial accolades for a company no matter how you look at it. However, it all started from very humble beginnings of managing properties in the Lake Tahoe area due to overflow of demand.
You see, Joseph was able to identify the opportunity and seize it. Not many people are. Most people would give up when something doesn’t quite go their way.
The journey to launching and building InvitedHome didn’t happen easily or directly. Originally, Joseph and Feldhusen attempted to get funding for a software platform. That didn’t pan out. But that software became the basis for InvitedHome’s marketing and automation platform today. It’s called HomeCraft. And, in essence, it’s one of the most versatile pieces of software on the market for managing the vacation rental experience.
As a software engineer, I understand particularly how difficult it is to build a platform like this. It takes an enormous amount of effort. There is so much planning and coding that goes into this, along with scouring and squashing bugs, that it’s an exorbitant undertaking. Yet, Joseph and Feldhusen were able to leverage the one asset that they had been building all along, and use it to create InvitedHome.
The pair have billed HomeCraft as software that handles “anything to do with cash or communication of your high-end home.” Not only does this manage the actual vacation rental bookings itself, but also maintenance for the home. The system incorporates work orders and seasonable maintenance that’s required to be handled on homes to keep the quality up and ensure that things don’t break when guests are at the property.
This type of preventative maintenance and forward-thinking helps to avoid things like a water heater busting during the midst of a snowstorm or an air conditioner malfunctioning in the midst of a heat wave. They’re things that you’d expect to do while living in the home, but not when renting it out as a vacation rental. This places an extreme amount of attention on the quality of InvitedHome’s portfolio.
Any company that focuses on quality over quantity ultimately succeeds in the long term. While difficult at first, it builds a solid base and platform for growth well into the future.