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Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson (Part 2)

Posted on Sunday, Jul 12th 2015

Cliff Johnson: After law school, I ended up working at a tax firm in Colorado and gained a lot of experience there. I worked with a lot of small businesses and mid-sized businesses, which was very invigorating for me. I was interested in tax law but I was always more interested in their business story and figuring out where things were going well or what they were doing wrong. I next worked for a larger firm in Phoenix for about a year and a half working mergers and acquisitions, which I wasn’t very passionate about.

I moved back into a smaller firm in San Francisco doing tax law. I moved around a little bit after law school. I really dug into the companies and saw myself being more of an entrepreneur than being passionate about tax laws for the rest of my career. I was at a crossroads where essentially I was going to stay in law but was ready to start out on my own .

That’s when I met Eric through Craigslist. He was looking for someone to help him with an existing business of his. He also had some ideas about how to get into the vacation rental space. I came up to Portland and met with him. I had a great initial meeting. It’s one of those times where there are certain people you meet in your life where you’re just in sync in your vision of what a business can really be or where you are in your life. That was really our initial bond. We both shared the excitement around how we can do that in an industry that we love. Both of us have great experiences staying at vacation rentals with groups of friends and families. We saw that as an interesting opportunity to change an industry that was ready for change and technology.

Sramana Mitra: What year did you start?

Cliff Johnson: We got together in November of 2009 and set up the corporate structure. Then, we launched our website in March of 2010. We’re a little over five years old now.

Sramana Mitra: What was the premise of the business you started?

Cliff Johnson: Basically, the thing that got us started initially was that Eric has a house in Long Beach, Washington that his wife had inherited through her family. They inherited the responsibility to take care of that home. Essentially, Eric looked at hiring a property manager to take care of it. What he found was that people either couldn’t guarantee strong marketing and strong income results or they couldn’t guarantee that they would take care of the home. Some of the quotes he got said that the house would rent for around $3,500 a year. In the first year that he managed it, the home rented for over $20,000. That was what got us thinking about vacation rental space.

Once we launched the business, we were actually looking at what aspects of the vacation rental space we wanted to get into. We had two different models that we were testing out in the beginning. One was a booking service model where we would only be handling the marketing side of the business. We would have a listing, market it, bring in the guest, book it, and then hand everything off to the owner. It’s similar to the Airbnb model. The other side of the business was doing the full service management. We do all the marketing, handle all the reservations, but then we also manage housekeeping and everything on the ground. That’s the business that ended up really taking off for us.

The reason behind it was, that was the area where we felt we were actually adding more value both to the homeowner and the guest. Basically by having full control of the experience, we were able to provide better income returns for the owner and also provide a better overall service experience. Initially, it was just the two of us. We just divided and conquered. It was critical that we had different skill sets to work with early on. We were able to gain the trust of the home owners we work with because of our backgrounds, work ethic, and dedication. Later on, we set up the whole system, which is now a scalable system. We have processes and procedures that allow things to work in extremely different regions.

This segment is part 2 in the series : Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson
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