D.C. may not be the first city you think of when you hear the word “startup”, but the District has its fair share of entrepreneurs using their creativity to help solve all sorts of problems, from the basic to the more superfluous. It’s why we’re littered with coworking spaces, and why programs like the Startup Hoyas Summer Incubator exist.
It’s why instead of doing whatever Georgetown law students usually do during summer vacation, Alexander Galicki and Kentaro Murase decided to join the Startup Hoyas and develop a service that would solve a serious problem for all of their friends. Roamer, a website that allows college students and alumni to post and bid on subleases all over the U.S., aims to make it easier for students to travel the country while finding safe spaces to stay. Galicki and Murase called me up from New Mexico and New York, respectively, to talk about their time developing Roamer and everything the process has taught them.
How did you guys get together and come up with Roamer?
Galicki: We met in law school. Every summer in law school, us and our classmates go work all over the country. In New York, LA, and also internationally. So I was working at a law firm in DC, and I had colleagues from all over, and just kind of casually starting to talk to them, I asked about where they were living for the summer. Most of them had a place in D.C. they’d gotten for one month, two months, three months, but it kind of turned out that it had been a complete nightmare in terms of finding a furnished place in D.C. for the summer.
So I asked them, “What are the current options out there to find a place for one to twelve months?” And the first thing they all said was, “Well, we tried Facebook.” They go on and ask if friends in other cities if they could post a listing for them in that school’s Facebook group, which is usually closed off. A few people found apartments that way, but in most cases they didn’t. The second option was usually Craigslist, which tended to fall through a lot, it was unreliable and kind of unsafe. The last option people reverted to was Airbnb. One guy I worked with was doing two months in D.C. and then a month in New York, and in NY he ended up having to pay 3,000 to 4,000, or more, for Airbnb.
So I kind of saw this problem, got back to school, Kentaro was like an old friend of mine, and we were like, “Why isn’t there a better option?” Something that has the safety of Facebook and Facebook groups, the searchability of Airbnb, or Craigslist, but not the cost of Airbnb. Just, why is there not something better? Why hasn’t anyone ever tried to solve the one-twelve month subleasing marketplace? We knew that was a problem we were seeing in our small world, but it was much bigger. With the increase of telecommuting, people are more open, especially millennials, to new cities. “I’m going to go to San Francisco and see if I can find a job,” or “I have this opportunity in LA or Miami…” and you’re not going for a few days, but three months, four months, five months, and you want a good housing option. So we thought, alright, it seems like there’s a problem here that needs to be solved. So that’s kind of the origin of Roamer.
What happened next?
From that point forward, and our greatest takeaway, it was all execution. Scattered along the way, there are other entrepreneurs that tried to solve this problem, and they weren’t able to. We’re looking to learn from all of that and kind of push through and make it happen.
As far as what happened next, we got a prototype built. We didn’t want to spend two years developing a product no one wanted, so we just did it really quickly, we worked with developers in Finland. We launched it in February / March 2015, and then we had the product up and running and it was like, how do we tell people about it? And then we turned from being product designers to being marketers. It was an entirely new skill set. We worked through that grassroots network, through our friends, and built Roamer up to 2000 users. We had 500-600 completed transactions, and 2,000 unique conversation threads.
Most apartments in the hot cities, LA, D.C., New York, San Francisco, Chicago, some of them were getting in between 50-100 unique inquiries, per apartment. So the demand was enormous and it was just crazy seeing all the numbers. After that, we ended up being selected to participate in the Georgetown Business School Summer Hoyas Incubator program, so we did that all summer and had the advice of really successful entrepreneurs. We had two or three focus advisers that worked with us through the summer to help us figure out where to take Roamer next. That was where the new Roamer came from. We’re just launching now, and really starting in January and February.
What’s different about the newest version of Roamer?
With the new Roamer we kind of did a couple of things, one is we opened it up to all college graduates and alumni. The demand was enormous for cities, so talking to our users, what they wanted was more places to choose from, a greater supply. We also realized the problem was so much bigger than graduate students. So we expanded our user base, we redesigned it, and most importantly we implemented our new bidding auction mechanism.
It’s no longer just, you go on, find an apartment, and message the place you’re interested in, instead you place a bid. Your bid consists of two pieces of information. One is your price. So if someone has an apartment and they list it at 1,200. So when you go to bid on a place you might say, “Okay, 1200 for Eastern Market, one bedroom in a shared place, that sounds about right.” or you might say, “No, I’m going to bid 1000.” Or maybe you see that a lot of people have bid on it, and you really like it, and so you’ll bid over the reserved price. The other thing is that you still submit your personal information, about yourself, why you’re coming to the city, the dates you’re interested in… So it expands the amount of relevant information for hosts and guests.
I think one big thing coming out if it that we learned was that there is no big place to see the value of these subleases. There is no marketplace for it. Last time around when people were coming and listing their places, it was just based off of what they pay for rent each month, but they’re getting a hundred inquiries from people who are kind of desperate to find a safe, good. reliable option in D.C. for the summer. At that point, maybe the apartment is more valuable than their rent. A furnished apartment for three months in D.C. for the summer, it’s value is not what it’s rent would be if it were an empty apartment on a year long lease. So we were seeing all of this information behind the scenes and wanted to enable our users to see it as well. There’s definitely a market transparency aspect to it. Also, we just wanted these matches to happen. Sometimes a host might get an inquiry from someone that’s a really good fit, but they’re only interested in the month of June. Then they might get a request from someone who is willing to pay a little bit less, but is interested in June and July. So it’s this mix of factors, of dates of price… how many people are coming with you? Do you have a dog? Do you have a cat? Also, the fit. Are you a good fit? Do we get along? Do I trust you? It’s kind of empowering to users to sort it out among themselves but in a really centralized place where that can happen.
Would you say the bidding aspect is what sets you apart?
Galicki: I think that’s it. We’ve seen in the space that it’s littered with companies that tried to figure out long term subleasing, especially for students. We were kind of like, look, if we’re going to be serious about this, make a dent, make a difference, and really try to conquer this thing then the same old model isn’t going to cut it. We saw Poshmark, we saw other companies experimenting with these new models and it doesn’t… it can be something completely new. We could invent a new way to think about long term housing, and we’d been figuring it out and we spent a long time developing this new model and interface, and every little detail of how it works. I don’t know. We think it works. We think it is totally different and that it’s something no one else has ever done before. So I think that’s definitely something that differentiates us. I mean, we’re safe, so there’s the restricted aspect to it, but I think the bidding and the auction is really cool. It’s really different. It has never been done before.
Murase: It’s one of those things where there are hundreds of websites out there and it’s surprising that no one has ever done this before. We’ve looked everywhere and we’re basically the first people to allow bidding for rentals.
Do you think most sales will end in a bidding war? Or do you think most people agree with what the host is asking?
Galicki: With our launch, I think that’s one of the things we’ll be interested in finding out. So last time around, the bids were happening. People were submitting bids with their personal information, without a price, but that was all private. Only the host knew they were getting a hundred offers. We would have people email us and say, “Hey, Sarah X in Washington isn’t responding to me.” And we would say, “Well, she has a hundred people interested.” So part of it was communicating how popular a place was to the people looking. So I think… I don’t know. It will be really interesting to see how things play out in the summer. Will bidding wars happen? Will people accept the reserve price? As people start submitting bids on the reserve price you imagine, once ten people have done that, someone is going to say, “I really need a place.”
Murase: I just want to add that I think everyone goes first to the bidding up idea, but the opposite is also true. There are tons of houses in Charleston that people at UVA are living in. In these college towns the supply is bigger than the demand, so you can bid under the listing price and get a bargain. There’s no reason you should pay the full year rent in the summer when no one wants to be in a certain place.
Galicki: We had the problem last year. We had all these people email us from South Carolina, North Carolina and say, “Hey, can you add us? Can you add our cities to Roamer?” and we added them and we got a lot of listings, but there were very few people wanting to go to those places. So part of it, when we grow in size and you aggregate everyone in that one place, then you will find and capture that one, or two, or three people that want Charleston or Durham or Charlottesville for the summer. And that was something we saw.
One of the few people I know who was leaving Seattle for the summer found a girl in New York who was going to Seattle for the summer, and so it’s like ships in the night connections. I feel like there are so many ships in the night out there. Everyone is already doing these transactions in these little pockets. You know? In Facebook groups, on listservs, through email. We’re kind of saying, hey everyone, come together, put it in one place, let’s provide a really good mechanism for you to find the right match.
Like you’ve said, a lot of what people use Roamer for is to find short term housing. Do you guys have any ambitions to move into long term housing as well?
Are thing from the beginning was always like we had certain hypothesis and we had certain ideas of what we wanted Roamer to be, but as it’s grown, and as we’ve learned, we have no preconceived notion of what Roamer will be or should be. We’re just responding to our users and trying to evolve with that. We don’t want to create a product that no one uses and no one wants.
We’re certainly open to evolving further and going into longer term leasing market. I think that’s where the bidding / auction mechanism comes in because that mechanism is applicable in a lot of spaces, it’s not limited to what we’re doing. So I think there is a potential move there. Where maybe the way you would find all housing, not just subleases, but full apartments that are empty. Landlords could list their apartments and if one had an apartment open up in a really popular building in Adams Morgan, maybe there’s a better way to find people and have people make offers. I think that could be an interesting development.
What would you do differently?
Murase: I think we should have started earlier. We had this conception nine months before we actually launched the website, and we were just talking about how to launch the website. But really, the greatest thing we learned from Roamer is that feedback is… like as soon as you have customers you suddenly learn all about the market you’re in, the needs of the consumer, what they want, and then you can start building. It’s basically hard to build a product based on your outside conception of what the market is. You have to actually be there, emailing the customer, and really understand what they want. To build that is really rewarding, and to have people come to you and say, “Thank you so much for helping me find a place,” there’s nothing like it. I think, that’s what I wish we would have done earlier.
Galicki: Yeah, I completely agree, a startup is not really like you just go and then you have the company, it’s all learning from your users. The earliest moment, on your first day, you can go and learn better ways to do it. So I completely agree with Kentaro, just stop talking about it and find a way to execute and test some of your hypotheses. That could be walking around a campus, making a simple landing page, interviewing people. I think we were smart in that we didn’t spend two years creating the best version of Roamer with little thing possible, you know? For one, it probably wouldn’t have survived. It probably never would have gotten built because we would have just kept trying to protect it. Or you spend ten years and all your resources and time and money and then you build something and no one wants what you built. So we went, what is the barebones version of Roamer so we can start getting feedback from people, and I think we could have done that earlier.