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Gusto Ad: This interview is sponsored by payroll provider Gusto. com slash Mixergy. But Andrew, boss that he is, will tell you about it later.
Andrew Warner: Hey there Freedom Fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses and joining me as someone whose business I wouldn’t have thought would work in a world where you already have so many competitors. And sure enough, it is.
Steve Satoru Naito is the founder of Anyplace. is a remotework friendly accommodation. So if you’re traveling and you want to live someplace without having to pick out furniture and make sure that the internet is fast enough and all that, they provide it all from the couch that you’re going to sit on to the key light you’re going to use when you do a zoom call with someone all provided on a monthly basis.
And the reason I wouldn’t have thought it would work is because there’s frankly, there’s Airbnb and there are other options.
Why don’t we start off with this first question? Give me the revenue. How much are you guys doing?
Steve Satoru Naito: Our current annual revenue round rate is six million dollars and we expect to hit 10 million revenue round rate early next year.
Andrew Warner: And the model is how do you get the place? How do you rent it? And then where do you get customers?
Steve Satoru Naito: our business model is a sublease model. We partner with large property management companies who manage multi family properties across the United States. such as Graystar, UDR, Avalon Bay, and we lease unfurnished apartments in the bulk, and we furnish them and install high speed internet and office setup, and submit them to our customers. So this model allows us to control the quality of customer experience and properties and expand, our units quickly. And once we have established our brand, we can expand in an asset light model, in the future with a management contract and revenue share model. right now, we are doing a service model.
Andrew Warner: I see. I was going to ask you, how’s this different from what everyone talked about with WeWork where they were leasing property and then they, long term leases, and then they were renting it out short term. And if rents increased, they did well, but anytime rents Decrease. They were stuck. And I guess what your answer is, we’re doing it this way at first, but in the future, we’re going to, just partner up with the real estate owners.
Is that right?
Steve Satoru Naito: That’s correct. Our business model is same as we work, the huge difference is, we don’t, lease, Crazy long term, like 10 years more than 20 years, like something like that.
Andrew Warner: What type of leases do you have? How long?
Steve Satoru Naito: Usually one to two years.
We are pretty
flexible.
Andrew Warner: Okay. So the type of lease that I might get if I was going to move into a new city.
you buy the furniture, you make it look nice. You make sure there’s internet and everything else that goes into an anyplace home.
Steve Satoru Naito: that’s correct.
Andrew Warner: How do you get customers? Are people going to anyplace. com and looking for homes?
Steve Satoru Naito: it is not difficult to acquire customers in the accommodation sector because there are established acquisition channels such as Airbnb. one of our biggest acquisition channels. but fee is expensive. They charge us around 15% as a commission. So to acquire returning customers is pretty important. it is okay for customers, to make their first booking on Airbnb, but how to get them to make the second booking directly is a key. we have the advantage of, physically. Touch point with our customers,
And before, customer who booked on Airbnb moves in our unit, our local staff leaves a postcard on the table in the room. And we offer of, 200 discount the next time stay. You make a reservation directly with Anyplace. So, if they like our experience, they will naturally book directly with us next time. This is how we. incentive by, the direct bookings. 20 percent of bookings came from returning customers in Q3 this year.
Andrew Warner: And the idea now is you just keep listing on Airbnb. If you get a rental on Airbnb, great. If not, hopefully you get it off your platform, but in the future, everyone who comes from Airbnb, you ideally would like them to come and search on your site.
Steve Satoru Naito: That’s correct.
Andrew Warner: Okay. Where else are you getting people? How else are they finding you?
Steve Satoru Naito: we invest in, SEO and contents marketing a lot. So actually 50%, 5 0 percent of customers, came from direct.
invest.
Andrew Warner: I told you before we got started that you understand how this is because you were an interviewer. What were you doing as an interviewer before you got started with Anyplace? Why’d you do it?
Steve Satoru Naito: I’m originally from Japan. And, came to San Francisco, I didn’t have friends I didn’t have money. I didn’t speak English. I had nothing, but, I had a dream. my dream is to build global, product like the next Airbnb or Uber. And, Before I came to San Francisco, I was a, tech reporter for TechCrunch Japan. I had, knowledge in how to interview,founders and investors. And I wanted to build friends So I, conducted more than 100 interviews and then making friends before I started my own company here
Andrew Warner: You got to the Bay area and you said, I don’t know anyone here. And so you started doing interviews. was it for your personal blog?
Steve Satoru Naito: Yeah, my personal Blog
Andrew Warner: Okay. And as a result, you built these connections. Who are some of the people that you met while you were interviewing?
Steve Satoru Naito: Dave Morin,
Andrew Warner: Dave Morin stayed
connected with you.
Steve Satoru Naito: Big name.
Andrew Warner: Yeah.
Steve Satoru Naito: and then the,founder of Atari. gaming company,
Andrew Warner:
How did you stay in touch with them? I’ve done interviews for years and what I find is that with most people, I don’t stay connected. My best link to them is I have something in my inbox confirming the interview. And if I ever need to reach out to them, I hit reply on that. And that allows me to have a relationship, but that’s it.
Steve Satoru Naito: after I interview with them, I invite them to, sushi dinner. I’m originally from Japan. I know what is, authentic sushi restaurant.
And then they usually say Okay. let’s go, sushi dinner together,I will teach you the real sushi. Something like that, I build a relationship.
Andrew Warner: That’s a great idea. I do think that people are real foodies. And if you as a Japanese person can say, let me show you the best sushi restaurant or give you the right experience. I could see them going in for that. And even if they say no, at that point, now you’ve connected with them on a social level and they could reach back out and talk to you about that.
All right. Tell me about where the idea came from.
Steve Satoru Naito: we started Anyplace in 2021, but we pivoted during the pandemic. Our original idea of Anyplace was a marketplace that allows people to live in a hotel on a monthly basis.
pandemic has changed the way people live and work,
remote work has become the norm. Now most people can work from anywhere. but the problem is regular hotels and Airbnb are not designed for work. So they usually have slow internet and small desk,
these are not suitable for working. I’m a digital nomad, I change my location on a regular basis and I usually stay, in Airbnb or, hotels, but I was so frustrated about,their work environment.Real estate operators underestimate the work environment. so this is why, we started,building a new category of work friendly accommodation.
Andrew Warner: Personally, our digital nomad, you would go to stay at a hotel. You stayed at Airbnb in both situations. You said, if I want to sit and work, I don’t really have a spot in a hotel. They tell you to go downstairs at the lobby, or maybe they’ve got some desks somewhere. At a house, they basically are telling you sit down at the dining room table and work.
And for you, neither one felt just right enough. And you said, maybe there’s a new opportunity here. I’m going to be the one who creates it. Your first vision was, I’m going to do this with hotels. Some hotels are going to want to partner up with me, right?
Steve Satoru Naito: Right.
Andrew Warner: why did you go for hotels and not homes?
Steve Satoru Naito: our original idea was marketplace, we work with hotels, we reached outbut, usually don’t understand why it’s important. So that’s why we decided to build,through the SubList model.
Andrew Warner: So the first plan was, Hey, go to hotels and say, list your properties on our platform. All you have to do is go through this checklist that I have items that you need. A desk, good internet, a cup. What else? I keep going back to a desk and good internet, but it’s more than that. What else did you want?
Steve Satoru Naito: webcam, key light, mic, monitor. Ergonomic chair.
Andrew Warner: Interesting. You know what? Because I was going to say that there are a lot of hotels like Courtyard Bar Marriott, even that have desks already. you want more than that. You want someone who comes in with a laptop to just plug in, have a good microphone that eliminates echo. Frankly, I’ve interviewed a lot of people from hotels.
I get how bad that could be. Good light. You want it to be that whole setup. And you thought they would list their properties on your marketplace and they said, no, talk to me about how you went and reached out to them and tried to convince them. What was that experience like? What did you do?
Steve Satoru Naito: we reached out our, hotel partners. hey, COVID has changed the way people live and work. And now, they want to access high speed internet and office setups, but usually they say no, it’s pretty hard, to control the quality as a platform,So that’s why we pivoted our, business from the marketplace model to, service model.
Andrew Warner: And so then you went back to hotels and you said, all right, we want to just get space from you for multiple months. Would you be willing to make that deal and give us a discount on your price? And they said, yes.
Steve Satoru Naito: Yeah. So that’s our, initial idea of marketplace.
Andrew Warner: I don’t want to get too in the weeds here, but who did you call at hotels that you got a deal from?
Steve Satoru Naito: I talked to, hotel managers or revenue managers. And then if, I commit to 30 days. Plus day
Steve Satoru Naito: more longer, like several months, would you be willing to provide a discount and, some of them said yes. so in this way we started, our, original idea
of Marketplace.
Andrew Warner: Got it. Just contacting hotel managers and trying to make a deal with them. You know, I wouldn’t have thought that hotel managers have that kind of leeway, but I understand they do because there’s a guy here in Austin. Chris Beeman. During the pandemic, he said, you know what? All these hotels are empty. I would love to live in a hotel.
So he went over to the hotel manager and he said, let me make a deal with you. You’re basically sitting on these empty rooms. Give it to me. And he asked for it. I forget what the price was, but we’re talking about really cheap for a month worth of stays and he just kept staying at these hotels and it was incredibly comfortable from what I heard.
They had pool. They had space. They had access directly to downtown. It was absolutely wonderful from what I heard. All right. So I get it. Now you starting to have that take me through. You said, investment from Jason Calacanis helped things take off. How did you hook up with launch, which is Jason Calacanis is investment vehicle.
Steve Satoru Naito: in 2017 he tweeted about his incubator. Hey, we are looking for great, founders and ideas and if you have any, great product, please, email. And then he put his email, in his tweet and I send a pretty simple email, just three sentences.
So first sentence is,product description, one, one sentence pitch. And second line is about traction. And third one is, I emphasize my commitment. I never give up until I build a global product here. and then he, replied back Hey, you know, Let’s chat over coffee.
Andrew Warner: That short email got you a let’s chat over coffee. Wow. You didn’t even have to like bring up Dave Morin’s name or anyone else. It was just, here’s my idea. I never give up. What do you say? Tell me what that, coffee was like. One of the things that I’ve heard from people who’ve sat down with Jason is that he is really good at sharpening the way that you think about your idea and the way you explain your idea.
Even people who are, who feel that he’s just too much. Love and want more of that part of him. So what was that coffee like?
Steve Satoru Naito: we had a quick meeting. Actually, it was 20 minutes.
It’s short meeting. I was like, hey,we are originally from Japan and, do you like ramen?
And he said, I’m not a ramen person. I’m a sushi person. And, I like Ginza, Ginza is the best place for sushi, something like that. And spending time five to 10 minutes for ice break. And I was like, hey, we should talk about business. And after that, Jason, asked very simple questions. Who our customers are, how,we acquire them. And then, how we differentiate, others, at that time, we just had 20 minutes call, but after that, launch team, took a deep due diligence. Like they, spoke with our customers, they, review our, financial statements. So this is unusual, right? So Y Combinator or other, accelerators, Usually they, took a look at the application and have, short meetings.
and then they make decision, but launch is pretty much like doing the deep due diligence. And then after that, we receive an email, hey, you have been accepted the launch incubator,
Andrew Warner: How did you get your customers back in that early day when you were sitting with Jason over coffee? What was the original?
Steve Satoru Naito: we posted our website on Craigslist.
Andrew Warner: That is kind of how I think the Airbnb people did in the beginning. Also, were you also listing on Airbnb?
Steve Satoru Naito: At that time, no.
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How did being in launch help you become a better entrepreneur or improve your business?
Steve Satoru Naito: launch accelerator was totally different than other accelerators like YC. every week, Jason, brought three to five investors from Sequoia. Founders Fund, Greylock, top tier VCs, and we pitched to them and get feedback. it was, 12 week program. And I met, a bunch of investors, through that process.
And then at that time,I didn’t have much experience,To pitch to investors in English. So I was so nervous and then, the question they asked two founders, pretty like similar, who are your customers and, what is your defensibility and what is a market size and something like that.
So I’m getting used to, it was a great experience.
Andrew Warner: you raise money, you come out of that program, things are going well. And then now you take me to what happened during the pandemic.
Steve Satoru Naito: after we graduate his accelerator, we raised a 2. 5 million seed around and after that 5. 3 million series A around.
But right after we closed our series A, the pandemic hit and our revenue dropped to less than half.
So we needed to change something to survive the pandemic.
Andrew Warner: And the reason that it dropped so much was it was obviously people weren’t traveling in the early days, but they were also much less willing to stay in hotels. And you were a hundred percent in hotels at the time, right?
Steve Satoru Naito: Right. We work with, hotels and also some, vacation rental properties.
Andrew Warner: And so you start to scramble. How did you figure out what the solution was? I remember how tough those days were.
Steve Satoru Naito: we realized that the pandemic has changed the way people live and work.
So many people want to access the high speed internet and office setup. But, with the marketplace model. we cannot control the quality, So that’s why we pivot from the marketplace to sublease model. And we decided to shut down the marketplace model. We are, focusing on 100 percent of our resources.
Andrew Warner: And so the current model was how you had enough money, you were able to start going in and renting long term, buying furniture and setting it up. What’s the first place that you set up like that?
Steve Satoru Naito: I went to a, apartment called Nima in San Francisco,
and I reached out to them.
Andrew Warner: I know the place.
Steve Satoru Naito: I went there and at that time they had a bunch of, empty rooms. Because of the pandemic and then I, offer them, I will lease one unit, I want to sublease this unit, I got to furnish and install high speed internet and standing desk monitor. But I don’t wanna, live here. can I, officially sublease this unit to, someone else? And then at that time, they wanna, fill out their empty rooms. So they said, yes. Okay. And I did a bunch of research on,what’s a mic and webcam monitor, good quality.
And I, launched our first unit and then, yeah. This is how we started.
Andrew Warner: being in the pandemic would open them up because frankly, before the pandemic, they hated subleases. Buildings, even if you bought a place, I was going to buy a place in San Francisco and I figured, the days that I’m not using it to record my interviews, I’ll just rent it out.
Buildings hated that. And so suddenly the pandemic made things worse, but also opened up a new opportunity.
Steve Satoru Naito: now, some properties allocate, 10 to 20 percent of their portfolio, residential rooms to corporate housing operators like us.
So as I understand it, that’s the model for a while. And then at some point you start to create partnerships with, as you said, Graystar, Avalon Bay, UDR, I think. What are those partnerships like?
Steve Satoru Naito: they have, multi family residential buildings across the United States, through this partnership, we expand our unit in a scalable way.first step is we reach out to them and then they will do the agents of our business.
They will check our financial statements, business model, and then once their headquarter approved us, we can access to their inventories. across the United States.
Andrew Warner: so this partnership isn’t one way they’re doing. Marketing for you or anything. It’s more like they’re making it easier for you to rent from them. Right?
Steve Satoru Naito: Right.
Andrew Warner: I remember Brian from Airbnb a while back told me the story of how he figured out how to redesign Airbnb, how to think through the pictures on the site, how to go from just a spare bedroom to just renting the whole place, and it was all going back to what he told me were visits to his customers, homes, spending time with them, understanding what they were doing.
When you talk to your customers, what are some of the things that you’ve learned from them?
Steve Satoru Naito: what I learn from them is, consistency is important for them. We have several returning customers. Some of them stay with us three times and four times already. And the reason why they book with us repeatedly is consistency of quality.
we manage our properties, professionally, through Anyplace they can access certain level of, amenities, properties and experience and location. So the consistency of, quality is pretty important for them.
Andrew Warner: I do love going to Airbnb. But you never know what you’re going to get. You might end up with this amazing surprise where it’s better than you expected. You might end up with exactly what you thought. but it’s missing something that makes the experience, I don’t know, useful, comfortable.
And that’s sometimes why I want to go back to hotels, but I,hate going to hotels. the problem with being in a hotel,I can’t connect with the other people I’m with. You have to meet them in the lobby and that’s just not a warm way.
I like when we wake up and we see each other, we have coffee, we’re in each other’s way, and that’s where we connect.
Steve Satoru Naito: Are you partnering it up with any one of these nomads sites, or have you done anything with them, like nomad list?
Not yet, but,I’m pretty interested in partnering with them,
Andrew Warner: How many properties do you have now?
Steve Satoru Naito: We have more than 100 units across the United States. San Francisco, New York, LA, San Diego. We are currently available in those four cities.
Andrew Warner: Do you make money on each property that you list? Are you selling them? Are you renting them out? Long enough that you can be profitable
Steve Satoru Naito: we are not profitable yet at the company level, but we generate profit at the unit level.
So we are still in growth
Andrew Warner: So unit level, you rent a place for a year, you know, you’re going to make a profit on it for that year.
Steve Satoru Naito: Right. 50 percent markup on the top of the depends on the season and depends on the market though. And our, average occupancy rate is 80%. it’s also depends on the seasonality though.
Andrew Warner: Do you think this could be done in other spaces? So you’re dealing with people who are traveling and want to work. Do you think that this kind of thing would work for vacations or anything else? is there a version of this model that might work in other places?
Steve Satoru Naito: we have two types of customers. So B2B and B2C.
for B2B, we have many, business travelers, who stay with us. So they used to stay at, Marriott, Hilton hotels. But, they are not suitable for, long term stay, like they don’t have a kitchen space and,they don’t have, standing desk and monitor thing.
they switch, from hotels to Anyplace. And another, sector is B2C,digital nomad types of people. after the pandemic, many people started, nomadic lifestyle and, they used to use Airbnb, but now, they fall in love with Anyplace, and this is long term vacation, style bookings, but we don’t do short term stays, less than 30 days, because of the regulation.
Andrew Warner: No you nailed it with this because Even if someone were to do the same thing for vacations and the laws wouldn’t be there Digital nomad they’re doing this on a regular basis every month of their life is essentially Another place that they’re renting.
And so you get that ongoing relationship with them. And there’s not a lot of, great, opportunities.I’m surprised that when I was looking for apartments in cities, that it was so hard to find long term rentals that were fully furnished, that I didn’t want to furnish the place, just design it for me.
And I don’t want to move my stuff out. I don’t want to have to figure out what to do with this. I don’t want to go back to Ikea furniture, which kind of. It’s chintzy and it breaks, um, where it feels just like, I don’t know, not as polished, not as cool. Everyone comes in and the first thing they say is, oh, I’ve got that in my house.
Actually, do you guys have Ikea furniture all over?
Steve Satoru Naito: no.
Andrew Warner: What’s the deal with, as I look at your, past, I keep seeing something called insta bed from 2015 to 2017. What was that?
Steve Satoru Naito: Instabet was last minute deals on vacation rentals. It’s something like hotel tonight for Airbnb, but it didn’t work.
Andrew Warner: Okay. How did you get people To list on it or did you,
Steve Satoru Naito: I contacted, Airbnb host on Airbnb
and Airbnb banned me.
it was pretty hard to acquire the supply side.
And then in the hotel industry, if I acquire Mario Hotel or Hilton Hotels, I can access, a bunch of inventories, and then usually they have leftovers. But in the location rentals, e especially Airbnb, if I acquire one, Airbnb host, usually they have one or two listings.
It’s not scalable acquisition process.
and then if those hosts are, good quality, usually they don’t have. leftovers, right? So it’s pretty hard to, acquire a good inventory,
Andrew Warner: And still you did this for a couple of years that must’ve been a really painful period.
Steve Satoru Naito: right? For the first two years, I have a struggle to find product market fit. And, with Instabet, this is a product name and also company name. For the first two years, since I started my own company, tested a lot and failed. We changed products a lot. And then in 2017, we found, opportunity of Anyplace
Andrew Warner: what are some of the pivots that you did with InstaBed?
Steve Satoru Naito: furniture rental. I don’t want to set up, furniture every time I move to a new place. So maybe furniture, Rental services, allow my lifestyle more flexible, but problem was,I never drive the car in United States.
I have a driver’s license, but I rented, out a van. to deliver furniture, I bumped every time, and then I was like, this business is not sustainable
Andrew Warner: Why’d you stick with it? And how’d you even get to pay the bills? Two years, nothing.
Steve Satoru Naito: We raised money from, Japanese NGO investors. it was
320k.
Andrew Warner: How’d you stay optimistic? How’d you keep from hating yourself and hating the business and feeling like nothing was ever going to work out?
Steve Satoru Naito: it was tough time, but, it was fun. my, dream is to build a global product here. And I believe San Francisco is the best place, Because there are many,great investors, great founders, and great talents. in Japan, to be honest with you, 90 percent of startups are copycats. So they copy U. S. startups model and localize them into the Japanese market.
And it sounds boring to me. I don’t want to spend my time on someone’s idea for 10 to 20 years. so this is why, after I graduate my college, I moved to San Francisco.
Andrew Warner: All right. Well, congratulations. I love the idea. I’m impressed by how far you’ve come with this and that you didn’t give up before. the site is. It’s anyplace.com. Great domain. What’d you pay for that?
Steve Satoru Naito: Yeah, it was, 25K or something.
Andrew Warner: Not bad at all.
Wow.
Steve Satoru Naito: Not bad. Yeah.
Andrew Warner: Great. How’d you get that for
25 K
Steve Satoru Naito: from, funding investors.
Andrew Warner: mean, like, how was it a hard negotiation or was it just listed for that?
Steve Satoru Naito: I found it on GoDaddy,
And then I, yeah, reached out to the owner through GoDaddy and then it was not hard negotiation.
Andrew Warner: Okay. Good deal. All right. Thanks so much for being on here. And I should say, listen, this interview is not sponsored because what I want you to know is that, um, what I’ve been focused on lately is taking the team that’s been editing my podcast, and frankly. Steve putting this whole thing together and I’m making them available to other podcasters.
We’re working with three. I’m not ready to take on another person, but if you’d like to have us book your guests for you, help you edit, help you produce your podcast beginning to end, including promote, contact me. And then when we have space to take on one more, maybe we can work together or maybe I can just give you a.
Better direction. If it’s not the right fit for us to work together, my email address is andrew@mixergy. com. All right, Steve. Thanks so much for being on here, man.
Steve Satoru Naito: Thanks, Andrew it was fun.
