Mr. B&B
Matthew Jost had already built and sold a business before Mr. B&B. At 17 he started Planet Series, a website about TV series that he described as the largest of its kind in Europe, and he sold it at 21 to the French equivalent of IMDB, Alociné, for about one million US dollars. He left university after two years of computer science to work in the web industry at the French radio station NRJ.
Mr. B&B launched at the end of 2014 as a marketplace. Homeowners list their places, travelers book them, and the platform takes a fee on every transaction: 4% from the host and 12% from the traveler. Jost said the company bootstrapped for its first six months before raising capital from business angels, reaching a total of $5 million raised. The team grew to 22 people by late 2016.
The platform's positioning goes beyond gay travelers. Jost said it is open to the whole LGBTQ community, and straight women also use it because it feels safe. The average booking is about three nights, around $300.
Year one produced about $300K in total bookings in roughly three months, which Jost called a good start that showed traction. Growth continued, with about $3 million in transaction volume in 2015 and a 2016 target of $7 million. Most business happens between April and September, which makes the company highly seasonal.
Jost also said most travelers book alone, and that solo travel is expensive. The company responded by offering shared apartments at lower prices and by helping users connect with the local LGBTQ scene.
The most telling number was repeat business. Travelers take about 1.5 trips per year, and roughly 40% of bookings came from repeat customers. Jost said that with only about 80,000 listings worldwide, doubling the listings would expand what the company could offer.
Advertising added a second revenue stream. Mr. B&B sells display ads, email placements to its roughly 300K subscribers, and street marketing for events such as Pride. Jost cited an average open rate of about 14% and said half of openers click through.
As of November 2016, Mr. B&B had about 80,000 hosts in 135 countries, around 3,000 bookings per month, and a planned $1.3 million in gross revenue for the year. Jost said he was based in Paris and worked mostly on West Coast US hours.
- •Serving a community that mainstream platforms underserve gave the company a defined audience with a strong reason to return.
- •Repeat bookings at about 40% of business mean growth comes partly from retention, which lowers the cost of acquiring each new booking.
- •Offering shared apartments to solo travelers solved a real price problem and drove adoption among the platform's most common users.
- •Layering advertising and sponsorship revenue on top of a 16% take rate built a second revenue line from the engaged email audience.
- •Bootstrapping for six months before raising capital let the founder prove demand before taking investor money.
- 1.Pick an underserved community with a clear shared need, such as safety or social connection, and build the product around it rather than a generic audience.
- 2.Identify the most common user segment (for example solo travelers) and design a pricing option that directly solves their biggest problem.
- 3.Charge both sides of a marketplace, as Mr. B&B did with 4% from hosts and 12% from travelers, so revenue scales with transaction volume.
- 4.Build an email list early and use it both for repeat bookings and for selling sponsorship placements to a targeted audience.
- 5.Track repeat-customer rate from the start and invest in listing supply, because more inventory drives both repeat use and new bookings.
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