Ep 534 Why a "short list" of acquirers may be a trap

**Colin Morgan** (0:07)
Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer, Colin Morgan, and today's episode is an exit story with Andrew McConnell, who built and sold Rented, a SaaS platform that helped vacation rental managers price homes dynamically, like airlines and hotels. Now, Andrew walks you through the full arc, the first idea that stalled, the pivot that worked, what it's like negotiating with venture investors, and the hard lessons he learned when he tried to sell the company himself before hiring a banker to run a real process. He also shares what life looked like inside an earn out and why he left after a year to start his next company alively. Without further ado, here is John Moorlough with Andrew McConnell.

**Andrew McConnell** (0:56)
Enjoy.

**John Warrillow** (1:03)
Andrew McConnell, Booklet of Built to Sell Radio.

**Andrew McConnell** (1:05)
Thank you for having me. Great to see you, John.

**John Warrillow** (1:07)
Yeah, I know, great to see you too. We're gonna talk all kinds of wellness talk, but before we get there, I wanna get into the business that you started and sold called Rented. Explain this business to me like I'm a lay person, like I'm a 12 year old child. Explain it to me.

**Andrew McConnell** (1:24)
Yeah, so I think as a consumer, most people are used to buying airline tickets or booking hotel rooms and seeing the flight or prices change dramatically. Day to day, week by week, depending on the browser you're using, whatever. That historically did not really exist for vacation rentals and Airbnb. The average person go have their home and say, oh, it's $150 a night. And in reality, there's some nights that it should be $650, and there are other nights that may only be worth $80. And so that dynamic pricing engine that we've gotten used to with airlines and hotels had not existed. So Rented was the enterprise solution for large vacation rental managers to go put that kind of pricing architecture on top of their homes.

**John Warrillow** (2:10)
That's so cool. So yeah, this is like the service that people hate, right?

**Andrew McConnell** (2:15)
Like you're walking into the website and it's like, the flip side is twice as much only when it goes up. So that what we try to explain a lot, and there was a lot of education to the market from the buyers of saying, oh, it's just about pushing prices up, saying, no, no, no, you only have 60% occupancy. We can take it to 80% because the issue is you're pricing these days that aren't worth that much. And you could make money in all these different ways. And then also there was some advisory on weekends. Like you had a good CRM, you understood who lived within driving distance. If on Wednesday the weekend's open, you should be marketing those people. Say, hey, this home that you booked last summer, did you know you can get it for a quarter of the price this weekend, just drive over, you can have this great long weekend with your family, and just create demand. And so to only react to it with the prices. There's a proactivity as well.

**John Warrillow** (3:07)
I love it. It's so cool. Yet I think of vacation rentals have gone almost exclusively to Airbnb and VRBO. Like, A, were those guys customers? Did they use your search pricing engine? And maybe I'll start there. Were they customers?

**Andrew McConnell** (3:26)
Yes. No. So if you think about it, Airbnb and VRBO are like Expedia or booking.com. So you could go to marriott.com, but you could also get Marriott on booking.com. You could go to deltaamericanairlines.com, or you could go to Expedia or Travelocity. And that's what their online travel agencies, that's what VRBO, who's owned by Expedia and Airbnb's standalone company, both are. So the people who were putting the homes on VRBO, those were our clients. So they may have 400 homes. They have their own websites. Some people book directly there. They push to VRBO, they push to Airbnb. Some people book there. But we managed for those people, the prices that showed up on Airbnb and booking.com and VRBO. So those, the corporate companies were not, but the people who were managing the homes, pushing to those channels, those were our clients.

**John Warrillow** (4:22)
Because I think of an Airbnb is just someone with like a vacation rental. But what I'm hearing you say is that a lot of people have multiple vacation rental properties that they're using Airbnb or VRBO as a channel to.