Rats in a Maze - the magic of real estate rental marketplaces
Rats in a maze –– that’s probably how we would appear to aliens watching from above. We sleep in one very specific rectangle (technically rectangular prism), work in another, and jog on a hamster wheel in yet another. And we take the same routes back and forth, day after day.
But there’s nothing inherently wrong with all that. It’s pragmatic. I, for one, quite like my main rectangles. And it’s a sensible shape for a building after all.
What I take issue with is where we go for our special moments. We always seem to end up here:
Think about all the conferences, bat mitzvahs, seminars, weddings, strategy off-sites, reunions, training sessions, awards ceremonies, and the 500 other types of occasions that led you to the homogenized hell that is hotel function space.
As wonderfully varied as those events might have been, the place that holds them is identical, boring, and vaguely uncomfortable, all over the world. It’s a prison with ornamented yet durable carpeting and padded yet stackable chairs. And like good little rats in a maze, we go there all the time.
But there’s good reason for this as well. Historically the short-term, real estate rental industry (think: hotels, conference centers, and executive office suites) has required a mountain of capital to own, outfit, and operate a space. And all that Cap and Opex has effectively constrained the amount of supply that can feasibly exist –– without hefty price points and high utilization the model doesn’t work. Then HomeAway unlocked the door to private vacation homes at a huge scale. Then Airbnb did the same for primary residences (I hear they’re doing well, by the way). Neither company owns, outfits, or operates any inventory. They have no desire to maintain price points, and utilization is only a vague idea to them. The hospitality industry is terrified. And they should be. Little do they know it’s about to get a lot worse.
Beautiful, captivating, and historic spaces of all shapes and sizes abound –– more in a single city than you’ll get to in a lifetime. These are the are the spaces befitting of our special occasions and they want your business. Priced even at a fraction of what hotels and other venue providers charge, this is a powerful source of incremental earnings for the owner of an under-utilized space – 25x that of Airbnb on an hourly basis. And the demand pot is large – well over $100B in US venue rental spend annually, triple that if you include all the associated catering, furniture rental, A/V, etc. Now if only an online marketplace could aggregate all of this prospective inventory, expose true cost and availability, and enable real-time booking. They’d flood the market with additional and better supply and collapse price points in the process. Would that be something you’d be interested in?
World, meet PeerSpace. PeerSpace, World. We here at Foundation Capital are thrilled to be leading their Series A. PeerSpace is the hero that will break us out of hotel function room hell. More importantly, please meet some of their spaces:
Now price is an important factor in taking share from incumbent providers in any market. But there’s a whole other dimension to consider with real estate: how does the space itself make you feel? The right space is transformative. It can energize, trigger creativity, and make us feel different and better about ourselves while we’re there. Hotels are never the right space for anything. Thanks to PeerSpace, we now have a better way. Their marketplace is now live in 3 markets (SF Bay Area, LA, and NYC); CEO Rony Chammas and team are working hard to bring PeerSpace to a market near you very soon.
Disclosure: Not only are we PeerSpace investors, we’re also a client!
