TLabs Showcase on travel startups featuring US-based vacation rental service to raise money for charities, Geronimo.
Geronimo is a service that uses spare weeks at vacation homes to raise money for charities.
Michael McFadden is one of the co-founders and an advocate for Geronimo. Michael has been in the vacation rental industry for five years and started TheSociety.com and VacationRentalsForCharity.org.
Mike Last is the founder of Charity Helpers, LLC (owners of Geronimo and OneSpareWeek). Mike is an electrical engineer turned entrepreneur. Â Mike started LastMinuteGolfer in 1998.
What financial support did you have to launch the business?
This is primarily a self funded project with a little outside angel capital (under $100,000) as of March 2011.
What problem are you trying to solve?
It is becoming more and more difficult for a charity to raise a dollar. Meanwhile vacation homes sit vacant most of the year. We are using spare weeks at vacation homes to help charities raise money.
Describe the business, core products and services?
For vacation home owners and managers we help them turn spare weeks into big donations for charities. We also allow owners and managers to chose to keep half the rent. The owners and managers have all control.
They select the dates they want to donate, they select the rates and they can keep half the rent.
For charities we help them raise money. They can ask their supporters to book their next vacation through Geronimo and have the money go to their cause.
We also create white label websites so charities can promote vacations on their website.
Who are your key customers and users at launch?
We have three key users:
- Vacation home owners/managers: This is our supply. We need owners and managers to give a week. Â It can be a last minute vacancy or a week in their shoulder season or even off season.
- Charities: We need charities to spread the word. Let their supporters know that there is a new way to support their cause.
- Travellers: We need travellers to consider Geronimo for their next vacation. By booking on Geronimo they can select what charity will benefit.
Did you have customers validate your idea before investors?
Before joining forces with Geronimo, I had been working VacationHomesForCharity. In a two year span we helped raise over $400,000 for charities via vacation rentals.
What is the business AND revenue model, strategy for profitability?
Geronimo collects a “technology fee” on each transaction. Our intent is to cover our costs through the collection of this fee from many properties/ many transactions.
This fee varies (from a low of 6% to a high of 18% of the total rent paid by renter) based on the donation preferences chosen by the property owner.
This fee is very low by comparison to other fundraising programs you may be familiar with, and we’re proud to be one of the most efficient fund raising solutions for non-profits.
SWOT analysis â€“ strengths, weaknesses, opportunities and threats?
- We have a business that helps society â€“ everyone we talk to wants to see this succeed. Â Itâ€™s great to have moral support from people inside and outside of the industry.
- Our technology enables easy transactions and minimizes the interaction with charities so now itâ€™s easy to give by taking a vacation. Â We also make it very easy for an owner to select exact nights or weeks that they want to be used to raise money.
- We are a startup. Â We are flexible and are still building out features as we get feedback from the early adopters.
- We are a startup. Â We donâ€™t have repeat travellers coming to our site and we are just building our network of charities, owners and managers.
- Online booking for vacation rentals is still a small percentage compared to the hotel industry.
- There are 1.1 million charities in the US alone. Â If each charity has on average 200 supporters that means we have at least 200 million people that could take their next vacation and help
- Based on industry data available we estimate the average vacation home sits vacant 85% of the year. Â That is a lot of unused nights that could be used to raise money.
- There are some very large companies in the vacation rental space that could chose to come out with a charity offering. Â However we are building the network of charities so it might be better just to work together.
Who advised you your idea isn’t going to be successful and why didn’t you listen to them?
I have had a few owners and managers tell me it isnâ€™t going to work because they donâ€™t get to write off the donation. To this I say its okay for “selfish giving” a term I learned from Joe Waters.
The reality is when an owner uses a spare week on Geronimo they can still receive some income. Â This is a week that was not going to be booked so they are actually making money on a perishable week.
I recently started a taxes category on our blog to discuss some of these issues.
I have some people tell me that itâ€™s too difficult to facilitate online bookings for individual owners. Â To this Iâ€™ve said there are companies proving that it does work.
Airbnb.com is probably the best example for the vacation rental industry to watch. They are facilitating many transactions online and each property is very unique. The key is to deliver a quality user experience and build the trust between the owner/manager and the traveller.
What is your success metric 12 months from now?
Money available for charities (this is calculated by the nights donated across all the properties and the money that will go to a charity if itâ€™s booked). We should have well over $10 million available for charities.
Money raised for charities. We are still so early in our life cycle that we are not sure how much will be raised in 12 months. Â Hopefully a lot! Â We know these charities need it.
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