Startup Spotlight - Circular Hospitality
All Things Venture #004
Hey Everyone - Dez here from Apex Venture Studios. In the not too distant future (we're being optimistic here) the world is going to open back up. We're going to get a vaccine for the coronavirus, and our schools, workplaces, and communities will settle into a new normal. We're going to get back to Saturday Morning brunches, and snapchatting weird faces in public. We're going to ride subways again and we’re going to go to bars. We're also going to travel again. But will travel be different?
We recently had the opportunity to sit with George Ruizcalderon the founder of travel startup Circular Hospitality to get an inside look as to how the travel industry, specifically home sharing, is changing. A bit of background on George himself, he graduated from Cornell in 2015, and worked in private equity real estate for 4 years before enrolling at HBS to get his MBA. He credits Ocean's Eleven as an influence in his foray into hospitality because of Andy Garcia's character (I mean just look at this guy, he might as well be the walking embodiment of a Four Seasons hotel).
APEX: Can you describe Circular Hospitality's business?
George: We're a luxury vacation brand that is focused on providing the standardization of a hotel, but bringing it to the home sharing economy. We want to provide the security and standards of a hotel, but combine that with the best aspects of a home.
APEX: Got it, so you're operating in the home sharing economy. What differentiates you from a platform like Airbnb, Vacasa, or other large marketplaces?
George: Well for starters we look to bring the secondary homes of home owners online to our platform and we partner with them. We offer to become their property manager, so they get the security of knowing their place is well taken care of for 80-90% of the time they aren't there, and we help maximize the revenue they are looking to generate from the property. Additionally, we operate on core values of sustainability, authenticity, and providing a circular economy.
APEX: In effect you guys are a B2B company?
George: Somewhat, we're a B2B company on the property management side but a B2C brand for consumers.
APEX: Tell us more about that last point you mentioned, about providing a circular economy.
George: Right, so the circular economy is the concept of capital being circulated through the economies local to a community. It's spending your resources shopping at a locally staffed retail that also manufactures its brand in house versus going to shop online at Amazon or in person at a Macy's. What a circular economy means for Circular Hospitality is that at each property, we source and invest in products that are featured in our properties that come from the community. It's custom and locally sourced linens, towels, soaps, you name it. It comes back to the standards and security you expect from a hotel, but combined with the authenticity and sustainability of traveling and being part of a local community.
APEX: Love it. Love the concept. On the B2C side, what are Circular's key levers for growth?
George: We believe differentiation is on our side there. And we think about, how do you make the customer into a fanatic of your brand. We want to sell the idea of a circular economy to people.
APEX: And coming back to the actual properties themselves a little bit. What's it like to stay at Circular Hospitality property?
George: Well first off, we invest $3,000 into every bedroom to provide hotel amenity standards. Secondly, it comes back to that initial point I made around building a luxury vacation brand. We're focused on building a brand, and a collection of properties so we can be discerning in terms of which properties we bring online. We get into the details of each home. How is it designed, is there private parking, how do the couches look, how do they feel, is it a true form shower, what are the functional aspects people need and can be delighted by?
APEX: Where do you see Circular Hospitality in the next 6 months?
George: We're looking to learn, build reputations, and then replicate the process in multiple cities
APEX: Any advice to an aspiring entrepreneur?
George: Remain authentic to yourself. Be passionate. Have a business model that makes sense in an area that you think will continue to grow. Make sure you address a pain point. Reaffirm your ideas through feedback from the market. Think long term, and have an exit strategy.
APEX: George - amazing, couldn't have put it any better. Thank you, best of luck. Here's to you becoming Andy Garcia.
George: Here's to us all being Andy Garcia, thanks for the time. Talk soon.
TL;DR - HBS Grad starts a luxury home sharing brand that provides the standards of a hotel for consumers and property management services for homeowners
If you happen to have a second home (I know right? Completely forgot my second home out in Montauk, I'll brb), and are interested in Circular - check out their website which you can find here.
That’s all for this week. Let us know your thoughts. If you run or know of a startup that would like to be featured in our newsletter, feel free to drop us a note.