Go To Market Before Perfecting Your Product: Startup Tips With Rupert Hunt
By Yitzi Weiner and Casmin Wisner
“Realizing that the only part of my site that people were using was the bit I’d given the least thought to was a shock, but you have to get over it and use that information to build the business around your customers.”
I had the pleasure of interviewing Rupert Hunt, the founder and CEO of SpareRoom, the UK roommate-matching site, now serving over 400,000 users in the US to create happier apartment shares. He bootstrapped his business from the ground up, all around the concept that living with the right people is better than living alone — an idea built from his own experience. He’s just recently returned to London after living in New York to grow his business in the US — where he met his two entrepreneur roommates through SpareRoom.
What is your backstory?
I was never supposed to be an entrepreneur. I was meant to be a rock star. But, after several years of plugging away in a band, it became clear that the opportunity wasn’t going to come knocking. In the meantime, I’d been teaching myself to code in between stacking shelves at the local supermarket, and was starting to get work as a developer.
This was 1999 and I was living in London. At that time, finding apartments to rent was a terrible experience. It was done entirely through notecards in shop windows and a classifieds newspaper called Loot. I was convinced there was a better way, so I started building a website to solve the problem. At the very last minute, I tacked on a noticeboard feature for roommates — and after a few weeks, that was the only part of the site that people were using consistently. With that information, I did something that didn’t have a name back then — I pivoted.
We launched SpareRoom across the UK in 2004, and in New York in 2011. We’re now used across the U.S. and growing fast.
Can you share the funniest or most interesting story that happened to you since you began leading your company?
For me, one of the highlights was hiring my first member of staff, Gemma. She is now one of SpareRoom’s directors, but the decision to hire her was based entirely on a single conversation in a pub. She had the idea for Speed Flatmating — like speed dating but for finding roommates.
It was a great idea and relatively cheap to try out. We ran one event in London back in 2004 and got coverage in The Times. By our third event we had two TV crews, five radio stations, and nine journalists show up. When we launched the events in New York in 2012 (as Speed Roommating), ABC, CBS, and Time Magazine turned up to our first three events. We now run events weekly in NYC and London.
What exactly does your company do?
We create happy apartment shares. It sounds a bit over the top, but we realized a long time ago that when you share your home, the people are way more important than the apartment. SpareRoom exists to make finding great roommates a simple, safe, and stress-free experience.
What do you think makes your company stand out? Can you share a story?
The one bit of our story people are always surprised about is that we’ve never had any investment, which goes against most people’s perceptions of the modern tech world. It’s always the ‘wow’ moment in any conversation I have about SpareRoom. Businesses that don’t receive or pursue masses of funding are often disparagingly referred to as a “lifestyle business,” as if you aren’t taking business seriously — but in my view it means you’re taking it more seriously. It’s your money that’s on the line, and rather than being focused on exiting, you’re focused on building and running a sustainable, meaningful business. When you have investments, you generally have two additional customers (who are likely to be taking more of your attention): your investors, and your future buyers. We just have our regular customers to focus on.
We’re also something of a modern family business, which makes us unusual in the current tech climate. There are two other directors of the business. One I met through a family friend — she’s been with me since we launched in 2004. The other is a friend from university — the guitarist in the band I failed to achieve greatness in! The singer also works for us now and my sister has worked in the business for years. But it’s not just the personal connection — several staff have been with us for years and everyone feels really invested in what we’re trying to achieve.
At a time when people are starting to reject the divisiveness and self-interest that seems to have ruled the world for a few years, dealing with a business that has some history, stands for something meaningful, and also is entirely self-funded, seems to resonate.
None of us are able to achieve success without some help along the way. Is there a particular person you are grateful for who helped get you to where you are?
My father was definitely an inspiration growing up as I witnessed him run his business. He was a PR genius, and there was always some crazy stunt or story he’d cooked up and got in all the papers for. When I started my business he was a huge encouragement (as was my mother), giving me support and ideas for what to do next.
How have you used your success to bring goodness to the world?
There’s an obvious answer to this, that we’ve just launched an ongoing partnership with Breaking Ground in NYC to help them provide housing and support to New York’s street homeless population. We run a monthly Live Rent Free contest, where we pay one roommate’s rent for the month (as well as an annual prize paying a year’s rent once a year). When we launched we got feedback on social media from people who loved it, but were asking if we could also do something to help homeless people. So we now match the contest prize every month and donate it to Breaking Ground to support their permanent and transitional housing programs and street-to-home teams.
But there’s a less obvious answer and, in many ways, it’s one I’m just as proud of. We know that home is the most important thing in most people’s lives. When you share an apartment that means finding the right roommate is crucial. Your decision can make the difference between an awful year and the best time of your life. It’s a personal crusade, both for me and the company, to help as many people as possible have those great experiences. That’s why we describe our role as creating happy apartment shares. We’re trying to make the world happier, one apartment share at a time!
What are your “5 things I wish someone told me before I became CEO,” and why?
- Don’t get hung up on any big idea. You need to get to market as soon as possible and be guided by the market, because chances are your idea will be wrong in some way. Realizing that the only part of my site that people were using was the bit I’d given the least thought to was a shock, but you have to get over it and use that information to build the business around your customers.
- You don’t need to throw money at marketing. Even if you have the money, it’s better to throw brain power and creativity at it. There will always be free, or low cost, ways to grow your business (that are often more effective too). In the early days, we bought branded ads in the Loot classified ads newspaper and resold them to our users, giving them a great deal in addition to their SpareRoom advertising, and giving us free brand advertising in the leading competing service of the time. We set up revenue share partnerships with property portals who listed our rooms and provided white label services, including one for a popular London newspaper that was widely read by our target audience. We also set up our own portal, listing our rooms as well as our competitors’ rooms. It was great for SEO and also gave us valuable intelligence on our competitors, while earning money from them.
- Find a way to be your own customer. There’s a lot you can understand on an intellectual level through market research, but the closer you can get to being your own customer, the deeper your understanding will become on a more emotional level. I never set out to start a roommate site, and I’d never placed an ad or answered an ad for a room to rent with strangers. I’d been living a married life since soon after launch so was feeling increasingly disconnected from the customers I was trying to serve. Things got worse before they got better — in summer of 2013 my wife and I separated and I found myself living on my own for the first time. I used it as an opportunity to do the ultimate market research and to get a couple of housemates of my own. So I placed an advertisement on SpareRoom, went to a few of our Speed Roommating events, and found a couple of roommates. Well, as market research goes it was utterly game changing. The clarity and insight it gave me about what was important, what was working, what wasn’t working and where we should be taking things was incredible, and near impossible to replicate through third party research. What’s more, I realized I loved to share, and that living with the right people beats living alone — which has become a bit of a mantra for us. And I’ve shared ever since.
- It’s OK not to pursue funding. The VC world seems entirely based around creating businesses to sell, rather than building meaningful businesses that last and bring genuine value to users. I spent way too much mental energy in the early years worrying about whether I should be taking funding, and I’m glad I didn’t.
- You don’t need an exit strategy. If you don’t intend to sell, you don’t need to worry about it. People used to ask me what my exit strategy was and I’d feel stupid early on saying I didn’t have one. When I was in a band, many years ago, our one goal was to make enough money from making music that we didn’t have to do anything else and could spend more time making music. The idea of building a company and defining success by being able to sell it and stop being involved is the exact opposite of that. I want SpareRoom to succeed so I can do more, not so I can walk away.
Is there a person in the world whom you would love to have a private breakfast or lunch with, and why?
British comedian Ricky Gervais, who created The Office. As well as being one of my favorite comedians, I think of him as an entrepreneur — he’s a rule-breaker and a pioneer, as creative with how he gets his product out there as he is with the product itself. But he also appears to not be motivated by money — his motivations are his craft, but probably most of all having a laugh!
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