A home is never perfect, and that’s part of the charm. “You may not find our properties having the same look-and-feel as a hotel, but that's the point,” explains Turochas Fuad. “We are not trying to be a hotel.” Nowadays, families or large groups are looking for unique accommodations to experience a destination differently or hold special events such as weddings, sans the price of a hotel. More importantly, they want to be able to stay together. “You can rent a villa on travelmob with five bedrooms for 800 dollars per night, and have 20 people living in it,” he continues. “. . . versus a hotel room where you might pay 250 dollars a night and you might have to get five rooms.” After “falling in love” with the sharing economy and its potential for disruptive change in the travel accommodations industry, Turochas embarked on his second entrepreneurial journey. “I still remember the first booking we got on the day of our beta-launch,” he says. “She was a lady from South America, and we were very surprised she managed to find us.” After that initial confidence boost, he left his job at Skype, where he was Managing Director for Asia. In doing so, he walked away from a “decent chunk of change” since Microsoft had acquired the video communications company. His ‘gamble’ was validated when investors, the media and adoption eventually caught on in a big way. “It is about empowerment at the end of the day, helping individuals to monetise their assets, services, and knowledge through these platforms. This is expanding supply greatly.” But expanding supply greatly has also made some people uncomfortable and unhappy. Some incumbents, and licensed players, now find new entrants able to enter their markets at little to no costs. “These marketplaces are called disruptive for a reason, and sometimes, regulators don’t have an answer just yet,” he advises. “It’s up to the companies and property owners behind these trends to be responsible, and to figure out how to work with their regulators.” The self-described naughty kid with “a bit of an attention deficit problem” has certainly done well for himself. More than ten years ago, when he was 29, Yahoo had acquired his first start-up, WUF Networks, which built an early version of the personal cloud. “I don’t think I’m the smartest person around nor did I do exceptionally well in school, but you know what, I’m persistent, and I keep trying,” Turochas relates self-effacingly. In July of 2013, travelmob was majority-acquired by HomeAway, the largest vacation rental site in the world, in an all-cash deal after rejecting a number of potential strategic investors including Airbnb. He admits travelmob was a more strategic affair as compared to the first one. “WUF Networks was born out of trying to solve a technical problem,” he says. “Travelmob was started as a business.” And now that he has also exited his second start-up, he is exploring a third. “One of my biggest regrets to date is that I waited too long between my first and second start-up,” he confesses. “I won’t be making that same mistake again.”
Conversations with Turochas Fuad
YONG HUI YOW: How’s travelmob doing post-acquisition?
TUROCHAS FUAD: We have seen our business quadruple every year since the beginning. Close to 80 per cent of our transactions are within Asia, which is our main focus as a company since we started off specializing in Asian-based vacation rentals. Now that we are part of HomeAway, a million of their global listings can be also found on our platform. In July, we just celebrated our third year. The whole experience has been wonderful for the team. We have been very fortunate to have stumbled upon great talent and investors along the way, and I cannot thank them enough.
YONG HUI: Why did you sell?
TUROCHAS: We needed to scale our business expediently and compete effectively against the global players. The acquisition deal gave us that opportunity, while allowing the company to run independently. No doubt, the acquisition was also financially rewarding for our investors, employees and founders. What HomeAway also offered was their brand and network. Afterall, they are the largest vacation rental site in the world. They make, in terms of sales, twice that of Airbnb, and not many people know that. HomeAway also capitalised the company in the double-digit millions which really helped amplify our efforts. Back then, the options were not plenty as it was not easy to raise substantial capital out of Asia to fight the global competitors. So we had to be smarter and do what it takes to compete.
YONG HUI: What’s the founding story?
TUROCHAS: Back in 2011, I was working for Skype, where I was the Managing Director for Asia. I was getting a little tired of the corporate world and have been back in Asia for eight, to nine years. I was itching to start another company and stumbled onto the concept of the sharing economy. I fell in love with it and what it can become. There weren’t a lot of companies in Asia focusing on this model back then, and I thought travel has always been one of the marquee industries which have given birth to high-value companies. That’s how travelmob came about! I still remember the first booking we got on the day we beta launched. She was a lady from South America, and we were very surprised she managed to find us. It was a good sign. We should have kept a screenshot of that transaction.
YONG HUI: How did you manage while still working at Skype?
TUROCHAS: Oh, I just juggled. After the beta launch, we started marketing, recruiting and talking to investors. The funny thing which happened was I spoke at an event at NUS [National University of Singapore], and didn’t realise one of the participants worked for TechinAsia, and they inadvertently announced that the MD of Skype is coming out to do a start-up. I wanted them to take it down, but they didn’t want to... but that was okay, I just dealt with it.
YONG HUI: What happened when you returned to work?
TUROCHAS: Well, the good news was that my ex-boss at Skype really supported and encouraged me. In fact, he invested in travelmob and really helped us along. He has been a good friend and mentor. He now runs Facebook for Asia. I left my job in the late part of 2011 to focus on travelmob full-time, then my co-founder also joined me in early 2012 as we started to scale the team.
YONG HUI: Was it an easy decision to leave Skype?
TUROCHAS: It was a calculated move. My first daughter was conceived around the same time as travelmob started, so I had two babies at the same time. A lot of family members and friends were questioning my move because I was a highly-paid executive at Skype. When Microsoft bought Skype, I also had a decent number of shares and options. I walked away from 70 per cent of the payout, and it was a decent chunk of change. Not the easiest decision, but it was clear and had to be done.
YONG HUI: In a way, it is an easier decision if you have nothing to lose.
TUROCHAS: I think so. But my wife was very supportive; thank god for that. She knew I was unhappy, going to work day in, day out. But when she saw me doing travelmob, she could tell I was excited, and a much more cheerful person to talk to. But it was a calculated risk; we knew this had legs.
YONG HUI: How did you acquire the initial inventory?
TUROCHAS: Our approach as an online marketplace helped. First, we were free to list, so a property owner can list as many properties as he or she wants. Like any marketplace business, it always starts with supply. So for the first 3 or 4 months while we were in beta, we spent 3 or 4 months building supply in key cities across South East Asia. We did everything – cold-called, newspapers, classifieds, and got people to try our site. But making it free really helped because there's no money upfront, so they did not mind trying us out. We grew to almost five thousand listings in three months.
YONG HUI: Is travelmob’s clientele generally wealthier and more affluent than Airbnb’s market?
TUROCHAS: Not necessarily. A larger portion of our user base consists of groups and families. Usually, they are booking a larger place and for longer periods of time. Our listings are value-for-money because you can rent a villa with five bedrooms for 800 dollars per night, and have 20 people living in it, versus a hotel room where you might pay 250 dollars a night and you might have to get 5 rooms. With that said, we also offer a nice 50 dollar apartment in places like Taipei if your budget calls for it, but we mostly focus on vacation homes.
YONG HUI: Have you seen wild graduation parties at your properties?
TUROCHAS: We have seen a few weddings actually. We have beautiful Peranakan homes and heritage places, and they are popular for wedding ceremonies. We have also seen a fair share of staycations, people who may just want to get a penthouse to enjoy the cityscape.
YONG HUI: Do you use travelmob yourself?
TUROCHAS: Yes, of course. The last family reunion I had was two weeks ago in Phuket and everything was booked through travelmob. Twelve of us went. Whenever I go to Hong Kong, Taipei or Tokyo, I would stay in one of our properties. It’s good because I get a chance to meet the owners and learn what we are doing right or wrong. And I usually don’t tell them I’m the CEO of travelmob; I just show up.
YONG HUI: Do you see yourselves as competitors to hotels?
TUROCHAS: In a certain sense and in some cities, models like travelmob do, but overall, from a macro-perspective, we are expanding the pie. We open up a whole new type of accommodation option for families to enjoy a destination. We are targeting a very different type of traveller with the properties that we have. People who book with travelmob are looking for the convenience of a home. They want a washer-dryer, wifi, kitchen and multiple rooms because they want one family or group to be together. We are not a replacement for hotels. We provide you with a home, and the things which make up a home. A home is never perfect so you may not find our properties having the same look-and-feel as a hotel, but that's the point.
The focus is moving from corporate to private, from masses to the individual. It is about empowerment at the end of the day.
YONG HUI: Marketplaces such as travelmob are good because it helps people monetise their assets instead of having the money all go to the shareholders of a hotel chain for example. What’s your take?
TUROCHAS: That's the beauty and genome of the sharing economy. The focus is moving from corporate to private, from masses to the individual. It is about empowerment at the end of the day, helping individuals to monetise their assets, services, and knowledge through these platforms. This is expanding supply greatly.
YONG HUI: HomeAway is a decade old company, and could have ventured into Airbnb’s market early on. Why did they not?
TUROCHAS: For HomeAway, the majority of their properties are what you call secondary homes. These are investment properties or the second homes of the owners. Airbnb was very focused on a very different segment. They started with private and shared rooms in the beginning, and most are primary homes. It's the apartment or house you are living in. They targeted people who needed to subsidise their rent by renting out an extra space. Airbnb went very hard for that segment. It’s a segment HomeAway is not focused on because their travelers (guests) are looking for entire spaces with privacy of their own. Airbnb did a great job marketing their segment, and they got the attention of the media and investors. The sharing economy was also taking off and that raised all boats.
YONG HUI: How about corporate travel. Is there a large potential there?
TUROCHAS: Yes. Previously, property owners used the classifieds to get corporate business, or they may work directly with corporations whose employees needed a place. Now, we provide them with a simple platform to list their properties, and for expats and corporate travellers to book a stay. Corporations are now able to offer their employees the option to live in beautiful apartments and villas at a reasonable price.
YONG HUI: How has expat packages changed in recent times?
TUROCHAS: We are moving towards a model where the company would give you a budget for the three months you need to be somewhere, instead of finding an apartment for you. Instead of paying for an expensive serviced apartment, you can now find a decent place on travelmob and save a ton of money. The less you spend on accommodations, the more money you have leftover to maybe fly your family over for the weekend. This is a great choice for expats.
YONG HUI: How are the regulatory issues around subletting?
TUROCHAS: It's a grey area in a lot of cities, but that’s how disruptive these marketplaces are. They are called disruptive for a reason, and sometimes, regulators don’t have an answer just yet. Trends will always move faster than regulation. It’s up to the companies and property owners behind these trends to be responsible, and to figure out how to work with their regulators.
I still bleed purple. A lot of ex-yahoos will say they still bleed purple. I do want that company to make a huge comeback.
YONG HUI: What do you think of platforms not owning the assets which they help transact?
TUROCHAS: When Hilton started out, they did own the properties where the hotels operate, but nowadays, that may not always be the case. The hotel property may be owned by corporations or private owners, but the management is by Hilton, lending their brand, experience, and service expertise. If you look at our model, it's quite similar, but we take it a step further. We don’t own, and don’t manage the properties. We are a pure middleman, which allows you to find and book all these wonderful places easily. This is one layer above the hotel operators. Even serviced apartments such as Oakwood may not own the apartments nowadays, but they provide property management services and lend their brand. In a way, what we do is not too different.
YONG HUI: Travelmob isn’t your first company.
TUROCHAS: No it isn’t. I started WUF Networks ten years ago in Silicon Valley. I ran that start-up for about 3 years before it was acquired by Yahoo!. After that, Yahoo! sent me to Singapore to run their South East Asian mobile business.
YONG HUI: What was WUF Networks about?
TUROCHAS: We were building an online personal cloud. We called it the personal network, since the “cloud” term was not coined yet. We built software which connects and syncs up your network enabled devices. So if you were on your mobile phone, you could browse photos or stream music that resides in your PC. It was ahead of its time. Not many companies understood what we were trying to do except for a few hardware makers, so we generate revenue by licensing our software rights to companies like Yamaha and Pioneer. We spent a lot of time in Japan trying to get these guys to integrate our software into their products. You may think Yamaha only makes pianos and guitars; they actually make one of the best AV equipments out there. So they implemented our software into their music media server to enable music streaming within the house, just like how Sonos does it now.
YONG HUI: You could have done an early Dropbox of sorts with that.
TUROCHAS: We could have gone many different directions. We could have gone the YouTube direction where we host all these videos we had, but we chose to go down the route of being more personal because there were a lot of DRM [Digital Rights Management] issues at that time, such as how many copies of a file you could have. Keeping it to a personal network was a cheeky and clever way of solving that. Our cloud stored an image of a file which you can stream to one device at a time. After 2 and the half years, Yahoo! came knocking and made a great offer to some first-time entrepreneurs who were very young. We were like: that's great! We should do it! That was really fun.
YONG HUI: Why did Yahoo! want to acquire WUF Networks?
TUROCHAS: Yahoo! at the time was buying companies left, right, and centre – they were looking for a technology like ours to support their music business on mobile devices. Not many folks in Asia know this, but they had developed a Spotify-type of business many years ago, called Yahoo! Music Engine. The only difference was that it's not on the web. It was a software client you download, and it was all you can eat Music! I believe it was 12.50 dollars a month. This was 2003 or 2004. It was started by Dave Goldberg, who was the GM of Yahoo! Music. Back then, Yahoo! was one of the top destinations for discovering music. After we got acquired, I worked for Dave’s organisation.
People can be too concerned about the sexiness of their start-ups that they forget the fundamentals of why and what they are doing.
YONG HUI: What happened to Yahoo! Music Engine?
TUROCHAS: I think what happened to it was what happened to Yahoo! in general. Yahoo! was trying to figure what to do as it matures as a company, and it went down a different path. Many great people, such as Dave Goldberg decided their time at Yahoo! was done, and many others left to do something else. Yahoo! had a lot of great products, and they could have taken over the world. Yahoo! almost bought Facebook, Google, and many others. Flickr was one of the best products they bought. It was ahead of its time. You can argue that Flickr could have become Pinterest. But you know what, I still bleed purple. A lot of ex-yahoos will say they still bleed purple. I do want that company to make a huge comeback.
YONG HUI: They managed to get a piece of Alibaba.
TUROCHAS: Yeah, they managed to get that. But it's all cyclical. Some people wonder if Google is going to be sustainable... but it will be many years before things start to crack... probably not anytime soon. But again, that’s the beauty of things in technology; new companies will always come up and compete.
YONG HUI: In terms of your approach, how was travelmob different from your first?
TUROCHAS: My first start-up was born out of trying to solve a technical challenge. We were too naive and inexperienced to figure out the business. The second start-up, travelmob, was started as a business. We knew it had legs, and could potentially generate a lot of revenue, and also disrupt an industry. There was more mature thinking behind it and there were a few potential exit strategies. For me, it's always about making sure there are good business fundamentals, and a path to profitability. This has to be concrete, and you have to deliver. It may not be exactly what you planned, but you need to figure out how to get to that point.
YONG HUI: What mistake do many entrepreneurs make?
TUROCHAS: One of the things a lot of early entrepreneurs do is they may have a lot of passion, and a lot of things they want to do, but they don’t put all their pieces together to build a business. People can be too concerned about the sexiness of their start-ups that they forget the fundamentals of why and what they are doing. There’s a difference between starting a startup and running a business. Having said that, look, I’m learning every day too and I’m not perfect. Hopefully, the mistakes I make, help me become a wiser and savvier person.
YONG HUI: What have you learned working with numerous co-founders over two start-ups?
TUROCHAS: Everyone is different, so you cannot expect your co-founders to agree with you all the time. Try to have co-founders who are unique from you, and bring different skill-sets. It is important to divide and conquer in order to focus on what you do best individually. It is also super important to be upfront, honest and open to discussing difficult points. There will always be times when you disagree, but what’s important is to focus on the future together. I’ve been lucky enough to work well with my co-founders. Hopefully, they say the same about me.
YONG HUI: Was HomeAway the only potential acquirer that came knocking?
TUROCHAS: Before travelmob launched, Airbnb came knocking, and even made an offer. They flew us to San Francisco to meet their founders, investors, and key employees. But it was a horrible deal which did not make sense for our investors or employees, so we decided not to take it. Then as we were raising our Series A, we also had a few online travel companies that came to us but I was not so keen because when you take money from strategic investors, you close the opportunity to sell to their competitors, or you may get a lower valuation in the future. HomeAway was one of those strategic investors but when we said no, they came back with a much better offer. The rest, as they say, is history.
YONG HUI: What are the untapped opportunities in the sharing economy?
TUROCHAS: In the corporate world, there could be many areas where the sharing economy model can work too; many ideas we haven’t really thought about just yet. The nature of marketplaces is still evolving, and we are still in the early days.
YONG HUI: What's next after travelmob? Another start-up perhaps?
TUROCHAS: I'm currently working for HomeAway. Our goal to lead this space in Asia hasn’t changed. In due time, I will be transitioning out of the company and will look into starting another venture. One of my biggest regrets to date is that I waited too long between my first and second startup. I won’t be making that same mistake again.