Set timelines that are very strict, because you’ll likely keep pushing for months beyond those deadlines.
Ian McHenry is the co-founder and President of Beyond Pricing, a first-of-its-kind revenue management and dynamic pricing software for short-term and vacation rental owners who list on sites like Airbnb, HomeAway, and VRBO. Ian has spent his entire career in travel and technology, first as an investment banker at Raymond James, advising large global airlines on their IPOs and fundraising and later as part of Oliver Wyman where he advised the world’s largest global airlines and hotels on revenue management, dynamic pricing, and loyalty reward programs. Beyond Pricing is an outgrowth of Ian’s deep experience with pricing and revenue management in the airline and hotel sector. Having seen the lack of sophistication in the growing vacation rental and Airbnb sector, especially with regard to pricing, Ian founded Beyond Pricing to bring the same sophistication in pricing that large global airlines and hotel enjoy, to the small Airbnb or vacation rental operator. Ian is a graduate of Princeton University and grew up in Claremont, California.
Where did the idea for Beyond Pricing come from?
I had spent my whole career in travel with a particular focus on helping the world’s largest airlines and hotels with dynamic pricing and revenue management, as part of the global management consultancy Oliver Wyman. My co-founder David had spent his career as the founder and CTO of multiple startups and had rented his spare bedroom on Airbnb for years. We saw the vacation rental and Airbnb space growing quickly and becoming over 25% of the accommodation market. It looked a lot like hotels 30 years ago with little sophistication in standardization of guest experience as well as little sophistication in pricing and marketing. We first launched Beyond Stays, which was a full-service property management company and hospitality brand, looking to create the Hilton of short-term rentals and address both the brand and the pricing inefficiencies. We were making our owners over 40% more through the pricing algorithm I built and quickly realized this was what excited them the most. We pivoted to turn our algorithm into a full-fledged, first-in-the-industry dynamic pricing software, which we launched in June of 2014.
What does your typical day look like and how do you make it productive?
I assume my day is like any other startup founder’s. I get into the office around 9 am, often after having done an hour or two of calls with our partners and customers in Europe from home. After dealing with emails, we do standup around 10 am to set the priorities for the day. The rest of the day is a mix of everything from checking KPIs, calling prospective partners and customers, responding to investors, mocking out new products and going over new product features with our team, to taking out the office garbage. The key to productivity, for me, is to set your top 1-2 priorities for the day (never more than that) and getting good 2-3 hour chunks of uninterrupted time to work on those. That’s where you go from just keeping the wheels turning to huge improvements in the company and product.
How do you bring ideas to life?
Mocks and user stories. We start with what problems a user is having and discuss their story and how we can solve it. Once we have that, we mock out a potential design and then add Trello cards for all the boring details and backend mechanics needed to make that mock work.
What’s one trend that really excites you?
Dynamic supply. We see this with Airbnb but also with Uber and a growing number of “sharing” economy trends. Demand is constantly changing. People travel at different times, people use lights at different times, people buy certain things at different times. The ability to also scale up and down the supply side is really exciting to me. With taxis, no matter what the demand was, there was still the same number of taxis. Now, with Uber, that supply scales with demand because we are using cars that are normally used for personal use to move people around. Being able to use an asset for multiple things helps drive this, as with Airbnb and short-term rentals, which can be a person’s long-term home one day and a traveler’s short term home the next. Dynamically pricing helps create the incentives to bring supply on to the market, too, and we help create that efficiency in the accommodation space.
What is one habit of yours that makes you more productive as an entrepreneur?
Focusing on the 1-2 most important things each day, and focus – which is related. You can’t go chasing every shiny object or get bogged down replying to emails that don’t matter or at least don’t matter relative to the big thing you’re putting off.
What was the worst job you ever had and what did you learn from it?
There are no bad jobs. You always learn something, even if it’s just about yourself and what you need in a job. I learned very early on to only take jobs where you are directly reporting to and learning from an expert. Not only will you learn much faster but because there is likely no middle layer, you will get responsibility well beyond your experience.
If you were to start again, what would you do differently?
I would have probably killed my bootstrapped startup earlier. I built it and launched it within a month (after having taught myself to code) but then didn’t buckle down and give myself a deadline for hitting profitability or raising money. Set timelines that are very strict, because you’ll likely keep pushing for months beyond those deadlines. In my case, I pushed 12 months beyond.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Top 1-2 priorities each day. Can’t emphasize it enough.
What is one strategy that has helped you grow your business? Please explain how.
Stay small and go big. That’s a confusing statement so let me explain. Product market fit is something people talk about all the time and at its core it’s about making something people love. You do that by replying quickly to every support email and being obsessive about the small things and really understand what makes people use your product and what you can do better. That’s how you stay small. Listen to your users. But it’s not enough to have 20 people who love your product. Once you have a product people love, you need to go big and figure out how to distribute your product. If people don’t know about your product, they can’t use it and love it. So constantly look at how to get your product out there and try to understand the return on your time. While early on you might scrap for articles in niche blogs, later you are going to need to shoot for the New York Times, Tech Crunch, Wired – these publications that will provide 100x the traffic. Similarly, you need to figure out partners who can already have a huge audience and leverage them.
What is one failure you had as an entrepreneur, and how did you overcome it?
As an entrepreneur, you fail/learn every day. An early failure was an inability to find a technical co-founder for my first startup. I came from banking and consulting and knew very little about tech. I spent 2 months trying to find someone to take the leap with me and eventually gave up and taught myself to code and built a minimum viable product (MVP) myself. Once you have that, both technical co-founders and investors will be easier to get.
What is one business idea that you’re willing to give away to our readers?
I shouldn’t give this away because a friend had it, too, but now that I’m a homeowner: Uber for Exterminators. It’s incredibly hard to find a good exterminator who has a high hit rate (actually catches critters) and often they are booked up. When you have a tenant complaining about raccoons or squirrels or rats, you want to get rid of them ASAP and you don’t want to waste time. It’s also a high margin business that I imagine no one is looking at. That and cheaper luggage. A bunch of startups recently jumped into the mattress game. I feel like luggage has similar crazy markups (though you don’t negotiate for your luggage).
What is the best $100 you recently spent? What and why?
My team will laugh about this, but the 21 Day Fix. It’s an absolutely inane infomercial diet and exercise program. My fiancée and I are dropping a few pounds before the wedding and with the stress of our lives, it’s impossible to get ourselves to put mental focus into diet and exercise. It’s definitely not “worth” $100 because it’s a DVD and some food containers which probably cost $5 total to make and ship but it makes you do it and makes you focus, which is why it works.
What software and web services do you use? What do you love about them?
Slack. We live in Slack now and it has completely replaced internal email and is our repository for everything. I fear the day they start charging more because we’ll pay it.
What is the one book that you recommend our community should read and why?
First of all, audio is where it’s at. My future mother-in-law, as a journalist, hates when I say this, but I consume everything through Audible or Pocket’s new feature that lets you listen to articles you save. That being said, listen to Traction by Gabriel Weinberg and Justin Mares. Traction is everything and it gives you the basic building blocks of how you acquire users. Also, have everyone who is non-technical read/listen to the long-form article What is Code? by Paul Ford so they can know the basics of the stuff making their website go.
What people have influenced your thinking and might be of interest to others?
There really is no one or two. You read a lot and absorb a lot and you create your own sort of worldview. I think two important parts of my worldview can be tracked to two amazing people: Yvonne Chouinard, founder of Patagonia and Rudyard Kipling’s poem ‘If’. Chouinard taught me about priorities and his book Let My People Go Surfing sum that up nicely. Remembering what matters most in both your personal and professional lives (and having distinct ones) will make you more successful in both. Kipling’s poem is about grit and entrepreneurship is about grit and just toughing it out. There is increasing consensus that the best founders just keep going and I definitely believe that. We’ve nearly died as a company multiple times but we’ve kept plugging and it’s worked.