Understanding the Mindset of Growing a Large STR Company

Okay, welcome back to the Boostly Podcast, the podcast that gives you the tools, the tactics, the training and most importantly, the confidence so you can go out there and get yourselves direct bookings. Today on the mini series of behind the Host. I'm really excited because we've got a host who looks after hundreds of units in an absolutely booming part of the world. A place which you need to be paying attention to because there's just so much going on, there's so much opportunity. And just by listening to this, you're going to get understanding of the mindset of what it takes to grow a large STL company, but also an idea of what opportunities there are in this part of the world. So let me introduce to you, we've got Mahesh of One Perfect Group. She's the CEO and she's going to be talking today about her business so you can learn from her experience. So welcome along. Thank you for joining me.

Thank you so much, Liam. Happy to be here.

So I know I've given you a bit of introduction there, but can you give me the elevator pitch of what is One Perfect Group? What does it consist of?

So One Perfect Group has three verticals. Our main leading brand is our short term rental company which has been in the market for the past eight years by the name OnePerfect Stay. Like you mentioned, we are managing hundreds of units across Dubai in the prime areas and in the secondary areas. And alongside One Perfect Stay, we have a real estate company. Because you see in short term rental, when you are the property managers, you're sort of entering the sales cycle rather late. And I'd like to be at the brink where the investors taking that decision where exactly to buy and why. So hence I have One Perfect real estate and most of these units that we get to manage for One Perfect Stay are unfurnished. And I always had a flare of aesthetics and interiors. So that has gotten into One Perfect Space, which is our interior and renovations company. So that's. Is that a long elevator pitch?

No, no, that's good. That kind of gives us kind of the elements to the business and yeah, we do. It's one of the things which for me as a host, when you're first starting out and for many of the hosts listening to this, there is always that challenge of, like you say, finding the right property. So when people are looking at growing management, often they're thinking, oh, the landlord's got furnish it and that's a barrier for that landlord to do. So if you can say, hey, you know, my other company can furnish it for you. This is the fees for that. You've removed the problem for them.

Right.

And created an extra service and extra income for one of the companies. So that's a great idea. So talk us through why Dubai? Why is that the, the area that you're specializing in and who, who tends to stay in the properties?

To be honest, Dubai, because I've been here for the past 15 years. Dubai has always been home for the longest time. And of course, Dubai being the touristy place that it is, the focus is on hospitality. And to be honest, my entrance into this space was quite coincidental. Before this, I was a 9 to 5 salesperson for IBM. And you know, seeing the sort of energy that I had, like never ending, you know, always going from one job to the next, I knew that I was meant to be an entrepreneur. And so it coincidentally happened that I met the investor at the right time where they were just about to put their unit on short term rental and I did up the place for them. Esthetically I furnished it and by the time I was finishing, I had a guest to stay there for a couple of weeks. So literally starting from one unit to, to hundreds of units. And just because, you know, Dubai is completely service and tourist centric space. So it just gave me that sort of a head start and a leverage to really grow into that sort of space.

That's cool. And I mean first of all, wow, that journey, how long since you had your first unit to where you are now, how, how long has that journey taken?

About eight years. And so, you know, Dubai model is completely on management, right? There are different variants to short term rental where people venture into rental arbitrage or master lease. And now, you know, there's built to rent. But to start off with, the most flexible model is the management model where you sort of split the revenue between yourself and the landlord. And that's the sort of model we follow in, in Dubai. So yeah, for the past eight years, since, you know, we started off, I was doing it as a freelancer. Starting 2014, 2015, 2016, we formally, you know, created the company One Perfect Stay. And since then, you know, it's been just going ahead. I mean, you know, the pandemic was there a few years ago. And not just that, you know, like they say, two steps forward and probably one step back. And also because, you know, I never had an external fund to back on. You know, it's a completely bootstrapped company. So the growth has been gradual but steady. That's what I can Say, I mean.

I think it's impressive. I mean, eight, eight years is no time at all when it comes to when we think of businesses in general. And I always think of that quote which people underestimate what they can do. They overestimate what they can do in a year, but underestimate what they can do in 10 years and 10 years. Obviously looking at the last eight years, I mean that's amazing to have those three aspects of each of the businesses helping towards that goal of growing collectively the group of companies, which is amazing.

I'd just like to add, yes, with one perfect stay and in these eight years. So it was just not the short term rental segment. We also escalated the other two verticals that I just introduced to you. So the idea was, you know, you have to be, I mean, being property managers, there's, and you know, for any business, for you to create and for you to grow, the bottom line has to be positive. I mean, there are no two ways about it. I do understand, you know, where the companies are coming from with external funding focus, you know, going from seed funding to round A, B, C. And personally I feel that, you know, that takes your focus away from the core business. And you know, me being the lone ranger in this, I had to be first of all really, really sincere to what I was doing. So my entire focus was on scaling the business and getting the verticals up that were going to be more profitable, more cash flow rich. So that was my sort of strategy.

Do you know that it's impressive and also just going off piste from our questions a little bit. What do you need to have as a mindset? So there'll be people listening to this. Many of the people listening to this will either have just the one or perhaps a management company managing, you know, let's say 20, 30, 50, 50 units. What kind of mindset changes looking back, did you go through or what kind of, I guess abilities and competencies does somebody need to possess to grow a company like you have in the way that you have.

Liam, if you see the way I look at it, I think there are two kinds of people, one who are inherently entrepreneurship minded and they think like an entrepreneur. I don't know whether it's in your genes or, you know, it's in your blood. And the other lot is, you know, who are meant to be in a corporate or a 9 to 5 setup, let's say there are just no two ways about it. And even, you know, when there are people coming to join my team and I'm interviewing Them. That's the only thing I see, the mindset. It doesn't matter where you are in your life at that particular moment, but it's just about, you know, where you want to go. And I think if you personally talk about me, I think it was always about, you know, what's next? What's next? I would never just say that, okay, this is it. Even, I mean, today when we're recording this podcast, I have my future plan laid out based on, you know, how the market is changing. But yeah, one, one thing that really sets the tone is you gotta be, you gotta be ready for the next step. And I think not having no as an answer, like, these are the cliched probably phrases, but I've lived by them. Keep going, you know, doesn't matter. Even if you're taking two steps forward and one back, if you're clear in your mind that what does growth mean for you? If you don't give up, give up, you will eventually get there. Like, if I look at my, my, my goals five years back, you know, they were naive, they were innocent compared to what I'm aspiring to do now. I mean, not just aspiring, but, you know, having the plan laid out in front of me. So, yeah, I'd say just keep growing and, you know, keep improving. Don't, don't stay at a place for, for too long.

It's very inspirational and I really like that. I mean, I certainly identify with that and I know people listening will do as well. But I always think as entrepreneurs, we are building stuff out there in the world, but actually we're actually building our character and like, say, growing, changing. I look back to just a year ago, two years ago, and you can see how much you've learned during that time, as long as you put in more. And I guess the one thing that I've learned is more speed of action will get you growing faster, you know, like, so actually it's just whatever the challenge is, just, just, just trying to overcome it. And that brings us on to the next question is what challenges have you faced and how have you overcome them? If you pick out maybe the biggest one or few, that would be awesome.

I'd say, let's say in the past eight years, the two biggest that I can name, I mean, looking in the past, recently was the pandemic. That was something that really made me think twice about really continuing with this or not. But, you know, somehow we sort of, I think my strategy in that phase was to get one on one with the hundreds of our landlords who were, who we were managing. So I think being empathetic towards, towards your clients, whether that's your investor or your guest, and quickly thinking on your feet. So because there were no external outpouring of the, of the travelers, we really focused on the local market because everyone in that phase was struggling even financially. Right. So we were on flexi payment models. We were doing long term, in short term, so you know, monthly stays that just kept us going. So that was like one of the biggest challenge that I faced. The second one was, and it still is, is that, you know, and especially in Dubai that you know, we, because the asset supply is quite vast, so we are always, you know, managing it on revenue sharing basis, which is the management basis. And that is one thing, it is a challenge, but it's also an opportunity where you know, it's, it's flexible. You, you really don't have that sort of, what should I say, you know, I mean your risk is still mitigated you being in the management business. But you know, having it done for so many years and this has been a challenge because you know, your churn out rate is quite high. I mean if I think of it in the past so many years, if the churn out rate was a bit lower, let's say I would probably be, you know, maybe touching 1,000 units. But that's not the case because you know, it's a flexi model, but it is a challenge in its own way. So how do you mitigate that? You move towards territories where rental arbitrage is more feasible and you know, the, the asset is more sticky and there is a huge upside for you to make money. But then again, you know, having said that, you have to enter the, that sort of a market at the right time where the annual leases are still, you know, at an acceptable rate. The economy is at such a stage where it is ideal for you to enter that specific market. So I would say yeah, like these two challenges. Pandemic, dealing through the pandemic and sort of pivoting from the management model more towards the rental arbitrage in the other regions. These two have been my, my biggest challenges and I've sort of found my way through them.

That's really cool. Really good insight. Especially I mean if you're listening to this and you've just got the one or two properties that may not have impacted yet that, that answer. But for, for me as somebody who's, who's growing a management company myself and deal with, with arbitrage and hopefully for you as the Listener out there who are doing the same, looking to build a management company and to grow your company and just knowing that there will be challenges of when to enter more arbitrage and that actually there is Churn. It's one of my biggest worries as a property manager that actually there are clients which move on for whatever reason whether or not whatever they were expecting was different and whether or not we've not hit the target of what they're going through or whether or not the market's just different to what, what they was expecting a few years ago in the staycation boom that you do get churned with management and that's actually for a mindset thing for me, something which I've had to come to terms with that it's not a reflection on me as a person that is just we've, we've put everything into it that we.

Could do and that just happens. Definitely never take it personally. That's another learning that I've had.

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What would you say has been switching that round the biggest successes so far. What are you most proud of?

I think despite having such a high turnout and despite having such a vast supply, still managing to keep the unit number, you know, 100 plus and sustaining ourselves in an ever changing environment like Dubai. You know there's, there's always a supply and you know, so you have to, and, and your, your investor size and your investor portfolio profile is also changing. So that's another thing you know, you, you should keep in mind. But I think the, the, the biggest achievement or you know, the most pro, the thing that I'm most proud of is that you know there's, there's no external fund, you know, it's a fully bootstrapped company and the sort of scale that we've reached despite that, I mean we are competing with, with companies which have, you know, 10, $15 million behind them with the same size as us in Dubai. So probably that's something which makes me quite proud of where we have arrived.

It's amazing and congratulations on hearing it because knowing that it can be done is the first step for people listening to this, that actually there is a path, there will be challenges, but ultimately the successes on the other side of those challenges. So diving into say, some of the actionable tips for the listeners. I know. And again, going off piste from our questions, I know one of the things they'll be interested in is at what stage did it go from you looking after just a few properties to building that team which of course helps you with the properties at the moment. Was there any particular first hire or the hires which have made the most difference? You know, when you've grown your business.

You mean what was the turning point between reaching that sort of a scale?

Yeah, especially regarding the team side of things. So was there a moment where you were able to bring in somebody to be more kind of front line so you could focus on the business? What sort of size did you have to reach to do that?

Yeah, like I was saying, you know, the first hundred units are the most challenging. So I think after reaching that hundred mark it just got a bit easier. And probably, you know, there is a mental shift where you reach the first hundreds. It just becomes part of your system where you're also used to the churn out rate but you still know that, you know you will, you will keep growing and definitely, I mean all the credit goes to my team because again, you know, when I was busy scaling the other verticals, it's the core team that's taking care of the marketing and the operations, our check ins and our checkouts and of course marketing these hundreds of properties to maintain an occupancy of 85% year on year. So but exactly when it happened, I would say yeah, after reaching the first hundred, that's when it happened.

Nice, nice. And when it comes down to the tech that helped you to get there, what sort of tech do you use in your business? Feel free to drop the brand names and stuff like that. We're very open to that. And why do you use those pieces of tech?

Yeah, definitely. So we are completely tech enabled. We have a complete property management system. We went through quite a few, we experimented a lot. But now we are really happy with Hostify. So a free endorsement of Hostify that I've done, we've been with them for the past two years and quite happy the sort of analytics we get are quite good. But then again, you can't just rely on a property management system. And especially this time, we are also using some modules for dynamic pricing, smart pricing. I mean, yes, Airbnb has its own internal dynamic pricing module and that works fine. But again, you know, in order for us to achieve the targeted occupancy that we target on these many properties, we do use a few smart pricing tools. We are in the middle of switching between two, but smart pricing also helps us a lot. And of course, you know, then there is our own digital marketing team. They're also the ones who are pushing the properties on socials and, and other avenues. So yeah, there's, I would say like about 20 to 25% bookings which come from our website, which is completely, you know, I mean, it's another tech form of its own where we can take direct bookings because we have the integration from the bank and you know, the guests have the facility to pay directly to us like they would pay on booking.com and Airbnb and without even, you know, paying the commissions.

Yeah, and that's hugely important. I mean, that is what, what Boostly is, is all about is can you increase your profit margin as a business by removing some of those what we would view as unnecessary costs to either the guest or to you as a business by, by taking more direct booking? So that's really good to hear. And Hostify is one of the people who we work with at Boostly and I know it's great to hear that they're doing one of the questions which I'd love to ask. Usually we ask, you know, is there any tips for direct bookings? But because of the subject of what we're talking about, is there any tips for growing your portfolio? Is there anything that you look back and go, I'm glad we did that to grow our portfolio. When you were looking at scaling those.

Those verticals, I think knowing your customer and also know when to say no. I mean, you know, when you're scaling and you're in the early stages, you welcome everyone and everything in all kinds of units. So but I think after, let's say, you know, 50, 60, 70, you are at that space where you do have that liberty to say no. And you know, not every kind of asset will not work. So I think being honest with our, with our investor, telling them exactly if this will work on short term rental and why, if it will, if it will work and why it will not. So probably, you know, that's one thing because, you know, when you do that. And typically in Dubai, an investor just, they don't just have one unit, you know, they have like a portfolio. So if you advise them on something, let's say on a single unit which may not come in your portfolio but they have, you know, a dozen others which will work well and you know, they will appreciate and respect the honesty and probably give you, give you a lot more which, which, which is going to be a win, win for you and for the, for the investor both. So yeah, I think being honest to the client and then saying no to someone, you know, who may not understand the short term rental business too well because it doesn't work for anyone and everyone, you know. Yeah, I think these are the, these are the two things I'd like to.

Mention that's really cool and I think building those relationships are just so important. One thing for, for me that I've checked out recently, I subscribed to Air DNA and it was interesting to see some of the biggest competitors in my area. You can actually see the churn rate of clients that they take on and actually it was eye opening to me for the, you know, yes, you'll, you'll need to, there will be customers who leave but actually as long as you're taking on more units and your churn rate is as low as it can be, obviously then your business is in the right direction, which is amazing to see and really appreciate those, those insights. What would you say to yourself if you could go back those eight years and have a chat with yourself? What advice would you say to give yourself like a head start that just.

Keep going, you know, just don't stop, keep, don't over fret, don't overthink. And honestly that's my philosophy about everything. You know, earlier I used to be so ashamed of asking questions. You know, this is like my early years when I was in my early 20s. I would be so afraid to ask questions that, you know, somebody would judge me for asking such a basic question. But someone needs to ask that question to get an answer. So yeah, I think that would be my advice to my younger self that ask questions, don't overthink, don't take yourself so seriously. People have other things to do rather than just, you know, sit there and judge you. So probably that's something I'll tell myself.

No, it's good and I, I can relate to that. People out there need to hear that, which is, you know, don't overthink stuff. It's easy to make things bigger and more complicated than, than it is or needs to be. So what does the future of your business look like? You mentioned there were some plans that you've got. Feel free to share those with us.

Yeah, so like I said, I've identified a few regions and especially in Middle east because you know, with the, with the sort of initiatives Saudi Kingdom of Saudi Arabia is coming out with for the expats and the other nationalities, there's a huge opportunity out there which I'm exploring in Riyadh with some other strategic partners and I would really like to venture that into that probably with rental arbitrage. So that is something I'm eyeing in Saudi Arabia. Dubai is fantastic as it is and of course you know, the neighboring Abu Dhabi, it's just like a natural symphony, a natural synergy that just goes hand in hand with, with Dubai. But besides this region, I would say Europe. I've identified a few cities in Europe, especially in Spain, Barcelona, Italy and then if, if we look at America then it's NYC and all of these are going to be on the rental arbitrage. So yes, like you know, initially it was all about being self funded and completely focused. But I think if you have sort of, you know, conquered the most dynamic city per se, then rest of it becomes slightly easier and probably, you know, coming out with such experience now, you know, doing all of these cities on a relatively different model will be easier with an external funding probably, you know, now I can say know we are ready for that, we are ready for that growth.

That's really cool. And I mean just the fact that you're identifying other places then it's a good sign. I mean I talk to people sometimes they go, oh, hospitality, you know, is, is struggling and all of this stuff. But actually there's always opportunity in any industry and especially with the changes which is happening in our industry, the different areas, you just need to know where to look and have the mindset and the, and be ready, not overthink it as you say. So thank you for sharing that. So let's throw the mic open. How can people come and find out more? How can people come and get in touch and follow your business?

So we have quite a strong social presence. You can find our website oneperfectstay. Com. You can do direct bookings through the website and of course I'm on LinkedIn. The company profile is on LinkedIn as well. All my companies are on LinkedIn so we are quite easy to find like that.

Awesome. And of course we will share within the show notes. However you're consuming this piece of media. Have a look around the piece of media and we'll have the links in the show notes.

Thank you so much. Definitely, we'll do that.

No worries. No worries. So the last question which we like to ask is, is there a motto or mantra which resonates with you? One which you can say, hey, this is something I really, you know, sort of believe in or I relate to.

I say change is the only constant. That's one belief I live by. Whether that's a, you know, that on, on a very good day or on a really bad day, you know, this too shall pass. But yeah, the one motto I live by is the change. And probably, you know, personally as well, seeing the kind of person that I am always craving change, you know, going from, from, from one point to a completely drastic shift, even pivoting the business models that I've sort of formed. So, yeah, I, I'm a true believer of change. I mean, deep inside, you know, they say your, your sock is slipping inside your shoe, but I just go, and I take that leap of faith and I go for the change.

Nice. Yeah. Again, that's great advice. I mean, I, it's reminded me of we were coming up with like band names back in the day when I was very much younger than what I am now, but constant state of flux. And, and the reason for that is everyone's going through a constant evolution, a change. And you're absolutely right. Businesses, it's exciting, isn't it? It's, it's part of our entrepreneurial spark, I'd say, to, to look at that. So, yeah, thank you so much for, for sharing with us today and for giving us the, the journey that you've been on, but also for inspiring us. And what I'm going to be taking away from this is not to overthink things and also to really look at the bigger picture. You know, like, don't always plan for just the next 12 months. Really think, where is this business heading in the next. Yeah, 10 years. So thank you so much. Any last years before we, what we call it a day?

Just, just summarizing what, whatever we've spoken about. And you know, the, the last thought that I want to end this on is, look, this, this industry is not perfect. And you know, there are industry giants who are also at the, at the brunt of how the market sort of, you know, reacted despite them being so big. So I think the, the biggest thing that we can do is accept that this is flawed. Right. But there is again, and I think any industry, any service industry, which is not really, you know, standing on some really concrete foundations will be a bit jittery. But there are ways to sort of navigate through it through different approaches which are ideal for different scenarios and different regions. So probably the. I think the first thing towards improvement is accepting that there is something wrong that you need to improve or correct. So I think these are the. Are my last thoughts where I say that you sort of understand what model or what strategy is suited for which reason and why, and then probably, you know, go and you pivot from there.

Well, overall, I mean, it's been an impressive journey. I've really enjoyed speaking about it and I know there's going to be people who, who reach out to you off the back of this. So thank you for listening to this on the Boostly podcast. We know there's lots of places you can put your attention, and I really thank you for putting it with us and we look forward to seeing you on the next podcast.

Thank you so much for having me, Liam.

Thank you.

It was a pleasure.