Today we sit down with Ryan Dame, Partner at Casago. Ryan’s origin story into vacation rentals is super interesting. It all started back in 2002 as a college student capitalizing on a need for athletes and workers needing places to stay during the Winter Olympics. Since he was a child, he learned from his entrepreneurial father the importance of sales and systems. Transitioning from being the competition with Padzu to partnering and helping lead Casago with acquisitions bringing new profitable partners into the ecosystem. We dive into tech, how it is constantly changing the landscape of our industry, and how important it is to have a team of individuals who are great at specific roles. At the end of the day, many in the industry are looking for a more streamlined and efficient process, and Ryan is on the front lines making that possible. You don’t want to miss this episode!

This episode is brought to you by our sponsors at Beyond and Casago! Beyond Special Offer: https://go.beyondpricing.com/no-bs Free Portfolio Assessment $30 credit when you sign up Casago Special Offer: Go to https://casago.com/nobs/ to book your discovery call! A review of your business’ operating expenses to identify where you can save money Information on how to partner with Casago to scale your company Free $100 Amazon gift card for attending our 1-hour discovery call Learn more about your ad choices. Visit megaphone.fm/adchoices

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Empowering Local Operators With Ryan Dame

Mateo, how are you?

I am fantastic. How are you?

I’m great. It’s busy back from DARM, which was great.

I heard you crash the Hotel Data Conference also. How was that?

I did go the on last day because I was in town. I met with the property manager in Nashville, and then I went and crashed with JL, shout out to JL. I met up with some of the Hopper reps, which I’ve only met through Slack, so it was cool to meet with them. I met this Kat that’s on the Experience team, and it was cool. It was nice to meet people in person. Hopper had their own little party. We went and said hi.

Throwing a little bit of Hopper money around was nice.

It was good. I crushed the show. We had a great conference. It was nice seeing everybody. Shout out to Amy.

Shout out to Amy as she is one of the best ones.

Back after a week away, it’s catch up. I’m buried in emails but that’s what’s fun about it. Looking what you’ve skipped over and what you’re missing. You’re like, “Shit, I got to go ahead and get this out.” That’s normal. I’m excited. We have the one and only, we’re diving in, Ryan Dame of Casago. Proudly, it’s a sponsor of this show as well. We’d spent a long time coming anyway. We’re going to either get Steve or Ryan on. Ryan, thanks for joining us.

Welcome.

Thanks, guys. I appreciate that.

Ryan is holding a phone up and it’s jiggling around. He’s not in an office. Where are you exactly?

I’m in Cartagena, Columbia for the next 24 hours, anyway.

Columbia and ordained, Ryan.

He drops his father Ryan or something.

You’re with a friend of yours, you went ahead and did the wedding ceremony. You’re down there, you had some meetings. That’s awesome.

It’s been a fun week. I had a buddy that got married and his wife’s family is from Columbia. Much to my surprise, they asked if I would do the ceremony for him. It’s certainly a friend you can’t say no to. That happens on Friday. It was a cool experience.

Columbia is on my shortlist of places that I need to visit. I’ve heard only amazing things and you have yet to go, but it’s definitely on my shortlist. Have you been there before and does it live up to the expectations?

This is my fourth trip down. It’s an amazing city. Every city is a little bit different. Bogotá is a huge mass city like New York. It’s much more unique hipster, maybe more like an Austin, Texas thing. Cartagena’s got the old city, but then on the outside the old city walls, it’s got glass and steel, sky rises and more like a South Beach, Miami. You’ve got a little bit of everything down here. It’s a cool city. I have been traveling with a big group of friends doing this whole wedding thing. We’ve been running some 6 and 7, and this one’s an 8-bedroom Airbnb, so that’s been a fun experience to explore as well.

I heard great things, and we’re going to dive into your story. We want to hear all about this, but we’re talking about DARM and getting off the DARM. I have yet to go ahead and listen to Schwab’s presentation, but I’ve heard amazing things from 4 or 5 people. It’s like, “Holy shit, you should have listened to Steve’s presentation.” I don’t know if you’ve had a chance to listen to it yet with all your travels, but I heard great things.

Steve and I put the presentation together, so I’m pretty aware of the presentation itself. There was a lot of thought put into it. I’ve heard the same. I’ve got a bunch of texts after he got done that he crushed it and it was well received. That was exciting to hear. He does a great job presenting as well.

I’m looking at your LinkedIn profile. You still have Padzu. Talk about how you go with it. First of all, how do you stumble into the space? That’s always a great story. Let’s start there. How do you get into vacation rentals?

My story is not unique compared to a lot of us that have got into the PM space. In college, I went to the school of BYU. I was in the BYU Entrepreneurial Program in college. We had started a company that was doing housing for the 2002 Olympics. For the 2002 Olympics, I started a company called Housing2002.com. We started doing short-term accommodations just for the Olympics because we realized that Salt Lake at that time was going to be the least number of pro-rata hotel rooms in the history of the International Olympics.

They’re racing to build hotels and weren’t ever going to have enough. I had an opportunity in ‘96 to go to the Atlanta Olympics with my family, and my dad. We ended up renting a basement from another family and through the church network. When I was at BYU, I was like, “What if I give them a follow-up at Utah?” I remember what we did last time. We rented the people’s basement. We used to start this company. We bought an old autodialer. I don’t know if you’ve heard one of these before, but it’s an old tower computer, used to plug two cords in the back. I rented a $250 a month office in Salt Lake and it had two things.

You put a hard drive or computer disc into it. I had phone numbers and it would randomly call 801 phone numbers all over Salt Lake. I had to take it up to Salt Lake. I was in Provo at the time because Provo to Salt Lake was long distance and I didn’t want to pay the long distance. They were making these phone calls and it was like, “Do you want to rent your house out for thousands of dollars a night during the 2002 Olympics? If so, press one. If not, press two.” If they pressed one, it would be like, “That’s right. You can rent your house in a thousand,” and leave your name and number.

Every day after school, I’d drive up to Salt Lake, take all the notes down of everybody that had hit one, and call them back. It started a monthly service company with a monthly service fee to do that. That was my first forte into that. Through that, we ended up getting sued by the Olympic Committee for using the number 2002 on our website. They then had a housing, and their housing company was Coldwell Banker at that time, and then Mitt Romney took over the Olympics.

I don’t remember if you guys remember that. He was a BYU guy. He ended up putting our grief in touch with the Coldwell Banker group and we merged up that. We then ended up doing all the housing for the Olympics for that year. That was back before Airbnb was even a thing. That puts it in pretty a good perspective.

I was in Sandie in ‘98, ‘99. We’re all of the same age here.

Those ‘96 Olympics in Atlanta, my college hosted some of those. My dorm rooms in my sophomore year were these brand new Olympics dorms that they built on the Morehouse College campus. We were the first upper class, and this is how bad our colleges were in the Southeast. These were the first dorms with air conditioning built into this dorm. We were balling. I’m like, “The football team gets these dorms. We get AC now.” Freshman year was miserable. We had fans and windows and if you’ve ever been to the Southeast in the summers, that was brutal. We came up because of the dorms they built during the Olympics in ‘96.

Are you a Utah boy or did you just go to BYU?

I went to BYU. My family and I grew up most of my life in Idaho. It’s pretty similar to Utah though, just outside of Boise.

It’s a little bit South. You went in, there was a problem and you found a solution. I thought it was a pretty awesome story. It was an entrepreneurial spirit here right from the beginning. For those that are reading that don’t understand that hasn’t had a cell phone at your side for your whole life, and in pre-mobile, long distance was a son of a bitch. I’d get into so much trouble with my parents for long-distance calls. When I was first out of the house and having long distance, I’m like, “Holy shit, this is expensive.” It’s not a thing anymore but it was fun. It makes so much sense. Driving from Provo up to Salt Lake to go ahead and do that after school every day, I love that.

It was cheaper to pay the $250 rent for this little 5×10 office than it was to pay the long distance. I remember the calling card days.

The MCI cards.

How about 10, 10, 2, 20.

No one is going to understand that, John. That’s so far off the clue. People can’t even comprehend that now. It was bad.

Take us to where you went next. You dipped your toe into short-term rentals before Airbnb and seeing there’s a trend in a business, where’d you take it from here?

Interestingly, when we had built out that whole business, there was a kid from MIT who had created a little lens that was doing virtual tours at the time. It was a camera that shot up to a lens into a dome sphere, and then would unstitch it into a Java app to do virtual tours, but with one image, which was unique. They kept file sizes small. This is again, before YouTube, streaming video, and all this stuff that you have now to do with like Matterports and all that. He wanted to see if we wanted to use it for the Olympic stuff.

We went out and met him and there was a guy in our entrepreneur program. His name was Larry Linton. He’s still a great mentor for me, still to this day. He was like, “This is cool technology.” This kid wanted to sell it. This guy stroked us a check and at that time, it seemed like $1 million, but it was $150,000 to do this. We started using it in the virtual tours and then that turned in after the tours. Larry was like, “You guys got to write a business plan on how to use this lens.” We started rolling it out in real estate.

Ultimately, in my senior year of college sold that company to Realtor.com. I went and worked through Realtor.com for two years in Ann Arbor, Michigan. I worked all of their MLS national accounts. I was the Head of their Immersive Technology and I go to MLSs and say, “When you put on a new listing into the MLS have a little option to buy a virtual tour. We had local photographers in the different MLS markets.” Through that, I met a guy that owned Mayers Realty down in Florida. He’s a big independent real estate company, and that was the first time I ever got introduced to vacation rentals.

He was a big member of the MLS. He was on the board, but he had this whole other side business doing vacation rentals in Florida. I was like, “That’s cool.” When I went out to Scottsdale, I was flipping condos and doing some things. I had a couple that I was trying to rent, but I couldn’t get rented. It hit me. I’m like, “Maybe I took this into a vacation rental.” At that time, I was the 356th vacation rental listed on Vrbo in Arizona. Now there are 8,000.

When I went down to Florida, I worked for his office for free for about three weeks learning about vacation rentals. At that time, I was signed on with Escapia software. It was the only real software at the time. I was one of the first Escapia clients. That was the entrée to build that out. I was probably the first professional vacationer company in Scottsdale when it first all started. Now there are probably twenty great companies.

That was back in ’07 when that whole thing got started. Were you branded at that time as Padzu?

No, at that time, I had a stupid name. It was Top Scottsdale Vacation Rentals. It was done because my SEO guy was like, “This will be a good SEO name for you,” and for SEO at the time. This is how Google and Yahoo wanted to see it so that was the name of it.

It’s the times, though. You pivot with the times and we’re still doing everything now. Top Scottsdale. I get it. I could see the Top Scott sale website.

I had a question for you. I want to stick a pin in something real quick and something you said. How was that experience of working within that industry? I want to get to this theory versus application. John and I were at DARM and we were talking about what vendors and other people can learn from getting in and being a part of the management experience.

Talk to me about what that was because you don’t hear people say, “I went over here.” Whether they got paid or worked for free, they go in and experience how a business operation runs and how to be hands-on in a property management business. Granted at this time in the industry, how did that shape your perspective as an entrepreneur and as a person getting into this space? I know it had to be the real deal for you. That mentality is not normal. Talk to us about what made you do that and what you gained from that experience.

Two things. One, my dad is an entrepreneur and runs a very successful business. A lot of it I learned pretty early on working with my old man and watching him. When I was a kid, my dad would be like, “What do you want to do for spring breaks?” I’m like, “I want to go on whatever business trip you’re going on.” He was traveling all over.

I was the oldest of five boys, so my dad would put me on a plane with them and I’d ride around with his salesman around the East Coast and stay at the hand for the dance and eat out every day. I thought it was the greatest thing. I’ve always been super intrigued and fascinated by that. My dad is definitely someone who’s taught me that entrepreneurial spirit. Even more importantly, it taught me the art of sales and systems.

For me, that was probably the biggest application and the vacation rental side, whether it’s selling yourself to an employee that you know that you want to hire or try and to do an owner acquisition of a piece of property. In our world now, it’s acquiring vacational companies and bringing on new partners into our Casago ecosystem and the system’s piece of it. Doing those three weeks out at my ability in Florida for me was going, “I’ve got to figure out as many pieces as I can because no one else is doing it in Scottsdale. Even if I don’t do it perfectly, I’m going to do it a lot better than the next guy that tries to come in and figure it out.” Trying to figure out best practices was a big piece of that for me.

It’s interesting. I met you through Golden. Shout out to Michael Golden, the great connector. I remember when I first got into this industry and was rolling around. I’ve watched you move for a long time and you’ve always been super cool. You’ve always been willing to talk and engage around my questions and my novice, “I don’t know these things,” but you’ve always been super great. I’ve always watched the way you move from a business perspective and it’s different.

I see your approach to how you roll through this industry and it’s very different from a lot of others that I see move within this space. It makes sense looking at your background and where you come from. Talk to me about the growth that you’ve seen and how much has technology from your time being in this space changed the businesses that you see and have been a part of and the direction in which you move. Technology can do two things. It can build your house of cards or it can optimize your business and help you grow. With your business perspective and your business acumen, I’m interested to hear how that’s been a part of your path and your journey in this space.

Thank you for the compliment. That was nice. When you say I do things differently, I’m the guy wearing T-shirts and sneakers everywhere I’m walking. On the tech side, going back to the history of this years ago, we were walking into these meetings in these VRMAs. It was a room full of gray hairs and I felt like the young buck and was a little bit smarter than everyone else in that room. I had a little bit of an edge when it came to the tech and understanding.

I outflank a lot of these people in this room from having more of a tech perspective. Cut to 2022, I’m the old guy in the room and trying to keep up with all the tech that’s going on. It’s incredible if you watch what’s changed in this. The truth is Steve has a background being one of the Founders of Streamline. One of the things that I’ve always admired about Steve because Steve and I both lived in Scottsdale. We were both competitors and friends at the same time.

He was probably the one that shed the most light on the software, the systems, and the implementation piece because he understood it. They built Streamline for Casago. Him and Carlos built it around Casago. It was very much to say, “This is a need and let’s build it to fit this need.” Since then, we’ve created a tech stack that revolves around Streamline. We’ve got a lot of things to bolt into the Streamline, but Streamline is the nucleus of the tech that we run at Casago.

That can be from anything. We did this cool piece of tech that Steve came up with and its QR codes. Steve’s follow a patent on it even, but it hooks up through our Casa app. We have an app on all of the maintenance guys’ phones and the cleaner’s phones. They have pre-made QR codes that are made out of wood and we laser engrave them. We bought our own engraver and do this out in the warehouse. We can make a bunch of these every day.

We got around engraver by the way. Steve loves doing it.

He does. I love him for it too.

He loves the fuck around all that stuff. It’s awesome.

We’ve created these QR codes, but this is a good little example of, “When there are problems, how do you build tech around it?” They can go into a house. If we get someone that came and goes, “We’ve got two phone calls on this stupid Owner X system of how to connect and how to do this. People are always complaining about it.” We can go and take this QR code. It’s a placard about a business card size. It has our logo on it. Click here for information about this product. They can scan the QR code with their app, find the house in our Casa app through Streamline that they’re tying it to and say, “Here’s the house.”

They then can record a video on, “My name is Ryan. I’m going to show you how to use this Owner X system. First thing, you’re going to hit this button and you’re going to hold it down for five seconds. You’re going to pay both.” You can do this whole video for it. It complete and uploads into a Casago branded viewer and video. It then creates a help need for this piece of equipment inside that house. It has notes like, “Was this helpful?”

It creates a video catalog of all the help things that we can go through a house. When we start tracking and creating the right analytics around things that are going on inside of a house, we can start to say, “This has been a problem three times in a row. It’s how to do the video.” We’ll focus on the things that we think are the biggest pain points inside of a house for a guest. This is all a guest-pacing product essentially. It’s finding ways to help fix those problems how to increase the guest experience right off the bat.

[bctt tweet=”Focus on the biggest pain points inside a house for a guest. Find ways to help fix those problems to increase guest experience right off the bat.” via=”no”]

Ryan, think about the other side of it. Think about it for the homeowners. This is the analytics that you’re getting from this for the homeowners. This is like wearing your smartwatch that’s going ahead and taking all your vitals. This is the vitals for the homeowners, and then retention for homeowners. You could say, “This is what’s doing great. This is what’s fucking up.” It’s smart.

It’s super cool. People can put comments like, “Was this helpful?” The guest, once they logged in, they say, “I found this helpful a little bit more or this is the wrong video.” For the retention homeowners, to John’s questions on the software side, we’re tying that back into our PMS. If we deactivate a property, every one of those videos deactivates as well.

We’re using the Streamline piece as the hub of the tech. We also went out and acquired a smart home tech company. Now we’re implementing all the smart home tools into that will be integrated through Casago to go do our own smart home tech with blocks, thermostats, and routers. We’ve got a whole roadmap on it, but we’ll probably be the most all-encompassing smart home type of package. We’ll have that done by the end of 2022. We’re trying to integrate all that tech.

At this point in the Costco ecosystem, we’ve got over 3,500 homes. That’s afforded us the ability to go out and probably spend a little bit more money. We have a team of developers now, which I don’t think very many property management guys have. That’s a luxury that we’ve created and we’ve made it a priority. To continue to evolve that ecosystem of either creating more consistent systems or reducing the cost of how those certain things inside of that business metrics operate.

[bctt tweet=”The short-term rental spaces must create more consistent systems or reduce the cost of how certain business metrics actually operate. ” via=”no”]

You’ve said it five times, and a slight pivot, but out of your mouth, it’s Casago. Before we get into Casago, where you’re going and why this partnership and the transition over to that, I want to know, looking back at your growth in the space. You came in hot and hungry. I look back even in my years in the space, I’m like, “If I had done this a little bit differently, if I’d gone about that,” what is something that you are like, “I fucked up. If I had done that a little bit differently, this could be here.” Do you have one of those moments like that a-ha moment where you’re like, “Man,” only?

Two things. One, when I had Padzu, we were in three markets. The first one was through acquisition. The second one we started at Greenfield in Park City, Utah. I learned a pretty expensive lesson on the first acquisition thinking, “This is pretty easy in Scottsdale. This is four hours away and this should work the same.” I had my head handed to me on our first acquisition.

When I say the head-handed, I got to the point where I was like, “There’s no way this business works if I don’t get in a car. Every Monday morning, I would wake up at 4:30.” I was at the office by 9:00 in Palm Springs and I would stay there Monday, Tuesday, and sometimes even Wednesday. I did that every week for over a year. I wasn’t doing that the first couple of months, and then you could start to see the chinks in the armor and things starting to not work the way you want to. It’s like, “Just because I’ve got what are good systems, the people are a big part of that system.”

Even the transfer of culture of what was going on in our Scottsdale office to the Palm Springs office, which isn’t resonated and didn’t translate because of me. That was a big lesson and an a-ha moment of trying to think in life, “This works fine here. It’s going to work fine there,” and not having refined documented systems. We had some systems in place in Scottsdale, but they weren’t documented to the place where you can take this and say, “Now this playbook works everywhere.” That leads to my second one. I’ll be perfectly honest with you.

Steve and I have now been business partners for going on two years, and I wish we would’ve done it several years ago. We’d be having even more fun than we’re having now. We both made a lot of headway. He’s a great partner. He compliments my deficiencies. You used to have laser printers. He loves all that stuff and he’s a great tech mind.

That’s allowed me to be able to remove myself from the pieces of the business that are truly my favorite and do what I love to do, which is more of the face-to-face and the business development, and those things. I used to take phone calls from all the owners if they got upset because I was the guy that signed them up several years ago and all that.

That slowly evolved away where I’m like, “I don’t hear a lot of the guest complaints as much as I used to.” There’s now more of a buffer in there. If I can rewrite the script, there are no regrets about the partnership that Steve and I have put together. What we continue to build together and the team that we’ve built, I’m super proud of that. I wish I could put more jet fuel on that because that’s something that’s been exciting and fulfilling.

As Mateo and I know a little something about good partnerships and feeding off each other, weaknesses and strengths and there’s a lot to that. You and Steve are a lot alike, but you’re very different as well. The complementary parts are a lot alike in vision and where you want to go, but it’s a complimentary partnership.

I don’t want to glass over the frenemies thing too because that shit is weird. One of the things, when I got into this industry, I’ve never seen so many competitors that are, case in point, cool with each other in the same space and transitioned into working with each other. Where else do you see that? What other industry do you see that? In other industries it’s beef. It’s war.

They’re on the streets, you don’t like each other, you going to finance, and you’ve not seen banks work with each other like, “This institution’s great too. It’s my boy over there.” They’re like, “No. That institution sucks. Don’t put your money over there and we’re going to crush them. In the next ten years, we don’t want them to even be in this space.” That story is compelling and it’s a great reflection of who we are as an industry.

This story, which is still being written is going to be a great one. Talk to us about this space. Talk to us about Casago. There seems to be a lot of excitement. I see what you guys are doing. What you guys are doing is different. You’re not the typical franchise and you have whatever side of the fence people fall on within this space, “Are our franchise is good? Are they not?” Whatever seems to be irrelevant because the product that you are putting out is deep. Knowing both you and Steve, it’s a reflection of both of you. I see your fingerprints all over this thing. I see the organization you’re building. I see what you’re doing with the people you work with.

It seems solid. You got a solid team, and they’re responsive. From the outside looking in, I’m proud of what you have built and where you guys are going with this.

I appreciate that. You’re right. We’ve almost built this backwards. Mateo, to your point, it’s interesting because up until two years, we weren’t franchising at all. All of these were offices built by Steve or I or both and/or acquisitions that had been made. There was an immense amount of support put into it. We have unique value propositions. One of the secret sauces and silver bullets of Casago is our Casago University down in Mexico.

We have an entire university with an actual dean of the university. It’s organized training. It’s workbooks. Every new employee goes down there. They go all day and then go home with homework and have to come back and get their quizzes scored and all this stuff. Everyone thinks, “I’m going down this beach in Mexico with this training. It’s going to be cool.” They come back dog-tired and like, “That was a lot.”

Is Pilar the Dean?

She is. Pilar is the Dean. She is awesome. She keeps you on task. If one of our offices hires a new operations manager for their office, we send them down to Casago University, they come back a trained ninja. They understand the Streamline now. They understand 100-foot work orders, the flow, the timeline, the email response deadlines, and the whole flow of the business.

How to do things the most efficient way so that when we send that employed backup to our general manager, it’s not like four weeks of hand and a whole day in the field and trying to take time out of their job and train the new guy. We try to get these people trained into a very succinct system that’s repeatable. That’s a big value proposition of what we’ve done there.

Because of that, we’ve probably overstaffed it all to support the Casago piece. Steve tells the story the best. They were in a VRMA Executive Summit years ago. There were some comments made about some of the value that the Casago had, the scale, and how they could come into cities, do a little bit better and have a little bit better margin optimization because of these things.

It goes back to the old quote, “You could do a lot of things good or do one thing great,” and any time you can find someone in your organization that does one thing great at a highly repeatable, high-value add level, that’s going to rise all the bugs in the system. One of the things that we’ve done extremely well is to find great people to do very specific things inside of the organization. We get a better yield out of that task or out of that silo of the business.

We get better output and cost because of that. What’s created the Casago thing is Steve was at that conference. There are two managers that went to Steve and said, “You have some of this stuff that Eric Brown is talking about. Would you guys ever think about letting us have access to it?” That’s how it came up. He was like, “Like what?” He was like, “A licensing or this and that.” That began the conversation about what word a franchise looked like and how it looked like to franchise.

These two guys that asked that question, Mike and Nick, became our two first franchisees. Again, it’s a reverse-engineered franchise to your point. More than half of the people that are signing up as Casago partners are existing operators. These are operators that know their metrics and know their KPIs well. They understand their op cost and their profits. They understand what they’re paying for share or connection fees, softwares, and all that.

One of the most interesting testaments to what we continue to build at Casago is we’re finding operators with 50 to 150 units count doing anywhere between $3 million and $12 million of gross rents coming and saying, “What does it look like if I overlay the Casago operating system on top of the business I have now?” What we’re finding the answer is like, “This says value because there’s a level of scale to it.” As I said, I grew up in Idaho. I grew up in a potato town and most of my buddies’ dads were farmers. I used the analogy a lot.

Essentially, it’s what we’re building at Casago. When I was on these farms, I wanted to hang out with my girlfriend all the time. One summer, I was like, “I’ll come work on your farms so we could hang out and see you.” I worked under her dad’s farm and his name was Mr. Barrett, an amazing guy. In that local farm community, they had a co-op. In that co-op, they would all fill up their gas with the tractors at the same time and they would buy their seed and fertilizer together. All of these things they were buying together.

I’ll never forget him asking, “Why do you sell at this crappy gas station instead of the Chevron or whatever.” He was like, “We buy this gas together as this co-op.” He explained to me what the co-op is. It is essentially going like this, “I have a 300-acre farm, Ryan, but I’ve got 20 other farmers. They’ve only got 3-acre farms, so we have 6,000 acres. When you buy gas and fertilizer for 6,000 acres, you get a better deal on it than if you’re buying it for 300 acres.” I was like, “That’s cool.” They bought everything. If this dropped us, it’s going to go across your field.

They may as well go across your neighbor’s field too. He’s already up in the air. There are some economies of scale to that. That’s how I’ve always even looked at what we’re building at Casago. As a company, we have an economy of scale. We added three new partners, and as we continue to add new partners, we’re adding to that ecosystem and being able to continue to process improve, but also cost improve everything that we’re doing. On the farmer’s side, much like the cost of buying everything, they also had the advantage of when they sold.

If I had a potato that would come in to get all the French fries they needed for McDonald’s, they were negotiating to buy 6,000 acres of potatoes, not 300 acres of potatoes. That’s the other side of this. For us, the real win is come in as a mass community of like-minded people that leverage each other’s inventory and marketing outreach. Master them like what you guys are doing on this show. It’s social awareness and a free flow of ideas to make us all better. What’s happening on our franchise side is we’re able to help reduce the cost and as our ecosystem gets bigger, it becomes more and more powerful.

We’ve got our weekly calls and mentoring stuff, but we’ve got these systems. Our whole goal is when partners come in, we want this thing to become neutral to them and not cost more money, but make more money. That’s where it hit for me. Once Steve and I became partners, it’s exactly what happened for my business in Padzu inside of the Casago ecosystem. I took that inventory and we merged all of our inventory together. One of the things that Steve and I realized when we did that, were like, “If you have two big competitors in the market, you roll them up. There are economies of scale there.” That inventory is more profitable than it ever was together.

The other output of it and the goal is, our partners make more money, which makes their companies more valuable. More importantly, it allows them to deploy the Katrinas, the Pilars, and the Bill Johnsons. We have a revenue manager by the name of Tom Lyons that we’ve got from Starwood Hotels. He was doing revenue and deal management for Starwood at a high level.

Being able to deploy best-in-class people, maybe as an individual person at Padzu, I wouldn’t be able to afford a six-figure revenue manager at that level. Being part of this network, I get access to somebody who is a data scientist and brilliant when it comes to revenue management strategies that I’m now being able to tap into. That’s part of that value proposition.

That’s a unique perspective. It’s the idea of this collective and community economics. We talk about how you scale successfully, how you scale within this space where we have a lot of companies that are scaling through acquisition and these sophisticated means and bringing all of these different bodies and people together. You have to successfully do it, get buy-in, and then make it work. I love that farming analogy because that’s the model of how it’s done well.

Everyone’s survival is dependent on each other, but everyone’s gain. When everyone gains, the collective gains. You weather the storms together too. During the downsides, you’re also weathering that downside together versus taking it individually and not having that risk mitigation and having it spread out. It’s a great example of what we’re always talking about, “How do you scale successfully and what does it take to scale brands and companies?”

The things that you said paint a picture of one way, and I’m saying there’s only one way, but a way that it works and works well broadly and allows for success. I’m going to let people read those takeaways and figure those things out for themselves. Creating those systems where the wealth and all things are shared is going to make an environment that benefits the broader community and allows for these things to have staying power. Now you’re just not doing it solo and not solely resting on 1 entity, 1 person or 1 group.

I appreciate that. Also, it’s important that you’re also riding the horse that gets you to the race. For us, when we bring on a new partner, we’re not putting two partners in Galveston, Texas. We’re going to find the right partner. We’re going to support them with the right tools. We’re going to make sure they have plenty of silver bullets in their sling to have a highly successful business that meets the objectives and goals that they want. The other important piece of this is we’re putting trust in these partners to be the right partner in that market and be able to execute.

They’re putting trust in us to make sure that we’re bringing a ton of value to them. I truly believe and know when we bring on these partners in their market, we’re giving them a competitive advantage. To your point, that ecosystem grows, and the advantages continue to grow. Several years ago you couldn’t even get Airbnb on the phone and have a conversation with you like, “We have a dedicated Casago Airbnb rep in San Francisco. We can send information.” You can send like, “I don’t think this resolution plan was done the right way for our franchisee that has 50 units.” Kona, and she’ll get in and be like, “They handled this completely wrong way. I’m going to reverse this.”

[bctt tweet=”As short-term rental partners are given a competitive advantage, the ecosystem continues to grow.” via=”no”]

Those things don’t happen. They never happen for me at Padzu. When I had 400 properties, I wasn’t getting that service. Also, with that scale comes access and access becomes an important thing in this business. Being able to have a voice becomes important. That’s a cool piece of this as well. 2022 will be the first year we’ll put together our board of advisors, which will be Casago’s board of advisors made up of our franchise partners around the country.

That’s going to become our owner’s board that will help drive the decisions on how we spend money marketing and different things for these markets. I get excited about having a lot of people with brave voices speak up and talk about what the objectives are. In September 2022, we’re all going down to Oaxaca for our annual SABER Conference. We’ve got a three-day conference down in Oaxaca, Mexico. All of our GMs and franchisee owners come down. Unlike a typical conference, it’s a real workout breakout type of conference.

We’ve got our Airbnb reps coming down and all of the smart home stuff we’re doing. We’ve got Lexicon and Streamline professionals coming down. You pick a table where these issues get worked through at these different tables. For 3 days, our partners carve out 2-hour windows. It’s not like, “When you get home, do this and this.” There’s a team of people who learn from computers open with the operator done. We’re going to knock these ten things out on all your property inventory.

When you get back on a plane home, it’s not the copious notes you’ve taken at the conference of like, “That’s a great idea. I should take that home and execute that.” You’re going home and your business is better. It’s more efficient and you’ve got best-in-class people who have helped you tune that thing in. That’s a repeat kind of thing for us.

If we can do that every year and bring our partners in, get our inventory scores better, get the listing scores better and implement more technology to the listings, ultimately, that’s going to win. That will help the partners win and help the whole system. That training piece is super important. I have been making sure you have obviously the right people to help execute that to your point earlier was a poignant thing to say.

Ryan, I was close. It was hard for me to pass on going down there with Hopper. The invite was there. Our team is not big enough yet and we got seven conferences in September 2022. I’m going to 6 of the 7. I’m like, “We appreciate the invite, but next year.” I hear even more about them, and I’m like, “What the fuck. We messed up. We should have been there.”

The reality is he knows that you all are going to work and he’s going to be in the spotlight. He is like, “I don’t have enough time to work and play,” and then he is like, “It’s not going to work now.”

We’re still having an open bar at the end of the night.

I had a couple of things I wanted to run it by you real quick. You talked about acquisition and partners. From your eyes, and this is an assumption, you’re looking for profitable companies. You’re looking for businesses that are operating in the black and they’ve proven profitability. You’re looking for 50 to 100 units or whatever you’re looking for. Maybe it’s region driven. You mentioned you’re not going to have two Casagos in the same location.

You want to make sure you’re expanding correctly and scaling in an appropriate way. That all makes sense to me. My question for you is I’m a property manager. I’m excited about coming aboard and I’ve joined up with you. We are now part of your ecosystem. What does that transition look like for me as a property manager? What does that lift? We talked about you’re going to send everyone down to Casago University. I sold property management software. I understand when you change your books, it’s hard on teams. It’s not easy. What’s that look like? How long do you feel that these property management companies are now part of your ecosystem? How long do they feel like, “That wasn’t that bad.”

There’s no question. It’s interesting. There’s this weird bell curve of that transition. We’ve signed on some franchises that have no listing because then they’re people that want to get in an industry. It’s in a market where they can be successful with the system. We have Greeneville operators that have started with none and in the first year, they built out their portfolio to 25 or 30 properties. We have some others that have come. There are 5 or 6 properties that have come on.

Our average is around 60 to 70 properties. That’s maybe an area where there’s a lot of optimization because they’re big enough to where they need some more help and support. That’s where they’re like, “I should go hire this person and this person,” but then they see our system and go, “I might get away with leveraging and pulling some of these levers that Casago has to reduce the cost.” You’ve then got the bigger teams with over 200 listings.

The bigger the team, the easier that transition is for sure because there is more support and people that have identified roles. The 50 units are different. Essentially, a new partner comes on, let’s say, they’re on a track software. Whenever we take that inventory, we pull all the information over. We do the full transfer of all the reservations, listing data, pictures, and all of that stuff that is needed. Full onboard, full duplicity of their current website, and that domain, and then find a launch day.

Typically, we’ve probably got maybe 3 or 4 in the queue that is going to be launching at specific times of the year. Maybe they’re a summer market and we’re not going to launch that partner until October. Sometimes you have people that want to do it on the quarter because to your point, the accounting aspect of it, making sure that they can do quarterly returns the right way and out of specific software. We’d try to meet the needs of what the client wants and what their expectation is.

They go down to Casago University for those days. They come up to Scottsdale. That’s where myself and Katrina will sit down with the partners and talk about what their business goals are. It’s setting up a business plan for the objectives that they want to meet that year. An important piece of what we’re doing is we share our goals as groups with one another. There’s a large level of accountability, which is important and probably missing as a siloed independent operator in this industry.

Having some other people that you’re verbalizing what these goals are and trying to support each other has been hugely successful in how we operate. That’s essentially how the launch happens. That process will take anywhere from 3 to 6 weeks once we start going down that road. That’s not too heavy of a lift. There are people that change softwares and the software companies are like, “Here, we’re training you on the new software.” Now, you’ve got to run it, sit in your office and figure it out.

We’ve got a support network. We’ve got Casago University and we have a helpline. If you get stuck in the Streamline on something, we have our own Streamline helpline for the software with these people that know Streamline inside and out. Not putting in the ticket to your PMS software as getting like, “How long it’s going to get back with me?” They can call the phone number and get an answer to it and rock and roll.

If that came across the wrong way, I didn’t mean it that way. I love the processes you have built behind it, and it makes total sense. It seems like you thought of everything and then when you haven’t thought of everything that we’re hearing from you, you’ll figure it out, and then you’ll think of everything again, which is freaking awesome. This has been great. What’s next for Casago? Where are you going? Is it more the same, or do you got any new exciting things to now it’s coming up soon? Any you hear it here first kind of things?

There is some new type stuff that you’re definitely going to hear about. That stuff won’t roll out until 2023. Some stuff that is going to be first in our industry is going to shake things up. Again, it’s going to become a wider big remote around some of the things that we’re doing on the tech space side of things. The other part is again, continuing to grow this ecosystem of operators. Our goal is to have hundreds of partners around the country.

Right now, we have 33 all rowing in the same direction with the same objectives and the same goals and building something that could be very powerful. Going back to the whole Vacasa conversation. The truth is, does Vacasa have an advantage in some aspects of their business on a national level? The answer is yes. Now that they’re a publicly traded company, it’s very clear where they have some success and levers that they can pool at scale.

I saw a call chart tracking Vacasa’s call center on the average number of calls that their call center can take because their call center is taking calls from twenty different markets across the country. There are no seasonal dips of like, “I probably should use much. I need more reservationists now.” Other times, you’re like, “My reservationist hasn’t taken the call all day.” They can level-load their call centers and do some of these things.

Our objective is to continue to try to bring tools to partners that allow them to let pool those certain levers at their business at the right times and increase the ability to operate at a high profit and turn things off when they don’t need it. Turn things on when they do need it and have those economies of scale. What this brings, as far as the biggest piece of the value, the truth is, we’re wanting to let people compete nationally with national tools and call centers and things that they come in and out of at a very low cost to increase profit, but then win locally.

You guys all know this. This is the magic of our business. Local operators, local heroes, local owners, being local, getting involved in the community, going and being part of their chamber of commerce, working with those realtor communities. Nobody is going to put more work into your business than the owner. Paid general managers and big guys that get off at 5:00 and have other lives and other priorities. The key here is people that are like, “I don’t want to sell my business but I’m getting offers because this national company wants to come by and I don’t want to have to compete against the national company.”

[bctt tweet=”Nobody is going to put more work into your business than the owner.” via=”no”]

This becomes an outlet for them to say, “I can compete with the tools of all the big boys, and I can compete in my market against anyone on a very high level. More importantly, I’m the secret sauce. I’m the silver bull. I’m still going to be here. I still own this business, run this business, own this market, and I’m still going to go out and crush it here,” whatever city that these operators are in. That’s a pretty cool piece of all this and how it’s evolved and what I hope to continue to help drive and revolve as we go on here.

That is a differentiator for you, the local, but with the national power of tech. We had JB on, and he was talking about how with Vacasa and with turnkey prior, it was always hospitality, but logistics first with the hospitality pushed into it. He goes, “Hospitality is super freaking important, but without the logistics behind it, you’re not going to get to the level of hospitality you need because it’s going to fall flat.” That was pretty enlightening to me. I’m like, “I never thought about it.”

[bctt tweet=”Hospitality is super freaking important in short-term rentals. But without the logistics behind it, you can’t get to the level of hospitality you need to achieve.” via=”no”]

You’re always talking about tech first, but what about tech? It’s a logistics behind it. It’s being able to go ahead and have that there and without that, still, you’re nothing. You can’t compete without a logistics setup. I get what he’s saying. It’s interesting though. You’re focusing on logistics as well, but you’re keeping that owner in place and keeping that owner first. You’re like, “No one is going to love your business like an owner. No one is going to jump in like an owner.” You guys have a pretty cool product and I wish you the best of success.

The key is it is operational optimization because it’s logistics, but it’s one of the keys. You dropped this gem a couple of times and people got to understand it is the processes. It’s figuring these things out and giving people the tools that will allow them to work and work well. They take out the things that they don’t need, optimize the things that are going to give them more time and allow them to be better at the things that they do well.

That was key, and you dropped that a couple of times. I want to make sure people read that. It is logistics, but it’s also operational excellence in optimizing that operation so that you can focus on the things that you do best as a management, as a system, and as a business. That will lead to profitability. Stick and sure in that.

Ryan, thanks so much. We appreciate you joining us.

Gentlemen, thanks. It’s been fun. Hope to see you guys soon, probably in Vegas as I’m guessing it’s a nice time that your smelling base suit in The Streamline Summit.

Anthony might be at Streamline and maybe one of us will show up at Streamline. Do you want to drop your Married by Dame website? Is that up yet?

Thanks. We appreciate you, Ryan.

 Important Links

• DARM
• Hotel Data Conference
• Hopper
• Casago
• Padzu
• Realtor.com
• Streamline
• Owner X – Casa App
• Casago University
• Tom Lyons – LinkedIn
• JB – Past Episode
• https://Go.BeyondPricing.com/no-bs
• https://Casago.com/nobs/
• http://Megaphone.fm/AdChoices