Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
Alumnus Entrepreneur Profile:
Nakul Sharma, MBA’11J
Founder www.hostmaker.co.uk
Indian born Nakul Sharma was expected to become a doctor, an
engineer or a lawyer; instead he decided to take the unconventional
route by attending hotel school at The Shannon College of Hotel
Management in Ireland.
“It was the first time that I had left India and the culture
shock couldn’t have been bigger. I grew up in Bombay, a
city of 10 million and found myself in the small town of
Shannon with a population of just 50,000!”
It was here that Nakul learnt all there was to know about operations in
the hotel industry. “It was an eye opener. Few people know what goes
on behind the scenes in a hotel (I certainly didn’t. My father was an
engineer and mother was a school teacher) and even fewer appreciate
the complexity of operations.”
After a year including an internship in a hotel in Dublin, Nakul
decided to change courses and pursue the business side of the
industry at the National University of Galway where he earned a joint
First class honours degree in Hotel Management and Marketing
graduating in 2005. He became a graduate management trainee for
the Starwood Group in London where he was the only non EU
candidate out of 25 selected across Europe, Africa and the Middle
East. It was a fast track 18 month programme that covered all hotel
operations. Nakul’s final mission was in revenue management
dealing with the pricing strategy.
“I had a choice between online marketing or revenue
management and chose the latter as it had a direct input on
the hotel’s top line and was a good skill to learn. Normally I
would have stayed two years in this position but was ready
to push my personal boundaries and move to the next
challenge after just a year which came in Dubai.”
He left London and the Revenue Management Executive position in
April 2008 and was in Dubai just three weeks later. Here he was
responsible for opening two hotels for the Starwood Group and for
delivering a $40million revenue target while developing the revenue
management department and the reservation office.
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
“The two years in Dubai were hard - working 18 hour days in
a make-shift office sharing phones and desk space with no
air-conditioning in the sweltering Dubai heat! I was
responsible for a team of ten, all older than me - I was 24 at
the time. My boss was almost 60.
On the first day the hotel opened for business, the pricing
went wrong on the website - instead of posting $200 rooms
they had been listed as just $20 per room leading inevitably
to many bookings especially in the peak seasons. The
difference between London and Dubai culture came into
play - I just had to call people and tell them there was a
mistake – most people understood and after some
negotiation would agree to pay the right price or cancel.”
Despite these teething problems and the fact it was in the midst of a
global economic crisis that hit Dubai hard, within six months the
hotels were leading its competitors. After establishing himself in this
role, Nakul had the opportunity to lead the revenue management
function for a group of Starwood Hotels in the Middle East.
It was at this stage that Nakul decided that the time was right to study
for an MBA. He wanted to stay in the hotel industry but was ready for
a more strategic role. For this he believed an MBA could be the
catalyst.
On graduation from INSEAD in 2011 he worked as Director of
Commercial Strategy and Planning for the Intercontinental Hotels
Group. During his time at INSEAD the seed for Hostmaker had been
sown in Karan Girotra’s class although it was just that - an idea - and
Nakul didn’t really entertain the idea of taking it further at the time.
However as he explains:
“While I was at Intercontinental Hotels I co-wrote a paper on
Airbnb’s impact on the hotel industry. The top management
didn’t see them as a threat in their sector. However, having
stayed with hosts through Airbnb, I was convinced it was an
attractive alternative for travellers who were tired of the
mediocre offering in the 3 or 4 star hotels. Airbnb was making
homestays a true alternative travel accommodation category
Nakul knew that there was something to be done within this new
ecosystem. He quit his job at the end of January 2014. As an Airbnb
host himself Nakul could use his home as a test ground for the
services he proposed:
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
Hostmaker’s mission is to become the world’s first truly
global hospitality management company for homestays.
Hostmaker wants to bring out the host in all of us, by
enabling every home to always be ‘guest-ready’.
He met Hostmaker’s first clients through conversations on the Airbnb
platform using his own savings for the first six months while he
developed his ideas. A turning point was in June 2014 when a group
of his INSEAD classmates flew to London from LA, Seoul and Toronto
to brainstorm on Nakul’s venture (they had previously worked
together just after INSEAD on a project to acquire a hotel in London.
This had not gone through, but offered several learnings about
startup life.) This group later became some of the first investors. After
the meeting, Nakul changed the proposition to what it is today,
concentrating on the customer service experience. Hostmaker really
took off in July 2014 and has grown between 20-30% per week since.
In December 2014 a first round of funding was closed of £250K within
four weeks and was oversubscribed with commitments of £350K.
“The most important aspect in the first round of funding is to get the
right people to invest.”
There are currently six housekeepers; a delivery person and six back
office staff including Nakul and his wife who gave up her job after
seven years as a city lawyer to join the venture. For the moment they
are London centric but are looking to expand geographically. Nakul
believes firmly that they are the first among many ventures that will
be developed using Airbnb’s ecosystem.
Five of Nakul’s INSEAD classmates have now invested in the venture
and two alumni are set to join the venture shortly. Nakul is also the
first member of his family to run a business. “My dad was a little
nervous but is very supportive and has even invested.”
Challenges?
“As it is an operations business it is people heavy and quite
difficult to automate aspects of it. I made a conscious choice
in the investor note I drew up recently about the
housekeeping team. I do not want them to be treated as just
a pair of hands. These are the people who bring the home
alive and represent the brand on the frontline. The staff are
employed full time not on contracts and they are paid over
the living wage. As there are 100 homes to service it isn’t
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
always easy for them to get around so we take into account
travel time etc.”
Advice?
“Commit fully to making the venture work. The project I had
with the other students during my time at INSEAD I believe fell
through because I wasn’t committed full time. Test the idea and
give it your best shot.
Do what it takes to make it happen even if this means having to
leave a special dinner party to troubleshoot your customer’s
problems.
Since we closed the first round of funding there has been a lot
of interest in bringing hostmaker to other cities….”
Anne-Marie Carrick, Research Associate ([email protected]), March
2015