Case Study: How Rent Like a Champion Nailed Airbnb’s Business Model for Games and Events
What once called ‘eBay for vacation rentals’ is now a standalone brand and an inspiration for many startup ideas. We are talking about Airbnb here. Of course, the platform follows a similar business model as eBay’s (C2C), but the Peer-to-Peer model that Airbnb trails-into is about rentals, not selling stuff.
Any eCommerce platform working on this model allows its users to sell products and services to each other, and the platform makes money from the commissions it get from the users in return for facilitating the transactions. Inspired by this business model of eBay, Airbnb was able to build its brand name and a place in the market. Today, this $30 billion company is giant enough to land its founders on the Forbes cover. A business that nailed the old school C2C eCommerce into something more profitable, accessible, broader, and branded.
What Airbnb did with eBay’s model is a perfect example of how little innovations in the existing business models can land you up with more profitable undertakings and even let you create a completely new segment in the market.
In this article, we are going to analyze a similar innovation that ‘Rent like a Champion’ did in 2006. We will see how it nailed the Airbnb’s business model, created its own segment, and managed to not only succeed despite Airbnb’s prominent presence but also secured a $200,000 investment from Shark Tank panelists Mark Cuban and Chris Sacca for a 10% stake.
What is ‘Rent like a Champion’?
Each year, millions of Americans travel across the country to enjoy football games, golf tournaments, racing events, and other kinds of festivals. The obvious choice for them is to either book an expensive hotel or camp around, which might not be a possible choice for everyone.
‘Rent like a Champion’ lets you book a homestay nearby the prominent places famous for hosting games and sports events across America. Their value proposition is to let sports lovers travel across the country and enjoy the games, while the platform will take care of arranging a comfortable homestay for them. If you are traveling alone or with your family to a game event, it’s most likely that you will find a nearby place to stay on ‘Rent like a Champion’.
How similar ‘Rent like a Champion’ and Airbnb are?
‘Rent like a Champion’ is very similar to Airbnb in terms of the business model they follow. They observe the same peer-to-peer rental marketplace model, except they offer a completely different type of service. Where Airbnb presents itself as an affordable alternative to hotels, lodges, and resorts in holiday destinations around the globe, ‘Rent like a Champion’ focuses around American sporting events, college festivals, and other kinds of events. It offers homestays nearby prominent sporting events destinations. Except for this, everything is almost similar to that of Airbnb.
- Catalog: Like Airbnb, you can find all kinds of dependent, independent, and furnished properties in their catalog
- Booking Process: Like Airbnb, you need to place a booking request, pay online, and wait for the booking confirmation email
- Listing fee: Like Airbnb, you can list your home free of cost on the platform
- Monetization: Like Airbnb, both homeowners and guests pay service fees on each transaction they make or get on the website
What makes ‘Rent like a Champion’ unique?
When players like Airbnb and HomeAway are already dominating the market for home-sharing and vacation rentals, ‘Rent like a Champion’ places itself strategically in a gap that giants can’t fill. We are talking about small towns in the US, which host hundreds of sporting events and fests each year, and millions of people move around to attend them.
They started as a football events home-sharing platform to offer comfortable homestays to the college students and football fans around the event-destinations. Initially, they operated in small towns like South Bend, IN, and Ann Arbor, which hardly concerned the likes of Airbnb and HomeAway.
Eventually, it gave locals a way to make some extra cash renting their homes out, and fans got some affordable alternatives to expensive hotel rooms. Most of the time, there was not even a single hotel near these locations, which allowed the platform to best without any competition. Small college towns were strategic grounds for business where none of the giants and traditional hotels had any prominence.
Until 2015, ‘Rent like a Champion’ continued on its niched ground and focused only on football events and homestays around them. However, once they featured in Shark Tank and secured the investments, they finally expanded into other actions such as golf tournaments and racing events. Moving forward, they even collaborated with NASCAR tracks and became official homestay partners to their events.
Lessons to take from ‘Rent like a Champion’
Today, ‘Rent like a Champion’ has doubled the number of houses on its platforms. It’s experiencing a balanced growth on both sides of the platform: Hosts and Guests. Of course, the appearance on Shark Tank gave a massive marketing boost, but they were able to feature only because they had a great idea. It’s run by as few as 12 employees and yet has managed to become a prominent name among the American sports fans. We found the following takeaways from the company’s recent developments inspiring:
Micro-Niche: They knew the overall home-sharing market is not an easy nut to crack with Airbnb, HomeAway, and traditional hotels already there. Therefore, they focused on a micro-niche that no one had explored yet. Please note that they did not even cover all kinds of sporting events but only college football games in the early days. They did not go for a niche but a micro-niche.
Patience: They began in 2006 and served in a micro-niche until it was a good time to expand into other events after they secured investment and good exposure. They had an idea and dared to experiment with it on a small scale. It’s something that many entrepreneurs lack. We have to understand that not every successful business starts with a bang. They started small, but they aim to grow bigger with a presence at every popular event, from the Super Bowl to the Kentucky Derby eventually.
Focus on the core audience: Although they now have expanded into many other towns covering other kinds of sporting events, they still present their core business as a solution for college football games. You can take this cue from every successful business in history. For instance, Airbnb. Though Airbnb now also offers hotel rooms, luxury villas, and even palaces in its catalog, it still manages to attract its core audience – i.e. the people looking for affordable homestays at holiday destinations.
To summarize
The success of ‘Rent like a Champion’ is a clear indication that the peer-to-peer property rentals market still has tons of space for the new entrants. Why limit your idea with just home rentals? One can start an Airbnb for storage spaces or an Airbnb for car parking spaces. Besides, hundreds of many other niches have not seen any ventures yet. Everything that you can sell on an eCommerce site has the potential to fit into the rentals market as well. For example, you can follow the same peer-to-peer renting model and start a camping van rental, party supplies rental, event venue rental, co-working space rental, Vanity Vans rental, Ski supplies rental, Gym equipment rental, Construction equipment rentals, and many more. So, what’s your unique rental business idea?
Renting your clothes to a stranger or wearing some else’s clothes might sound weird. However, this is the concept behind the clothing rental marketplace. While clothing renting isn’t an entirely new concept, recent business additions are disrupting the market by offering an efficient peer-peer rental model.
Just as you can rent out a home to a guest, you can rent out office space to freelancers, startups, and small businesses. The concept of co-working spaces is a great way to connect people while they are working and to generate passive income. The profit of this rental business idea depends on the price you charge and the number of tenants you get. As a thumb rule, charge a premium price if you offer a premium experience. Regarding the business models, it works in a bit different way. While the basic way to make money out of an office space rental is in the form of rent, it is possible to widen the horizon to other revenue sources like memberships and partnerships with your regular clients.
