onefinestay: Case Study on Branding, Growth, and Strategy

This case study examines onefinestay, a vacation home rental company founded in 2009, and its challenges in branding, market segmentation, and growth. The company, which offered high-end home rentals, faced difficulties in positioning itself in a competitive market and balancing the needs of both homeowners and guests. Miranda Cresswell was brought on board to analyze the company's brand and positioning, which led to questions about the most effective way to segment the market and communicate its value proposition. The case explores onefinestay's evolution in the sharing economy, the competition from companies like Airbnb, and the strategic decisions needed to expand globally and increase market penetration. The case also highlights the challenges of managing a two-sided marketplace and the importance of a strong brand identity to attract both homeowners and guests. The company struggled with the balance between meeting the needs of homeowners, who supplied the properties, and guests, who paid to stay there. Ultimately, the case study provides a comprehensive overview of the company's journey, its challenges, and its strategic decisions.

JILL AVERY ANAT KEINAN LIZ KIND
onefinestay
Miranda Cresswell was delighted to be helping Greg Marsh (HBS MBA
‘06), founder and CEO of onefinestay, a vacation home alternative to
fine hotels, with branding work for the company. onefinestay was
founded in September 2009 in London, and offered high-end home
rentals to travelers who sought a more authentic and local experience
than a typical upscale hotel might provide. The company equipped its
rental properties with luxury amenities such as fine linens and towels,
prestige brand toiletries such as Kiehl’s, and an iPhone loaded with
local maps and restaurant recommendations. By the fall of 2014,
onefinestay had approximately 250 full-time employees, and an
additional 250 contract staff. The company operated in four cities in
Europe and the U.S.
According to Marsh, onefinestay's brand had been "hacked" together
quickly during the company's early years. After five years of rapid
growth, Marsh brought Cresswell on board to do a comprehensive
analysis of the company's brand and its positioning in the marketplace.
Cresswell had spent several months gathering data and insights, and
was starting to experiment with use case scenarios that took a crack at
segmenting the company’s customers. The preliminary results were
interesting, but raised more questions than they answered, and
Cresswell wondered if this was the best way to segment the market.
While segmenting in this way was intriguing, it led to a branding
challenge – as a start-up, it was difficult for onefinestay to have the
resources to support multiple brand messages in the marketplace and
different segments wanted different things from their travel
experience. She pondered whether there were other ways to group
customers that would allow for a more universal positioning for the
brand or whether the company needed to focus on one or two
segments to serve.
Positioning the fledgling brand was a challenge. Who was the company
competing against and how could it carve out a unique value
proposition that would appeal to travelers and be differentiated from

what was offered by other hospitality options? Was its current moniker
“the unhotel” working for or against it?
As a two-sided marketplace, onefinestay also struggled to find the
balance between meeting the needs of two customers: the homeowner
hosts who supplied the company's unique inventory of properties and
the guests who paid to stay there. At times, their interests were at
odds with one another. As Marsh and Creswell considered refinements
to their product strategy, they had toEducational consider how their product
and service offering differentially impacted the host and guest
experience.
The competitive landscape was heating up and Marsh was eager to
allocate marketing resources in a way that would generate substantial
returns and help scale the company. He had big ambitions for the
company, but wondered what the right growth strategy was. Should he
focus on increasing the breadth of onefinestay’s global reach by
expanding into more cities around the world or should he focus on
building depth by increasing market penetration in the cities in which
he was already operating?
The Founding of onefinestay
Marsh was born and raised in London, England. Following his
graduation Christ’s College, he worked for GF-X, a logistics
marketplace startup, in a variety of operations and marketing roles.
Following the completion of his MBA program at Harvard Business
School, he joined Index Ventures, a leading London-based venture
capital firm, as an associate on the IT investment team.
Marsh had just returned from a 2009 trip to Pisa, Italy when the idea
for onefinestay occurred to him. He had a “dreadful stay” in a “dreary
airport hotel,” but thoroughly enjoyed an out-of-the-way restaurant
recommended by a friend who had grown up in the area. Without the
friend's advice, Marsh recognized he would have missed out on a local
experience in lieu of the typical tourist attractions. At the same time,
after coming back to London and making his nightly walks home from
work, he couldn’t help but notice the many luxury residential
properties in the area that appeared empty for vast portions of the

year. Marsh wondered, "Why are these places empty? Why are the
places where I would most want to stay if I was visiting a city the ones
where you can't get to stay?"1 He called it a “no light bulb moment,”
noting “the lights aren’t on because nobody is home.”
Marsh conducted research to see if anyone else was doing something
similar, and ran the idea by a colleague who encouraged him to start
the company. Marsh’s concept was to provide discerning travelers with
upscale home rental options that would be more authentic than hotels
and more reliable than other vacation rental choices. At the same time,
homeowners would earn extra income from their properties when they
otherwise would have stood vacant.2 Marsh elaborated further:
Our mission is not to destroy the hotel industry. However, a proportion
of travel— certainly the majority of leisure travel—is just infinitely
better and far more enriching to stay in a home than in a building that
is soulless and has been designed for transient occupancy.... What
we’re bringing to that rental sector is generally a curation and quality
and service control that you take for granted in some industries
including hotels and chain restaurants, but that you don’t find in this
much more informal sector of the economy or that you haven’t found
until now.3
In September 2009, Marsh left Index Ventures to co-found onefinestay
with Demetrios Zoppos and Tim Davey. Zoppos and Marsh had worked
together at GF-X, and Marsh knew Davey through his work as co-
founder and chief technology officer at one of Index Venture’s portfolio
companies. (See Exhibit 1 for management bios.) Marsh commented,
“With this business, I wouldn’t even have attempted something so
ambitious and complex without Demetrios and his operations expertise
and similarly with Tim and his experience: we simply couldn’t have
done this without our technology.”4
Together they raised approximately €200,000 from friends and family,
and launched onefinestay in May 2010. Marsh reflected, “We really did
have to beg, borrow, and steal to get the first half dozen homes on the
Web site to start the ball rolling. Another adage, fake it till you make it,
well, we faked it a bit—of the first half dozen homes, one was mine,
one was Demetrios’s, and one belonged to a friend who has never
rented it out and insisted that he was never going to—it’s long since
come off the site, may I say—but we needed calling cards.”5

By late 2010, onefinestay was able to raise $3.7 million in a Series A
round led by Index Ventures, PROfounders Capital, and a number of
angel investors with experience in the travel and hospitality industries.
The company grew rapidly, signing 100 homeowners and increasing
revenue tenfold in 2011. Spurred by its success in London, in May
2012, onefinestay launched operations in New York City. One month
later, the company announced it raised $12.2 million in a Series B
round, led by the U.S. venture capital firm Canaan Partners, along with
participation from Index Ventures and PROfounders Capital. (See
Exhibit 2 for board member biographies.) (According to Marsh,
onefinestay had raised additional capital since 2012, but had not
disclosed its more recent funding events publicly.)
Boosted by tourism during the summer London Olympics, by the end of
2012, onefinestay had 1,000 member homes in New York and London,
and employed a team of more than 100 people. The company
continued to expand and refine its operations, and in September 2013,
launched in Los Angeles and Paris. onefinestay also began developing
partnerships with travel agents and corporate travel organizations. By
the fall of 2014, onefinestay had operations in four cities, with plans for
continued rapid expansion. The company had over 2,000 houses or
apartments to rent, with more than 5,000 rooms. In total, onefinestay
had a property portfolio worth over $5 billion.
The Rise of the Sharing Economy
The sharing economy (also known as “the peer-to-peer rental market”
or “collaborative consumption,” among other names) generally
referred to the exchange of assets or services among individuals, aided
by the Internet and smart phones. Since the mid- to late-2000s, the
use of technology and online market platforms was enabling
individuals to become part-time entrepreneurs, blurring the distinction
between consuming and producing. The best-known examples of
sharing economy companies included Uber and Lyft, the taxi-like ride-
sharing services; Airbnb, an accommodations rental platform; and
TaskRabbit, a marketplace for outsourcing small jobs and household
errands. Forbes estimated the revenue flowing through the sharing
economy would exceed $3.5 billion for 2013, with year-over-year
growth of more than 25%.6 Investors had taken notice and were
aggressively funding sharing economy companies. By October 2014,

Uber had raised $1.5 billion, and had an implied valuation of $17
billion, more than rental car market leaders Hertz and Avis combined.
Airbnb had raised $795 million, and had an implied valuation of $10
billion, more than the market value of Hyatt Hotels, a leading
hospitality company with 549 properties around the world. Shervin
Pishevar, a Silicon Valley venture capitalist argued, “This is a
movement as important as when the Web browser came out.”7
Nonetheless, observers recognized the challenges faced by sharing
economy companies, including establishing trust, providing
demonstrated value, and addressing the “chicken-and-egg” problem of
ensuring enough supply and demand. Investor and entrepreneur Raj
Kapoor also pointed out the need for consistency of service in the
offline experience, particularly during a sharing economy company's
early days.8 Perhaps the biggest hurdles for sharing economy
companies were the legal and regulatory issues, since most existing
laws had been established for traditional large-scale organizations, and
were primarily set at state and city, rather than national, levels. Some
locales such as San Francisco, Washington DC, and the United
Kingdom were developing regulations to support the sharing economy
and encourage economic growth, while other regions were moving
more cautiously. By the fall of 2014, Airbnb remained in a contentious
battle with New York state regulators, and many other cities and
countries were grappling with the tax, legal, insurance and policy
issues raised by sharing economy companies.
Managing a Two-Sided Marketplace
While people often described onefinestay as a “high-end Airbnb,”
Marsh disagreed with the comparison. He noted, “We don’t think we
compete with Airbnb any more than Marriott competes with Expedia.”
Marsh pointed to onefinestay’s collection of carefully curated homes
and apartments, its attention to detail—similar to that of a high-end
hotel—and the fact that guests never interacted with hosts as
distinguishing characteristics. In addition, Marsh saw onefinestay as “a
vertically- integrated service-enabled market, providing a variety of
value-add on top of a brokerage piece. What we’re doing behind the
scenes to create that market and then service and support it, is
actually almost more important than the market itself. We’re not a
distribution business, we’re a manufacturing business.” He further

described onefinestay as “a hospitality company and also a very
complex logistics company behind the scenes.”9
Homeowner Hosts: Managing the Supply Side
Most of the properties listed on onefinestay were homeowners’ primary
residences. Marsh commented, "The homeowners might travel for a
month or two, they might have work that takes them overseas, they
might have a second home in the south of France or whatever. It’s
even more important in those situations that they’re emotionally
comfortable with onefinestay and the guests that we introduce to their
properties, and [that we] manage them on their behalf as a very, very
credible service partner. There’s lots of stuff we’re doing behind the
scenes to earn that trust.”10 He elaborated further on a homeowner’s
decision to join onefinestay:
It’s not only about money. Of course, people wouldn’t be likely to do it
if there were no money or emotional benefits involved. The average
onefinestay member probably earns a household income of $250,000 a
year and their property is worth ten times that. It’s not like an extra
few thousand dollars a year is going to fundamentally transform their
lives. But, if it’s free money, and someone else is doing all the work, all
you have to do is overcome the anxieties and the trust issues around
affiliating. When you get your home back after your vacation cleaner
than you left it, you stop asking yourself, ‘Well, why the heck would I
do that?’ and you start thinking ‘Well, why wouldn’t I do that?’
Homeowner members were required to list exclusively through
onefinestay and were expected to make their homes available to the
company for at least four weeks per year. Two-thirds of onefinestay’s
homeowner members came through word-of-mouth referral. Keyvan
Nilforoushan, onefinestay’s Paris general manager noted, “I know to
expect three calls on a Sunday from people who’ve been out to dinner
on Saturday night with one of our hosts. When hosts come back from
holiday, that’s when it happens.”11 Marsh reiterated the importance of
social validation and noted that most decision makers on the supply
side were female, "Often it’s one mom talking to another mom at the
school gates. We realized that if we could figure out how to make
things sufficiently easy and compelling for folks who would not
otherwise do this, we could bring a tier of inventory to the market
that’s never previously been available.” (See Exhibit 3 for additional

information on onefinestay’s member hosts.) Marsh explained the
process of signing up homeowners:
The “take-on” process starts when the owner first joins. It’s not one
single interaction, but takes place over a period of a few weeks.
Homeowners may have heard about us from a direct mail marketing,
through an editorial piece, or increasingly, from a friend or an
associate at work. We go to visit them in their home. The visit is
basically a sales meeting, in the sense that we are trying to persuade
them in a very general and soft way, to join the service. We’re almost
discouraging folks from membership unless we’re really convinced it’s
going to be valuable for them and for us over the medium- to long-
term.
Marsh estimated the company listed approximately one in ten of the
properties offered to them. He explained, "People get anxious that
we're the taste police, but it's rarely a question of taste. Our issues are
much more likely to be practical, like is it a good location, does
everything work properly?”12 A third co-founder and president of the
Americas, Evan Frank added, “The homes need to have WiFi, they
need to have bathrooms and kitchens in really good condition, and
they need to have character. It has to look like somebody lives there
and that the owner has a personality. What we don’t want are homes
that look like standard hotel rooms or apartments. Whether it’s nice
furniture, great views, interesting pictures on the walls, you have to
walk into the home and think there's something special about it."13
Once onefinestay and a homeowner decided to move forward, the next
part of the take-on process was called the registration phase. It took
place again, on premises, in order to register the homeowner’s assets.
A representative from onefinestay went in with a scanner and created
an extensive and detailed inventory of the property—information about
everything in the home and where it was located, down to the rules
and exceptions of the owner. Marsh added, “That might include
instructions such as not to use an abrasive surface cleaner on the
downstairs table. It might also include information about which
bookshelves or wardrobes to seal off, and which spare room should be
used for storage.”
The meetings typically lasted a few hours, and for a large property,
could take significantly longer. As Marsh noted, “Ultimately, we need to

be able to deal with any issues that arise in that home, so we can
manage the property as if the owner didn’t exist.” The next step was
the photo shoot. onefinestay merchandised the property, wrote copy,
and presented images of it on the company’s Web site. Marsh
commented, “We’ve actually done a lot of process engineering to get
the quality consistently excellent at a sensible cost.” Typically, the first
reservation occurred within just a few weeks since homeowners often
signed up with onefinestay in anticipation of an overseas or extended
trip. According to Marsh:
This is where the fun part starts. Once the homeowner leaves town,
the property’s essentially under our control. We go into the home and
we stage it. We call that provisioning. We run through the original
checklist and it’s almost like an episode of CSI. We bag and tag things,
and when needed move stuff around. We do a little bit of de-cluttering
and we usually seal off a spare room or some of the wardrobes and
cabinetry with little bar-coded, tamper evident seals. They serve as a
nudge to remind guests to be considerate during their stay. There’s a
deep clean, including fresh hotel- grade thread-count linen sheets on
the bed, plush towels in the restrooms, and fancy bathroom products—
Kiehl’s in New York, Aesop in London, and L'Occitane in France.
The homes included in onefinestay's portfolio were distinctive.
Examples included a former sugar warehouse in New York City with
views across the Hudson River, a three-story loft in a former rectory in
New York’s Murray Hill neighborhood, and a two-bedroom apartment in
London’s St. Pancras railway station’s clock tower. (See Exhibit 4 for
images of sample properties.) Prices ranged
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from $250 per night for a comfortable one bedroom apartment to well
over $2,500 per night for a grand townhouse. Pricing for homeowners
was negotiated up front and then marked up by onefinestay before
being posted online. As one reporter noted, “The beauty of
onefinestay...is that you stay in the kind of place you’d like to live in,
but probably can't afford.”14
Attracting Guests: Managing the Demand Side

Approximately 70% of onefinestay’s guest customers were leisure
travelers, and the remaining 30% were business or mixed-purpose
travelers. Frank noted, ““[We cater to] a wide variety. There are a lot
of families and business travelers. They are the type of people who
would otherwise stay in a higher-end hotel at a four-star price point."15
The vast majority of guests booked their stays with the company
online, about half the time with phone or email assistance from a
onefinestay guest sales representative. Historically, approximately
80% of onefinestay guests learned of the company during a Google
search. However, by the fall of 2014, it was a much more blended
picture, with bookings coming from a range of online and offline
channels, alongside a high proportion of organic (unpaid) traffic. (See
Exhibit 5 for more data on onefinestay guests.)
The travel agent channel was relatively new for onefinestay. Corporate
travel departments used onefinestay primarily for relocations and
consultants who came to a city on repeat business.16 While the
majority of onefinestay’s properties had multiple bedrooms, some were
single-room apartments. By the fall of 2014, one-third of the
company’s channel business was with traditional, offline travel
organizations such as Virtuoso, while two-thirds was with online
organizations such as Booking.com, Expedia, and HomeAway. In the
hotel sector, travel agency fees typically ranged from 10% to 12%.
Marsh commented, “It’s not free, but it is scalable. Referral behavior
within the travel agent community is very, very strong. We have a
unique product and if we’re successful in educating that channel, we
think it’s very, very powerful and a great opportunity for us.”
A typical guest might stay around a week, paying in the region of
$600-700 per night for the experience. (Channel sales through travel
agencies, carried a higher average ticket of approximately $7,000 per
stay.) Travelers generally reserved properties well in advance of
arrival, typically paying by credit card and providing flight details. The
company had a “meet and greeter” to meet guest travelers onsite
when the guests arrived. The meet and greeter helped guests with
their bags, handed over the keys, showed them the iPhone, and
explained the house rules. Marsh noted, “We lend guests an iPhone
because most people have a smartphone, but they often don’t have
local data packages, so it’s extremely expensive to use that device
when they’re traveling.”17 The iPhone also included onefinestay’s own

app with a ‘contact us’ button so that guests could contact onefinestay
anytime during their stay. Marsh added, “From then on in, the guest is
on their own except for periodic maid service, usually once every
week. Then, when the last set of guests leave during a specific rental
period, we go back in and reverse all those set up steps so the owner
finds their place like they left it. Actually, they probably find it a bit
cleaner.” (See Exhibit 6 for a flow chart of onefinestay’s operations
process.)
Onefinestay’s net promoter scoresa for both guests and hosts—
consistently between 60 and 70— were extremely high, particularly for
the hospitality sector. Other feedback was generally positive as well,
although as one guest commented, "For the practically challenged,
there are downsides to living
like a local. Locks and keys, light switches and alien TV and alarm
systems are not my friends."18 According to Marsh, guest loyalty
appeared strong to date.
The onefinestay Virtual Marketplace
The onefinestay Web site functioned as its virtual storefront, attracting
and serving both sides— homeowners and travelers—of the two-sided
marketplace. The company’s home page was geared primarily toward
guests, with glossy images of sample properties, media logos from
high profile news and travel publications that had covered the
company, and folios to assist guests with beginning the home search
process. Other pages provided guest testimonials and additional
content on onefinestay’s unique offerings and amenities. A separate
tab was dedicated to potential hosts. In addition to a general overview,
two videos highlighted onefinestay’s ease of use and financial and
other benefits from different homeowners’ perspectives. Marsh
commented on the company’s digital presence:
Although we don’t think of onefinestay as a web business, our online
storefront is clearly the most salient introduction that most customers
will have to our brand and proposition. It’s also almost the only way
you can effectively communicate the specifics of a unique home, so
the site is really doing three things: it’s educating people about a new
category of accommodation, it’s introducing them to our branded
service promise within that new category, and it’s a point of a sale for

the particular homes that we market in the cities where we operate.
It’s the antithesis of a transactional purchase: big ticket vacation travel
is a deliberative, considered, consultative purchase which will take
days or even weeks to consummate. Our typical guest or guest group
will visit our site many, many times, from multiple devices, before
making a final decision. That’s why we have a fully staffed follow-the-
sun inbound sales organization: at this price point and service level,
some people want support if only to provide comfort that we’re the
‘real deal’. A complex purchase path in a novel category makes it
especially difficult to get insight from traditional web analytics tools,
which are designed for simpler, more transactional small basket
commodity shopping. That in turn means determining the efficient
frontier for paid search acquisition, say, is quite a subtle and nuanced
analytical problem.
Expansion Plans
onefinestay’s launch in New York City was the first step in its broader
strategy of international expansion. Marsh’s plan was to test and fine-
tune onefinestay’s operations in London before taking a leap of faith
and launching in New York. He explained, “We made a lot of mistakes
in London. It was expensive, but we built the tools, systems, best
practices, processes, and organization structures, so that when we’re
launching now, we’re coming into a market with far more
sophistication and a much more mature tool kit.” New York
homeowners warmed to the onefinestay concept relatively quickly,
joining at a rate that was three times as fast as when the company
launched in London. Marsh added, “It took us more than 14 months to
sign up our 100th homeowner in London. It’s taken only 6 months to
achieve that milestone in New York.”19 The same was true for
onefinestay’s Paris and Los Angeles markets, which took four and five
months, respectively, to sign 100 homeowners. (See Exhibit 7 for
additional data on new market growth.) Ultimately, Marsh hoped to
have operations in every major world city.
Marsh felt there were two key learnings the company had gleaned
from its expansion efforts to date. The first was the importance of
referrals and increased brand awareness. He elaborated,
"When we are launching into a new market and starting the city
operation, the first thing we do is to email our existing community and

ask if they know folks who have a place in Paris or have their own
place in Paris, and many of them do. Our first 25 or 30 homes in Paris
were all through our own network.” Second, Marsh also recognized the
need for strong general managers to run the local markets. He
elaborated:
One of the constraints in growing this business is the management
competence needed to operate these business units. They are
commercially and operationally complex. You need a certain amount of
personal maturity because you’re often interacting with high net worth
homeowners and guests who have high expectations. You need to
pacify those on both ends, and deal quickly and effectively in service
recovery situations in a competent way, often without support or
recourse from the center of the business.
Increasingly, we’re convinced that we need to grow much of that
general management capability internally because it’s too unusual a
set of combination of skills and abilities. As a result, one real constraint
on the rates and locations of the launch strategy is our ability to find
the type of folks who are going to be effective at running these
businesses.
Once a general manager was in place for a new market, they typically
had two lieutenants—an operations lead and a commercial lead. The
commercial lead focused on the supply side, building the portfolio and
inventory of homes. The operations lead was initially responsible for
procuring a warehouse and office space, and then transitioned into the
day-to-day management and execution of the business. About nine
months after its launch, onefinestay’s Paris operation employed
approximately 25 people. Roughly one-third of the Paris employees
were on the commercial side, assisting with pricing analytics,
merchandising, sales, and account management of the portfolio. The
other two-thirds in the operations group were split roughly equally into
three functional areas. The member services team supported the guest
experience. The coordination and logistics team did the operational
planning to manage the different cleaning and staging groups. The
third team provided logistics and warehousing support.
Marsh was proud of the company’s expansion plans to date, and eager
to grow further quickly. On the one hand, Marsh recognized the value
of having a global footprint. As a budding hospitality brand, he wanted