Upgrading your AirBnB with Jordan McDonough of Somerled Designs

0:00There are more than 2 million short-term rental listings or Airbnbs in the US. And if you're the owner of such a property or curious as to why you chose one over another as you're searching through the results, this episode's for you. I speak with Jordan McDonough. She's the co-founder of Summer Lead Design, and her business works with owners on interior design. There's also a great entrepreneur story of college friends who combine their marketing and interior design skills to build a business with 150 people and working on hundreds of properties each year.

0:38Hi, Jordan. How are you? Good to see you. Good to see you too, John. Happy you're on the pod today. And we're going to discuss a topic we haven't discussed on the pod before, which is short-term rental business. And in doing prep for the pod, I was just kind of shocked that Airbnb, I think next year, turns 20 years old, which I think really accelerated this market. And I saw that there are two and a half million short-term rental listings in the US. I guess I believe what I see on Google. That's one for every 100 adults in the US. I guess my question is, how's the market going? How is this market?

1:19And if you own a short-term rental, how do you make it stand out? Yeah, that is some crazy metrics and statistics of the industry that we're in. It is crazy to think that Airbnb is 20 because it still feels like a very new industry. Right. Yeah. I mean, I would say that it has seen some great evolution over the last like five to 10 years. It was very different from its very beginning stages of just throwing up an air mattress or like an extra room and people are just able to kind of like crash at someone's house, kind of like you would like a grandma's couch. But in today's industry for Airbnbs, it is so competitive.

1:59Like that is, that's crazy. 2.5 million listings. And what we do is we do interior design specifically for Airbnbs and short-term rentals. And so the way that we came into the industry is that we just saw that this industry is becoming more and more competitive. And in order to still make this make sense as an owner to actually invest in an Airbnb be and host it is that you need to differentiate yourself from the other 2.5 million listings. And so design is the number one way to market your property. And so it really is a business strategy and you have to stand out if it's going to make sense for you.

2:38So yeah, it's a very cool industry. It still feels very much in its infancy, but it's changed so much over the past few years. And I would say the biggest driver of that change is guests' expectations have increased dramatically. You know, we're not expecting to just go and crash on someone's couch. Like we want an experience. We want to feel like, you know, this host is more of like a luxury hotel or like a, you know, a high-end residential or hospital kind of space to stay. So that's, yeah, I love those metrics. That's kind of what we base everything off of is the competitive edge. Did you know that Builders is sponsored by business.com?

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4:01Yeah, I feel what you mean about experience. I almost feel like back in the early days, whenever that was, it was primarily a way to save money versus a hotel. And now I agree, whether you're watching Airbnbs or Virgo's TV ads, they're more focused on the experience aspect of it. Or maybe some of the logistics, just that you're not all sharing one room. You might have a house or something like that. And you mentioned things really changing in the last five, 10 years. It did make me think about COVID's impact. It felt like, you know, maybe it was at the time when COVID was really going strong, it was a way to sort of stay safely too.

4:49You're not in a hotel with other, you know, with other people, you get your own property, et cetera. I want to ask you more about standing out. Like, what are the different approaches someone could take? Is there a deliberate intention of having a certain style or making something feel really local or making something feel really upscale? What are the different ways that you can approach someone who doesn't know where to start, but they do know that they need to up-level the marketing, if you will, of their property? Yeah, I think you hit on some really key terms here. So I know that you mentioned, okay, people are wanting to maybe stay as a group instead of individual hotel rooms.

5:30I think COVID was a huge catalyst for us to actually take a step back and think, okay, what do guests want? And so our approach is really interesting because we start everything with market research and strategy before we're actually jumping into the actual design style. And so if you have a property, let's say in Nashville, Tennessee, we're going to take a look at that property, see the location, and then determine who is the ideal guest. And based off of what the ideal guest is, that is when we actually build on that and decide on a specific design style. And so if it's a group of friends is your ideal guest, or it's like a family or like a multi-generational family, the design is going to look very, very different first based off of that target audience.

6:14And then exactly that local inspiration is going to be so important because people are going to be choosing the location that they're going to be traveling to before they choose your Airbnb. And so we want to make sure that, okay, if they are going to said Nashville, you know, we want the design to feel like you are in Nashville, you have arrived. And so that experience level is so important, but also catering to the needs and the expectations that guests are wanting out of their stay. And so we do a deep dive into who these people are, what the local inspiration kind of can give us clues and cues so we can then go to our design board and come up with an inspiration and then go from there with the whole design process of actually procuring product and the final product as well.

7:04You know, the multi-generational aspect is really interesting to me because when my kids were younger and traveling to a short-term rental, I wanted to know that there was a crib, you know, or some of the features. Maybe if you're going with older parents, there's some type of safety or accessibility or something like that. It's interesting that you're approaching things from a market research standpoint. We didn't really talk about the origin story of Summerland Design. How did it get all started for you and your co-founder? And what inspired you to help others with their short-term rental properties?

7:48I love our origin story because it really is very organic. My business partner is one of my good friends. And we just kind of saw a hole in the marketplace and we were able to fill it. And so we founded my business partner. Her name is Bree. and our kind of story started in college. That's when we met together and our husbands were in the dorms together. They were in the same hall. And so her and her husband met freshman year as well. I kind of came into the picture a little bit later, but we were just great couple of friends. And so no kind of business foundation at the start, but we were just good friends kind of going our own ways.

8:26And so Bree, she worked with a marketing agency and she was building up other businesses and their marketing channels. Whereas I was working in interior design, mostly high-end residential in Park City, did a lot of vacation rentals at that time as well. And so her and her husband, my business partner, Bree, they at the time saw this boom of Airbnb. So they saw on TikTok people talking about, hey, I'm investing in Airbnbs, And this is the return that I'm seeing. And so it just kind of sparks their interest. And so they started investing themselves and her with her marketing background. She started seeing that, okay, my competitors in this given market, what is making them stand out?

9:09And every single time it was incredible interior design. And so she knew that that's kind of where her skillset ended and where she needed to kind of outsource. And so that's where I came in. So I was interior designing and she reached out to me and just hired me to help with their first two properties. And we just had a really great thing going. That is where she was able to bring in her market research to me of saying, okay, this is the target audience that we're looking for. This is the amenities that we want to add. This is the experience that I want it to feel like for these guests. And then I was able to deliver more so on the design side.

9:46And so we had this really great thing going just with her properties. And then people just kind of started taking notice. Um, like I said, they found kind of their community of STR investors on TikTok and ended up joining a community. And so once they started posting their listings, people just organically started reaching out to them of who did your interior design for you. And so at that point, like, Hey, this is like a really great thing going. Obviously people are asking about it. Let's just start providing that service for other people. And so that that's how it started. It kind of just snowballed from there.

10:19we were able to build out like a robust service offering for these people, both virtually as well as in person doing the full implementation. It was a post-COVID world. So people were a little bit more used to doing things virtually at that point. And that was about three and a half years ago. And today we have a full-blown team and we're able to provide about 60 to 70 projects per month for STR investors. Wow, that's some significant scale. I think that if an STR owner or investor, how do they know that they have an interior design need or a designer marketing need? Is it that there are certain metrics that they're struggling with?

11:05Is it that they just bring something to market for the first time? Who's your ideal customer, I guess? Yeah, that's a great question because we work with people who, yeah, maybe they already have an Airbnb and it's been up and running for 10 years or even shorter. And they're starting to see their metrics decline. They maybe aren't getting the same return that they've gotten in previous years. And so that's a lot of times when people come to us and say, OK, I need help to flip this Airbnb for it to continue to make money for me or I need to sell it. And so we do like a full underwriting. we say, okay, this is what you need to do.

11:44And design is always the answer. On the flip side, we have first-time investors where they maybe come across people talking about Airbnb investing, like on social media, or there's some great tax strategies for Airbnb purchasing. And so first-time investors in this day and age, we always are trying to reach out to them and say, okay, for you to be competitive, you have to have an interior designer. It's kind of a non-negotiable. You know, there are other people in the space, but regardless, like you need to use a designer if you really want to flourish and see the kind of return on your investment that you're hoping for.

12:20And so, yeah, we kind of work with people across the board, whether it's first time investors, people trying to refresh their properties or more serial investors as well. Whether they have a large, large portfolio of STRs and they're trying to add to it, you know, those ones are people that we tend to do more and more for. But yeah, luckily, we've been able to cross paths with lots of people in different kind of stages of their investment journey. If you're hired by an owner, someone who hasn't worked with you before, what should they expect the process to be like and how much investment in their time they need to make in order to in order to sort of work with you and see this project be successful?

12:58Well, we founded everything with that investor in mind. And so luckily my business partner, Bree, she was investing in short-term rentals and we knew that our service had to cater to the investor. It's going to be a very different process than a residential interior designer, where they're going to sit down with you and say, what do you like? And it's going to be a very, very long and drawn out process. Whereas us, we sit down with an investor and that first conversation, we don't even talk about design. We take a look at their property and we do a full underwriting of their property. And we see, okay, what have you invested into this STR already?

13:36What was your down payment? Okay. What are we looking at in terms of your monthly mortgage payment? What are you going to do in terms of renovation? We need to kind of like break down all the numbers and then show them, okay, short-term rental interior designer, Summerled is going to help you reach this ROI. And so it's very much a lot of number talk on that first initial consultation call, which is completely free. And we just walk it through with you. We want to be that partner with all of our clients so they know that they can trust us with this investment dealing. And so after that, that's when we get into the strategy part.

14:12So that's when we compile all the market research, who that ideal target audience is, what are amenities that we're going to be adding to the property to stay competitive. And then from there, that's when we jump into the overall design direction. We create that mood board. We sit down with clients and based off of all of our market research, this is what we believe is going to make you the highest return on your investment. And so again, because they're investors and we want to get this short-term rental up and running as quickly as possible, our turnaround time for our design is 10 business days.

14:44And so it is quick and we are only sourcing products that is in stock and ready to ship. And so by the time our clients receive our design deliverable, either them or us, depending on the service that they've chosen, they're ready to just hit purchase on all of the furniture. And from that point, the listing can go live in about four to six weeks. So in all, you're looking at about a six to 10 week turnaround time from the very first call that you have with us, which time is of the essence. We want to get you cash flowing as soon as possible. So hopefully that gives you a little kind of behind the curtain peek of what that process looks like working with us.

15:23I'd love to hear if you have an example of like, what's one of your most eccentric or wildest sort of designs that you've done for a property? Yeah. Yeah. So again, it all depends on that market research, but sometimes, you know, we have these crazy ideas of, okay, we need to stand out in this really saturated market. this is what we have to do. And so a few come to mind. So I'll maybe give an example of first, one of our favorite target audience groups is women. Women tend to spend a little bit more for an experience. They want a really nice day. And most of the time, it is women who are booking the Airbnb, whether that is a mom for her family, or it's a woman for her bachelorette group or a girls weekend.

16:10And so we do always kind of keep that in mind that we want to cater towards women to a certain degree, because those are usually the decision makers when they're hitting book. And so for a girls group, one comes to mind in Miami. And so Miami is actually a really, really competitive market for short term rentals, both for families as well as kind of like women and girls groups. And so we had this great property, the client was all in ongoing like full force, like girls group kind of like nightclub, vibrant pink slots of like palm trees, kind of like that tropical aesthetic interwoven. And we had this kind of bonus space.

16:49And so typically, like what normal short-term rental investors would look at, that bonus space is, okay, let's make it a game room. Let's put in a pool table, maybe like some arcade games. And what we did, we took a step back and said, okay, that bonus room should be something that's catered more towards these women. Women aren't going to sit around and play pool all day. They want to actually have an experience together to build these friendships. And so we actually made that bonus room, what we then called like our club room. We made it so we had like a stage. We installed a stripper club or a stripper pole.

17:26We had karaoke. We had neon signs. We had a bar. And so then this turned into this experience that people would book this Airbnb specifically for that room over the competitors. And now these group of women don't have to go out to the club. they can actually bring it inside. And so that was pretty wild. We don't do stripper pulls very often. That was just like kind of the appropriate demographic that we wanted to target for that specific property. So that one was pretty wild, but we've done kind of everything under the sun. We did another one in Florida that was like ice cream themed because it was targeting families and it had a very cute kind of ice cream parlor retro vibe, like right there on the beach.

18:10We've done a lot of like, you know, theme parks if we're in Anaheim close to Disneyland or Disney World over in Orlando. You know, so we do everything under the sun. Again, based off of that market research, those are kind of the crazy ones. But we also do ones that feel, you know, appropriate for the surroundings and for the people who are booking to. Makes total sense. And it's a story. It totally resonates with me that it's an experience and probably helps with word of mouth in certain ways you might not even be able to measure with reviews or some of the other metrics. You know, I'm curious when you and your partner got started, I'm sure you were very hands on with every single property.

18:53At some point, especially when you're talking about 60 or 70, I don't remember if you said per week or per month, but at some point your time is limited. How did you approach scaling and sort of what was most difficult about it? And then what have you learned in the process of scaling and giving yourself more time to do more to build your business? It's such a great question because that is something that we weren't sure how to scale at the very beginning because it really was me and myself. And we were we were the sales team. We were the customer service. We were implementing, we were doing everything.

19:32And service businesses are hard to scale because you need more personnel in order to scale that kind of business. And so what we did, our very first hire was a sales rep. And so then that was the very first thing taken off of our plate. And we had a really great system in place at the very beginning of, okay, now we need to get interior designers. Now we need to get project managers. I will say a few years ago, the biggest turning point in terms of incredible growth and scale was we hired a COO and she was able to come in and help us with our operating system and really sat down with us and said, okay, how are we going to scale this business?

20:14And so I don't know if you've heard of EOS before, but this is the operating system that works really well for us. And that is kind of like our holy grail and Bible that we cover across all of our different teams now. And so we have this great system in place of pods of teams of designers and customer success and project managers. And we're now able to just duplicate that over and over again. And then we have the systems in place from operations of having weekly meetings with all of our teams, having scorecards to rate our team members to make sure that they're performing to the level that we're wanting.

20:52and so many other great things that EOS has taught us. So I will say that has been like the biggest turning point about a year ago, where we went from about like 30 to 40 employees on our payroll to now today we're at 150. Oh, wow. That really kind of put the oil on the fire and that's what helped us really grow a lot. That's really cool. How do you approach culture building? I'm curious, I know that you and Bree you live in different states. Do you have a physical office or are you 100 % remote? Yeah, we're 100 % remote, which sounds crazy for an interior design business that's very, very hands-on.

21:31So we started 100 % remote. When we started the business, Bree and I weren't in the same state. And like I said, it's a post-COVID world. And so luckily, we were all used to using Zoom. We knew how to call people on site and have them help us with some hands-on things like getting measurements of the properties. And we have a better system in place now. But from day one, it was calling contractors or realtors with a tape measure and trying to get things all in place. But we were able to evolve from that and get to where we are now. But sorry, what was your original question? I totally got off.

22:11No. Well, I was curious about culture building. You addressed that. And first, how do you keep the sort of vibe that you and Brie created three or four years ago across Team 150? A lot of people who are new at the company. Exactly. So Brie and I, when we started the business, sorry, I just started thinking about other things. But we started remotely and we felt very fortunate that we were able to build a workplace that we wanted to work at. And so we were very, very intentional from the very beginning of building out core values of what we wanted to make sure would be maintained in all of our hiring.

22:49And so we knew soon it wasn't going to be us doing all of the hiring. It wasn't going to be us doing all the training. And so how would we instill that in our people? So culture just continues to snowball and be upheld across the different teams. And so sometimes it's hard to maintain in a virtual setting because you don't get face to FaceTime, but we have lots of tools. I think hiring is our number one tool of making sure that we have the right people in place, not only for skillset, but also culture. And so that has been like, I think our biggest competitive edge is like, we have really, really great people that share the same values as Bree and myself.

23:25We do do quarterly meetups with our directors, kind of like our higher level management. And that in turn, you know, builds culture with them. And then it kind of trickles like top down. We do a big end of year event where that's when we actually fly everyone in. And that's like a really great event that everyone looks forward to. And, you know, just using tools like Slack and making it feel like, hey, this isn't just a workplace where we just have to only talk about work all the time. You know, there are, you know, life events being shared every day and asking for movie recs and book recs and sharing recipes.

23:59And, you know, we really want to have that balance of, okay, yes, work is a workplace. But also this is a community of primarily women that love this environment because they're able to not only be their job title, but also be multifaceted women. And that was our goal when we started the business, because I would say Bree and myself are definitely multifaceted. And we had different life trajectories and different goals. And work and summer led was a way of just for us to continue to sharpen our skill set. And that's the place that we've been able to build for so many other women. today. We have other men as well, but I would just say primarily a woman workplace.

24:39It sounds very intentional with the culture and congrats on that and congrats on the growth. Are there any rentals that you won't take? Like someone has a place in Europe, a place in Asia. Are you not yet going international? Are you taking international clients? Oh man, not international quite yet. I hope someday. The furthest international we've gone is, you know, we've done Puerto Rico, which, you know, I guess that's US territory. So it's nice because all of our favorite vendors still ship to Puerto Rico, but we've done all 50 states, including Alaska and Hawaii plus in Puerto Rico. So that's kind of like our region right now, just based off of our systems and our vendors.

25:21That is what works currently, but yeah, we hope to break into international someday. Cause I'm not just, you know, opens up our market and industry so much more. Tastes and trends change all the time. Do you know, or are you spotting any trends, maybe consumers interested in new types of things or new types of properties that owners are creating that are a particular hit these days? Yeah. Yeah. So trends in short-term rentals, you know, there's the trends that are going to kind of come and go quickly. And then there's trends that I wouldn't even call trends, but just like need to have no matter what moving forward.

26:02And the need to have no matter what are amenities. Like I mentioned, you know, guests are looking for experiences. And so gone are the days of just, you know, setting up beds to sleep in and a kitchen to cook in. We need to incorporate ways in which people can interact together. They are booking an Airbnb to build memories, usually with their group of people. And so we need to facilitate that with intentional interior design. And so different amenities that I'm seeing are like a huge hit across the board are pickleball courts, you know, game rooms are always up there. But again, the intentional, like that story that I mentioned of, okay, if you have a girl group, maybe think it a little bit, but yeah, a lot of outdoor things.