Annabel Palmer talks to the founders of Hire Space – London’s online venue rental business
THE PUBLIC has grown increasingly comfortable with the notion of sharing assets – homes, cars, hairdressing skills – and buying second hand products through websites like eBay. Airbnb, the San Francisco-based holiday rental website and sharing pioneer, for example, was used by 2.5m customers in 2012. A report from May this year estimated that the UK sharing economy is now worth £4.6bn.
A natural progression was for the phenomenon to reach venues. HourSpaces cropped up in New York in 2010, allowing performing artists to hire out rehearsal space. Hot new startups have begun to enable venues to turn their unused assets live.
Old friends Will Swannell and Ed Poland decided in the summer of 2011 that they would do for venue rentals in London what Zipcar has done for ridesharing. They founded Hire Space – a website that allows the public to find and book spaces online – a year later.
Many startups are based on the premise of making something easier for their target audience. Hire Space claims to save consumers the hassle of calling round a dozen venues, only to find half are busy on the day you need, and the other half are too expensive.
The idea was born from a noble ambition of helping community spaces survive in recession-hit Britain. Swannell was on the Teach First scheme, and grew frustrated that his school’s buildings were worth “millions,” yet stood empty after hours. At the same time, the school was applying for emergency funding. “I didn’t even have textbooks for my Year 8 class.”
Poland, meanwhile, was working to save local authority venues from closure. Sat in their local pub, they came up with a plan to help venues with limited budgets market their spaces for hire.
Hire Space now lists 850 venues and gets roughly 20 enquiries each day, from £1,000 bookings to £500,000 all-star conferences. The selection of venues extends beyond local authority buildings, and includes the National Portrait Gallery and Olympic Park. “But getting venues to sign up was incredibly tough,” says Swannell. They phoned hundreds of them, withmany declining to participate despite the offer of a free listing. But the pair persisted, and blitzed social media to build their profile.
The shift in objective – from charitable venture to sustainable business – came after a short pilot at the end of 2011, when they realised the idea could generate returns. Now the business makes money by charging commission when a booking goes through. Commission on average is 9 per cent, but their commitment to offering “good customer service” is such that the fee varies according to customer feedback.
So the next step was to raise money – one of the toughest challenges faced by entrepreneurs today. They had to perfect their schmoozing skills – “it was a hard few months of breakfast, lunch and dinner with various angels before we could get a group together,” says Swannell. But by April 2012, they had raised a seed round of £500,000, and had TopTable founder Karen Hanton on board as an investor and adviser. “Karen has expanded a business overseas – her experience will prove invaluable when we start looking beyond our shores,” says Poland.
Prior to April 2012, the pair spent six months working from Poland’s kitchen, “working every hour possible and not earning anything ourselves for a long time.” To keep overheads down, they outsourced the technology for the original site build – Swannell had a background in software but it wasn’t web-based – and they didn’t take on their first member of staff until May 2012. Today, IT is done in-house, which enables the pair to closely monitor customer and stakeholder behaviour on the site.
They’ve raised a further £100,000 from their existing angels, and are setting about operational scaling. “But what is really hard, what you don’t think about before starting up,” says Poland, “is how long it can take to build a team that wants to work together and that shares your vision.”
Indeed, in many ways Poland and Swannell are your typical modern-day entrepreneurs: they have gone from pot noodles in Swannell’s kitchen to the trendy curry houses of Brick Lane, firmly believe in “company culture,” and capitalised on the UK government’s Seed Enterprise Investment Scheme (SEIS). They believed in the scheme’s credibility to the point that they “virtually mentioned it before pitching their idea”. And the pair are taking advantage of the support system provided by the Silicon Roundabout. “There’s a real sense of comradery – you meet people who are going through the same struggles, and you problem-solve together.”
Their staff numbers have doubled in the past three months from six to 12 and Poland informs me the company is hitting its headline targets and, if it continues to do so, will be profitable by mid-2014. It may be premature, but Swannell is already looking at his business with the same sense of fulfilment with which he used to look on his class at the end of an academic year. “I would see their exam results, and feel I played a part. Now, we’re creating jobs by building a new business.”
CV ED POLAND
Company name: Hire Space
Company turnover: On target for £200,000 in first 12 months of trading
Job title: Co-founder, head of content
Lives: Hoxton, London
Studied: English at the University of Nottingham
Drinking: Whiskey sours
Eating: The Swizzle Burger at Patch Bar
Reading: Oscar Wilde – great copywriting inspiration!
Favourite business book: The Lean Startup, by Eric Ries
Talents: Communication, persistence, and an eye for talent
Motto: “Be loyal, and look forward”
First ambition: Play for Arsenal
Heroes: Muhammad Yunus, the microfinance entrepreneur
Awards: World record length five-a-side football game. It was 27.5 hours. The record has since been beaten, sadly.
CV WILL SWANNELL
Number of staff: 12
Founded: September 2012
Job title: Co-founder, head of product
Lives: Islington, London
Studied: Theoretical Physics at Imperial College, Finance MPhil at Cambridge
Eating: Pie and mash. Lou Farrows, in Bermondsey, is top notch.
Reading: Education, Education, Education, by Lord Adonis
Favourite business book: The Lean Startup, by Eric Ries
Talents: Fast learner and a hard worker
Heroes: Brett Wigdortz and Steve Potts
First ambition: To win a Nobel Prize
Motto: Be good, keep learning
Awards: Tessla Prize for Best UK Undergraduate Computational Project