Interview with Bob W

In our latest interview, we had the pleasure to talk to Niko Karstikko and Sebastian Emberger, co-founders of Bob W. Bob W is our most recent investment and an innovative start-up.

Niko has previously founded a VC-backed consumer tech business named SportSetter that he successfully exited in 2016 and is now a hospitality entrepreneur.  Sebastian has a background in investment banking at William Blair and Leondardo. He successfully led the family business to an acquisition before founding Bob W. 

Niko: Bob W is the slicker alternative to hotels and rentals. It’s a hybrid of the best of the hotel experience, best of the short stay rental experience packaged in our affordable brand offering. Most importantly, the whole service runs on tech. Due to that we eliminate mistakes and save costs but also improve quality and empathetic, smooth experience for the guest. We aim to elevate the experience of what hospitality can be for the modern traveler. 

Niko: The backdrop is that since 2012, I started AirBnb as a host as I was anyway a lot on the road due to my start-up. First, I only did it with my apartment but then also with an investment apartment, my brother’s investment apartment and so on. We had up to seven apartments we rented via AirBnb. When I then excited the firm, I decided that I want to take a break in Asia. At that point I was wondering how I can handle the rental of my apartment and figured out that I can deal with it remotely. The requirements were good chat-based customer service, six months of soap in the closet, a bulletproof to-do list for the cleaners and so on. With the start-up mindset, I realized that there is an actual business opportunity and a possibility to start something spectacular if you’re in charge of the tech, the hardware and the physical product.

When I went to Asia, I was wondering why I, as a person who likes the “live like a local” experience, stays so much in hotels. And I’m sure that I wasn’t the only one who felt like that. Is it because of trusting the host? The key pick-up? Trusting the pictures? That was when Sebastian, a former study abroad mate, and I started talking, and we realized that there’s a massive hotel industry. Even Europe alone, 7 million plus hotel rooms that’s consolidated, has brands and has standards. The short-stay market has over 4 million listings. However, it’s completely amateur and there are no brands and no standards. According to estimates, only 0.5% of the market is branded. That’s when we decided that we’re going to create a new category of hospitality – a hybrid of the best hotel and the best of the short-stay experience, which is targeted to the next generation of travelers. A traveler who mixes business with pleasure and appreciates the consistency and scale of a hotel and its services, but available via tech. And benefits from the short-stay category of the utilities and amenities of an apartment, a good price-quality ratio. We packaged that up in our affordable brand Bob W and make sure that it runs all on tech, as mentioned.

Sebastian: I guess the obvious answer to this is: the pandemic. We launched our first multi-unit asset in August 2018 and had a super successful and quick ramp-up until December 2019. That’s when the first stories about the virus appeared, and I guess nobody back then knew what’s going to happen. In the beginning we observed it all from a certain distance, but in the beginning of 2020, it really started hitting. We still saw growing numbers, but all of a sudden it all tanked. We saw occupancy rates going down and nobody knew what to do in that situation. Furthermore, we put our heads together, and we’re trying to understand what strategy makes most sense. What we then did in the end was very much focused on the technology and building resilience in the business through this technology. We tried to build the right revenue management and pricing algorithms so that we had more flexibility in our model. Because what the data showed early on was that demand for short-term travel was not existing anymore. But there was still demand for long-term travel through frontline workers, medical staff and so on.

We’ve built the technology to cater both shorter and longer stays. We learned a lot about building resilience in the operational model and on the technology stack. 

Niko: We’re a very mission-driven company and focused on recreating the consumer’s expectation of what hospitality can be. At the moment we operate in five countries and our very mission is to create a five-star hospitality experience at scale for every guest, every visit – and that all whilst transforming the hospitality business in a sustainable one. We try to think extremely critically about what the old-school hotel industry has been and get us out of that framework to create a new standard.

The outcome today is that our NPS score is hovering close to 90 and a 4.9 out of 5 customer satisfaction rating. That also includes buildings we just ramped up.

We live that every day, and it’s super motivating to see this thing come into fruition. On the one hand, of course, it makes better margins than the traditional hotels and runs more smoothly. But at the end of the day, it’s the guests that really make the decision. And aside from that, I guess we just have fun doing this together. The best thing to wake up to is having a great time and a great co-founder. 

Sebastian: I’d say it’s about collecting the right data and utilizing that data. I guess right now we’re at the very beginning of that journey. Right from the start we had this vision of having a super individual customized sort of experience, and therefore we see the value of gathering all kinds of data points about how the customers are moving within the apartment – all GDPR-compliant of course – and what amenities they’re using. And through that we can build, what we call, a rich guest profile. We really get to know our customers over time. And when they come back, we can customize the experience in a fully automated and digitized way, specifically tailor-made for the customer. We want to solve what some hotels can achieve by having a lot of personnel by using technology in the right way. So, in the end, it’s about how to customize the experience to the individual traveler.

Niko: We started the journey a couple of years ago already. We now have the framework in place, and we can make these points actionable.  

Niko: I have been an entrepreneur for so long that I can’t see myself doing anything else. If it wasn’t this, I would probably be somewhere in adjacent spaces interrupting consumer experiences which traditionally have been heavy on people and doing that in a much lighter technological and technology driven format. I’m probably an entrepreneur for life.

 Sebastian: For me, it’s kind of hard to imagine something else. But when Niko called me up to start talking about Bob a few years ago, I was considering going back to university and enrolling for a PhD program. I wanted to do some more finance and economics. I guess in hindsight, I’m very happy that it never came to that.