7. Start-Ups: Company Intermezzo: Bungalo
Okay, enough with all the theoretical aspects of a start-up. Time to look at real life now. Yes, using some theory in building a business is important and it will definitely guide you through some difficult steps and bridges. Also the theoretical knowledge is a must-have when meeting up with parties that could be of any interest; say they ask you why you chose a certain model or if you have any views on other theories that may help. However, in the marketplace itself you’ll find things will never work out the way they did in the books. Read into what happened to other companies in your field, what were their struggles and what were the unexpected opportunities and strengths?
Let’s introduce a company, or actually it’s founder and try to get some inspiration from his story.
Bungalo, a website acting as a third-party cottage renter, was founded in 2009 by founder Haukur Gudjonsson (Icelandic origin). He wanted to rent a cottage in Iceland, but nowhere was there a website or page to be found which put all available houses in an overview. Haukur, claiming himself to be an expert in building and running companies, decided it seemed that a website like this could be the next unicorn. A unicorn in this case is referred to as the next big idea, a business that will change the world and most importantly: is profitable. Where Bungalo tries to differentiate itself from websites as Airbnb and Booking is that they don’t post hotels, guesthouses or even apartments on their website. It is very common in Iceland (and many more Nordic countries) to have a summer cottage and a winter cottage. Of course you can’t be at 3 houses at the same time, so the supply side is quite sufficient. Iceland is known for being a relatively expensive country, so renting a cottage from individuals would be the cheaper option for any tourists exploring the Land of Fire and Ice. Yes, there definitely seemed to be a good opportunity lying around.
In March 2010 the first version of the Bungalo website was released online. Working very closely together with their users, the team has been trying to improve any experience they wanted to create for the customers, being open to any comment or feedback they could receive. Currently they are the leading company in Iceland for cottage rental, and in 2014 Bungalo expanded it markets by opening up an international office in Canada.
In the lecture given by Bungalo founder Haukur Gudjonsson he mentions quite some interesting perspectives on building Bungalo, which could be useful for us when analyzing start-ups. First, a little more on his story: he has 12 years of experience with entrepreneurship, founded 5 companies in total and teaches and mentors internationally. For him, very importantly is the mentality of the start-up. You have to build products that the users will absolutely adore, even when you have no money to put into it. Bungalo was developing around the time that Iceland was hit by the global economical crisis and was on the edge of bankruptcy. Crawling up from the bottom led them to a healthy company nowadays, with 5 employees, operating in 3 countries, serving around 40,000 travelers per year and making revenues close to $5 million. Haukur describes the most memorable stages in the lifetime of Bungalo to be the first sales, the first income, the first employee, expanding to Canada and managing to hook on his first investor. We must all admit though, it your company makes it through these stages then you pretty much have built quite something.
So that was our small intermezzo, get ready for hard-on theory next time again!
This post is part of the series “How to start a Start-Up”, based on lectures taught at Reykjavik University. For more information on Start-Up Iceland, have a look at their website
Check out the website of Bungalo for their offerings: https://bungalo.com/
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