THE COMPANY: Guesthouse Network, Somerville, Mass.
THE CONCEPT: Web-based management and marketing tool for guesthouses in 16 major cities
THE FOUNDER: Assaf Korkidi
THE PITCH: As city hotels get pricier, property owners are renting furnished apartments on a short-term basis. This market is valued at some $1 billion annually. It's not cost-effective for owners to build systems to help them manage and market their properties. Instead, Guesthouse Network offers free Web-based tools that aggregate owners' apartments under one branded network, market properties, and compile guests' feedback. Guesthouse Network, launched in September 2008, takes a small percentage of the reservation fee.
PETER BODINEMANAGING DIRECTORALLEGIS CAPITALPALO ALTO, CALIF.
Bodine says Korkidi has a good idea, and his site is easy to use. But he's operating in a crowded field with larger and better-financed competitors such as HomeAway.com and LeisureLink.com. Bodine wonders about the depth and quality of Korkidi's "inventory," or offerings, which will determine the kinds of advertising partnerships he can make with sites such as Travelocity or Expedia (EXPE). And hotel prices are dropping because of the recession, so Korkidi's point of distinction—cheaper vacation rentals—may be vanishing, at least temporarily.
Bodine says posting customer critiques will give Korkidi an edge: "The next evolution of this is really guest reviews, and for a smaller startup this will be even more important." Bodine also likes the focus on 16 major cities. Still, "it's not big enough to get the return multiples that VCs are looking for."
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