How AirDNA CEO Scott Shatford grew AirDNA to $9.9M revenue and 6.5K customers in 2020.

hello everyone my guest today is scott shatford he is the founder of air dna uh which is basically a leading source of vacation rental data looking on obviously scaling that he's got 15 years of experience as a data analyst which is obviously leveraging in the new company uh scott you ready to take us to the top let's do it all right so you came on the show well gosh it must have been about a year and a half ago now at this point right yeah i think which is about just about a year ago yeah maybe it's a little bit over yeah i remember my big thing with you as i love the product because i own air airbnb properties but from a company perspective your churn was through the roof um talk to me well first off update everyone so what does air dna do and then talk to me about churn have you been able to get that down sure yeah so air dna we are the you know largest provider of short-term rental data airbnb data vrbo home away whatever it is we track every vacation rental around the world every day and try to analyze it like a hotel property trying to figure out how much revenue is generating what its occupancy rates are what its average daily rate is charging is and so uh you know we just built built out a lot of technology to understand how to do that at scale and so we provide that data to vacation rental managers or real estate investors or hotels trying to figure out who's eating their lunch in their in their backyard uh hedge funds and a bunch of other folks that are interested in how sort of uh short-term rentals are disrupting uh real estate and hospitality and what opportunities it's creating and are they still paying on average call it 75 bucks a month yeah somewhere around that probably you know we have a sort of a flagship product market minder which is our sas product you know we've got you know over 6 000 subscribers that product yeah paying in that range 60 to 70 bucks a month um yeah like like you mentioned you know churn is uh it isn't an issue for any sort of real estate product we've found because because a lot of people in real estate they're making a one-time decision right they're trying to say hey should i buy this property or that property should i buy in breckenridge or bail like and so a lot of it is sort of a one-time big decision that they're willing to spend a bit of money in to make sure they get that decision right once uh but keeping them around you know for the next year or two is the tricky part like how are you helping them set up that property how are you helping them price that property how are you helping them benchmark their performance versus their peers right and so you really got to take them on a journey uh and so you know what we've been trying to solve for the last year is how do we make sure we can solve you know the entire journey for our customers which is not just buying the property but setting it up pricing it monitoring it and optimizing it over time so when you look at over the past 12 months uh churn what what is it what is it at now man we don't even look at turning on a scary uh it our monthly churn is is a little under 20 right now um and so that annualizes into something that's probably you know close is around 60 percent uh annually when we're looking at sort of our our annual return you know once we hit sort of a three month mark you know people stick around right and so we know this is sort of the use case we want somebody that's actually operating properties is monitoring competition making daily pricing changes to their to their listings and so that's the customer that sticks around for a while yeah give me give me that story though real quick let's actually break this down because you you see this pattern you know if people stay past month three their churn drops significantly so it's unfair for me to ask you like a weighted average turn number so let's break this down first 30 days you know all your signups on the sas product churn is what probably pretty high right about 40 yeah and then if they make it past day 30 the churn between days 30 and 60 drops to about what yeah so we're hitting about the average turn of about 20 at that point in time okay and then if they make it past month four how low like five percent yeah see so that's actually not i mean it's it's not bad it's good that you know that though so you can make smart decisions about getting more customers right right yeah yeah you know and we've been fortunate that we can uh you know we can replenish our the people we're losing every month and more right we're getting uh you know 16 1700 people a month coming in to subscribe and we're you know losing whatever it is 13 1400 people out the back door but you know over time we're still sort of able to add net new subscribers each month but you know there's two ways to solve it either you're throwing more people in the top of the funnel you're trying to close the bottom of it and then not letting them escape and so you're trying to do both at the same time but uh we know there's a lot of consumers out there there's over three million airbnb hosts there's a lot of other people kicking the tires on getting into the game a little bit so you know a lot of our efforts are around sort of just marketing and freezer acquisition yeah so okay tell me more about that so today when you look at your total expenses on marketing and things like that what are you spending fully weighted to get a 75 a month or 70 a month customer uh it's it's uh it's good we don't spend much on on on right so we might spend 100 bucks a day on adwords and we don't spend much else right it all comes through uh direct traffic seo and free um referral sort of traffic tell me about an seo term that you rank really well for that brings in a lot of your organic traffic sure yeah just like uh occupancy rate fill in 80 000 cities around the world right airbnb occupancy in nashville and surprisingly like all of those long tail terms that have sort of a geographical component along with occupancy revenue whatever it is i mean that is sort of the long tail that we dominate right so we have uh maybe yeah maybe it's 80 000 visitors a month that are coming in on pretty you know unique you know really um targeted sort of seo keywords yeah now you are auto generating these and i can tell because when i put in airbnb occupancy rate austin um the metadata under the headline it says like 66.666666 percent like it's clear there's a formula that's driving this thing um have i mean have you figured out a way to put human touch on these things to you know maybe get up above patch.com and inside airbnb.com uh that's a good that's a good question you know it all depends on the search term you're right we have dynamically generated 80 000 unique sort of uh keywords or meta descriptions right um and we thought that that you know is more about a click-through play and it's not really as much as a sort of a you know moving up in the ranks uh play uh we are continually working on technical seo you know for in-app experiences for things that are built in like you know javascript or or react is what we're built in you know google it's a bit of a mystery i don't know like exactly how google is tracking that how they're rendering the page how you can sort of make sure that they don't they don't ding you for duplicate content and so you know we've got a full-time guy who's just trying to work through how do we make sure we're getting these uh um crawled correctly and that we have it you know ranking as high as possible yeah what's his name and did he come from real estate or did he come from like marketing and seo i can't give you that oh you don't know where he came from uh no he's really just more of a front-end developer that sort of has landed in this sort of uh in this niche the talent is just really hard to find for this technical seo town we've looked oh really yeah we looked all around town of people that specialize in seo and nobody's been able to sort of do what we've done with sort of the in-house talent so what are you what tools are you using there's a lot of tools that will help you dynamically launch thousands of landing pages for long tail keywords do you know what you use um i think it's all a built-in house i don't think there's any sort of tool we're using okay but uh i could be wrong on that so that's okay that's technical okay but that kind of search term combination of kind of you know city name occupancy rate airbnb that drives about 80 000 uniques per month into the site yep that's right that's great okay what's the team size today how many people uh we're pushing about 50 people now okay five zero and how many are engineers uh a dozen okay so how many sales people with quota good questions uh with quota we've got about seven uh what we would call sort of our closers and we've got about five outbounders how do you i mean actually i'm asking you feel good about the model on the sales folks do you feel like you have the right ratios of kind of quote a target to you know full ote you know comp etc i would say you know so that that team is based out of barcelona and so i try not to think too hard about how that structure...