Unlearning the old to create something new - transcription

Unlearning the old – transcription

By Fiona Boyd |

When Steve Sammartino started www.rentoid.com he found himself throwing out everything he’d learnt at uni and taught in his marketing classes at the University of Melbourne and teaching himself how to do a business from the ground up. This is a transcription of the video interview between Steve and Fiona, called “Unlearning the old to create the new“.

Fiona: …I’m talking this week with Steve Sammartino who is the CEO and owner and founder of Rentoid.com. We mentioned, we were talking about Rentoid but we’re going to go into this business in a little bit more depth this week because many of our readers and the people who watch our videos are also online startup people and they want to know the nuts and bolts of how it really happens, not the fake stuff, not how fast you’re going to make the dollars, how it really works. Welcome Steve.

Steve: Thank you for having me again.

Fiona: Steve, look, let me know, now, Rentoid is two years down the track, and two years is really early days, that’s your social proof really, or proof of concept. What sort of scale have you been able to achieve, what amount of resources do you need, what size audience have you got in your first two years?

Steve: So, we’re…at the moment some of the stats that matter to us is that we have nearly 30,000 items for rent, that equates to around about 35 million dollars worth of stuff up for rent on the site. The majority of that’s in Melbourne, in Sydney and a little bit around some of the other states, in Australia…

Fiona: But you are global aren’t you?

Steve: We’re global, so the site, no matter which country you’re in, it’ll recognise the country and give you the right currency and so on…about 80% of our members are in Australia and about 20% are overseas. This 80/20 law, Pareto’s law is everywhere in Rentoid! About 80% of our business is in Australia, 20% is overseas. About 80% of our rentals come from the rental industry, so the rental industry have actually really come on board and started using Rentoid as a method to gain more exposure for consumers of the stuff that they already rent.

So we’ve really collaborated with the industry because the rental industry’s been slow to come online. And what we’re trying to do is build something that’s a little bit like carsales.com.au or realestate.com.au where you build an aggregation and an online format that makes sense for that industry. Because the rental industry has quite a few nuances – there’s more transactions and times people connect in a transaction, so we’ve kind of been working that out for the last couple of years, so we’ve really got some scale now, we’ve got more than about 60 – what’s – over 60 rental companies using Rentoid as a format to attract new customers, and we get, it’s round about 30,000 uniques a month.

Fiona: That’s – I mean – these are fantastic…

Steve: Yeah, the numbers are good…

Fiona: I know you, as an entrepreneur, in your heart of hearts, you want to see that, you know, non-linear scaling off the asset balance…

Steve: Yeah, totally.

Fiona: You want to see the hockey stick projection…

Steve: Totally! Of course!

Fiona: But you’ve got to get all of the variables in place in order to make that and it sounds to me like they are in place…

Steve: They are in place. And we talked about sequence…and it’s almost like it took us two years pretty much to work out what to do, I feel like we’ve just worked that out. And I often say in entrepreneurship, you don’t run out of money, you know what you run out of? Time. People run out of time because life moves on or they become impatient, it’s, we kept our costs really low, which is a good thing that we’ve done with Rentoid, but one thing that that’s allowed us to do is have enough time to work it out.

And a lot of businesses fail, especially when they’re in a new space, because the entrepreneur or the founder hasn’t really had the time to work out that algorithm, and every industry has this kind of like underlying algorithm. We feel as though we’ve kind of worked that out now, in terms of the usability and what makes sense.

We know it’s a good model because people make money, save money, recycling items is good for the environment, but to get it right in a model that works in the right sequence is the really hard part. Building the website, putting the ones and the zeros in the digital format, right, that’s easy, building stuff is easy. Making the stuff work in a linear format, in a sequence that works right, is the really hard part. I feel as though we’re kind of getting that now.

Fiona: You also lecture others in marketing…

Steve: Yup.

Steve Sammartino had to unlearn everything he knew about marketing and business when he started Rentoid.

Fiona: …because that’s what you have more than a decade of experience in. Do you apply the same principles to Rentoid or did you throw the marketing book out the window?

Steve: Yeah, I threw it out the window. You know what? I went through a period of unlearning. I had to unlearn all the corporate stuff and all the marketing…most of the marketing books that we read are written for big companies, they’re written for large organisations. In a small organisation a lot of the things are really different. And my favourite thing is momentum. I think about – I like to really relate physics to business, and momentum is a function of speed times mass. Big companies are big, but they react slow.

But if you’re a small company and you want to get momentum, and momentum equals success in business, you need to move fast because you’re tiny, so move quick, be nimble, which means that you haven’t got time to research, you haven’t got a lot of resources, just think of stuff, do it, implement it, see if it works. So that’s the real difference in marketing in a small company versus a big company.

And I teach marketing at Melbourne University, and what I teach is totally the opposite to what I do at Rentoid. And I really have to have this separation principle, because when you’re in startup land, forget all the stuff you read about big companies because it doesn’t work and it’s not real. So the one thing I would say over all things is, do things, do them quickly.

Fiona: David and I had a similar principle when we were running Arts Hub, and, we used to call it the lean, mean fighting machine, and it was about keeping all the costs down, finding the most efficient sequences to do things, and not trying to appear as a monolith…

Steve: Yeah…

Fiona: Cos I think, in our culture, the big companies do dominate the psychographic, and we follow them almost blindly, in a lot of ways. Startups have to do things…oppositionally, almost.

Steve: Yeah, totally, and I think, admit who you are. So in all our copywriting, if you read through Rentoid.com, go to any of the pages, like to the FAQs…

Fiona: Very honest, very honest…

Steve: We’re honest, we’re a small company, and we say stuff like, we’re a couple of guys in Melbourne, we’ll look after you, if you want to speak to a real person, come and talk to us. I’ve got a mobile phone number on the website…people are like, gee, that’s quite revolutionary, I’m like, you know what? I’m a real person, talk to me, call me any time, I’m there.

And I answer the phone personally, people say, is that you, Steve, you’re the guy that runs Rentoid – oh, cool, thanks, bye, and they hang up. It’s kind of weird cos they don’t expect it. If you’ve ever tried to ring a big web company, you can’t do it. So we admit who we are, we’re small and we treat people the way we can, we use how small we are to an advantage, with our copywriting.

We don’t have a whole lot of legalese stuff through the organisation and then through the way we communicate with consumers. We’re one-on-one, we answer phone calls personally. So we think, well if we’re small, how can we use that as an advantage. And the Web 2.0 community really like, and love the underdog, people that take on new ideas and do it. So we just kind of embrace it.

Fiona: Steve, you might be small now, in your own mind, but if I could get you to cast your mind forward five years in time, I know you don’t want to stay small, in your mind or in the business. What do you see Rentoid as being and looking like in five years time? Will it have a global presence? Will the tentacles reach far and wide?

Steve: I wanted to have a global presence and I’ll tell you why. Not for greed and personal wealth but because Rentoid matters, right. You know why it matters? Because the biggest problem we face in the world right now is overconsumption, OK? And Rentoid is teaching people one of the really old philosophies in life which is…

Fiona: …repurposing and reusing…

Steve: Yeah, repurposing and reusing and recycling the stuff that we have, and sharing. But the cool thing is, it’s got an economic model attached. So you can’t know everyone. You can know the people in your street and share stuff, and that’s great and I love that and encourage that, but the people you don’t know, it’s like, you know the twenty dollars for my lawnmower is cool, it means you will respect it, and you’re quite happy to give me that twenty dollars, and Rentoid, you know, to me in my mind, could be one of the things that saves the world from itself because overconsumption is the problem. It’s not climate change, it’s not global warming, it’s overconsumption, because all of that stuff leads to climate change…

Fiona: …absolutely…

Steve: …so if we can be a little bit more clever with the resources we’ve got, and embrace the technology, that’s something I want to be part of. So I want Rentoid to be global for that reason and, you know, my viewpoint is, I want to stay in the business, even if other companies became involved or I sold out a portion of it, I would love to stay in it because I believe in it conceptually and love what I’m doing.

It’s like, I went through a marketing career where I sold beer and processed cheese and all of these things that people don’t need, and I felt really proud about what I’m doing now, and when you do that you think, gee, this is something that I want to take to the world, for those reasons. And if you provide service then you get rewarded financially. So I want to provide the service on that scale, then if those rewards come, hopefully I can be a guy who’s not greedy and horrible with that, and, you know, repurpose it in a nice way.

Fiona: I have a belief, Steve, that when you get your model right, and your heart’s in it, and the audience sees it and gets it, you have a winner on your hands…

Steve: …I’d say…

Fiona: …you have a winner on your hands. Thank you for your time.

Steve: Thank you for having me.

Photo: Flickr jonasb

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