An hourly home rental startup is trying to make lemonade out of lemons during the coronavirus pandemic.
Globe allows its users to rent empty homes, apartments, and rooms by the hour. When it launched at Silicon Valley accelerator Y Combinator’s annual Demo Day in September, cofounder and CEO Manny Bamfo proclaimed that it would become a second space for constrained professionals unhappy with open office floor plans, or traveling workers who wanted privacy instead of coworking spaces.
But over the last three months, Globe’s entire world spun off its axis as states enacted shelter-in-place orders to stave off the coronavirus pandemic. Offices closed, workers toiled at home, and kitchens and living rooms became the de facto second spaces Globe once wanted to provide. The same tectonic shifts have revealed cracks in the bedrock under Globe’s big brother, home-sharing startup Airbnb, as most non-essential travel ground to a halt. All of a sudden, the young startup’s future looked a lot less promising.
“We worked with hosts that would open up their spaces in the middle of the day while they were at work, but in mid-February through early March, that part of our business tanked,” Bamfo told Business Insider. “We were terrified.”
But Globe’s biggest weaknesses, namely that it was relatively young and had less cash in the bank than Airbnb, also made it easier to adapt. In the span of a few weeks, Bamfo said his team had reworked the host process to accommodate property managers fleeing Airbnb.
Before February, Globe essentially let anyone with a lease rent out empty space in their homes while they were away. The process of renting out a space on Globe was quick and simple, and almost anyone could do it.
Now, Bamfo said they’ve created an official application and listing process, something the property managers had become accustomed to when listing on Airbnb. The sudden halt in non-essential travel meant that rental managers were often sitting on tens of empty properties and losing money, fast. So they reached out to Globe about listing their city-bound properties on Globe as work spaces, or private places to take calls, or oases for harried parents in need of an hour of silence. According to Bamfo, the pivot worked.
“Right now there are 10 million property managers or Airbnb hosts that don’t have any demand for travel,” Bamfo said. “And then there are all these people that are saying, ‘I need space,’ so there is an organic pull that we are getting.”
Operating a functional home-sharing startup is not an easy feat to pull off in a pandemic, and Bamfo said the team has made significant investments in the technical and screening processes to ensure Globe remains compliant with city and state ordinances.
Now, guests have to provide what amounts to a temperature selfie — a photo of themselves with their temperature reading on a thermometer — to Globe before they get their booking details. Hosts are provided sanitization kits — a collection of wipes, gloves, and soap sourced from professional cleaning crews — when they list properties on the site. Guests are encouraged to book spaces only for essential activities like job interviews within their apartment buildings, or within three blocks of their home addresses, to help limit travel as much as possible. However, Bamfo said that safeguard is operating on an honor system at the moment.
But for Globe to emerge victorious from the current economic environment, it will need to operate fully above board and in good standing with the cities where its spaces are located.
“We find mental health to be an essential need and work is an essential need,” Bamfo said. “Travel is 100% non-essential, but work is 100% essential. We are in a global economic crisis and we need the opportunity to work, so we find it 100% essential to have space to get work done.”
High density, high risk, high reward
As restrictions loosen in some of Globe’s current markets, the fact remains that the business is built for cities and the white-collar workers who live there. The current safeguards that limit how far a guest can travel to get to a Globe space are optimized for high density housing like high-rise apartments. Even when the pandemic subsides as a threat, people seeking a private respite for a few hours are likely to look for building close by.
But study after study has found that many of those metro-area workers, Globe’s target customer base, are gearing up to flee cities once restrictions are lifted. Months cooped up working from kitchen tables or couches in pricey apartments, often with a roommate or partner, have erased some of the appeal of city life. Thursday, Facebook announced that it expects to move roughly half of its 50,000 employees to permanent remote work, a policy that could substantially rework the dynamics of California’s pricey Bay Area.
“A lot of our hosts were relying on revenue from Globe to make their rent,” Bamfo said. “In the markets we are in, rent is expensive.”
If the predicted urban exodus does in fact play out with young professionals fleeing to the suburbs or small towns, Globe could be looking at a future less favorable than Airbnb’s, which profits from the travel market under normal conditions. But Bamfo remains optimistic.
“At this moment, our future is bright,” Bamfo said. “We are trying to make homes work better for our world right now. We can’t all cram into offices and we can’t all cram into our homes. We need a middle ground, and that’s Globe.”