ENTREPRENEUR: THE INNOVATORS Competition helps build brand awareness

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Joe Poulin of Luxury Retreats helps travellers find the perfect villa to rent. (CHRISTINNE MUSCHI/NATIONAL POST)

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When he was 11 years old, Joe Poulin started recycling computer disks from his home in Montreal, at 13 he was buying and reselling computer parts, and by age 15 had taught himself web design. He was just 17 when he flew to Barbados to convince the owner of a vacation property to let him build a website to attract visitors. The result, Luxury Retreats, combines a web platform with the personalized concierge-like service associated with high-end getaways.

Since its startup in 1999, the company has grown to more than 2,100 villas in more than 50 destinations with about 150 employees, and the company is on track to reach sales of $100 million a year at the end of its fiscal year in June. Some 50 contract workers worldwide inspect properties and decide whether to approve them for inclusion. In this edited transcript of his conversation with Financial Post technology reporter Christine Dobby, Poulin, founder and chief executive of Luxury Retreats, shares how he applied technology to the travel industry and how he's used the more recent popularity of new types of travel sites to his advantage.

Q: How did you decide to start a vacation property-listing website when your (self-taught) expertise was in computers?

A: I knew how to build websites, I knew how to rank them on search engines and when I was speaking with the homeowner in Barbados, I realized he had no concept of how to drive traffic to a website. I thought, why not build one website for many homes, drive the traffic to it and then figure out some kind of arrangement for the traffic?

My original model was to do a listing service similar to what Homeaway.com does today, charging homeowners to list their properties. My objective was to make a million bucks by listing a thousand homes and charging each $1,000 a year. Where it didn't work right away was I literally showed up at peoples' doors and no one was giving a 17-year-old $1,000 for this Internet stuff.

I went back to Montreal and built the site anyway (under a brand we still have today, Caribbeanway.com). The industry already (had a system) where you took a cut of the revenue from a sale and I decided that was a good way to approach it, because when I talked to homeowners I could say, "I just need some pictures and information, if you never hear from me again it doesn't cost you anything. If you do, it's because now I'm bringing revenue and we'll do a revenue-share."

When I kicked off the company, we had about seven properties, and I decided to use the Internet and the search marketing I knew how to do to attract traffic and then take a cut of the revenue. That's the model we still use today.

Q: Why did you decide to target the affluent travel market?

A: It was initially a fluke, because the first property I dealt with when I was building that first website was a luxury home. I was debating how far down-market to go and I saw that dealing with someone at $100 a night versus someone at $1,000 or $2,000 a night -- their sensitivity to how much their time is worth, how important it is for things to be absolutely right and the willingness to pay for that is different. In realizing that early on, I decided to focus more on the affluent market. I saw an opportunity in tech and attracting people on the web and marrying that with high-touch service that should go along with what you get in a five-star hotel and wasn't really apparent in the industry at that point.

Q: With sites such as Homeaway and Airbnb, the popularity of booking non-traditional vacation properties online has taken off recently. How have you dealt with the competition?

A: With these companies coming into the space it's been building awareness. If you asked someone when I started the business 12 years ago if they'd rented a home, it was like speaking Chinese. Today maybe it's four, maybe it's five people out of 10, which might seem like not a lot but it's a heck of an improvement. With Homeaway dropping money on Superbowl ads and marketing, it has built awareness of the general concept. We're very confident in our own model and how we're positioned and saying there's a difference in the experience you're going to get with us. All of the companies out there are unique and may work for some and not for others. For example, we're not going to go out and rent only by the room like Airbnb would, and if that's the type of traveller you are, then that's the best service for you. If you're looking for predictability and you don't want to sift through 2,000 listings in some part of Italy, then you'd probably want to come with us.

Q: You raised $5 million in venture capital funding in September in a round led by iNovia Capital. What's behind the timing of that?

A: There were a lot of people circling around in the market and we thought it was a good time to bring on a partner to help validate things from an outside perspective. It was not really financially driven because we've been a profitable business for a number of years and our model's been self-sufficient thus far. But from a talent perspective it ended up being one of the greatest ways for us to put a stamp on things and say, "We're hiring, we're growing, we've got serious guys behind us." The biggest thing was how to strengthen what we're currently doing and build the team from a board standpoint as well as the management team.

-- Financial Post

Republished from the Winnipeg Free Press print edition January 29, 2013 B8