John Shriber, Roomster Co-Founder, on Growing an App Business without Venture Capital
When John Shriber and Roman Zaks started Roomster in 2003, they were determined to grow a business where they were accountable only to their customers, team, and product – and not to external investors.
17 years later, Roomster is a worldwide leader in roommate matching, co-living, and shared housing. In fact, Roomster is in 192 countries, and is still expanding. The team has plans to improve safety and security, as well as additional features that will streamline the experience of finding and living with a roommate.
We talked with John to learn how he and Roman built Roomster into the growing business it is today and how they’re rethinking home sharing.
What do you attribute to Roomster’s success?
Many of our newer competitors have raised a lot of money. We never did. Raising capital can mess with your focus. When you only have a set amount of revenue coming in, and you need that money to grow your business, it keeps you hungry and scrappy. By doing that, you make the right decisions. If we had raised a bunch of capital before we were ready, we would’ve grown inefficiently, and would have made a lot of critical missteps trying to appease outside investors.
Because our company is small, we’re able to stay nimble. We can look at our product data, spot the problems, make changes quickly, build new code, and reevaluate. Every time we look at the data, we’re always asking ourselves, “What can we do to fix that?” We’re constantly solving problems – and we’re able to keep this focus because we have our own capital and are in control of our business.
How do you stay relevant?
Every business has a niche. When you get outside of that niche, you lose your relevance. We focus on exactly what we’re good at: roommate matching. That’s our core business.
How did you think about growth when you were starting out? How has it changed?
We started this business with five grand. $500 of that went toward Google Ads. That’s all we had. There was no room for error. It was five months of letting people join for free before we reached the critical mass we needed to start charging. After that, we started making money almost right away. We’ve seen increasing returns of nearly 40-50% every year.
Today, we still dedicate a lot of capital for advertising on all the major channels – Google, Facebook, etc. We now have a huge reach, and we use these networks to continue to reach more people.
What was tough when you were starting out?
All of it was tough. There was a lot of outside pressure from our first venture, and we were trying to start a business from nothing. I was in the trenches dealing with customer service while Roman was building the product. But it was a great adventure. Still is.
How has the housing/rooming market changed since you started?
It’s exploded. We were early to the market when we started Roomster in 2003. More people are signing up and more people are living together. Co-living is also growing globally. I think it’s a smarter way to live.
What advice would you share with other founders in mobile and/or in housing?
Don’t raise funding until you absolutely, really need it. Housing is a very tough business, and in its current state, has very tight margins. You have to understand exactly how much you’re spending and how much you’re taking in.