The boldness was there from the beginning. In 1999, when Joe Poulin found himself knocking on the doors of lavish villas in Barbados, he was a 17-year-old from the outskirts of Montreal. He had never been outside Canada before, but he had an idea to make the villa owners some money: a website that would market their vacation homes for rent.
Even though he was brushed aside by the owners as just another naïve teenager, he remained convinced there was money to be made and built the site anyway.
A few months later, Poulin flew back to Barbados. This time, he offered his service for free in exchange for 20 percent of the rental fee. "Next time you hear from me," he told the owners, "it's great news because I've got money for you." He returned to Montreal with seven properties to list.
Fast forward 14 years and today Poulin's villa-rental startup, Luxury Retreats, has 150 employees and lists more than 2,000 properties in more than 50 destinations around the world, from Oahu to Umbria. By focusing obsessively on quality and learning the hard way what it means to hire the right people, Poulin has made his company an under-the-radar success story in the crowded space for vacation-home rentals. His traction has come from the high end of the market, where just a week's rental could range from more than $40,000 on the French Riviera to more than $400,000 on billionaire Richard Branson 's private island. Clients want nothing left to chance.
Richard Branson's 14-bedroom vacation home on Necker Island, part of the British Virgin Islands. The entire island is available for rent through Luxury Retreats. Image credit: Luxury Retreats
And Poulin sweats the details. Properties listed by Luxury Retreats go through intensive vetting: Quality inspectors rate properties on more than 100 points, such as amenities and proximity to neighbors. If a property falls short, the owner must improve it before listing. Once a property is ready, the company sends a photographer to take pictures for the website. The goal is not only to curate an elite selection of homes but also to cultivate a consistent mark of quality.
It's a system that has paid off handsomely for him. With no college degree or formal training, Poulin led the company to $100 million in revenue last year. "I'm not an academic guy," says Poulin, who speaks quickly and in a choppy cadence, continually biting off one thought to offer the next. "There was no real plan B. It was just: 'This is going to work. And if doesn't work, I'll just do another business.' "
His entrepreneurial aspirations have a long foreground. His father worked in the pulp-and-paper industry, which meant recycling magazines, and at age 11 Poulin began reformatting the floppy disks and CDs of free software that came bundled with some of these magazines. After turning them into blank disks, he would box them up and sell them.
At 13 he began taking apart computers, and two years later taught himself to build websites. It was as a freelance web designer that he would travel to Barbados. A client wanted a website to market his beachfront villa, but he didn't have any pictures. He flew Poulin down to take them and see the villa firsthand. That trip to Barbados determined his course -- one that would bring a set of challenges common to young companies.
About four years into Luxury Retreats, Poulin says he found himself relaxing his grip on customer service as he was scaling the business. Before long he realized the need to consciously slow growth, until he could manage it without sacrificing the service that was so critical to his success.
"At the end of the day, what it comes down to in ultimate validation is that [a] family goes and does the trip and comes back [with] a smile on their face," he told himself. "So if something's got to give, it's not that."
Like many shoestring founders, Poulin micromanaged everything until he found himself confronting his own limitations. By the mid-2000s he realized he needed a mentor. He found one in Peter Kern, a managing partner of InterMedia Partners, a Manhattan-based private-equity firm.
Also a board member of Expedia, Kern rented twice through Luxury Retreats and eventually asked to meet the chief executive. "Anything you need, I'll help you out," Poulin recalls Kern saying when they met in New York, "but if there's a way I can get a little skin in the game, I'd love to do that."
Kern came on board in 2007 with what initially was a three-percent ownership stake. Together, he and Poulin hoped to build Luxury Retreats into a leading brand.
Their eagerness led to a serious mistake. In 2008, influenced by outside advisers, Poulin hired a full management team for Luxury Retreats. It was the right move for growth at the right time, he says, but he failed to define "the right DNA" for the company. While he hired seasoned managers, they didn't fully support the company's mission. "This passion was missing and very apparent," Poulin says.
Between 2008 and 2012, a time when the house-share market was exploding, he replaced his entire senior staff. "I could have moved that much higher, that much better, that much further or faster" if the right team had been in place, he says. Only in the past 12 months has he put together that "right" kind of team, "people that are relationship driven and genuinely looking to improve the lives of others," he says. He requires executives to work "side-by-side in the trenches" with anyone below them to build camaraderie and an understanding of the business.
The vacation-rental business is not a new one, but in recent years a slew of companies have risen up to modernize it. One of the market leaders, HomeAway, offers more than 325,000 rentals around the world and went public in 2011. Travelers can also turn to peer-to-peer services such as Airbnb, which allows members to rent out their homes for short periods. Airbnb has raised $120 million in funding since 2009, according to published reports. Priceline's Booking.com also recently entered the market by including vacation rentals with hotels in its lodging results. Priceline bought travel meta search engine Kayak, on whose board HomeAway CEO Brian Sharples sits, for $1.8 billion last November.
Because the market is so crowded, and because Luxury Retreats is not yet, admits Kern, "the Starbucks of the space," the company woos clients by focusing intensely on service and amenities.
Take Kirk Muller, coach of the National Hockey League's Carolina Hurricanes. He spent nine days with family in a rented villa on Italy's Amalfi Coast in June. A Luxury Retreats staffer suggested a cliff-top villa in Praiano, a small fishing village. Breakfast was prepared by a private chef and each morning the concierge catered to their every whim. The Italian man assisting Muller's family arranged a private day trip to Corsica aboard a 30-foot yacht. It was Muller's fifth time using Luxury Retreats. He says he was drawn by the personal service and what it means: "the value of your own privacy, the fact that you have it pre-planned ahead of time but with the flexibility of changing your plan."
Luxury Retreats's commission on rental fees is between 20 and 30 percent -- the industry standard, and similar to that of competitor Villas of Distinction.
Casa La Laguna, Doug Schneider's 13,000-square-foot villa in Cabo San Lucas, Mexico. Image credit: Luxury Retreats
Doug Schneider started renting his villa in Cabo San Lucas, Mexico, in 2008 after a $2.8 million expansion. He lists his property with more than 12 rental companies, although Luxury Retreats customers accounted for about 55 percent of his villa bookings over the past two years. Schneider's 13,000-square-foot compound, whose multi-tiered swimming pools are connected by a water slide, regularly attracts celebrities and other VIPs, what Poulin calls his "AAAA clients."
What bubbles up most in conversations with Poulin is his possessive pride; he has been fielding buyout offers for years. In 2005, the nonprofit motor club AAA expressed interested in buying his company. "We're not for sale," he told them. When AAA offered instead to take a 20 percent stake, valuing the company at about USD$20 million, Poulin accepted. A year ago, however, he and Kern bought back AAA's interest in Luxury Retreats, wanting greater ownership.
Still, Poulin says being based in Montreal puts Luxury Retreats at a disadvantage when competing for attention in the States. He decided that securing venture capital would help raise the company's profile and represent the vote of confidence he longed for.
As of September, when Luxury Retreats received its first infusion of venture capital, Montreal-based iNovia Capital estimated the total market value of the properties in the Luxury Retreats portfolio at more than USD$6 billion. The initial funding offer, led by iNovia, was USD$20 million, but Poulin talked the investors down to USD$5 million in exchange for a smaller, undisclosed stake in the company.
"I'm not looking to exit," he says. "I look at what I've done on my own, and I say, if I bring a lot of smart people around me, if I bring really good investors, a really good management team, I can only imagine what they're going to help me do."
Poulin has several goals for the next two to five months. Among other hires, he wants to bring in a vice president of marketing as new destinations open up, including London and New York. And his role will continue to shift. After bootstrapping for so long, he wonders, "How do I become more the general of the army?"
But then Poulin, who has dedicated half of his life to his company, of which he still owns between 70 and 80 percent, backpedals: "I'm an operator, so I like to be right into the details of things, and I'll never let go of that."
An earlier version of this story misstated AAA's 2005 investment in Luxury Retreats. The nonprofit motor club purchased a 20 percent stake in Luxury Retreats at a valuation of about $20 million.