By Péralte C. Paul
Identify a problem and build the solution to solve it.
That’s the mantra two entrepreneur CEOs — one in the vacation rentals space and the other in the credit and debit card payments sector — have operated under in the creation of their companies.
Both startups — VacationFutures and First Performance Corp. — are the latest to be accepted into the Advanced Technology Development Center’s (ATDC) highly competitive Select Company program.
VacationFutures, based in Atlanta and co-founded by Andrew McConnell and Mickey Kropf, has created the first wholesale marketplace for vacation rentals.
The company serves as the nexus between homeowners who want to rent out their vacation homes during the times they’re not using them and property managers who seek houses to rent out to vacationers. But it puts a twist on the relationship.
McConnell’s company, which serves 30 U.S. markets in addition to operations in Asia, Europe, the Americas, and the Caribbean, allows homeowners to take the total number of weeks they won’t use the home and sell to the highest bidder. Property managers bid against one another for the rights to rent out the home to their vacationing clients. If all looks good during the due diligence period, the winning bidder gets to use the home for those identified number of weeks, McConnell said.
The homeowner gets the benefit of guaranteed income as well as professional property management, without the time-consuming hassle of renting out the home on a case-by-case basis, vetting potential renters and dealing with other possible hiccups.
Not only do they save time, said McConnell — he came up with the idea after a conversation with two medical professionals renting their home out on their own — but it also saves money. That’s because under the normal arrangement between owners and professional managers, the managers charge high fees for that service.
“We’re like the eBay for those transactions,” McConnell said. “I kept looking at the space and we couldn’t find anybody who was doing it, everybody wanted it, and it is a $100 billion industry, so we created it.”
He wanted to incubate and grow his company at ATDC because of three core programs. There’s Campus Connect, which recruits and links Georgia Tech students to Select Companies. Industry Connect pairs these startups with Fortune 1000 firms in need of their technologies, and Entrepreneur In Residence (EIR) assigns them a seasoned business veteran who can guide them through the challenges of operating a startup.
Macon-based First Performance Corp., the brainchild of founder Stefan Kraus, gives consumers more control in terms of the security surrounding their credit and debit cards.
Using the intellectual property it has licensed from MasterCard International, First Performance, through its GogoNogo app, gives cardholders the ability to control where and how the cards can be used. (Though licensed through MasterCard, the First Performance app will work on Visa, American Express, and Discover-branded cards, as well as those issued through Asia’s JCB and China UnionPay card networks.)
That means cardholders can define whether or not a card may be used at an ATM, online, via mail order or telephone order, in a bricks and mortar store, or even a specific geographic location.
For businesses with corporate cards, comptrollers can limit where and how much employees can spend, he said. Parents with college-age dependents can add their kids as authorized users on their credit or debit accounts and input those controls as well.
Kraus, who has been in the corporate vulnerability management and payments security sectors for 17 years, likens it to consumers being able to turn certain features on a credit or debit card on or off, based on their individual needs and preferences.
“Security has been a passion of mine,” Kraus said. “Everyone has payment cards that are essentially ‘on’ all day, every day, and I thought wouldn’t it be clever to create some type of firewall or platform to give people the ability to turn them ‘off’ and give them card control.”
Those efforts by the company, which is in talks with the largest U.S. card issuers to incorporate its security protocols, come as a slew of high-profile payment card security breaches have hit U.S. retailers. Target Corp. and Neiman Marcus Group Ltd. both suffered data breaches that left millions of customer accounts vulnerable.
Indeed, global card payments fraud reached $11.3 billion in 2012, the latest data available, according to the Nilson Report, an industry trade newsletter. And the United States accounts for the lion’s share of that amount, 47 percent.
Kraus said he wants to be at ATDC because of its connection to Georgia Tech. One of the nation’s leading technology incubators, ATDC is a unit of Georgia Tech’s Enterprise Innovation Institute.
“ATDC gives me the platform and direct access to resources in terms of Tech’s genius,” Kraus said. “I’ve been to California and I’ve been to the (Silicon) Valley, and this is on par in terms of working with the top of the top.”
The EIR program and access to that expertise, as well as being in a collaborative environment with fellow startup entrepreneurs, also was a draw.
“I didn’t want to pick an address in Midtown and say, ‘we’re here,’ I wanted to be in a building and surround myself with people who are just as passionate and into their business as I am in mine.”
The addition of VacationFutures and First Performance is part of a targeted strategy of bringing in more financial technology, or FinTech-oriented startups, into the Select program, said Timothy Sheehan, ATDC’s lead EIR.
“We’ve chosen a few sectors that we see as growth areas for us, including FinTech,” Sheehan said. In addition to FinTech, ATDC is focused at bringing in startups from the Healthcare IT, Manufacturing, and Sensor and Analytics sectors into Select.
Startups designated as ATDC’s Select Companies are those deemed most ready to succeed, get investors, and thrive as stand-alone enterprises. They also receive one-on-one mentoring from EIRs, as well as access to other ATDC and Georgia Tech business development programs.