RentMama: Gunars Grundstoks, Vilnis Sluka and Valdis Pornieks
The co-founders on securing that first supplier and the importance of mentors
Tell us what your business does:
RentMama.com simplifies the car rental process for consumers and provides them with a website where they can find flexible offers from their local, independent car rental companies all in one place.
With the big car rental brands dominating the likes of yell.com, and simple aggregator websites only listing national prices, it is difficult for consumers to find the affordable prices of local car hire companies.
Renters receive a more personal service from local firms and benefits such as the ability to choose the exact car model they want and flexible pick up times. They are also proven to be friendlier to younger drivers.
Where did the idea for your business come from?
We’re active travellers and often search for affordable rental services in the places we visit. Anyone who has ever tried to find good value car rental will have spent at least a couple of hours searching on Google, Expedia, Kayak and other sites.
We became tired of going through this tedious process time after time and an idea struck: why shouldn’t all appropriate rental companies be presented to us as soon as we have specified our requirements? RentMama was born.
What is your unique selling point?
Small, local vehicle rental businesses have little or no online presence, so they need RentMama to grow and compete with larger companies – as well as reduce their marketing costs.
We make it easy for customers to discover and book with independent companies, as it is these who offer the best deals and personalised customer service. The customer is left feeling satisfied that their money has gone towards supporting a local business.
What were you doing before starting up?
Gunars founded IT House with Valdis, which does strategic user experience stuff and helps businesses to find business on the internet. Valdis also lectures on web technologies at Vidzeme University of Applied Sciences in Latvia.
Vilnis has a master’s degree in transport and has worked in the car rental industry for many years.
What planning did you do before you started up?
We started with a very small version [of the website], that we created in two weeks, to see if there was demand for the service. There was interest so we decided to develop RentMama further using an agile and lean start-up methodology.
We spoke to potential suppliers and customers to understand their needs and what they thought about the idea. We wanted to move fast but we also knew that we lacked some important skills, so we applied for the accelerator Startup Bootcamp in Denmark in 2010.
Here mentors helped us to build a product and find our value proposition. Then, in 2011, we applied for the Ignite100 accelerator scheme in Newcastle-upon-Tyne, where mentors helped us with our marketing strategy.
How did you raise the money?
For a long time we bootstrapped RentMama and survived off our savings, while we focused on making contact with investors.
It is very important to start communicating with investors early, as this gives them time to see your project develop. Then, when it’s done, they know you and have had time to do their homework.
How did you find suppliers?
It was hard in the beginning but once you find someone who really believes in your business, and you get a few suppliers on board, many of them will help you to find other suppliers.
What challenges have you faced and how have you overcome them?
Like many start-ups, we have faced a lot of challenges funding the business ourselves – as well as with cash flow, marketing and lack of experience.
However, participating in accelerator programmes has helped us to get over these challenges, and we have come out stronger.
Where is your business based?
We are based in Newcastle and have piloted across the North East in the past month, where we have more than 30 vehicle rental companies signed up with us. That equates to over 3,000 vehicles in our online catalogue.
We are originally from Riga, Latvia and have found it fairly easy to focus on RentMama while we are in the UK. When we visit home, it is a nice break for us.
How have you promoted your business?
We are a very socially active team and believe that it is important to interact with our customers via Twitter, Facebook, email and our blog. We also attend many networking events and have built close relationships with PR and press contacts.
We’ve found that keeping people in the know about the journey and progress of our start-up has been very beneficial and has created interest and hype around RentMama.
How much do you charge?
Our business model is to charge 10% on every completed deal. Very simple.
What has your growth been like?
We originally launched RentMama in Latvia, where we are growing at a nice pace and have 70% of the local car rental market on board.
While we are growing and expanding in the UK, we have more expenses to pay out so at this stage we are seeking investment.
What’s the impact on your home life been like?
The last two years have been quite hectic. We have been working very long hours but thankfully we have supportive families who have encouraged us along the way.
Vilnis left his job to work full-time for RentMama, but he also does some photography work part-time to earn some extra cash.
What would you say the greatest difficulty has been in starting up?
The hardest part is working on RentMama while the company is not making any money.
Also, in the beginning, it was hard to clearly explain what our value proposition is to suppliers and customers. These are all things we learned through the start-up process, and with support from mentors.
What was your first big breakthrough?
We have found good advisors who understand this market well and we communicate with them regularly.
We were very successful in Latvia and we want to do the same and better in the UK.
What advice would you give to budding entrepreneurs?
Find the best advisors you can and connect with them as soon as possible.
Where do you want to be in five years’ time?
In the next five years we would like to see that we are helping customers and small companies connect with each other by building a trusted site.
We want to see RentMama become a major marketplace for local and independent vehicle hire companies.