The following interview is a conversation we had with Jonathan Sukhia, CEO & Co-Founder of Topkey, on our podcast Category Visionaries. You can view the full episode here: $7 Million Raised to Build the Future of Financial Management for Short-Term Rentals
Jonathan Sukhia
Brett, thank you for having me.
Brett
Not a problem. I’m super excited for our conversation. I’d love to begin with just a quick summary of who you are and a bit more about your background.
Jonathan Sukhia
Yeah, for sure. So my name is John and I’m the CEO of Topkey. And basically, in a nutshell, we’re building, as you mentioned, a financial operated system for real estate companies. The target market right now that we serve as vacation rental management companies and hospitality companies that have exposure to that audience. So we work with a lot of companies that run and manage single family rentals in multiple markets across like both urban and leisure markets. And we are basically a full scale financial operating platform for those companies. So we have credit cards, expense management, bill pay, and then we have built out a number of property management software and accounting integrations to a lot of the systems that management companies use.
Jonathan Sukhia
So in a sense, you can think of us as a bit more of a verticalized ramp or Brex, but targeting a specific niche in real estate and really building out a lot of functionality there. So the reason we served that market was I used to work at Airbnb and came from Airbnb, where I spent several years and then have been in hospitality and hotels and then investment banking kind of my entire career. So kind of in reverse order, was at Airbnb, was previously at a company called Hotel Tonight that was acquired by Airbnb and I let it led a team of partnerships folks there. And then before I joined hotel tonight and had been in California, I was in mergers and acquisitions and corporate development at Starwood hotels. And they started my career investment banking.
Jonathan Sukhia
So I’ve kind of seen a lot of different hospitality businesses over the last 1213 years and my career, and have spent the last three years or so building out Topkey and really kind of combining a lot of the stuff that I worked on across partnerships and short term rentals and then finance. So yeah, happy to dig in further anywhere. But that’s kind of a, in a nutshell, I background.
Brett
Yeah, let’s do it. Let’s dig into hotel tonight. I feel like that’s a company that is known.
Jonathan Sukhia
Like, I know the name, but I.
Brett
Don’T know too much about them, I don’t know too much about the story. And of course you don’t know what it’s like or what it was like to be part of that organization and.
Jonathan Sukhia
Be part of that team.
Brett
So biggest fact to your experience there, what was it like and what did you learn?
Jonathan Sukhia
Yeah, so hotel tonight was a company founded in 2010 by a couple of folks, but primary Founder CEO is Sam Schenk and then guys Jared Simon and Chris Bailey. And basically it was launched as a mobile booking app for last minute inventory targeting the US and european markets. So ultimately, like hotels at night was a booking platform. So kind of competing against Expedia booking.com and the real like advantage and pitch that they had to operators in a traditional two sided marketplace was, hey, hotels, you sit on a lot of inventory that goes unused and you’re either you’re unable to sell a room from last night that you would have tonight, right. So you can’t sell a room that’s already expired, so that inventory ends up going unused and it costs the operators significantly. At our gen, of course, like it’s kind of lose.
Jonathan Sukhia
You don’t like distribute your inventory. So were building at the time and then the app was launched the same day. Last minute you load a room, it’s super fenced, so the other websites can’t be kind of shopped against it, which hotels really were careful about because they didn’t want the pricing to compete against their regular rates on major websites and their direct sites. But over time, hotel Tonight grew and really took a pretty unique slice of the market that was operating essentially at duopoly, where booking holdings and Expedia were the only game in town. Expedia bought and owned hotels.com and orbits and travelocity and booking holdings bought Priceline and kayak, and basically just that whole industry consolidated and hotel tonight became this kind of unique asset that was not owned by either of those players.
Jonathan Sukhia
And long story short, ended up basically building out a full stack of operators kind of on the supply side to go capture it and sign up inventory and then a really, I think, world class marketing team to build out the demand side and hotel tonight excelled in, like, major urban markets. So you’d see if you lived in New York or LA or SF, you probably see the signs and posters and billboards and we get hit with targeted ads and ultimately also expanded until tonight went from same day to like 100 days over time. So were eventually acquired by Airbnb for a very great exit for everyone. I think the list price is public now, but it was around $450 million and, you know, just an excellent outcome for the team, but was a really cool experience to go through.
Jonathan Sukhia
I joined in 2017, so I was a bit later on, like, I came in a few years after the company had been launched, but it was really a wonderful place and I learned so much from my time there. So I’m happy to dig in further there. But in a nutshell, that’s the hd story.
Brett
What was it like being part of that acquisition or when you went from hotel tonight to Airbnb and working within Airbnb, what was like the biggest difference.
Jonathan Sukhia
There that you felt? Yeah, I mean, what was really to me, most unique about that was just seeing the scale at which Airbnb was operating at. I remember joining Airbnb and going to our office in Dublin and it’s like 2 hours with multiple floors and people working across all of Europe. And that was just one of, I forget how many offices Airbnb had. So what was cool about that, I think for us was just seeing the amount of, until tonight had grown from, I would say, zero to a very, like, popular, but I would say relatively niche market that people in certain regions knew a lot about. And we had a lot of. What is Tim Ferriss thing about? Like, not Tim Ferriss, but who’s the guy? The 100 true fans, you know, that I forget.
Brett
Yeah, he’s like the wired Founder.
Jonathan Sukhia
Yeah, the wired, yeah. Kevin Kelly.
Brett
Tim Ferriss made it famous.
Jonathan Sukhia
Like, I know that Kevin Kelly’s the guy. Right. And so hotel tonight did that. They knocked that out of the park. But it was just at Airbnb, it was like that with multiple zeros behind it. And you can see it in the way that the product adoption curve looks. Look at that stuff. It was so cool to get into the wheels of that operation, but certainly just a different scale that were used to. I’ll say. One other thing is the acquisition was unique because when we joined the hotel tonight, team came in, were basically tasked with building out hotels onto the Airbnb system. And then separately, there was a really interesting role for a lot of our teams. That a lot of these vacation rental companies weren’t professionally managed at Airbnb.
Jonathan Sukhia
They had a team, but it was like there’s a huge long tail of individual owners on Airbnb. And that’s really the core business. Core hosts is what they call it. And then we got to kind of be acquired, but also then come in and like, actually take over some really unique responsibilities. So started to manage a lot of the relationships with not only the vacation rental companies, but also the hotel groups that were being onboarded to the platform. So in a sense it was. It was a very interesting role because were starting to oversee relationship and I managed a team of folks and myself included, were managing partnerships and working with a lot of these different operators. And that was very. I think that’s kind of unique.
Jonathan Sukhia
When a lot of companies get acquired, you end up cutting the team or like the team has kind of shrunk a little bit to kind of fit in. Whereas Airbnb, really soft until tonight, is like a team that they could help kind of build out the professional management on of the business. So, yeah, in a lot of respects, it was a really unique opportunity there.
Brett
One thing I really like about Airbnb is they talk a lot about how important the customer is. And I don’t think it’s bullshit. You know, most companies, they’ll have that in their core values or they’ll talk about it like, their CEO will be on like, CBC talking about how much they care about the customers. And then, like, as a consumer, you experience it and you’re like, what are you talking about? This is a shit experience, you guys.
Jonathan Sukhia
Right, right.
Brett
Airbnb is very different. And I really admire Brian Chesky and how he’s, like, in the details, proactively working to make it a better customer experience. I just think that’s very cool. And, yeah, seeing, like, the threads that he joins on Twitter and the comments that he makes on he cares, which is really cool. It’s a very real thing in that company. From the outside, it seems, at least.
Jonathan Sukhia
I totally agree. I mean, I think that this concept of being a Founder and then having, like, people to do certain functions and then you being kind of, like, removed from it, I think a lot of times that seems enticing. As an early stage Founder of, like, man, at some point we’ll just hit a milestone and then I won’t have to think about that. And it’s like, go to Twitter and see Brian Chesky messaging random people, explaining how to do something or answering a question or clarifying something. Patrick Collison does it at stripe. You’ll see went through y combinator and Patrick will post someone ask a question on the YC message board. Patrick will follow up with them directly. And a number of founders are like that.
Jonathan Sukhia
And I find that just incredibly, it’s not easy to do that knowing all the responsibilities those guys are kind of having to manage. But it’s a testament to kind of the, I would say YFC preaches and it’s talk to your customers and it doesn’t really go away. You know, I’ll tell you another person who does it really aggressively, in a positive way, I should say, is Parker Conrad from rippling. If you ask a question in those message boards about something, and we’re happy customers at rippling, he’ll literally follow up with you and be like, hey, here’s how to do that. You should talk to this person and it’ll be like within hours. So you have no excuse as a Founder to not do that. Right?
Brett
Mark Benioff’s another one that I saw doing. It’s like this dude’s got a tower that like defined the landscape. And someone like complained about there was something insane like Slack was trying to charge them like eighty k to like export their data cause they were leaving the platform and they posted about the horrible experience and Benioff responded like, just dm me. And then they open a thread with the CF slack and apparently I think it got fixed in like an hour or two. That is pretty impressive at this level, are still doing that. They still care. And I think that’s like a really good example.
Jonathan Sukhia
What I’ll do is I’ll say if I see someone that has an issue, I’ll say, just dm me and it’ll be me that responds in another thread.
Brett
Yep.
Jonathan Sukhia
When I’m not quite at the scale that we have teams to just pass off things to. But no, I mean, I’m kidding, but like it is to your point, it’s such a. It is. The only way that you can stay grounded is to keep staying connected to your customers. They don’t go away because you hit these scale milestones or anything.
Brett
No matter how big your tower is, you still got to be on Twitter talking to your customers.
Jonathan Sukhia
Exactly, exactly.
Brett
Now let’s dive a bit deeper into Topkey and everything that you’re building there. Just talk us through at a high level. Give us the product. What’s the product do? What’s the value it brings? And what are some of the things, features and capabilities that your customers are very excited about.
Jonathan Sukhia
Yeah. So we work with hospitality management companies that oversee third party properties. So for example, let’s take a hypothetical customer. They are based in, let’s say, Myrtle Beach, South Carolina, a big vacation rental market. They have 150 properties spread across multiple unit types. Have some single family homes, they’ll have some condo units. Maybe they work with an HOA and under a professional management agreement. What they are doing day to day is, let’s say they have, call it ten employees. They are using all sorts of different systems and processes to essentially track and navigate expenditures. And when a management company is introduced to us, often we’ll start digging in on their stack and we’ll say, hey, what are you currently using for credit cards? And they’ll say, oh, we have a couple of different credit cards and we work with a couple different bank partners.
Jonathan Sukhia
And we use a PM’s system, like that’s property management software. And there’s a bunch, but like streamline or track or desky or hostfully or any of one of a number of systems. And then we use bill.com for ap. And we have a payroll process that we use through a third party. And so you start to kind of like dig into the weeds. And the operators that we work with just have a lot of complexity in the stack that they currently work within. And ultimately like one of the challenges that they are encountering. And often it’s more unique challenge for a property management than it is for other types of business. There’s a lot of expenditures that are being made on behalf of their owners that need to be billed back to those owners.
Jonathan Sukhia
So you can think of it like, hey, I have a bunch of properties. Every time I make a purchase that is applied to a listing, I actually want to make sure I get reimbursed by my owners for that purchase. And so at the end of each month, they’re doing like monthly reconciliations for not just one business in the form of the corporate, but they’re doing a reconciliation for every property, about 150 properties. You’re basically doing 150 sets of books. And if you’re incorrect, a, you risk like the owner being upset with you, right? Like, hey, you’re charging me more for something, or b, you’re not getting reimbursed for something that you were either contractually or otherwise, right? Like you spent dollar 500 on sundry items for that property in July and you should reimburse for that.
Jonathan Sukhia
And so just that pain point was what we recognized initially was such a challenge, using kind of legacy cards, legacy expense systems, and so with Topkey, we are able to take a manager, get them set up within like three, four days, super simple and super fast. And then an operator can create custom cards that we issue from Visa. They can make purchases on those cards, and then the moment transactions are made, we send those cardholders, which is typically like a maintenance person or someone in the field, a tax. And that person can very quickly and almost instantly affix that transaction to the right property. They can assign it to a category, and then they can sync it directly to their property management software system like streamline or track.
Jonathan Sukhia
And we have deep integrations with those systems to push transactions over and basically allow bookkeepers to stop doing manual data entry. So we have an integration to the PM’s, and then we have an integration to the accounting system, which is like often quickbooks or if you’re a little larger, sage or Netsuite. And so really we help them close their books faster and we help them make sure that any transactions are. And if we’re accurately at the point of sale, and that’s just b one, I would say there’s a whole other set of problems that we’re now solving for. But that was really the initial pain point that were introduced to. And continuing to really build a deep relationship with this type of customer is really the focus for us.
Jonathan Sukhia
It’s like better understanding what other pain points they have and just continuing to build out tooling and support for this sector and this type of customer base. This show is brought to you by.
Brett
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Brett
Is it the CFO that you’re typically selling to, or what does that look like for these types of work?
Jonathan Sukhia
It varies depending on the size of the company. So a company that has maybe 150 to 200 units is probably the CFO in conjunction with maybe the owner of the business. Sometimes, well, sell into, like, the COO or the general manager. And then there are times where we’re basically selling directly to the CEO or the owner. So it varies. But for the most part, yeah, it’s either the finance board or whoever’s kind of running the finance what about the.
Brett
Marketing philosophy when it comes to marketing? How would you best summarize your approach?
Jonathan Sukhia
Yeah, I mean, so it’s something that we’re really thinking through at the moment. Actually, I just had a really good discussion with someone on this last night is we started very word of mouth heavy and I knew a lot of people in the industry. We’re fortunate enough to have some amazing people that have been advocates early on who have helped us find, I would say, kind of best in class managers to then onboard. And even today we continue to onboard companies who are referring us to new folks we’re fortunate enough to never had any churn. We continue to just find more and more operators who are sharing information about our product. Whats cool about our industry is its grown like crazy as you can imagine, right? Like vacation rentals used to be a smaller niche market and now its with Airbnb and VRBo.
Jonathan Sukhia
Its ubiquitous both across like major us and international markets. But theres a lot of information sharing because so many people are not competing with each other. Right. You might manage a set of properties in northwest Washington and you might go to a conference and work with someone in Orlando and you’re never going to like compete. So there’s a lot of like information sharing that goes on and a lot of like interesting marketing kind of angles from that perspective. But we spent a lot of time building those relationships and we’re still pretty early. So I would say those relationships coupled with going to conferences, being present, having a booth, showing up, showing that we really are in this industry. And it helps having come from the industry because I can speak to it really particularly.
Jonathan Sukhia
But those have been the things that we’ve focused on for now. There’s a lot more that I want to do that we should be doing that we’re probably not yet. And so more on content and like SEO and just really building out more of like a traditional set of, I would say like trying to find more channels to execute against. But that’s been like our major focus the last year and a half since we really went live with the product early 2023, I guess was kind of when we first started onboarding customers.
Brett
What about thought leadership? What role does thought leadership play today or what role is it going to play in the future?
Jonathan Sukhia
Yeah, for sure. I think there’s a lot of opportunity there as for founders to be seen as like the experts in their domain. So for me, what I’ve done is when I’ve gone to conferences, I’ve got on panels and tried to be kind of someone who’s available to speak about challenges that people see. And I think one thing that’s important to do, and I was talking with another Founder yesterday, is, hey, focusing on things that aren’t. The companies we serve have all sorts of challenges that they’re dealing with. And if you come to them and you try to, like, talk to them about your product so many times, it’s lost. Right? But if you’re coming to them with like, hey, we’re seeing this in the market, you should execute this way. It’ll help you, but it’s not, hey, buy my product.
Jonathan Sukhia
You have a lot more credibility that way. So figuring out better ways to just position yourself as that. I try to do that on LinkedIn a little bit, but also just doing it more generally. Like, you need to know people reaching out and asking questions. I think so just like trying to become friends with a lot of these folks and trying to better understand, like, what are they dealing with day to day. I think it helps you become a better, like, thought leadership person versus just like, using some sort of AI bot to post stuff on LinkedIn or Twitter. And you see a lot of that, too. And I just don’t think that’s as effective. People kind of are smarter than we may give them credit for. Oh, that makes sense.
Brett
But no, it makes perfect sense. If you see the word like, delve, that’s the one that I always know. Like, if someone uses that in a LinkedIn post, then I know it was chat GPT. Like, that’s not a word that, like, a normal human would use, but chat.
Jonathan Sukhia
Chipt always spits that out.
Brett
Yeah, yeah.
Jonathan Sukhia
The amount of, like, well, it’s kind of funny. I was at a wedding the other day, and one of the guys at the wedding, I actually had the honor officiating the wedding, but afterwards there was a bunch of speeches for the bride and the groom at the reception, and this one guy got up and, like, literally gave a speech about using AI. And it was hilarious. Like, it was almost like, so clear that it was AI wrote it. And then at the end, were talking afterwards, you basically admitted to it. We’re like, the language was so flowery and, like, over the top. And I was like, oh, my gosh. But like, if you know, you kind of know, right? And I just think more and more people are going to identify it.
Jonathan Sukhia
A lot of people didn’t know, but, like, I have used those tools a lot. You’re like, okay, that is hundred percent not his words, you know, so it’s applicable for our conversation, because it’s just easier, right. To leverage that stuff. But like when you really like, start using it, I think you’re just going to see an explosion of it and it’s going to be so overly used, people are going to be very quick to identify where it’s no longer effective. I don’t know, maybe people already starting to do that.
Brett
Yeah, I think so. I think LinkedIn is just full of this stuff now. Some people have to be zoning out and be a little bit numb. And like you said, they’re smart. People can figure it out now, especially, like the more people experiment with it. Let’s talk about category. So when it comes to your market category, is it STR financial management or what is like your actual market category?
Jonathan Sukhia
Yeah, I mean, we are targeting a portion of property management and it’s really important for us that we focus on that core customer so we aren’t spreading ourselves too thin. So we do say we target, you could say SDR or vacation rental or Airbnb managers. We define it as companies, not individuals. So we don’t work with any like one or two unit companies or landlords. But I would say, like so much of our product focus and so much of the work we’re doing right now is building out functionality that will be equally valuable for a long term rental management company or an HOA manager. And so there’s a lot more functionality to come that will allow us to kind of expand to those users.
Jonathan Sukhia
And one of the reasons why we’re doing that is a lot of our customers have those assets under management as well. So there’s a Venn diagram and a lot of people have overlap. Our customer segment is unique in that, like a lot of these operators or were realtors and real estate agents, and then they start property management business. Maybe they have a brokerage, maybe they have some long term rentals, maybe they work with hoas. Maybe they get into hospitality or hotels. And so as you start to really, I don’t want to use an AI word, but delve into the customer and bring it back there for you. You do get into this world where they need more than just a system that can work for one asset type. I have a customer that we are onboarding right now and he has a coaching business.
Jonathan Sukhia
So we can support that business and we can actually support multiple different businesses on the platform and give you different credit lines for those businesses. Theres some really cool things we can do there to make your financial stack more efficient. But we certainly have our eyes on really servicing the core challenge for a lot of people, which is multi stakeholder, property level expense manager, who’s typically overseeing in our case like short term rental units and single family rentals.
Brett
Robert, when it comes to growth, are there any numbers or metrics that you can share that highlight some of that traction and adoption that you’re seeing today?
Jonathan Sukhia
Yeah. So one thing we look at really carefully is usage of the product. And it’s been a really interesting thing because as we build our product, we’re not just looking at like card spend or payments made, but we’re looking at a cross section of different things. Topkey, in order for this to be a very valuable solution, should support multiple use cases. So, for example, we built a build a product and we’re seeing increasing adoption. People are paying their vendors through it, they’re paying their owners through it. And that’s great because it shows stickiness of the product, but it also shows solving other problems which are really apparent to us because we’re working with these guys.
Brett
Right.
Jonathan Sukhia
We start seeing all the challenges that emerge as you start to having to do multiple payouts to multiple different owners and multiple different properties that you manage. And so for us, like metrics that we monitor spend, which has grown tremendously in the last six months. We monitor usage, number of bills paid, and we also monitor like number of transactions that are done on the platform. So we obviously want people to use the product more, but those things are really important to monitor. And then on the kind of more operational side for the team, it’s monitoring number of customers. We’ve grown like crazy since we launched. I can’t share like, hard numbers right now, but we’re really barreling down on those kind of target series a metrics. And I think we’re doing a really gangbuster job of potentially hitting those soon.
Jonathan Sukhia
And so I think for us, like, that’s been exciting because the team’s got a lot of momentum and that’s just kind of been our guiding North Star.
Brett
This point, from a fundraising perspective, as I mentioned there in the intro, you’ve raised over 7 million to date. What have you learned about fundraising throughout this journey?
Jonathan Sukhia
Totally. We started Topkey and we actually initially launched something different and pivoted after y combinator. And yeah, I mean, it’s a great question, probably one that I probably could take a whole podcast on. But for me at least, the biggest learning was to really have conviction around what you’re building and be sold on what you’re building personally. And that conviction belies so much more than just thinking you found an interesting market or thinking you found an interesting customer dates or a cool idea. And so being kind of intellectually honest enough to tell yourself, like, hey, you know what, I actually don’t have conviction on this idea.
Jonathan Sukhia
And I can just briefly, I convince you that I was, prior to this version of the business, were building something different, and we ended up kind of going back and forth for a better part of like six months trying to make something work that wasn’t working. This was multiple years ago. And I had to just step back, go to the drawing board and talk to our customers. And I went back. I knew I wanted to work with this customer base, and I knew there were a lot of challenges. And I did over 100 calls with those property managers to try to better understand their pain points. And after about the 60th or so of those calls, I was like, okay, I actually know there’s a pain point here and I want to service it.
Jonathan Sukhia
And so that really helped me a lot better develop that conviction. And everything kind of flows from that. The investors, the excitement, the energy, your ability to convey what you’re doing. If you don’t have it, theres no way you’re going to get your Co-Founder to believe you have it. Theres no way you’re going to get a Co-Founder if you don’t have one. Theres no way to get employees. Theres certainly no way you’re going to get investors who are talking to folks all day, every day. So that, to me, was the biggest unlock. And then when I felt like I have struggled or have doubts, going back to that, and I think this is true of anything, just making sure you go back and figure out what you’re convicted about.
Jonathan Sukhia
Because if you have nagging doubts about something, it’s likely that there’s something else there and you need to investigate it and not just like kind of sweep down the rug.
Brett
So, yeah, super useful. Final question for you, since we’re almost up on time here, let’s zoom out three to five years into the future. I know you’ve touched on this a little bit, but final shot here, let’s just go deep. Let’s go big. What’s the big picture vision three to.
Jonathan Sukhia
Five years from now? Topkey is a national brand working with a number of the leading property management companies across, lets say, North America and western Europe. We have the ability for folks to use the product both from a banking perspective as well as from a card perspective. We are really deeply integrated with their workflows, and they’re using our system for all of the day to day financial transactions and workflows that they are managing daily. For us to do that, we have to be able to better understand their pain points and then continue to build like additional value across the teams that are working within these financial work. So for us, it starts with getting like that v one and getting the first pain point and then just continuing to go back to them and say, what other challenges do you have?
Jonathan Sukhia
What other pain points do you have? And that’s basically where I’m trying to focus my time and doing that in conjunction with really smart engineers and really thoughtful Co-Founder and incredibly messy process. And it always requires you to kind of go back to the drawing board from time to time and make sure you’re asking the right questions. But it’s something that I think will prove, or at least so far as you’ll through, and I want to continue to do that.
Brett
Amazing. I love the vision and I really love this conversation. I think our audience is going to really love it as well. We’re going to have to wrap up here before we do. If there’s any founders that are listening in, they feel inspired and they want to follow along with your journey. Where should they go?
Jonathan Sukhia
Yeah, for our website, if they have a property management business, I will do a demo of the product and help onboard them. If they just want to talk and brainstorm. I’m on LinkedIn, kind of on Twitter x, but not as frequently, but I’m on LinkedIn. Or they can email me. John at Topkey IO and love meeting other founders and just kind of connecting with anyone. And if they’re ever in Nashville, let me know and I’ll buy you a beer.
Brett
Amazing. Jonathan, thanks so much for taking the time.
Jonathan Sukhia
Awesome. Thank you so much.
Brett
This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit Frontlines.io podcast and for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we’ll catch you on the next episode.
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