Why managed fractional ownership is a big deal for real estate
How Flyway can be an inflection point for new wealth creation.
I have spoken with many people lately about the nature of the fractional ownership model that our company, Flyway, introduces to the real estate market. The feedback, the ideas, and the questions I receive are tremendously helpful. These conversations also help me understand the implications of managed fractional ownership at a much deeper level.
And I think these implications can be profound from the moment this model gets increasingly adopted and expands into different geographies. This has to do with the classic disruptive innovation idea that Clayton Christensen perfectly articulated a few decades ago with his groundbreaking book "The Innovator's Dilemma". Four years before his death (in 2020), he gave a great speech at Google, where he explained how disruptive innovation works and how it differs from sustaining innovation, but most importantly, how it leads to new wealth creation. I think this is a must-watch.
The tech industry, over the years, has generated hundreds of examples confirming Christensen’s theory and making it a great driver for further investments in tech startups. Especially the sharing economy startups, from car-sharing, home-sharing, bikes sharing, office space sharing, you name it, they were great disruptors in their respective industries that changed the dynamics and led to growth and wealth creation.
One of the best (and most relevant to Flyway) examples is Airbnb. When Brian Chesky and his co-founders founded Airbnb, the vacation rentals industry was relatively small and inefficient. Millions of people had a spare home or room to rent out to other people, and they could always rent it out in a DYI fashion.
But the risks and inefficiencies vastly exceeded the potential benefits. Some of the biggest questions they were facing were:
How can I find customers for my rental?
Is it safe? How can I decide who to get into my property?
How can I get paid without any risk?
How can I organize my property's scheduling?
These (and more) questions kept people away from renting out their property before Airbnb. But then Airbnb came along and solved all of these problems by providing:
Trust and safety
These tools suddenly enabled millions of homeowners to feel safe renting out their space, and then the market exploded. By solving these problems, they unlocked this huge market that, for the most part, most of us couldn't realize how big it was.
The case for co-ownership
Similarly, second home co-ownership is not a new concept. For decades, people were buying homes together with other friends or family to reduce the costs of the property and split its use time. But this DYI co-ownership never scaled because it was a bad experience for all parties involved.
But now, Flyway solves all of these problems that make second home co-ownership affordable and hassle-free. By providing:
Demand aggregation (how do you get enough demand to have all the people you need to buy the whole home)
Scheduling tools (who gets in and when based on what rules)
Financing (coming soon)
And by solving all these problems, we believe we're unlocking a huge new market that will not measure by today's second home market size but will vastly increase it because it's so cheap and easy to own and enjoy a great second home.
That's why we're so excited at Flyway at building this new market. We’re starting from London second homes to quickly expand in more megacities soon and then move to vacation second homes. I hope you join us soon. :)