iRent2U (www.irent2u.com) is a new startup, which is looking to create an eBay-like marketplace for people looking to lend or rent items. The firm, which launched a beta of its site last month, was the result of a business plan competition at Pepperdine and three MBA students. We caught up with Roy Bacharach, co-founder of the firm, to get a better understanding of the company and what it is offering. Roy spoke with socalTECH's Ben Kuo.
What's the idea behind iRent2u?
Roy Bacharach: The idea behind iRent2U, is it is the one place to rent anything online. If you can imagine millions of people renting and lending, and making and saving money, and getting more from what they already have, that's the vision of iRent2U.
What's the story behind the company?
Roy Bacharach: The original idea came from one of my partners, Nils Von Bothmer, who was getting his MBA. My other partner is Tim McCormack. Nils was putting some furniture together moving into school, and didn't have a drill. He figured, someone nearby must have a drill, and that there were probably a ton of drills a mile from him. But, he couldn't get access to one to rent, and had to go buy one. He figured there must be a better way to do it. He had the idea for the site. In his second year for business school he studied abroad in Spain, in Barcelona. There, he met Tim and I. We were all in the same entrepreneurship course, and the idea was built through the team. When the course ended, we thought the idea was really cool, and it was an opportunity to change the world and make a difference. We thought we could make a difference, especially in the area of the environment, as climate change is a big issue. We saw through renting an opportunity to leverage the assets of millions of Americans - billions of dollars - currently unutilized in garages and in storage. We could provide a platform to let people seek out from others what they need, to alleviate their needs and enjoy their lives, and not necessarily have to buy and ship items. Those are new products that don't have to be built. So we're starting small, and grow bigger and bigger, and hopefully in a few years we can see the kind of difference it can make.
How long did it take to go from an idea to a company, and why did you decide it was a good business to pursue?
Roy Bacharach: The idea just captivated us. It was really cool, and fun to work on. We had no more thoughts than that it was cool and a chance to make a difference. Addressing how long it took, the academic part of the project ended in December of 2006. We entered a business plan competition at Pepperdine, where Tim was going to school, and we won the competition, and received $15,000 as first prize. We took that to start the company. From probably around February of 2007 until now, we have been actively working on it, as much as humanly possible. We went through the design of the site, the build, and launched back on the 15th of November.
Mechanically, how does the service work for a user -- do they ship the product to someone when they rent, or do they pick it up?
Roy Bacharach: In terms of how this works, a user can go to a site and list their items. Right now, we have a little over 300,000 items listed. Some are available for pickup -- you can drive to an address to pick up an item, and others are available for shipping--mostly smaller items like books and movies. You can also download movies. The model really depends on the people involved, on whether they want to ship an item or deliver it in person, or if a person can go over to their place to pick up the item. It supports anything. We keep it open, and as flexible as possible. There's a myriad of ways people can conduct business, and they can figure it out themselves.
How do things like security deposits work--what keeps people from just making off with the stuff you are renting out?
Roy Bacharach: There are a number of ways to protect the lender. We have a security deposit system, and a contract with strong arbitration clauses. We're working with the American Arbitration Association, and we also have a rating system. Various lenders can provide insurance, as well. Our payment system leverages payments either offline, or online through Paypal. It has a very high level of security.
We assume your business relies on taking a cut of the rental fee?
Roy Bacharach: Exactly. It's free to list, and when I rent to you, we take a small percentage fee of each rental transaction. The renters pay to the lender, and they pay us, similar to the eBay model.