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The Room Xchange Podcast Show is produced by the Ambitious Entrepreneur Podcast Network, a partner of The Room Xchange. Anne-Marie Cross is the host of this episode. Anne-Marie does a deep dive with the CEO and Founder, Ludwina Dautovic, on what The Room Xchange is all about.
Anne-Marie Cross: Welcome to episode one of The Room Xchange. The platform that’s changing the way we live. Did you know that we have a housing crisis? Not only in major capital cities across Australia, but also worldwide. Millennials have inherited the high cost of living, yet their income hasn’t increased to match it. And households? Well they are more stressed than ever because they have to work so hard to maintain their lifestyle. Did you also know that according to finder.com there are 7 million homes with a spare room in Australia. And you know what, that’s where The Room Xchange comes in.
The Room Xchange is an online marketplace that connects busy people who have a spare room, with guests who are willing to have a couple of hours around the house help out each day in exchange for food and accommodation. It’s taking the sharing economy to the next level. Connecting people who want more out of life with the resources that already exist. It’s a win-win for all.
Now, I’m your host, Annemarie Cross. Let’s welcome CEO, and Founder of The Room Xchange, Ludwina Dautovic, to tell us more about her amazing new business venture.
Welcome to the show Ludwina.
Ludwina Dautovic: Thank you Annemarie. That was such a lovely introduction. I really appreciate that.
Anne-Marie Cross: Many people don’t realize just how worrying the housing crisis is, not only here in Australia, across capital cities, but also the world. Let’s share a little bit more about this first, because this was, I believe, one of the reasons why it prompted you to set up The Room Xchange.
Ludwina Dautovic: Yeah, absolutely. I had two adults who were then, one’s 25, one’s 22. The eldest one left home at about 22, and my youngest is about to. And so I’ve gone through that entire process with them of trying to find a way to live independently outside of their parent’s home, but in a way that they can actually afford it. And, it was sort of something that they just kind of prepped, you know. It wasn’t really something that I was completely aware of until we started to have some of their young friends who were adults, were travelling or just needed somewhere temporary to stay. So, we offered up our home to them to come and stay, and that was sort of essentially how The Room Xchange started. And we can talk about it in detail a little bit later, but in terms of the housing crisis, and how it’s affecting particularly, well not only, but particularly the millennials. It’s actually quite impacting in a number of ways, and I really believe that if we don’t start to find a solution for that within the next 5 to 10 years, we could have a big issue on our hands.
Anne-Marie Cross: When you think of the cost of living, besides considering rent in homes and so forth, just the cost of living is certainly increasing as well, and I can imagine the pressure that it’s putting on all these millennials, and even homeowners too. It’s just incredible. Let’s talk a little bit about the sharing economy first because many people may not be aware of that term. I believe that the sharing economy is the fastest growing economy in the world, and it is expected to reach 335 billion dollars by 2025 in the U.S. alone.
Ludwina Dautovic: I know, it’s pretty phenomenal when you look at it like that. It’s very interesting to observe and notice how economy is changing, and again, I’ll talk about the millennials because I really believe through our research that they’re one of the key drivers in the sharing economy. And essentially, what it is, is it’s a form of collaborative consumptions. So it’s the idea of looking at resources that already exist, and utilizing them, as opposed to recreating them. So if you look at, you know, young adults today, their values are very different. They’re very much into caring for their environment, not wasting things. They’re not interested in working at a job for 30 years that they don’t like, so that they can have the great dream of owning their own home. They’re more interested in travel and experiences, than they are in pinning themselves down. But, they’re also very interested in, you know, when you look at the environment, part of looking after the environment is not creating new products, or new items to fill up a house, for example, when we can go and share it in somebody else’s. So that’s the idea of it, and I think that’s a big drive up, is also when we look at the high cost of living, and looking at ways to minimize our cost, and you know, one of the things I’ve been thinking about is, I’ve been observing how little I drive my car. I work from home, so I don’t really need to use it a lot, and my husband has a car as well. And I’ve actually been thinking about how better it might be to just get Uber’s everywhere. Not just for the fact that I really don’t have to have a car at my disposal, but it minimizes the cost, it minimizes the ways to utilising a car that’s already there, and if I did the numbers, I’m pretty sure it would be more than half the cost of owning a car.
Anne-Marie Cross: Absolutely, and as we know, I mean, Uber in itself is very much part of the sharing economy too, isn’t it?
Ludwina Dautovic: Absolutely. I think that a lot of people look at Air BnB, and Uber as being the forerunners. Air BnB mainly, I really want to give credit where it’s due there, because they have…they’re the ones that have invested the money and the time in educating the market to understand the idea of having someone random that you don’t know, stay in your house. And if you think of that, Air BnB’s been around since the late 2000’s, but we really only started hearing about them in Australia probably about 4 or 5 years ago, and it did take a while to educate the market, and they’ve done that. So it means that part of our conversation doesn’t have to be explaining the idea of that, it’s just that there are a few questions in general that pop up. But usually it’s like, ‘oh yeah, it’s kind of like Air BnB’, and I’d say, ‘It’s like Air BnB’s the barter’, and they’d go, ‘oh, ok that makes sense’, as opposed to having to go through the entire conversation and explaining how it would work. But it’s really quite interesting. A lot of times I find myself Annemarie, saying to people, ‘I’m not sure if you’re of that age but I’m 50 and when I was younger and single, and living on my own, we used to see a, you know, like an A4 poster up at the local supermarket community board with a bunch of tear offs and with phone numbers at the bottom that would say, ‘looking for a flatmate’, you know, the area location. You rip the phone number off and then you’d go and have a coffee. Probably not even that. Actually they would come directly to your flat. You’ve never met them before, you’d meet them, you’d have a chat, then look at their room and go, ‘yeah you look alright, ok you can move in’. I used to do that all the time. Isn’t it funny, isn’t it? It’s like, when you think about it. And then, you know, sometimes you have all these people having questions around safety and security, and I’d think, ‘well did you ever have a flatmate’? It’s really no different to that. But I guess it’s just because, you know, sharing economy again, has brought up, you know, things that we need to consider, like safety, security, insurance, and things like that. But essentially we’re in marketplace. We’re kind of like a dating for accommodation, I guess. Someone just said recently, you know, ‘we create the marketplace to match up the host and the guests so that they don’t have to go, you know, seeking, and looking for that themselves. So, the sharing economy is really creating a lot of those peer-to-peer platforms, which is essentially what we are, and that’s what Air BnB does, and you know, Uber with their app, and you know, I love Uber. I love driving around in cars. I actually want to drive around in Uber one day, and record everybody’s stories. ‘Cause you know those drivers have got the most fascinating stories.
Anne-Marie Cross: Yeah, and we know you have certainly got a fascinating story in how The Room Xchange came about. I know you’re going to share about that in a moment. In an actual fact, we were talking about the sharing economy, we’re talking about The Room Xchange, and the business now is up to date, self funded because you believe in it so much, don’t you?
Ludwina Dautovic: Yeah, absolutely, and I think that what we’re doing is we’re developing a global community here, a global company, and to do that, requires, you know, substantial investment. And for people to..or investors to feel confident in investing in us, they need to know that we’ve got some skin in the game. So, you know, that’s sort of where it all starts. Do we believe in it enough to back ourselves? Yes. So, we re-mortgaged the house, and you know, we were debt free a year ago, but you know, we’ve gone back down that route, which is you know, in it and of itself is a great opportunity to have that we have that asset so we could do that. But, you know, we have put a lot in it. Not just the money that we’ve invested, but our time, other people’s time, that have committed to it. That we’ve hired, and you know, so much more that’s gone on in the background to develop it to where it is today, and the fact that we’ve just officially launched it this week. So, it’s been 12 months and it has been great.
Anne-Marie Cross: Fantastic! Congratulations. And I mean, you’ve been in business before, and tech businesses too, and so, you know, this certainly, creating a business, and a successful business is certainly not something that you’ve not done before. In fact, this is your fifth business, isn’t it?
Ludwina Dautovic: Look, I’ll just clarify that. It’s the fifth tech company that I’ve invested in. So, I’ve invested in four other tech companies, and that’s been a passion of mine over the last, I’d say, 4 or 5 years. My husband and I are at the next stage of, I guess, you know, our financial planning was to invest, and so, because I had a good understanding of…yeah so it’s been because I’ve been working for myself for over 20 years, and there have been…I stepped into tech…I was in analog, so back and forward technology. You know, the Internet and, you know, smart phones, and all those devices came along. I was producing TV content in the analog days when we used to record on tape. So, when we were going from producing TV, and you know, other video type production work at that stage, and running media programs in schools, and then I moved into falling in love with technology and then develop various different businesses within that space. And because I fell in love with that, then it was the next logical conclusion to get more involved in, you know, some really serious tech startups, and that’s when I developed an interest in investing in tech, and through that I got to, you know, work very closely with the CEO’s of the company. Because I feel that in order to be a good investor, you need to be helpful. So, I offered my help and the result of offering that help meant that it opened me up to opportunities, contacts, connections, and also understanding the process of what’s required in establishing and setting up your own startup. And so the next logical step, particularly when, you know, as a result of me living this way, and so many people saying, ‘it’s a great idea’, and I’m one of those people that, I’ve always. When I hear, you know, four, five, six times, that something I’m doing is a great idea, I research it, and nine times out of ten, it usually ends up being a great idea, and that’s what we’ve done in this case. And I guess at the stage where Harry and I are at in our life right now, it’s like, well what do we really want to do in the next five to ten years? Good hard push, you know, creating something that’s going to be a great legacy, and that the fact that this really is going to change the way that we live, and it’s going to change, you know, society. A world as a whole, globally, because it really is. It’s bringing the bigger world to the most intimate place of all, which is your home.
Anne-Marie Cross: Absolutely, and of course you mentioned Harry there, and Harry is your husband.
Ludwina Dautovic: Yes, yes, my counterpart for twenty five years, nearly, we’ve been married. But yes, it’s…Harry has his own business so he’s the one that’s responsible for paying the bills and putting the food on the table, you know, while I’m slogging away at developing The Room Xchange and getting it to where it is. We’re very much partners in business, and in life, and yeah, and we’re very good friends too, so I’m very happy to have him around.
Anne-Marie Cross: Fantastic! So you mentioned that you’re drawing upon these experiences. You’ve been working closely alongside CEO’s of, you know, really successful tech businesses, and so I’m sure you’re using all of what you’ve learnt really now, to drive The Room Xchange. You’ve already shared a little bit about your story of how the roomxchange.com has come about. But, let’s just talk a little bit about the time that you went from having someone in your home, to then, ‘you know what, we’ve got an incredible business idea’. Share a bit more about that.
Ludwina Dautovic: I guess it just goes back to, you know, when I pay attention, and I listen to things that I hear. I don’t always get them straight away. I go away and I ponder. And, Harry and I were having a conversation one night in the kitchen, and we were just sort of, you know, chilling it out, and Harry actually said to me, he said, you know, ‘so many people have been telling us this is such a great idea, you know’, and I said, ‘yeah, I know’, and then he said, ‘I think this could become a global business, what do you think?’, and I said, ‘yes’. And this is the funny bit, he says, ‘do you think you could do it?’. I said ‘yeah, if it was between the two of us, I think yeah this one had probably be the one that I’d do’, and I said yes, and then we sort of, yeah we analyzed it, and discussed it, and looked at really putting some planning and thought into it before we decided. But that’s the moment that we decided that really it just…Guillaume has been with us for 18 months. He’s French Canadian. He’s been here on a work visa. He’s actually going back next week, which we’re very sad about, but the process of having him here is, I think about our fourth person that we’ve had on our exchange really solidified the process of it, I guess for me in more of a strategic way. We’ve had…when the idea first really happened, it was. I have a belief in giving people a hand up, not a hand out. I don’t think that just giving some cash to someone, for example, who needs it is really helping them. But, maybe inviting them for dinner would be better. You know, that’s what I mean by hand up, not a hand out. And so, when we’re having these people coming to stay, they come for a short while and then you say, ‘well you can stay a bit longer if you like’. And there’s a difference between opening up the fridge and grabbing a sandwich for yourself, or asking if you can have one. And what I wanted to do was make them feel comfortable enough that they could just open up the fridge and grab something. So, their contribution to the 2hrs a day to help me, was the equivalent of them actually paying for their rent and food, in terms of our equation of the value of what they were giving, living in this beautiful middle class house that we have. And that’s sort of how it begun. And then I noticed that they felt a lot more comfortable, felt more at home. And the change had shifted the energy around how we were all relating with each other in the household. That bit more sense of ownership, responsibility, care, contribution, and that’s what really made it start to work. And so we sort of followed that on, and then with Guillaume, it really anchored that more. And because Guillaume was long term, for 18 months, and the other one’s have been, you know, sort of a few months, three months, that kind of time. He’s also really become very much a part of our family. To the point where he calls me ‘Ma’. And occasionally he calls me Ludwina, and I’ll go, ‘who’s that?’, you know. It’s like when one of your own children call you by your first name, it’s like, ‘oh, that sounds so wrong’. In hearing what’s happened to him in that…when he’s actually, he’s been kind enough to let us film some videos of him talking about his experience being here, that we’ve been sharing on our social media. And it’s just really lovely. And some of the key things that have come out for him is that he has a second family. He feels like he’s had somewhere to belong. He’s felt at home. His parent’s have been so grateful, and have felt so comforted knowing that he has this environment here, while he’s here. He’s learnt so much. One of the things he said he’s learnt so much about is about his emotions. Because of how we are as a family, you just can’t be around us, and anyone who knows me will agree, it’s like, you’re going to get a hug anyway, you know, it’s just how I am. So he’s, you know, he’s really opened up a lot more, and sort of learnt to…oh well, recognize small things about himself. And on the flip of that, which is just been a recent realization, which has been something that’s been very lovely to recognize, is that when you have your own family dynamic, or your own household dynamic, you all have a way that you end up communicating with each other, it’s…I wouldn’t call it a rut exactly, but it’s your rhythm, it’s your pattern right? And to the point where, you know, if you have a household with kids, or…we got adult kids, for example, you know, Harry and I could be having a little tiff in the kitchen, or something like that, we don’t even think about it, you know, because you know, our daughter says she’s 22, you know, it’s like it’s nothing. But you start all of a sudden thinking about how you are presenting yourself in front of other people. It was so funny, the first time I realized that, and I went, ‘Harry, in the bedroom, let’s work it out there’. It was so funny. But, you know, I mean, it’s got to the point now where Guillaume’s sort of one of the household, and that sort of didn’t last very long. But, I guess the point I’m trying to make is, is that it breaks up your pattern, and it breaks up your rut, or your rhythm that you’ve got yourself into. It starts to cause you to think about how you are in your household and amongst other people. And then it challenges you on that, and then it’s like, ‘oh ok’. So you’ve then got to consider other people that’ll consider you, and I think it’s a really healthy thing to do.
Anne-Marie Cross: Yeah, absolutely. And you know, this is, you were saying that with your current guest, that’s your fourth or fifth?
Ludwina Dautovic: Fourth.
Anne-Marie Cross: And so, you having had experiences of having other people in the home, you from firsthand knowledge and experience, have, I would imagine really been able to pinpoint now, being able to step back, what really works, you know, when certain parameters were in place that benefits both parties. And I would imagine as you were sharing that story, from a parent view, also has young millennials, if I was to send them overseas, or even into state to study or to work or what have you, knowing that they were in a home who, you know, with parents or with people who really had same values, and were there to really support, will be such a relief from my mind. I would imagine that that’s the same for his parents too.
Ludwina Dautovic: Oh absolutely. And there are so many parents who would, like, at the moment saying, ‘oh my gosh, this is a godsend’. Because of the cost of housing for university students, it’s ridiculous. And there’s not enough housing for them. And we need international students over here because they pretty much fund the universities. Without them they would close up. And where’s the housing for them? And the cost of housing for their parents to pay for them to come here. I mean, this is such a great win-win. And I think the key thing here with too, particularly, with you know, when you’re talking about having young adults as children, is that, the difference is that they have to contribute a couple of hours a day. So, even if their parents were paying for the, you know, for them to access the marketplace, which is minimal anyway, but let’s just say they were, the person would still have to contribute around the house, which I think is great learning skills for them as well. It’s almost like, I see it as like a great Segway in between leaving home and being completely independent. Yeah, without all the costs. And that also gives them an opportunity to, you know, save up some money. Put it into their own pocket, and maybe it might be their dream in a year or two down the track, when they finish uni, or you know, after they travel. Whatever it is, or where they’re at, it might be just their dream to set their own place up. That they’ll be able to afford that then. Which means they’re not staying at home longer, which means that they’re maturing at the right time. And you know, and that’s another thing..now this is the parent coming out of me now, but I think children stay children longer if they stay home longer.
Anne-Marie Cross: I was just going to say, when children move out of home, there’s a mental shift, isn’t there? That they take more responsibility for what they do, what they say, and yeah, they really do need to take responsibility, and they do want to contribute. ‘Cause quite often, even as parents, we don’t see that we’re actually limiting them from doing things because we may just been part of what we do for them, and the…
Ludwina Dautovic: The household rut.
Anne-Marie Cross: Exactly! What a great way to build up our young adults.
Ludwina Dautovic: Yeah, and it’s sort of like, you know, it’s also, I want to be clear, it’s not just millennials in terms of our guests that we’re looking at. But I say this, I very much care about that generation and that’s why in my mind, you know, anyone that’s listening in that age group. Sorry about the tag in millennials, but you know, when we’re talking about, you know, a generation, you know, baby generation and why it’s the sort of 18-30 year olds that I’m talking about, ‘cause I really want to give you the opportunity to have your independence. You know, and I just think that this is a great way, and if you don’t find a solution for them in the next ten years, you know, what happens when people don’t have somewhere to live? And they can’t afford to live? It’s just awful. But, you know, and then also, when you talk about how they’ve inherited, you know, the high cost of living, it’s through our negative gearing, through our inflated cost of housing, just with what we’ve purchased. The purchase prices we’ve paid for them. You know, there’s so many different reasons why that’s the case, and I think that we need to start to think of really creative ways of living. But then on the flip of it, the host side, you’re looking at, I say middle class housing because as a business person you need to really identify who your target market is, and there’s backpackers around, there’s all sorts of various different places. You cater for a lot of different groups, so we look at is as that, it’s just, you know, ones that have got this sort of nice houses that are costing a lot to maintain their lifestyle, and which usually means I have to work very long hours. And it’s got a spare bedroom there, and they don’t have much time. By the time they, you know, get home from work and, let’s say they’ve got kids, get home from work and pick up the kids from after school care, and then go to the supermarket, come home, cook, clean up, couple loads of laundry, get kids ready for bed, bathed, maybe help them with their homework. Prepare them for the next day. It could be 10 or 11 o’clock before they even get to sit on the couch and have a breather, you know. But, even if they didn’t have children, even if they’re just busy professionals, they’re still working long hours to maintain a lifestyle, and it’s just kind of like my day ends when I finish my meal, ‘cause I cook. I’m the cook in my house, it’s my kitchen. But you know, by the time I finish cooking, the kitchen’s already clean. By the time I sit down and we’re eating, all we need to do is just clean the plates and the cutlery on the table, and turn the dishwasher on. I don’t do anything else after that on any weeknight. And I don’t spend all day Saturday, or all day Sunday anymore, doing grocery shopping and cleaning the bathrooms, and things like that. So, I actually have my time back to spend doing the things that I love, being with the people that I love. My hobbies, my friends, or just relaxing, you know, and that’s where the value is there for the host. So it’s such a great win on both sides.
Anne-Marie Cross: Yeah, and I would imagine then too, there’s expectations that have been set, and solid expectations but that’s supportive, it’s a win-win, as we said earlier, for all that are involved. And I would imagine looking back to when you had to do all of that, to now where you do get to rest and participate in family, you know, sitting around the table and having that chat. When we are stressed out, we often..that get’s left to last, or sometimes we never get an opportunity to do that. I’d imagine looking back to where you are now is just amazing, yes?
Ludwina Dautovic: Oh absolutely. Yeah, it’s just such a different way of living, and the beautiful thing about it is that everybody equally benefits. One of the things that we really adhere to is, making sure that the amount of time that the guest exchange is fair for the value of what the host is contributing as well, both sides. So it’s well worked out in a couple of days, so it’s not slave labour, it’s a very fair arrangement in, you know, keeping a very close eye and making sure that everyone is treated fairly in regards to that. But you’re right, it’s like the feeling of the household is just so much more relaxed because we just don’t have to worry about everybody, sort of knows what their role is. Everybody feels valued in the household, and we compromise, you know, a lot with that. There was a time where Guillaume worked, oh probably four or five days a week. He got some work in a truck, and we had to leave very early, and then he got back at about 4 o’clock in the afternoon. So, we just sort of worked around that, and said, ‘well ok, how about you just, you know, do this in the night time, and then on Saturday, or Sunday we just catch up on the other stuff’. We just worked around his schedule, and that was completely fine. But that’s all part of relationships, you know, you work and you care for each other. And we’ve had a couple of people recently who’ve signed up, who work night shift. You know, we get people from all different work situations, or different lifestyles and stuff. It’s just a matter of, you know, if you’re going in and answer the questions that we’ve got in the profile section, providing us with as much information as you can, then allows us to be able to match up, you know, the right household, hostel guest for you. So, it’s really good, so there’s no one, you know, right way to work this. It’s just that some people might be students, some might be travelling, some..you might have someone who’s a traveller, for example, who might want to go hard for three days, and then go on the road for four days. You know, so it’s just a matter of, you know, working out on what works best for you, and then us finding the…helping you find the best match, and then going from there.
Anne-Marie Cross: Yeah, and it’s a, as we said, it’s a win-win for all parties that are involved. It sounds as there’s a process that you follow for potential hosts, and of course for potential guests too. And once you get the right information, which you obviously gather, then you’re able, as you said, to be able to match the best guest with the best host. And I know with the further shows that we’re going to be sharing with people, we’re going to dive a little bit deeper aren’t we Ludwina, with benefits of being a host. What you’re looking for, who’s going to make a great host. Benefits of the guest. I mean, we’ve already covered some of that today. Who you’re looking for as a guest, and who can be a guest as well as, of course being a partner with The Room Xchange, and of course we’re going to cover those people who want to invest in The Room Xchange as well. I know you’ve started the Beta program, for people who have listened to episode one, and they want to head over there and find out more, ‘cause they think, ‘well, this is just the right thing that we were looking for’, how can they get in contact with you and find out more?
Ludwina Dautovic: Well, just head over to theroomxchange.com, and that’s the letter ‘x’ change.com. And just register an account there, and go from there. We’ve got some video tutorials and stuff there to help you to build the best account profile that you can. You’d be about 20-30 minutes to do that, but you can do it in chunks as well. But that’s just to give us the right kind of verification, information and, you know, also your preferences, and just your general information. But we’ve actually, for the first one hundred guests, and the first one hundred hosts to sign up, you’re going to get to use the platform for free in 2017. So, if it’s something that you’re thinking about, get over there now. You may not use the platform for a little while, but at least create your profile, and then once you’ve given us the information in there, then we’ll have a look at that and give you a call and we’ll take it from there.
Anne-Marie Cross: Fantastic! So the next episode, what we’re going to talk about, are the benefits of being a host, who you’re looking for in the host of The Room Xchange, and it really is changing the way we live isn’t it Ludwina? The Room Xchange really is changing the way we live, and it’s set to take the sharing economy to a whole new level. To find out more, and to join The Room Xchange program just got to www.theroomxchange.com and remember that letter X. You can also follow The Room Xchange on all of the social media platform. Just search for The Room Xchange.