Yonsei News

If we need to be away from home for a break or personal reasons, we would often turn to our relatives living in the region or search the lodging websites. Visiting the real estate office would not be the most preferred method in this case. Indeed, there was no place for "short-term rentals" in the real estate market. However, that does not mean that the other alternatives were reasonable in terms of cost. In response to this need, alumnus Park Hyung-jun was the one who created a new paradigm of short-term rentals in the Korean real estate market. Park launched 33m2, which has now become Korea's leading short-term rental platform and has grown rapidly.

Finding My Calling in Real Estate

"I've been interested in business and entrepreneurship since I was a kid, so much so that whenever I was asked to write down my dream in school, I would always write ‘entrepreneur.’ I used to collect and trade stamps, and I also enjoyed playing games like ‘Uncharted Waters,’ which I would play all night. I think I was interested in the act of buying and selling and making a profit. That interest led me to study business administration as a minor at Yonsei."

Although Park majored in urban planning and engineering, it was not at all surprising that he would conceive and execute his entrepreneurial ideas. After graduation, he joined a large corporation, as many do, but he always knew that he would start his own business one day.

"Starting a business wasn't as common then as it is now, so I experienced various things working as an intern while I was still in school. I even sold sandwiches in front of a women's university as an intern assignment. After graduating, I joined a large corporation, but I still thought a lot about startup ideas. I knew I wanted to start a business, but I didn't know what I was capable of. And one day, I came to the conclusion that I should just do what I wanted to do, so I decided to quit."

Though Park was content with his corporate life, he realized that continuing on this path wouldn't allow him to pursue his true aspirations. This realization led him to quit his job after four years to start his own business. Park did not quit with just one business idea in mind; he spent considerable time thinking about his career path and startup idea. During his time of contemplation after leaving his corporate job, he had the opportunity to experience the real estate market by helping his cousin, a real estate agent in Gangnam. The experience taught Park the charm of the real estate market.

"I was thinking a lot about what kind of business I wanted to start, but I thought it would be helpful to have something related to my major. Frankly speaking, there aren't many businesses associated with my major. Urban planning and engineering deal with cities and policy, but that's the job of a small group of people who make the rules. Graduates in this major would instead tend to work in asset management, such as real estate investment. So the other side of that was, ‘What are the things that large corporations can't do?’ In real estate, brokerage is a very personalized and localized market. So it's a very difficult market for these corporations to enter. Thus, I saw an opportunity here, which led me to start a real estate business."

Discovering the Potential of the Short-Term Rental Market

Before founding SpaceV, Park had first-hand experience in various areas of the real estate market. After obtaining a certificate as a licensed real estate agent, he gained experience in real estate-related fields such as offline real estate brokerage, shared space rental, auctions, and sales over 10 years. During this time, something caught his eye as having the greatest potential. In an overheated real estate market, one might wonder what blue ocean is left, but in his experience, the Korean real estate market was missing one major demand. That was none other than "short-term rental" demand. Unlike Korea, where tenants typically sign a two-year lease, short-term rentals are already a common real estate product abroad.
 
"When I first experienced real estate brokerage in Gangnam, the demand for short-term rentals far outnumbered those for subleases and leases. However, a lot of people don't find themselves in a situation where they need a short-term rental, so this was an area that was not developed. In a way, it's a no-brainer. If someone needs a place to stay for six months, they only need to sign a contract for that amount of time. But it's even weirder that the tenant is forced to sign a two-year contract when one only needs three or six months. It's only reasonable and natural to sign a contract for the period of my need. However, the existing market was not able to accommodate this demand because it was customary to have a two-year contract, whether it was a rental or a lease. And that led to the thought, ‘What if we could have tenants who wish for short-term rentals and lessors who want to lend their properties freely enter into contracts?’"
 
Park saw a blue ocean, a new possibility when he saw that even in a market stuck with a pre-fixed system, there was a demand for short-term rentals. The limitations of the real estate market also caught his attention. The market was fragmented and driven by individual brokers rather than a systematic organization. Some aspects of the market were also underdeveloped compared to heavily capitalized industries. With that, he was convinced that if he could build a service that could address and overcome these limitations, there would be new opportunities.

This led to the launch of 33m2, an online short-term rental platform. 33m2 is an online platform that makes it easy for people who need a place to stay for a week or more to find and secure a short-term rental. The name was conceived because of the high demand for short-term rentals of studio apartments of around 33㎡ (355 square feet) in size. 33m2 is a different kind of 'rental business' from lodging platforms like Airbnb, Booking.com, and Yanolja, allowing users to rent at a much more reasonable price.

Service in Demand: Anytime, Anywhere

Park’s prediction was accurate. There has always been a demand for short-term rentals. There is significant demand for short-term rentals, including business travelers to other cities, students studying in Seoul during their vacations, people needing temporary housing when their move-in and move-out dates don't align, those hospitalized in a different area, expatriates returning home temporarily, and individuals looking for a month-long stay or a 'workation.'

But from the lessor's perspective, are short-term rentals attractive? Why would lessors be willing to enter the short-term rental market when they have the security of a two-year contract? For lessors accustomed to face-to-face contracts involving large sums of money, 33m2's identity as an online platform proved to be a limitation. For Park, this was the hardest part.

"It was very difficult to secure the lessors. At first, I did not have a choice. The only way was to visit them one by one and convince them. I had to give out flyers as well. You would often come across flyers with rental inquiries. I recall visiting every university in Seoul and calling every single number written on the flyers. There was also a stigma around short-term rentals. However, from a lessor's perspective, short-term rentals not only have a higher monthly rent than long-term rentals, but they can also be used in conjunction with long-term rentals to minimize vacancies. It's also faster and cheaper when compared to signing contracts with a real estate agent. I persuaded every one of them, and as the number of transactions made on the platform increased, I think the experiences have steadily accumulated. It's a tough decision to make at first, but I think more people have confidence in the 33m2 platform. There is demand for short-term rentals in every neighborhood, and there are interested lessors in every neighborhood."

33m2 currently exceeds 1 million cumulative app downloads and has grown rapidly since achieving profitability last year, establishing itself as the largest short-term rental platform in Korea. As the short-term contract market has been revitalized through the 33m2 platform, both lessors and investors have come to recognize 'short-term rentals' as a viable product in the rental market. For users, it's a great option to rent a home for a few weeks or months at a reasonable price, rather than a long-term lease, hotel, or Airbnb stay.

Securing Credibility to Revitalize the Short-Term Rental Platform

There are concerns about the credibility of signing a lease through an online platform, especially since it involves a fairly large amount of money. However, the reason 33m2 can grow while gaining trust is that it provides various safety measures.

"It's just like delivery services. We all know that taste and hygiene are important, but delivering food has become natural these days. It's like a social belief. And there is a perception that even if there is a bad case, the issue will be resolved by the platform operator. I think that's what makes it more socially credible. This is even more so for 33m2. Instilling trust in contactless contracts is at the core of our service. We have the operational know-how to make it work safely. I think the most important thing is to continue to increase our credibility, even if it doesn't satisfy all of our customers 100 percent."

The service principles, such as 33m2 holding the deposit and rent, paying the lessor once the move-in is confirmed, and boldly suspending users in cases of bad lessors or tenants, illustrate his belief that securing reliability is the key competitiveness. Setting a deposit of KRW 330,000 for all contracts has also been cited as a factor in reducing risk and making it easier to accept online contracts. With the short-term rental market on the rise, one might wonder if there are currently any targets or trends that Park is focusing on, but he wishes to stay true to his roots as a platform.

"In fact, we are not very interested in the increase of certain target groups because there are plenty of them already. It's not a market with a shortage of demand; it's a market with a shortage of supply. We're seeing a lot of younger, more online-savvy customers, but overall, there is growth across all age groups. Our main users are in their 30s and 40s, followed by the 20s, 50s, and 60s, but the percentages don't change much. It's a service that people of all ages need. And if you consider what people are looking for, it's nothing special. They're just things that we care about when we're looking for a house. Whether it's parking, air conditioning, or how many rooms there are, we're not aiming to be a special service, but rather an ‘essential daily service.’ It's just a typical rental market and that's the basis of it. Initially, we focused on marketing to one target group, but we realized it wasn't effective. I think short-term rental itself is the most efficient marketing strategy for developing our service."

From Alumni to Business Partners: Synergy with a Trusted Ally

As Park founded the company and launched 33m2, he did so with the help of a trusted partner, alumnus Lee Jae-young (Urban Planning and Engineering, Class of ‘03), who is a co-founder and in charge of marketing at 33m2. In fact, 33m2 is not the first business they co-founded together.

"We had co-founded a dating app startup in the past. I had left my job and was looking for a career path, and he reached out to me about starting a business together. We both worked for large companies and shared aspirations to start a business. We both worked for large companies and shared aspirations to start a business. However, we weren't that close back then; it was more like acquaintances (laughs). We launched a dating app, and there were six of us on the team, and we were the first two to quit. Soon after, we reunited to form 33m2."

Barely knowing each other, it might seem odd that Lee would reach out to Park to co-found the company. The answer to this might provide insight into their teamwork and the growth of 33m2.

"I don't really remember (laughs). We didn't have a shared experience as students, like doing group projects or simply studying together. However, from time to time when we were together, I remember it was really fun. So I thought, ‘Well, I'm going to be working eight hours a day anyway, and I might as well have a little bit of fun while I'm doing it’ (laughs), so it's kind of an affirmation of his character as a good person."

At first glance, the two of them have contrasting impressions. Park is the calm type, while Lee is the dynamic one. There are many challenges to face as the company grows, but they seem to enjoy the process because of their strong desire to lead and build a successful business. Together, they can create synergy in their respective areas.

To Grow Quickly, To Last Long, To Work Joyfully

33m2 pioneered new areas in the real estate market, creating a new paradigm as an online platform. Now, Park is also turning to overseas markets. On this matter, he asserts that there are definitely plans in progress.

"We're actually working hard to prepare ourselves because a lot of people who use our service are traveling from far and wide, like business travelers, for instance (laughs). On the other hand, some demands are localized within a specific geographic region. Most often, people are looking for a place to stay while their houses are being renovated. These people would have to find a place in the vicinity. I think there are a lot of ways to do it. We can take our current service model and find local providers, or we can be like Airbnb and have one service provided for all countries. We are preparing by reviewing various options."
 
However, what Park ultimately wants to achieve is to have fun while building on the foundation of growth. Above all, he wants 33m2 to be a service for the entire country.

"We need to grow faster while staying true to our current services. It's not a service that everyone knows about yet. In the long run, we don't want to do anything extravagant; we just want to be a company that builds good services. I wish to build a company that is recognized for its service that many customers can use and be happy with, and a place where people I work with can enjoy as well."
 
SpaceV's motto is "Connecting homes and people safely and conveniently." In a way, it's a given. However, as a company that has already expanded the market and created new value, it is only natural to expect that Park will continue to build on this seemingly simple motto, further enhancing our lives by making them easier and more convenient.