Privacy, Safety & the Future of Rentals with Nils Mattisson (Minut)

Jessica
Nils, thank you so much for joining me on the Pillow Talk Sessions podcast. I always enjoy speaking with you and I have done a number of times. So it's really good to have you on the podcast here. But before we sort of get into our discussion, what I'd love for you to tell us is how come an engineer from Apple has come into the short stay sector and now also the living sector. What was it that brought you into short term rentals?

Nils
So thank you so much for having me, Jessica. It's always a pleasure speaking to you as well. Yeah, so I must admit, like, I stumbled into this industry and I don't think I'm the only one, actually. For me, entrepreneurship came first. I was very lucky to get to work at Apple at the time when a lot of things were changing and particularly the iPhone came to be and it bred this ecosystem around it very quickly. And it just happened, I think, that a lot of us who were around that sort of platform formation, I had a lot of friends who were early on then building apps and new startups that were suddenly possible, and I wanted to do a startup. After a while, I wanted to do a startup.

I was at Apple almost for 10 years, and then, like, I really got that itch. And so I was looking for a place to apply an idea I had. And the idea was like, can you monitor a space with preserved privacy? And it had come from a conversation I had a few years earlier with one of the very first employees at Airbnb. We were both in San Francisco, met in a bar by chance, slight chance. He was brought by a friend of mine and they were on a date, sort of. And she sort of forewarned me, you know, like, and bringing this tech guy. Maybe you can.

Jessica
Crashed their date, Did you?

Nils
Yeah. Well, no, it wasn't, it wasn't like I was crashing it, but it was like there were a group of us and she was like, you know, I'm bringing this tech guy. You're really into tech. Maybe you can have a bit of a conversation. And I could. And we ended up having a very interesting conversation about a lot of things. But one of the things that stuck with me was that Airbnb really, even at that early stage, had an issue with people putting up cameras when they were renting out their flats or homes, which you could understand. This, I think, is even predating reviews, right? Like, you're bringing a real stranger into your home. And there wasn't a lot of trust and accountability. And so unfortunately this happened.

But you could see the guest point of view that of course, like renting a place where there is a camera, it's like a complete violation. And so I thought that was actually an interesting problem. Like how do you respond to that quite clear need from the host of protecting their property and protecting their home while providing the privacy that the guest rightly expects. And so I put these two things together and I realized, you know, hey, maybe this is a good place to apply this idea that I had. And that's what we did. It's been a long journey with some ups and downs, but that's really how we got going and that's how I got into the short stay world.

Jessica
So that sort of building the environment for there to be trust between the guests and the owners is what you've done here, haven't you? So for one. And reassurance as well, through looking at it differently, looking at it not as oddly seeing something that was happening that wasn't really quite right and finding another way of solving that issue, but at the same time then providing that trust and security as well. It's interesting to kind of look at problems in a different way.

Nils
Yeah, I felt like what we were enabling was a different kind of balance, right? Like before, there was a very binary choice. Did you have some level of monitoring? And if you did, it was most likely a camera and that was a complete invasion of privacy or you had nothing and you had to completely blindly trust that the guest would take care of your home. And I felt like there was this opportunity to create a better balance and you could draw that sort of slider, if you will, between these two extremes and find the right one, find the place that was right for the different stakeholders in the industry. Like what feels right as a guest, what feels right as a host, and maybe what's good for the wider community as well.

Jessica
So instead of cameras, what did you put in? So what is the solution that you guys developed?

Nils
So what we did that was unique was we took machine learning that could recognize events from sound, but we put it directly on the sensors, which meant that no audio had to be recorded or sent across the network. But they could still classify events like someone throwing a party or there being way too many people or even just it being. And so that was the combination of new technology on the sort of IoT side, connectivity, and then machine learning becoming a lot more accessible and possible to run on very small computers.

When we started Minut, that was actually a sticking point for a lot of our investors because the sort of wisdom was that machine learning required these huge data centers. And of course a certain type of machine learning does, and even bigger today with large language models, but it's actually quite possible to run neural networks on very small devices as well. And that's the insight that we had.

Jessica
You're not just in Airbnbs, you have grown beyond the traditional Airbnb to the wider short term rental space and then also looking at some of the serviced living sectors, I believe. So is the issue the same across those different asset classes?

Nils
Yeah, and I'm going to say this was actually a little bit deliberate. When you start a startup, you want something relatively narrow to start, something you can focus on where there isn't a whole lot of competition, but you also want to build something that can grow quite big. And so what I liked about this area of privacy conscious monitoring is that it eventually will be everywhere where there is a need to balance different stakeholders.

So I can see, for example, in a student housing situation where you have a similar type of dynamic, or we have some customers in senior living where again, you want a degree of monitoring actually for the best of the tenant, but the tenant again wants to have a degree of privacy, maybe not exactly the same as in a hospitality environment. And so it was at least semi deliberate that we picked a problem area that could be applied to many asset classes. But then it's really been sped up by the fact that the asset classes are coming together.

We have customers who do short term rental in the summer and then they do student housing in the term times. There is a mix of build to rent or multifamily, if you're in America, with short term. Maybe you are a developer, you're bringing a new building onto the market, you don't want to saturate the market so you're portioning it out and in the meanwhile you do short term rentals. So we've definitely been pulled on that journey, but it was one that we were maybe intending to do eventually anyway.

Jessica
And I want us to talk about that convergence of asset classes because that's one of the core themes that we talk about on Pillow Talk Sessions. But I want to ask you actually about the different customers. And I don't mean the property operators, I mean the tenants that are in student and senior living. Because often we can kind of be guilty of putting everybody in the same bucket. You know, they're all tenants or they're all guests. Whereas actually they're very different, aren't they?

Like they're a completely different demographic and customer group. And the needs of why you'd want to monitor a space that has students in it compared to the needs of monitoring a space that has senior residents in it will be very different. So, you know, the seniors, I'm going to assume, are not having parties. It might be other reasons, but then the students, it could be obvious to say it's parties, but actually there are different reasons for monitoring, isn't it, in the student sector? So can you tell me a little bit more about the nuances of the different residents and why you might want to monitor the space?

Nils
Yeah, and you're right, they are completely different. Because of course everyone should be able to throw a birthday party, right? This is not. The technology can of course be used to prevent parties, which is very important in the short term rental environment where otherwise you end up terrorizing your neighbors essentially because there's going to be a party every other week.

And so when you move to a longer term tenant, that's no longer the issue. You still have noise and nuisance, right? Like especially with students, there are instances of people maybe not being very considerate with their neighbors and playing music at 2am every day. But that's a different kind of thing to detect when it's like every day. Is this a pattern? Is this something that actually goes beyond the threshold for what we would call antisocial behavior? And so you need to dial in a little bit for what is right for your particular asset class.

And then there are some things which are just human, right? Like smoking, for example. You have a group of people who are very sensitive to it. If your neighbor does it and you share ventilation, which you do in a bigger building, one person smoking is another person's real allergy issues, right? And so that is going to be the same almost regardless of what the asset is or who the tenant is.

And then on seniors there is really a broad range already. And I should be clear, the seniors is not a huge business area for us, but we nevertheless have a few customers who are using the product in really interesting ways. And it's everything from relatively young seniors care, we're talking 55 plus, but often widows or widowers might be living alone. And what you're looking for there is really, is there a risk of a fall or some kind of incident that would lead you to want to check in on that resident?

So for example, our biggest customer in this is in London with five or six hundred of these types of apartments. What they used to have was a system where a nurse would come and check on a senior every day. And if you're 57 and healthy, that seems completely excessive, but you are maybe also living alone, you might actually need that. And so then they replaced that system with one that identified what we called I'm okay signals. Like, is there normal signs of life? Well, in that case the nurse maybe doesn't need to come. But it also means that there can be much faster response time if there isn't that signal that something actually might need to be checked up.

So that's on one end of the spectrum. And then on the other end, seniors who are quite unhealthy, they have a very low expectation of privacy. And that's not our business. But of course these kinds of things exist where you have a camera at the bed and someone actually viewing it. And that might be the right choice for that tenant. So you have a very broad spectrum. And I think the technology, everything is possible. The question is what is right for the tenant and how can we bring that about?

Jessica
So it's such a learning journey that you guys are going on, coming from hospitality into a totally different way of looking at things. And I actually think with you guys, with Minut, you're one of the rare few that are doing that journey from hospitality to serviced living. There's such an opportunity there because it's a huge, vast growing market. Build to rent, student, senior. But not many companies are actually yet doing the journey that you're doing.

What other learnings have you had around that convergence of asset classes? And what are your views about how realistic it is to see more of that convergence, whether that's from an operator perspective who might be operating in different asset classes or as a tech vendor servicing these different markets?

Nils
I think there are a couple of forces that are pushing this. One is just, and this is maybe the optimist in me speaking, but things get better all the time, right? Like the student housing that I stayed in when I was a student in Sweden decades ago is not going to fly today. That's not the standard that people are expecting.

So if we look at things at a pretty zoomed out timescale, we see that there is this expectation from customers, almost regardless of the market, going up. And the gold standard of service in a living environment is a hotel. So you are moving on that axis. Even if there's a long way to go, you're seeing more of it. You see more common areas, you might see gyms, common roof terraces and these kinds of things. I mean it is a community. And that is a response to demand from tenants. You're expecting more, you might be paying more than in the past, but you're also expecting more.

And because expectations are going up across accommodation types, they are becoming more similar. It wasn't that hotels didn't have beautiful gyms, it was that student housing never had them, and now some of them do. Suddenly they are moving in that direction. So I think there's this macro movement toward higher quality living.

On the other side, I think short term rentals have spurred a lot of innovation and tech by necessity. Because it's much harder to run a hundred distributed apartments across a city than it is to run a building with a hundred rooms. And so because that was hard, there was a lot of demand for tools. That's where you got this industry with a thousand different PMSs and operations systems and tools like smart locks and booking systems.

Those tools enabled guest booking online, digital keys, seamless check in, access to amenities, and efficient operations. And those same tools can be reused in multifamily. You might not need them as frequently, but the problems are similar. And where there are efficiency gains, markets will adopt them. So I think innovation from short term rentals will continue to trickle into other asset classes.

Jessica
There is so much to unpack in what you said, Nils. The hotelization of real estate, the expectation of service, experience, all of that is becoming part of everyday life. And I think the innovation from short term rentals, driven by necessity, is something that other sectors are only just starting to recognize.

Nils
Yeah, and I think also in the short term rental world it's so easy to get started. You can take your photos in the morning and have your first guest in the afternoon. Maybe you shouldn't, but you can. And that has led to an explosion of supply. Especially during Covid, there was oversupply.

And when you have that kind of competition, you need to differentiate. You improve guest experience because if you don't, your neighbor will. Whereas in long term rentals, the dynamic is different. There's not enough supply, so there's less incentive to compete on experience. That may change over time.

Jessica
Can we talk about regulations a bit, Nils, and the impact on short term rentals and long term rentals?

Nils
I mean it's really hard, but we can look at examples. There is new EU and UK legislation coming which will enforce central registers for short term rentals. That means you can't list the same property across multiple platforms and bypass limits.

In many cities we already have strict rules like 90 day caps or primary residence requirements. These were introduced as a response to rising rents. But short term rentals are such a small part of the housing supply that they don't significantly impact long term rent prices.

We saw in New York when strict enforcement came in, Airbnb listings dropped by two thirds. Rents didn't really change, but hotel prices almost doubled. That’s a supply shock.

I think these regulations, which were previously hard to enforce, are now becoming enforceable. That will likely reduce supply and increase prices. I hope I'm wrong, but I think travel in Europe will become more expensive.

Jessica
That creates quite a challenging outlook for the industry.

Nils
Yes, and it's basic economics. Reduce supply, prices go up. And combined with rising flight costs, it could create a double impact where fewer people travel altogether.

Jessica
I want to move on to technology and hospitality. Are they mutually exclusive?

Nils
I think technology is a tool that can be applied to almost anything. You have a bifurcation of the industry. On one side, you have efficient, convenient, affordable experiences like autonomous hotels. On the other, you have luxury experiences.

Technology will play in both. There are areas where it performs better than humans. For example, customer service. We've seen AI outperform humans in satisfaction scores in certain cases.

So I think technology will enable both automation and enhancement of luxury experiences. They are not mutually exclusive.

Jessica
Are there other areas in autonomous hospitality that excite you?

Nils
Operational efficiency might not be exciting, but it's key. These properties still have people, but they are used more dynamically. Instead of sitting at reception, they move around or operate from central hubs.

The more interesting area is guest safety. In fully autonomous environments, there are new safety concerns that the industry hasn't fully addressed yet.

Jessica
What would you see as being the solution there?

Nils
It comes back to balance. Privacy in rooms, monitoring in shared spaces, and fast response systems. We have strong fire and gas regulations, but beyond that, there's more to be done.

Jessica
So going further on what is expected of operators.

Nils
Yes, being able to dispatch help quickly in emergencies. If operations are more efficient, you should be able to provide faster response when needed.

Jessica
Excellent. Nils, to wrap up, what is exciting to you and Minut over the near future?

Nils
I'm a builder, I love building things. What gets me up in the morning is having a plan and getting a bit closer to it every day.

We have new products aimed at people running full buildings. That's exciting because it's a different level of intelligence compared to what we've done before.

We're also investing heavily in guest safety. That's something I've come to care deeply about. The unfortunate fact is that as a guest in a short term rental, you are not as safe as you would be in a hotel. And I think that's wrong. So that's something we're going to try to fix.

Jessica
Excellent. Nils, thank you so much for being a guest.

Nils
Thank you so much for having me, Jessica, thank you.