‘Not having the money forced me to be creative and resourceful’: how SpareRoom flourished on a shoestring

Rupert Hunt, CEO of the house-share website, tells Zlata Rodionova about growing a business without funding, taking in lodgers for a dollar a month, and and what it takes to find the perfect flatmate

On top of the world: Hunt's business turned over £10m last year (SpareRoom)

More of us are sharing our homes for longer and if you have ever needed to find somewhere to live – and fast – chances are you trawled SpareRoom for flatmates.

Set up in 2004 by Rupert Hunt, then just 29, the website now has 12 million registered users and nearly 90 employees across the UK and the US. In 2019, the company turned over an impressive £10m.

Hunt, who is now 44, set up SpareRoom with £5,000 borrowed on a credit card and no external investment. To this day he reckons it’s one of the best business decisions he ever made.

“I’m not a big fan of this kind of tech culture these days,” he says. “There’s this obsession and focus on getting investment but it doesn’t always mean success.

“Getting the money is the easy bit, the hard bit is actually doing something constructive with it and not wasting it.

“I’m fairly convinced that if I had the money at the time, I’d probably spent it on obvious stuff. I’d have bought an advert in the Evening Standard for example, which would have probably cost me a fortune without any results. Whereas not having the money forced me to be creative and resourceful.“

Originally from Cheshire, Hunt dreamt of being in a rock band and studied pop music at Leeds University, which luckily included an optional web design module in the third year.

His first foray into business came after he moved to London in 1999 in the hope of making it big with his band. “The first inspiration for SpareRoom came from our own struggles at finding a flat. At the time it was mostly done through local newspaper’s adverts, it was an incredibly frustrating process.”

Using his web design skills, he set up a rentals listing website, IntoLondon – the earliest iteration of SpareRoom.

“At first it was just something I was doing in my spare time but then the flat share noticeboard really took off and I realised it was becoming a sort of community, a real marketplace, so I decided to give it a proper go,” Hunt says.

He moved back to his parents’ farm in Stockport near Manchester to save cash and it was his first employee, Gemma Allen-Muncey, who helped him out with advertising.

“Gemma, who is a shareholder today, was the brain behind the idea of ‘speed flatmating’ – a speed dating kind of format to find people to share a home with. The event got us a lot of press, even abroad. It was a turning point for us in term of people’s awareness of SpareRoom.”

“She really took a leap of faith with me. When I hired her I promised I would be able to pay her from the following month – but it turned out I could pay us both.“

Hunt used the platform to rent rooms in his £3m home (SpareRoom)

Another turning point for the company came in 2013. Hunt’s marriage ended and he found himself living alone in London, which encouraged him to use SpareRoom for the first time.

“We had been operating for 10 years and I had never used our product. I needed to give it a go and understand what our users were going through. It was just so enlightening, I understood that the process was just not intellectual but emotional too.”

“I saw things like the inbox or messaging as a bunch of features, but after using it I realised it was at the heart of the experience. I’ve also understood the challenge of trying to choose people based on reading an app. That’s what prompted us to add the video option, to give people the possibility to introduce themselves.”

The road to success wasn’t always smooth. Growing the website from a technical and hiring perspective both proved challenging in the early days.

“Every summer we had this new jump of growth and the application just couldn’t handle it. Initially it was just me trying to sort it out on my own. I tried for so long to find somebody who had the experience of a busy growing website but it was near impossible to find.

“I had my fingers burned a few times, hiring someone who didn’t have the experience and who just made things worse.”

Today, with over 3 million visits per month, SpareRoom is the UK’s leading flat- and house-share website in the UK. It now has offices in London, Manchester and New York.

The platform is still free but users have the option to pay for a premium account with advanced features including early bird messaging.

Hunt has found flatmates using SpareRoom on three occasions. Once anonymously and twice publicly, making a few headlines in the process.

In London, he famously decided to rent the empty bedrooms in his £3m home on a ‘pay what you can afford basis’.

He then repeated the experience in New York where $1 is all his lodgers had to pay each month to live in a 3,400sq ft loft apartment in Greenwich Village.

“I had just under 8,000 respondents in London, so it was a bit of a challenge to get through and even more in the US.

“It was a very different experience from doing it anonymously. In London we had the cameras in. I felt like even if I was spending more time with these people during the interview process, somehow I didn’t quite get to know them, because you’ve got people watching you. It didn’t feel quite as authentic as doing it without the cameras – but I made some nice friends out of it.”

Entrepreneurs are famously overworked and Hunt is no exception. In the early days he was up at 5am and worked through his weekends although he is now better at switching off: “In some respects there is no work life balance being an entrepreneur, it’s your passion so it’s very hard to switch off. But I’m at the point where I do switch off at night and on weekends but I feel like it’s a luxury I had to earn.”

With the benefit of hindsight, he regrets not testing his product sooner and encourages all the young entrepreneurs out there to get their product to market as soon as possible to see what works and what doesn’t.

“With IntoLondon, which was not only flat shares but also sales and letting, I spent months and months building these very fancy features for those other categories. But when I launched that just didn’t go anywhere because the demand wasn’t quite right. So don’t get hung up on the big idea because chances are you’re probably slightly wrong about your idea in the first place.

And what about tips to find the perfect flatmate? “Try to be honest with yourself. It’s a bit like a dating profile, people are always trying to be their best self but it’s probably better to be your most truthful self.

“Whether it’s about how clean you are or how often you’re at home – you’re going to be living with these people, so you might as well be honest from the very beginning.”