Stoop Case Study: Building a marketplace like an Operating System

Introduction

In the constantly evolving landscape of urban living, the search for convenient, flexible, and community-driven housing solutions is unending. This search led me to Stoop, a VC-backed marketplace for short-term rentals that aimed to redefine urban living with an innovative approach. As Engineer No. 1 at Stoop, I gained invaluable insights that have shaped and validated the value proposition of my new venture, Candle. Despite Stoop’s shift away from a marketplace business model due to COVID-19 lockdowns, the insights we gathered remain highly valuable.

Background

Stoop carved a niche in the New York City housing market by offering fully furnished apartments with flexible leases and a strong emphasis on community and ease of living. We enhanced less-than-ideal apartments — assets just below the typical institutional threshold — with value-add improvements such as minor repairs, trendy furnishings, modern amenities, Wi-Fi, and stocked pantries. Each apartment was rented out by room. While platforms like Airbnb have popularized this concept, Stoop's innovation lay beneath the surface.

Challenges and Objectives

Stoop was an operationally intensive, ambitious project that dealt with a fragmented market. Some challenges were typical for marketplaces, but many were uniquely complex.

On one side of the marketplace were renters: international students, expatriates, and newcomers to New York’s workforce, all seeking fully furnished, monthly rentals. On the other side were building owners with less desirable properties in otherwise attractive neighborhoods. They faced various challenges in meeting market demands.

To renters, Stoop offered an almost "too-good-to-be-true" value proposition:

• A room in a fully furnished apartment
• Bi-weekly cleaning
• Stocked pantry and toiletries
• All online operations: discover new apartments, conduct background checks, sign leases, manage security deposits, and pay rent from anywhere in the world
• Flexible leases, allowing tenants to leave "whenever" they wished or explore different neighborhoods within the network
• Keyless entry and an active community with numerous activities, field trips, and parties

To building owners, Stoop promised:

• Apartment facelifts
• Rent marked up by over 20%, with Stoop taking an approximate 8% cut
• Endeavors to maintain close to 100% occupancy, aiding owners in refinancing opportunities
• A fractional superintendent employed by Stoop to handle basic tasks

Stoop coordinated global operations across time zones, managed legal documents, handled property management, marketing, cleaning crews, designers, architects, and service providers.

How did such a relatively small team manage this complex operation effectively and efficiently?

The Solution

Believing in technology’s ability to resolve many challenges, the team sought frameworks to redefine and simplify the problem. The solution was akin to developing an operating system, almost literally interpreted.

Traditionally, an operating system (OS) like Windows or macOS acts as the fundamental layer between computer hardware and the user, managing resources, providing a user interface, and offering system management utilities.

For Stoop, this meant developing a comprehensive platform to coordinate and manage all aspects of operations for both renters and building owners:

1. Kernel / Process Management

• For Computers: Manages processes and computational resources.
• For Stoop: Managed occupancy by matching available apartments with potential tenants.

2. Memory Management

• For Computers: Allocates and tracks system memory efficiently.
• For Stoop: Managed listings, reservations, and user data for quick access and updates.

3. Device Management

• For Computers: Manages interactions between hardware and the system.
• For Stoop: Managed IoT devices like smart locks and Wi-Fi networks, and integrated services like Stripe.

4. File System Management

• For Computers: Organizes, stores, and retrieves files.
• For Stoop: Managed digital assets such as lease agreements, user documents, and property photos.

5. Security

• For Computers: Secures the system against unauthorized access and threats.
• For Stoop: Ensured secure transactions, data privacy, and compliance with housing and rental laws.

6. User Interface (UI) and User Experience (UX)

• For Computers: Provides the interaction layer between the system and the user.
• For Stoop: Offered an easy-to-use platform for tenants and property owners to manage listings, leases, and payments.

7. Networking

• For Computers: Enables communication over networks.
• For Stoop: Facilitated community building among tenants and communication between tenants and landlords.

This framework significantly clarified orchestration and coordination for the engineering and operations teams, improving observability and identifying where technology was most effective.

Key Lessons Learned

Our experience at Stoop reinforced several key lessons:

1. The shared offline experiences of a community add resilience to an online marketplace.
2. In complex systems involving many humans, the majority of your technology resources should be allocated to "kernel" activities—orchestrating and managing processes.
3. Apply technology surgically: initially, Stoop tried to automate everything, but by reimagining the company as an operating system, we identified high leverage points for effective intervention.
4. Deep integrations with third-party service providers create a seamless user experience and facilitate community engagement.

Conclusion

These lessons have become the blueprint for Candle. Understanding that the most meaningful human interactions occur in person, we believe that effective marketplace infrastructure should focus more on "kernel" work than on UI elements. This perspective guides the development of features like advanced scheduling and calendar management to support the gig economy and revenue-sharing capabilities to foster collaboration in the creator economy. We aim to provide invaluable tools for builders and innovators shaping the future.