Project update

Hi everyone, it's been a while since my last post, so I thought I'd drop you a line to let you know what we've been up to. In the last month we've made considerable progress in building the Sherpa home based lodging marketplace. Designing and developing a complex product like this is challenging when you consider that we're building it for mass market adoption. During the last month we found a great software engineer, nearly completed the front-end design of the site and have been hard at work at programming the interface. We also participated in a VC competition that gave us many more ideas to enhance Sherpa's product ease of use and competitive advantage.

Simultaneously, we are ramping up our sales and marketing activities to line up key partnerships that will be important participants in our launch. We are also hard at work building an inventory of great homestays, B&Bs, vacation rentals and home exchange properties.

The early 2010 launch of Sherpa couldn't come at a better time. People around the world are struggling through this difficult recession and are in need of a life- line. Sherpa will extend a life-line to millions of people by providing them with a way to market their extra living space to travelers in search of a more authentic and personal travel experience. Homeowners and tenants around the world possess an unbelievable amount of unused space that can be monetized by accommodating travelers. With real unemployement hovering around 17.5% in the U.S., many people are looking for new and innovative ways to make some extra cash as they seek their next full-time job or work their way through an educational program that will help them change careers.

Over 50 million trips were booked this year in the U.S. alone where the accommodation type was someone else's home... and not a hotel. That includes vacation rentals, B&Bs, homestays and home exchanges. We're building a product, and a company, that is going to help millions of homeowners get into this market and compete for these paying guests. We welcome your feedback and questions.



Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.


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Home based lodging: A recession proof business

The last couple weeks I've been presenting and pitching Sherpa Travel Exchange to investors, potential vendors and just about anyone that will listen to me. Sometimes people have an instinctive reaction to the concept of home based lodging (housing paying guests in your primary or secondary home). The home based lodging market is a lot more than just 22 year olds backpacking around and crashing on each other's couches (ala Couchsurfing.org). This market consists of any type of lodging services provided in one's own home as opposed to a hotel, including: B&Bs, Homestays and Home Exchanges.

The market is actually a $5B+ market in the U.S. alone. With respect to B&Bs, the Professional Association of Innkeepers International cites more than 17,000 B&Bs in the U.S. generating more than $3.4B in revenue. Millions of people each year stay at B&Bs, while the owners sleep in a room nearby. Many consider B&Bs to offer a more authentic local experience than hotels. We agree. Which is why B&Bs will be a major component Sherpa - not only existing B&Bs, but enabling ordinary homeowners to create a make-shift B&B in their own homes to earn some extra cash. The B&B market niche as a whole has proven to be recession proof as money conscious travelers seek more affordable alternatives to boring, sterile and expensive hotel rooms.

I did a quick scan of Craiglist yesterday and found more than 500 new listings posted that were advertising rooms for rent by the day in someones home. Yes, there are lots of people that want to earn a few extra bucks by taking in paying guests. For many of these people it's a better alternative to getting a full-time roommate. But, for all the great things you can do on Craigslist, it lacks important peer to peer reviews of hosts and guests, online booking, background records and other critical pieces of information most people would require to feel comfortable running a make-shift home based hotel/B&B. We are creating some exciting innovations in this regard. Stay tuned...


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Ponzis and Pyramids

Congress is set to pass another extension to the Federal unemployment benefits program. Now that the nation is approaching 10% unemployment, our government believes its a good idea to continue to extend the safety net. The news of the unemployment benefits extension got me thinking about what people do to make ends meet when they are unemployed or under-employed. So, I looked at the Bureau of Labor Statistics site (www.bls.gov) and found that for everyone one person that's unemployed in the U.S., there's at least one person that considers themselves "under-employed". That translates to more than 33 million working adults that aren't able to work as much as they'd like to.

One only needs to look at eBay to see the fallout of prolonged unemployment. In August, 2008 there were 15 million average daily auctions on eBay. In August, 2009 there were 30 million average daily auctions on eBay. People are selling their stuff to generate cash to survive.

Desperate times call for desperate measures for millions of people.

We've been hearing a lot about Ponzi schemes lately and it got me thinking about how people get involved in both illegal Ponzi schemes and borderline illegal multi-level marketing pyramid companies like Amway. People are trying to make an extra buck or two, which is why MLM companies like Amway exist where the members recruit other agents, who recruit more agents with everyone making a cut of the sales by their recruits - all the way down the pyramid.

In case you're curious about the origins of the term "Ponzi" scheme, it actually has nothing to do with my hero, Fonzi. Of course, Fonzi was the the always cool ladies man who I so desperately want to be . Charles Ponzi was an Italian immigrant to the U.S. who's likeness is associated with the get rich quick scams that he is so infamously associated with. Investors seeking abnormally high returns make investments in a fund that oddly generates a much higher rate of return than typical funds. Eventually, the fund manager running the Ponzi scheme can no longer afford to pay out the returns and the fraud becomes apparent. If you're trying to augment your income, try and stay away from anything that sounds too good to be true. It might turn out to be a Ponzi scheme.

Some people turn to other get rich schemes they find on the internet like the ones that promise you can earn thousands of dollars per week from the comfort of your own home. All you have to do is make a small investment - which is often where you get fleeced. Some people sell Tupperware, Longaberger Baskets, or Pre-Paid Legal services
to try and make ends meet. All of these involve making a pretty significant investment in time and/or money to actually make a decent income.

Sherpa has an idea that we think will prove to be the best way to earn some extra cash. There are 67 million homeowners in the U.S. with over 90 million unused rooms. Sherpa is going to help homeowners monetize those unused rooms by listing these rooms as Homestays. SmithTravel Research reports there are 4.8 million hotel rooms in the U.S. If only 5% of the unused rooms inside American homes become monetized on Sherpa, the lodging supply in the U.S. will more than double. This dramatic increase in supply will provide millions of homeowners with additional income and will make travel more affordable for so many more people. In doing so, Sherpa will address the growing demand for travel and empower millions of people to augment their income and earn a decent living.

Russ


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Becoming a hotel operator in your own home

We partied like it was 1999.

Problem is, we partied hard for five long years from 2003-2008. Our party favors consisted of copious amounts of low interest adjustable rate mortgages, McMansions, Cadillac Escalades and $25k limit credit cards. We visited Home Depot more times than many of us care to admit as we pursued yet another home makeover project idea inspired by one of the 45 TV shows depicting the transformation of a modest 3 bedroom home into a castle fit for a king.

Like any good party, the after effects are usually just as memorable as the party itself, if not more so. Today, large swaths of the American population are suffering from a massive credit hangover that has been made even worse by rising unemployment/underemployment, rising monthly mortgage payments, and foreclosures.

In late August, the Mortgage Bankers Association reported that the number of Americans who are in serious delinquency on their mortgage rose to a record 9.24% during the previous quarter. They also reported that 9.24% of homeowners were at some stage of the foreclosure process. In a country of roughly 65 million homeowners, that means nearly 6 million homeowners are in the process of losing their home or coming pretty darn close to it. This doesn't even address the 13% of American homeowners that are at least one payment behind and risk foreclosure.

The "American Dream" of home ownership has turned into a nightmare for many well-intentioned, hard working people. The great thing about this country is that, at the core of our DNA, is an entrepreneurial spirit. It's this spirit that has lead America through and out of several recessions and has driven GDP growth for our country and countless countries beyond our borders. We pull ourselves up by the bootstraps and do something to make our situation better. We don't expect a corporate bail-out, we just put our nose to the grindstone and come up with solutions.

Case in point, consider the emerging trend of home monetization. I know, you're probably asking yourself, "what the hell is home monetization?" Good question, because I pretty much just made it up.

Actually, it's pretty simple, homeowners facing foreclosure, layoffs or unemployment are realizing that they can run a hotel business out of their own homes. Forget about stuffing envelopes to make extra money or hawking some Amway products to earn a few extra bucks, these enterprising homeowners are recognizing that the most valuable asset they will probably ever own is their home, and it is woefully under-utilized and, unfortunately, is depreciating in value in many markets across the country. Instead of whining and complaining, many Americans are mad as hell and just don't want to take it anymore. Okay, maybe they're not mad as hell - but I assure you they're not willing to take "it" anymore... whatever "it" might be.

On September 3, in an article entitled "The Reluctant Landlords," The Wall Street Journal reported an increase in the number of Americans who are opting to rent out their homes or extra bedrooms within their homes to make some extra cash. In effect, many of these homeowners are becoming not just landlords, but part-time hotel operators. Renting your extra living space in your home to lodgers is not exactly a new idea, but it's one that many homeowners and tenants have discovered on their own.

Driven by financial necessity, unemployment, opportunism or a myriad of other reasons, many homeowners are deciding to get into the hotel business rather than finding a full-time roommate to bridge their gap between their income and monthly expenses.

We've all been spammed by countless work-from-home schemes that promise yachts, endless riches and beautiful women - if only we are to stuff a bunch of envelopes in the comfort of our own living rooms. Most people know that which sounds too good be be true probably is.

Running a hotel out of your home to deal with the financial crisis is perhaps the only legitimate home-based business. After all, you're using your home to propel you into your own service business, even if only for a 3-4 nights a month. We've been hearing reports of homeowners charging $100-150 a night to take in lodgers in their extra bedrooms and making an extra $750 in income each month. I talked to one of my neighbors who made $1,000 this week by hosting a business traveler on assignment for a 2 week project with a major consulting firm here in San Francisco.

These stories were the impetus for my home based lodging concept. Home based lodging is home monetization for the masses. It's giving regular homeowners the ability to compete with hotels by tapping into their entrepreneurial spirit and using their assets (their homes) to make extra money. However, before you can scale this concept for mass adoption you have to give homeowners a marketplace to find travelers and, perhaps most importantly, make sure that the traveler isn't some psychopath, criminal, sex offender, or all three.

We're working on addressing these issues with Sherpa Travel Exchange. Stay tuned and let the home based lodging revolution begin!

Hotel industry - you're about to get a whole bunch of new competitors!

Good Luck,

Russ

Russ Hearl

Head Sherpa & Co-Founder

Sherpa Travel Exchange, LLC

601 Van Ness Ave, Suite E-208

San Francisco, CA 94102

415-601-6244 mobile

russ.hearl@staysherpa.com