Yapstone

This week's Boston Business Journal features Yapstone, another one of those companies where you end up asking yourself: "Now why didn't I think of that?"

At its heart, Yapstone is simply a credit card processor; yet the company differentiates itself through a distinctive focus strategy -- niche market, highly specialized product. The exciting part about Yapstone is that it hardly created something new. In fact, the company leverages standardized, uniform credit card processing technology to accomodate a "specialized" rent-management program it sells to landlords across the country.

From a technologists perspective, Yapstone's rent-management system is not complex. In essence, the service incorporates off-the-shelf parts: basic data management practices mixed into an intuitive cloud-based tool (fancy way of saying "they host it").

But the real genius behind Yapstone is the business itself. Starting small, Yapstone was able to identify a need and a market while structuring the service well enough so it could scale and grow into different segments (like vacation rentals and inns).

Yapstone works under two business models: monthly fee or transaction percentages. Ultimately, this cost is passed on to the tenant; but in light of the recent financial crisis, many renters are demanding cheaper rents. The article cites this as a potential pitfall for Yapstone considering the service is a substitute for traditional payment processing approaches.

Though the article raises a good point, rising foreclosures have forced people to rent more, thus reducing vacancies and increasing administrative loads. Yapstone not only expedites tenant payments by organizes information more effectively, thus magnifying the company's competitive advantages in the marketplace.

As Yapstone continues to gain traction, look out for imitations and competitors. Considering the company is a first-mover, it will be interesting to see how Yapstone continues to innovate.