A globally aspiring Estonian startup, GuestJoy, helps independent hotels enhance their guest experience, upsell services and gather reviews in one solution.
In Startup Spotlight we zoom in on numerous Estonian startups, to find out more about their business model and how they got off the ground.
The Tallinn-based GuestJoy helps independent hotels around the world enhance their guest experience, upsell services and gather reviews in one solution. The idea is that by engaging their guests pre, during and post-stay stages of their visit, hotels could easily increase their revenue and rankings. “Think of it as a front desk in your mobile phone,” Alar Ülem, the CEO and co-founder of the startup, says.
Alar, how did the idea of starting GuestJoy come about?
It all came to me when I did my extended travels in Latin America. I decided to take time off from the corporate world. During that time, I stayed in all sorts of different hotels, hostels, B&B-s, bungalows etc. What I noticed was that as a guest, I needed to do a lot of work to get information about anything or to order something. At the time I did a lot of tours and activities, and it took me too much time to understand what was available. I thought this is really silly as most information is now online, why hasn’t this happened with hotels? Why do I still need to physically go to the front desk to ask something?
What problem is GuestJoy aiming to solve?
The Hotels and their guests are completely disconnected. The only time you engage in conversation with the hotel representative is when you get the key. This means hotels will never know if you had any issues at the hotel until you post a negative review. This disconnection also means it is much more difficult for them to promote any of the services they might have. For hotels, this results in lost revenue and lower guest satisfaction. We enable hotels to become more active when engaging their guests. A hotel, as a good host, will ask, ”has everything been ok?” or ”would you like something?”
How is GuestJoy different from other competing and similar companies out there?
Our service is designed completely with independent hotels in mind. We know hoteliers don’t have the time to manage yet another system. This means, trying to keep everything extremely simple and with a high degree of automation. To achieve this, we use a lot of data-driven intelligence in the background to assist the hotelier in their decisions.
What would you say was the hardest part of starting the business?
Getting the initial product out from the door. That was extremely challenging. To achieve it we tried everything: convincing friends, hiring, I even went to the Garage48 hackathon (an Estonian-founded hackathon where aspiring entrepreneurs develop a product or service in 48 hours over a single weekend – editor) to Ukraine, just to find developers.
Unfortunately, it didn’t work out and with the last person who seemed to be on board, his apartment was burglarised. After that, he decided to go to the US and start a new life. So I was back to square one. Eventually, I decided, if I wanted to get this off the ground, I really needed to start learning to how to code. You either make it happen or not.
How were you able to fund the business?
Initially, we funded our business from our own savings but that dried out quite fast. Eventually, we started to get enough money from our customers – we were able to keep bread on the table and also expand the business. Monthly subscription businesses are more difficult because the initial revenues are extremely small.
What have been some of the unexpected hurdles you’ve faced since starting?
Where to start. It would seem to get the first customers was hard but in our case, that was not so. We got some monetary traction quite early on. I think the biggest one was the realisation of how long it all takes. Founding a company includes so many facets that you have to build from scratch. Even the simplest things – like sending sales materials to the customer – caused us to scratch our heads, ”we haven’t got any”. When the reality kicks in, the startup glamour fades off very quickly.
Could you briefly describe the founding team and their background?
The company was founded by two people – me and my sister Annika. My background is in managing technical teams and product management teams in largest IT and telecom companies in Estonia. Annika has worked at many hotels in Tallinn and eventually managed a boutique hotel in the old town of Tallinn.
Because I’m more technical and product-oriented and she does sales, we complement each other quite well. I’m always been wary of surrounding myself with people who are similar to me. This creates a sort of nice bubble of similar thoughts. I’m a firm believer in diversity as long as values remain the same.
From your perspective, how do the economy and the laws in place in Estonia facilitate startups?
Is it difficult or easy to start a company here? Extremely easy. I think Estonia is a really good place to start and run an early-stage startup. I would say the only challenge I see is getting big. We will always have this barrier where larger customers and large consumer markets are somewhere else. In a way, it acts like a double-edged sword, it creates this intrinsic need to expand but also creates this initial barrier to gain sufficient momentum.
Have you received money from investors thus far – and how much?
None.* We have bootstrapped this. We took a small startup loan to start expanding more aggressively in other markets. This has proven invaluable for market validation and also for investors to see that the business is scalable.
Where do you envision GuestJoy in five, 10 years?
With the current business model, hopefully, acquired. But in terms of expansion, I would like us to be the gold standard of guest communication for hotels. When looking at our competitors’ solutions, I believe it is very much achievable.
What could you say has been some of the key things you’ve learned so far as an entrepreneur?
You really need to believe in yourself and do not let others discourage you. I’ve got so used to blank looks. If you start doubting yourself, it kills your inner drive, and everything falls apart.
What pieces of advice would you give to aspiring entrepreneurs out there looking to start their business?
Just start. There are too many wantrepreneurs out there. It is ok to validate the idea as a side-project of your current day job, but at some point, you need to make a decision. It is next to impossible to build a working company without going all in.
* The Estonian Business Angel Investment Programme has invested €160,000 in the company since this interview took place.
Cover: GuestJoy’s team in Tallinn (images courtesy of GuestJoy).