GuestU has overcome many challenges these past three years. Although our vision is the same as it was when we first started out, to improve the experience of tourists during their stay, our market approach and product have gone through several iterations.
We started off by providing white label Apps, and we managed to rapidly gain some traction in the market. Customers were mainly independent hotels which, through a monthly subscription, were able to have their own personalised mobile application, for iOS and Android. Portugal Ventures supported us right from the start, helping us finance the launch of the company and, particularly, to increase the sales and product teams.
We attracted over 250 customers in 32 countries. However, after a while we realised that our (business) model had some limitations and that the business opportunity would most likely not be large enough for our ambition. On the one hand, guest engagement levels were relatively low which led to a high churn rate. On the other, our added value did not allow us to charge higher tickets per customer, which limited revenue growth. It thus became necessary to change course, which forced us to reduce the team and to also be open to testing new business concepts, assess and rapidly draw conclusions.
We tried the B2C approach by launching the Clarice App, which received several distinctions such as being considered one of the top 5 travel apps by Fortune Magazine in the USA, and being highlighted by the NY Times. However, this approach, although very successful from a product standpoint, once again proof positive of the quality of design and engineering in Portugal, brought with it new challenges. We concluded that, given that this is one of the most competitive sectors when it comes to attracting users as it has 2 of the 3 biggest purchasers of online advertising worldwide (Expedia and Priceline/Booking.com) and retention (considering most users only use it once a year), a new pivot was essential.
This idea focuses on eliminating friction and on understanding how we can reduce barriers in order to increase the engagement of our users.
To date, more than 1,000 hotel rooms have a GuestU Phone, with some very interesting engagement metrics: approximately 50% of guests use the GP and use it, on average, +73min/day, with satisfaction levels at 9.0 out of 10, and a retention of 80%.
This level of engagement reinforces our confidence that we are adding value and solving a real pain point. That said, we are aware that there are many challenges yet to overcome, especially when it comes to international scalability and increasing network effect.
In conclusion, I would say that our greatest lessons learned are: have a good understanding of the pain point we are addressing, focus on something specific that our customers really value, iterate quickly, be obsessed with metrics and spend time with customers.
Something I would have done differently: I would have sought excellent mentors, avoided some distractions and spent even more time talking to customers.