Having closed his startup after 2 years, this founder’s reflections can help many past, present and future entrepreneurs. Below are the insights of SuiteLyfe Technologies Pte Ltd cofounder Sze How.
After 2 years building SuiteLyfe, a Singapore-based startup, my co-founder and I had to make the difficult decision to close the company.
We built the company together while we were still students at the National University of Singapore.
We started the business to help hotels earn money from empty rooms by offering people looking to holiday near home (called staycation-ers) affordable accommodation and good amenities at the last minute. Since these rooms are left over, we offer attractive rates and free amenities to encourage local residents to book at the last minute.
We also accepted nighttime bookings (until 5 a.m.) just to serve customers who were busy until late in the evening. The idea sounds very appealing, does it not? However, various factors prevented us from realizing that vision and ultimately led to failure.
Following that collapse, I want to record the challenges throughout my entrepreneurial journey to share with you.
Build strong relationships and experience
The hotel industry relies heavily on online travel agencies (OTAs), which generate more than 70% of hotel revenue worldwide. Comparable pricing is applied across multiple distribution channels. Together with technical barriers such as integration with channel management systems, this makes it quite difficult for a travel startup to establish a direct distribution channel with hotels.
Newcomers to this field need to connect with a channel manager, a system that lets hotels manage all OTAs simultaneously. Examples include SiteMinder, RateTiger and eZee Absolute.
Because of limited technical resources, we could not reach agreements with channel managers and instead had to build automation tools. There were many other difficulties as well. Overall, we entered a relatively new market with a very low booking frequency.
With no prior connections or experience in the hotel industry, it was very difficult for us to meet key decision-makers in hotel management. Nevertheless, with help from a few advisers and friends, we worked to build relationships from there.
A good idea that delights customers but cannot make money
We advertise both on the subway and on social media. I admit that although we had excellent marketing plans, execution was not good enough. We did not succeed in raising funds or building grand initial advertising campaigns for our app. We had a slow start but kept trying to build and reach a larger population through a series of events and social media marketing.
Despite competitive prices and accompanying amenities, these hotel rooms were still not attractive enough to draw last-minute customers. Nor was there a wide enough range of hotels for potential customers to choose from.
We now have over 6,200 downloads and an average of 100 daily active users. Although users are interested, only a very small number use the service in ways that earn us money. Successful transactions are far fewer than expected.
Expectations and Priorities Within the Core Management Team
SuiteLyfe’s entrepreneurial journey went like this: the founding team formed – the technology team began racing and created an MVP demo – the sales team used the MVP to secure deals before launch – the marketing team created advertisements and built the brand – and the product began to launch!
From technology to marketing, addressing everything at once is genuinely headache-inducing and extremely difficult. At the end of 2016, we restructured the management team because of differences in personal priorities.
We then expanded the core management team by 2 members to keep pace with growth. We even asked friends for help. Unfortunately, we still lacked the resources and people to address the challenges ahead.
For a young startup, attracting experienced talent willing to commit is very difficult. With a loosely organized team and no guarantees, we decided to return the remaining money to all investors.
In short, meeting every expectation on a multifaceted platform is very difficult. To all the hotels and customers who have supported SuiteLyfe, we can only say thank you. We could not have launched the product without them. Special thanks to all the hotels for supporting us throughout this time.
What is the lesson?
Giving up is never easy, especially when you have built and shaped your life’s direction and goals around a startup. The pain of disappointing those who supported you throughout the journey is indescribable. However, what matters is believing in and understanding where the process went wrong.
A startup’s journey may unfold at dizzying speed, but it is a marathon, not a sprint. It is an adventurous journey toward shared visions and goals. Never be arrogant, and always establish the right expectations from the outset.
Launching a startup is truly exciting, but day-to-day operations can sometimes become difficult. With a good idea, it is easy to persuade your team about the business plan. However, persuading them and building their passion for that vision is another matter. I have found that celebrating and recognizing small successes can go a long way.
Market interest does not always translate into market demand. On paper, we had a good business plan. But in reality, the numbers showed something completely different. You may get a large number of downloads and many active users, but revenue is what really matters.
For now, SuiteLyfe will operate as a lifestyle blog serving those who live in Singapore. It is time to say goodbye, but we may return someday, better and stronger!
On behalf of the company's team,
SuiteLyfe Technologies Pte Ltd co-founder Sze How.
Chương trình liên quan tại YUP Education: X-Startup – khóa học khởi nghiệp «Khởi Chánh Nghiệp» · The Journey – lộ trình phát triển doanh nhân
