Greek startup Discoveroom builds mobile-first, enterprise tools for the long-tail of owners of bed-and-breakfasts and guesthouses.
The 10-person company has received a pre-seed round of euro 110K in October 2013, and a seed round of euro 300K in July 2014.
Founder Nikos Anagnostou developed his technical experience on enterprise applications during previous jobs, such as his last gig as CTO of digital agency Scicada.
Discoveroom's tools aim to help the owners of small lodgings by digitizing their reservations process. The software lets owners manage bookings and clients from their mobile devices, which is handy when running an island property remotely.
Discoveroom created a Vine to show off its pitch:
Q&A with CEO Nikos Anagnostou:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
Greeks spend their summer vacations mostly in Greece, staying in one of the numerous small lodgings, like guesthouses, apartments, B&Bs, and holiday homes. These are spread around the country's islands.
Finding and booking a room in one of these lodgings is a time-consuming experience as it is mainly accomplished by phone. Small lodging owners may not have a reception, so phones are guaranteed to be answered all the time.
What is more, the difficulty intertwined in the communication process is applicable also to the confirmation of the required advance, resulting in more time lost.
A few trips around Europe confirmed that the situation was not much different all over.
After going through the same ordeal for the N-th time, Nikos Anagnostou started wondering whether there could anything be done to expedite and automate the booking process.
And his answer was that a solution could be achieved by empowering the owners -- by making easy for them to keep their room availability in a computerized system and to publish their inventory online.
A mobile device emerged immediately as the ideal tool for this. And this realization gave birth to the then-unnamed-startup discoveroom.
Size of the team, names of founders, management roles and key personnel?
Our team is 10 people strong, one founder (Nikos Anagnostou), five developers, one designer, and three people in marketing, communications and customer care.
Estimation of market size?
The market data for the small lodgings are scarce. In Europe, where most of such establishments seem to exist, the official stats bring them up to 250K.
We estimate that an equal amount will be in the rest of the world. And if we count vacation rentals in our market, then we are talking for over 2 million establishments, in a rough estimate, globally.
Discoveroom has two kind of competitors: the software providers that make PMS, CRS and internet booking engines (IBEs) on the B2B side of business.
It also faces the OTAs on the consumer side, because the OTAs obviously list many small lodgings too.
We haven't identified any key player that does both, except HomeAway.
Revenue model and strategy for profitability?
A subscription model for the tools for lodging owners (app add-ons, since our base app, our PMS is free).
Commission model for the bookings generated from Discoveroom site.
What problem does the business solve?
Discoveroom solves two problems: it helps owners modernize with a full stack of hotel apps but without the entailing complexity and helps travellers look into these special kind of lodgings only, aggregated and nicely presented on its website.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
Not much has changed since the beginning except in one aspect: midway we decided that we should invest more in the B2B side of our business, as it could scale more easily internationally, and as we found more opportunity there.
This has led as to plan the addition of a small CRS in our offering.
Why should people or companies use the business?
For the lodging owners we are a very affordable solution, probably the most affordable in the world, plus we offer the full breadth of apps they will possibly need.
For the travellers, we are a specialty OTA that gives solutions where a classic OTA might not: finding a place to stay in remote areas, possibly near to a site of special interest (like windsurfing spots, mountain hiking, scuba diving, trekking etc).
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We mainly rely on online marketing and the resulting word of mouth.
We have run various test campaigns to see how this can work and we have found that with a reasonable cost, this approach can support our growth in the long run.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We anticipate that we will be used by thousands of lodgings around the world for our B2B tools. For the travellers we will pursue a country-by-country approach, starting from Greece and Europe, and then the rest of the world.
In three years' time we expect to have covered the main European markets.
What is wrong with the travel, tourism and hospitality industry that it requires a start-up like yours to help it out?
What is right and what is wrong is highly contingent to the period of reference. The hospitality industry has not kept up with the major technology developments.
One of the reasons of the success of Airbnb is its appeal to a younger and more tech savvy audience, with greater trust for the internet and a willingness to experiment.
The rest of the hospitality industry is currently playing catch up in this respect. What we are trying to achieve, is help out the owners of small lodgings in this kind of transition, to a quick catch up and move forward.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?
Mailchimp, because we give a similar emphasis in design, and our approach is also to make a traditional process (mailing in Mailchimp’s case, bookings in ours), modern and sexy.
Which company would be the best fit to buy your startup?
HomeAway would be a good fit as we can compliment both their software and OTA business.
Describe your startup in three words?
Making dead simple to find and book a small lodging.
This year, Pegasus, a leading hotel switch and reservation service, has been splitting and moving to private equity ownership. Meanwhile, the world's most popular set of property management system tools are from Micros -- a company that is now distracted by its recent acquisition by Oracle.
Given that the leading dinosaurs are in disarray, the opportunity is big for upstarts to snatch away some business. Savvy entrepreneurs can ride the wave of mobile-first tools and software-as-a-service business models.
We wish Discoveroom luck. With its low cost of operation, its technical savvy, and its big market, it appears to be off to a promising start.