Hallways is a social network geared towards connecting backpackers staying in hostels. By connecting these travelers with a specific style of travel, the startup creates a social layer that is agnostic to any one booking site or hostel brand, and allows backpacking travelers to connect digitally while traveling.
Of course, hostels also gain immensely from a pre-populated network of customers and can transition off-line signup sheets to the startup's event management functionality.
Right now, the initial product has just been released publicly and focused exclusively on finding out who is staying in a hostel - or at a hostel in the same city - and to create and attend hostel events. This event functionality offers the most lucrative monetization opportunities while also allowing members to engage in creating temporary community wherever they find themselves.
CEO Benjamin Moshe shares more about Hallways in the Vine and interview below.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
I realized the need for Hallways during a solo visit to Amsterdam: I knew that there were other people in my hostel who wanted to do the same bike tours and museum visits I did, but there was no easy way to find them.
I decided to create a product that would do for hostels what Facebook did for dorms – use technology to make a naturally friendly environment way more social.
What is the size of the team, names of founders, management roles and key personnel?
I’m Benjamin Moshe, the founder & CEO of Hallways. I’m a former product lead at Amazon.com, and a graduate of the Kellogg School of Management – but most importantly I’m a passionate traveller myself. I’ve visited 23 countries and stayed in hostels on three continents.
Hallways was developed and designed by former employees of Skype and Amazon.
Please share your funding arrangements.
We’re currently self-financed. Once we’ve proven out the business model, we plan to raise a seed round to fund the rapid expansion of Hallways worldwide.
What is your estimation of market size?
We are targeting the entire youth travel market: 200 million arrivals a year. Hostels alone are a $34 billion business annually, so the potential for growth in this market is immense.
Who do you see as your competition?
There are hostel booking sites that offer social features – but they require users to book through their product to access these features. Since hostel booking is extremely fragmented, no one provider has a majority of the market – so no one can get the critical mass necessary to make the social side work.
Hallways is the only social network for hostelers that is booking-source agnostic. We don’t care where you made a reservation – once guests know where they’re staying, they can check into their hostel on Hallways.
What is your revenue model and strategy for profitability?
Our users are young travellers with disposable income, anxious to go out and spend money in a new city that they don’t know well.
In addition, they’re telling us exactly when they’ll arrive, when they’ll leave, and where they’ll be staying. There are many opportunities for us to provide our users with targeted recommendations that are both useful to them in planning their trip, and revenue-generating for us.
What problem does the business solve?
Hostels are the most social places on earth – but the social element is totally random. Anyone you don’t physically run into you’ll never meet, and any events you don’t hear about from a staff member you’ll miss completely.
Hallways users get the most out of their hostel stay. We show hostel guests who else will be in their hostel during their stay, and allow them to browse, join, and comment on fun events going on at their hostel. In addition, guests can plan their own events with other backpackers – whether that be a simple visit to Buckingham Palace, or a group train journey to the next destination.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We spend a ton of time soliciting feedback from hostels, to make Hallways more valuable and user-friendly for them. For example, hostels can now create recurring events, and message all guests at once – we built these features specifically to address pain points experienced by our hostel partners
But truly, we haven’t pivoted much from our initial idea. Hallways is still all about connecting backpackers with people and events in their hostel. We help create great travel experiences.
Why should people or companies use the business?
Backpackers should use Hallways because we answer the two questions they have about their hostel: who’s here and what’s going on? We connect our users with the people and events that are literally under their roof – it doesn’t get more relevant or useful than that.
Hostels should partner with Hallways for a number of reasons: first, we make it easy for your guests to connect with each other, creating a more upbeat, social environment that will improve word-of-mouth and online reviews.
Second, Hallways is a simple and effective tool for managing and promoting your events – hostels can replace old-fashioned signup sheets with online events management, and let guests know about pub crawls, bar specials, etc. in real time or before they even arrive.
Finally, Hallways increases engagement between guests and the hostel – we allow you to easily message guests before, during, or after their stay, or poll guests on preferred events.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We’re currently launching our beta product with a number of hostel partners including YHA and Astor Hostels in London, and will be accepting new hostel partners beginning June 2014. To be included in our expansion across Europe, please contact us at firstname.lastname@example.org!
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
Our goal is to be *the* social network for young travellers worldwide – we believe that we can accomplish this within three years. Word-of-mouth is extremely strong in the backpacker community, so if we consistently create great experiences we’ll be able to spread the world across countries and then continents.
Our primary challenge will be keeping users engaged when they’re back home, after the hostel-jumping fun is over. We have a few tricks up our sleeve, but we’re laser-focused on creating great experiences for hostel guests right now.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Backpackers are a passionate group with a distinct travel style – they deserve a product that’s built for their needs.
That’s where Hallways comes in – we’re all about making every travel experience as good as your best travel experience. No more finding out the day after about an amazing concert just down the street from your hostel. No more walking past someone from your hometown, and never knowing to stop and say “hi.” If someone or something cool is in your hostel, Hallways makes sure you know about it.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
I’m an ex-Amazonian, and there’s no question that the Amazon culture is in Hallways’ DNA, in two ways.
First and foremost: we are absolutely obsessed with creating a great customer experience. We listen to our users – both travellers and hostels – and work tirelessly to build the product that works for them, instead of just relying on our own assumptions.
Second: we are focused on the long term. Youth travel is a huge market without a dominant player in the social space, and we have a business model that makes sense. We’re going to concentrate on creating great experiences and growing a base of delighted, engaged users, rather than over-optimizing for revenue at the expense of our customers.
Hallways most certainly has a compelling brand proposition, especially given the fragmentation of other online/mobile social tools for hostellers. The name suggests an informal meeting space, and fits within the hostel ecosystem well. The execution is still in its infancy, but the initial product hits all the design buckets and is simple and straightforward.
For any emerging social network, scale is elusive as it requires some sort of network effect to truly be effective. However, given the specific targeting of travelers using hostels, network effects are far less important as its not necessarily about continued engagement but in-the-moment discovery of new people, activities and events.
Of course, this doesn't eliminate the challenge of on-boarding enough users to be of interest to other travelers. It's always the chicken or the egg. One way that the startup is going to overcome that is to get the hostels involved first. By integrating each hostel's schedule of events and other digital marketing needs, the startup gains a customer-facing advocate to aid in pushing people to the app.
And as travelers on longer-term journeys (as many hostellers are) move from hostel to hostel, the startup benefits from organic word-of-mouth as the app is physically transported to new hostels. This organic virality will help unburden the startup from the heavy marketing costs needed to grow a new social network.
This movement will also make the app more appealing to hostel groups, as they can continually engage with a traveler throughout the lifecycle of a multi-city, multi-month journey. The startup must consider traveler movements' as it moves beyond the basic launch product.
Tracking the travelers' engagements, and packaging this information to hostels is essential for success, as is developing a fun schedule of events that provide a halo effect to the Hallways brand. Getting boots on the ground in these hostels to curate events initially would be a guerrilla marketing approach to encourage that essential upfront word-of-mouth.
The startup should remain focused on enhancing - not replacing - the very face-to-face social experience that makes hostels so appealing for the demographic.
NB: Hostel image courtesy Shutterstock.