02/06/11 | Uncategorized

TetherPad Lessons Learned (and Pivots)

This guest post is from Sally Grisedale.
“Pivoting” describes what entrepreneurs do when they get stuck. It involves recognizing your business idea is failing and making a radical change. In week three, our team objective was to interview 20 concierge at four star hotels in the Bay Area and get four to test our prototype on a free trial basis. Through customer development interviews, we hoped to validate our business idea for “GuidePad”.
If four concierge were willing to exchange their time and skill to work with the device, this would prove our service had value. With value creation established, we would have a foundation to build a business model. So off the team went, interview questions in hand to learn about the world of the concierge and how our device could be of service. Our offer included a rentable smart phone with free national calling, Skype international calling, on call concierge help, turn by turn navigation, internet access and local listings, reviews, restaurants events and attractions.

How could concierge and their guests not want this amazing service? Well, they didn’t. And here are some of the reasons why.

The work of the Concierge has changed. Yes there are a few dedicated staff who work at large luxury destination hotels with 500+ rooms. We quickly learned that these people work on a commission basis and add high value personal touch services. Renting mobile devices was not on the list of “personal touch high value” services. Ouch!

This left the 90% of other “Concierge” who work the front desks of most hotels today. These people who are paid by the hour, are typically in their 20’s with a years employment history. They perform many tasks including checking people in and out, taking luggage to rooms, arranging transport, giving directions, suggesting places to eat or visit, giving change, running errands etc.

These people are very busy already, and did not have time to rent out a device. Additionally, there is no place to keep the devices, no one to keep inventory, track their upkeep and whereabouts. As one concierge said:

“When I give a customers a print out of how to get to an attraction or explain where a restaurant is, yes it can take time, but at least when I am done explaining, that is all I have to do, there is nothing more I have to worry about.

If I had to rent out a device I would have so much more work. I would have to take the customers credit details, get them to sign a contract, ensure the device gets back to the hotel and in the event it doesn’t track it down, keep inventory, get repairs and in necessary update a customer bill and resend it out.”

So this business model wasn’t a hit with Concierge, but what about their customers?

  • Most hotel customers on the Peninsula are business travelers and bring their devices and their itineraries with them. They are self sufficient and don’t need of another device.
  • The cost of network roaming, which we hoped to solve, is not an issue for most business travelers who have this covered by their companies. They stay connected to the office because that is what the office wants. If they are paying for their own plans and do turn roaming off then they can use the hotel business center for free to collect their email.
  • For hotel guests who may want such a device, like the wife of a business man with time on her hands, the range of things to do at a suburban hotel is small and catered for by existing print material including the numerous pre-printed guides held at the front desk and print magazines like “Discover Silicon Valley” a monthly events listing magazine.

So what have we accomplished in three weeks? We built a team, put together a business proposal, put up a website, conducted a survey, built a prototype, interviewed customers and took it to our distribution partners. We discovered our business model to date has no value to concierge (dedicated and part time) at suburban hotels. Neither does it hold value to their guests if they are business travelers, are very old or in their teens and twenties.

It may be that there is a subset or niche market for this device among the middle aged international tourist staying at large destination hotels in destination resorts. This could be our next arena for customer development.

When I wrote about the term Pivot three weeks ago, I thought the term was bright and shiny. I envisioned that Pivoting would be a moment when you let go of an old idea and come up with something transformative. Three weeks later I would like to amend that description to include the following.

Pivoting means you messed up big time in your thinking and now you need to go back to the drawing board!



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