Wise Words with Ernests Stals

Ernests created Reach.ly, a service that lets hotels reach out to travelers. The service uses a complex set of algorithms to monitor Twitter for potential guests.

Ernests has spent the last six years working on startup projects, experimenting with technologies such as QR codes and Bluetooth. However, in 2008, he built a geographic recommendation engine that would provide the basis for his new company, Reach.ly.

Reach.ly is focused on finding potential new guests for hotels. Toward that end, the service uses a complex set of algorithms to monitor Twitter for mentions of planned trips. Results are presented on a dashboard, allowing hotels to reach out to visitors who are heading their way. Hotels can then communicate with those potential guests through the Reach.ly interface, whether by sending a greeting, offering some advice about the city or extending a targeted offer.

1. Where did the idea for Reach.ly come from?

It came from several other projects we have done previously. Our team has worked on a Twitter monitoring tool, a recommendation engine for geographic places and an affiliate marketing solution. Combining all our prior experience we figured out that there might be new way for hotels to reach out for customers. Testing showed that Twitter users are actually happy to receive offers if they are sent at the moment when they are looking for them.

2. Considering the time necessary to reach out to potential consumers personally, do you think that — even with the Reach.ly service — this is a cost effective method of attracting business?

Good question. Our research shows that around 9 percent of people who are approached on Twitter with a booking offer actually do book. This is a very high percentage, and what we have noticed is that those who do reach out directly over a medium like Twitter have a much greater chance of securing guest reservations. Of course this is labor-intensive, but surely driving bookings should be what the social media staff are focused on? Further, we believe that hotels who engage in this direct conversation over social media have an opportunity not just to gain additional bookings, but also to gain loyal customers who value this extended form of hospitality, rave about it (easy to do in social media) and therefore drive more guests to that hotel. In some sense this is nothing more than opening the hotel door by a very kind and welcoming doorman – but done online ahead of the visit.

3. Can you describe a typical working day?

It starts with a task review from the previous day plus some open discussions about ideas we could research. Text mining is a challenging task and Twitter data, with its mass of slang and casual chatter is particularly challenging, so we have to figure out methods of normalizing the data. Afterwards it is pretty silent except for moments when we throw around our toy Angry Bird and fill the whiteboard with formulas. And yes, I deal with customers and look for their feedback through e-mails, calls, Skype calls and Twitter.

4. How do you unwind or relax when you’re not working on Reach.ly?

Unwind is good word to describe it. Myself and co-founder Kaspars are passionate kiteboarders. It is great way to clear your mind and relax. Sometimes I also try to get out on the board around 6am in the morning, before work.

5. What’s the secret ingredient to success as an entrepreneur?

I think it is healthy mixture of stubbornness and flexibility. You fail and go further; you hear nos and go further; have no money but still find ways to move forward. But at the same time as an entrepreneur you observe and figure out when to change direction.

6. What drove you crazy when building your business?

You can figure out dozens of ideas and ways of solving problems, developing the business or reaching out for customers, but it takes so much longer to test those assumptions. I always wish that this process would happen faster and just be able to move on.

7. What motivates you to keep going?

I suppose it is challenge. We are doing something that has potential to change the way people consume information and reach for an audience.

8. If you were to start again, what would you do differently?

Prototype business models more, iterate faster, talk to customers sooner.

9. Where do you see your business in five years, and how will you get there?

Five years for a startup is a long way out. Our vision is to change the way people consume information. We want to grow big so we start small by focusing on a niche. This lets us prototype faster and see what works and what doesn’t. I think the assumption-test-learn cycle could be good strategy to move forward.

10. If you weren’t working on Reach.ly, what would you be doing?

Most probably I would have another startup. I’m somehow addicted to internet businesses. If not, I would have travelled the world and maybe become a surf bum. Some five years ago there was one moment where that could actually have happened.

11. Tell Springwise a secret…

For now have no secrets to unveil but we do have some…

12. Any final words for aspiring entrepreneurs?

Just do it and think big.

You can read more about Reach.ly in our article here, or visit the Reach.ly website here.