The Exchanges

Q Why is that surprising to you? That's what I would have guessed.

A Uh, well, I think, I, I thought, particularly in the earlier stages of our company when we weren't as proven, I would have expected them to want us to take on more of the risk and then make money more on the upside, but because of the fragmented nature of the hotel industry where you have a separate party that owns the, the property, another one that manages it, and then another brand that could be on the, you know, on the outside of the building, um, getting alignment among those three parties can be pretty complicated, and what they want is to know what their expenses are going to be and have a A fixed price contract. And so anytime we tried to do a more variable contract, a pricing negotiation that might take one to two weeks would drag on for one to two or three months. And, uh, and so they wanted to limit the risk, but having some of our fee at risk does give them the confidence that we're willing to kind of, um, put our own, uh, livelihood and, you know, behind their success.

AI assessment note: “I would have expected them to want us to take on more of the risk”

Q Yeah. Yeah. Okay, cool. So take us, take us back. We'll actually help us understand kind of averages here. So I imagine you have all kinds of cohorts of different customers that you're selling to. Who are you actually selling to though? Is it the person that owns the building? Is it the Marriott that operates the building? Is like, who are you? Who's the buyer?

A It varies. Um, so if it is a strong brand like Marriott, who's not a customer of ours currently, they control all of their brand systems, and we would need to integrate into their ecosystem of inventory management, distribution, and so on, and they would then have complete control. So if a real estate owner wants to work with us at a Marriott property, um, Marriott would, would prevent that because, We're not integrated into their ecosystem today. Um, so in the case of a very strong brand like that, we have to go to the brand. In the case of smaller brands that maybe don't exert as much control or have more of a membership model, um, or when it's more of just like an independent hotel in a market, um, then it can be more of the management company, the people that are actually hiring the employees and operating them. What a lot of people don't realize about the hotel industry today, though, Is that a lot of times the brand is no longer the operator. They've gone so asset light that they no longer, not only do they not own the underlying real estate, they also don't actually hire the employees that service the guests. Um, and so those management companies tend to be our first point of contact and our ultimate champion to then get alignment from the brand and from the real estate owner to make a purchase of our software.

AI assessment note: “those management companies tend to be our first point of contact and our ultimate champion”

Q For a young student listening right now that doesn't want to go through the work of actually completing a degree at Harvard, but Sees the value in the network like you do. Is there a way to hack that? Is there a way to get access to that network without actually, you know, going through classes for four or five years?

A Um, yeah, there are. Um, I, I, I think that you do get other benefits other than just the network by, by going through, I did the two year program, so it wasn't a four or five year commitment. Um, but, uh, so in particularly in my case where I was going from a non-traditional background, having, uh, Worked in the arts as an actor and singer to then working in politics, um, it was really helpful for me to have a grounding in business terminology, the way businesses work, meet a lot of, you know, people that had worked in banking and consulting and other things that had a lot to teach me, um, aside from just the network. There is a, there are abbreviated programs, so there are things like the Executive Education Program, the Advanced Management Program, and other short, short courses that you can take, um, They give you access to the network. So that's the primary interest. Now they tend to be expensive. So it's like 60 or 70. I think it's like 60 or 70 grand. I mean, don't quote me. I don't know the pricing, but it's, I think it's like 70,000 dollars to go through an abbreviated program that then gives you full access to the alumni database. You can put it on your LinkedIn and, and start kind of networking in that circle.

AI assessment note: “there are things like the Executive Education Program, the Advanced Management Program”

Q Yeah, I mean, some people say, oh, we just put it 33, 33, 33, and I say, that's weak. Somebody's worth more than somebody else. You just didn't want to have the tough conversation. How did you guys have the conversation?

A Um, we certainly had the tough conversation. Um, so, you know, Marco and I, We're working on this business. We hadn't founded it yet. We hadn't created the actual entity, but Marco and I've been working on it for about a year. Um, and we met Craig Weissman, uh, let's, I think we met him the beginning of September of 2011. And it took about five months to court him. And, uh, his last two companies that IPO'd, um, but he'd never been a founder of a business. Um, he was the CTO of Salesforce for, he was there for about nine years and was the CTO for the last three years that he was there. And, Um, when we were, Marco and I were in Vegas at the time, and we were trying to raise money there. Um, we were getting valuations more in the, you know, one to two million range. Um, and the day that Craig joined, the valuations jumped up to the ten million dollar range.

AI assessment note: “we certainly had the tough conversation. Um, so, you know, Marco and I”