This post by Mukela co-founder, Tawanda Sibanda, was originally posted on Launching Tech Ventures. It contains Mukela’s experience selling their idea to Hotels locally. Some great advice in there for tech start-ups. Mukela won the the inaugural ZOL Start-up Challenge in September this year.
I am the co-founder of an Africa-focused hotel reservation site called Mukela.com (mukela is derived from the Zulu word emukela, meaning welcome). Essentially, the site is hotels.com for the African hotel market. If you were to go to expedia.com and search for hotels in Harare, Zimbabwe only 5 hotels will be displayed. Our database, on the other hand, contains over 150 accommodation options in Harare alone. Western online travel agents only scratch the surface of accommodation in most African countries, and are overwhelmingly weighted towards the most luxurious. Mukela.com’s value proposition is to provide the intrepid traveler access to a wide spectrum of comfortable but more affordable mid-tier hotels. Why aren’t hotels.com and expedia.com adequately serving the African market? The hotel market in Africa is extremely fragmented with few hotel chains. Achieving broad coverage in the region requires reaching out and forming relationships with hotels individually and is prohibitively expensive for the large players.
The success of Mukela.com hinges on our ability to cheaply grow our network of hotels in the region. As part of my Harvard Business School Launching Technology Ventures class, I designed and executed an experiment to determine the cheapest acquisition method for hotels (focusing on my native Zimbabwe). I experimented with three different methods: a PR launch in Harare, an e-mail marketing campaign and a telemarketing campaign. Rather than go into the details of the experimental methodology and business results, I would like to present two key lessons from my experience.
Firstly, iteration does not end with product development. Prior to running my sales experiment, I viewed product development thus: team iterates and pivots furiously in the early stages to achieve product market fit; then team uses out-of-the-box sales and marketing methods to sell the product. My experience with Mukela.com is that product development is actually the easy part. Selling the idea is significantly more challenging. I iterated my sales materials constantly in response to customer feedback. For example, consider my e-mail campaign. I was proud of my first e-mail draft. [Note: this link and several more that follow will download files from my Dropbox account]. It captured the reader’s interest in the first paragraph, articulated his/her problem, presented Mukela.com as the solution, and provided the reader with some actionable next steps. However, within hours of sending it to my product team for review, I was told to use my own name in the e-mail signature (to add a personal touch) and include a testimonial from an existing customer (as validation). See version 2 of the e-mail here. At this point I thought I was done and sent the e-mail to about 50 hotels. Within days, I received initial feedback from a few hotels that bandwidth in Zimbabwe was limited (more on that later) and they could not view the videos links in my e-mail. In response, I rewrote the sales email, scrapping the catchy intro and adding significantly more content about Mukela.com directly in the text. I went through similar iterations with my customer videos, sales pitch, and telephone script (version 1, version 2).
All this to say: do not stop iterating when you create your sales materials. Just as in product development, listen to customers, and tweak the design until you have created content that is good enough to effectively communicate the product to the client (in essence until you have a minimal viable sales product).
Moreover, be prepared to iterate on sales execution, not just design. As an example: please listen to my first hotel cold-call. Notice how I rambled and wasted time pitching Mukela.com to someone with no decision-making power at the hotel. After listening to myself, I tightened my script. Now listen to my second recording and notice the difference.
My second significant learning from the sales experiment is the importance of truly understanding not just your customer but your customer’s context. In designing my sales materials and strategy I was inspired by RentJuice, a startup targeting rental real estate agents that we studied in class. They relied on Webinars and videos to boost sales conversion figures. I created a series of videos introducing Mukela.com. My dream was to use a combination of blast e-mail and rich interactive content to convert hotels with minimal telephone or in-person contact. However, my first couple of interactions with actual customers dashed my hopes. The bandwidth available in Zimbabwe is so low that it took one hotel owner over two hours to download a 3 minute video. Many of my potential clients could barely access the website. Clearly, a web-intensive sales strategy is incompatible with the context of my customers. Moreover, Zimbabwean cultural norms frown upon cold-emailing. Out of 50 e-mails I sent to hotels, only 2 were opened. Zimbabwean businesses rely more on trust built through actual human interaction than webinars and videos.
In conclusion, remember: the lean startup methodology is a philosophy that applies to every part of your business: from product development to sales design and execution. Secondly, don’t blindly copy marketing strategies from Western companies if you plan to build businesses in emerging and frontier markets.
Finally, for those in the process of launching technology ventures I leave you with my top 4 more tactical takeaways:
- Use Camtasia Studio for your demo videos.
- Start using project management software early in your product development cycle. I emerged from 3 years at Microsoft with an aversion for process and tried to run Mukela product development without formal bug tracking or work planning software. The result was chaos, missed milestones, tons of e-mail, and forgotten phone calls. You need process. Power without form is anarchy.
- When you create demo videos, remember to get royalty-free music to prevent any potential legal issues. A good site for royalty-free music: incompetech
- In an early-stage startup, everyone needs to be a tester. Testing is not just trying the product and seeing if it works: it’s understanding the corner scenarios (what happens if you enter in a very large number of guests for a hotel room, or you try checkout before you checkin etc.). I recommended reading Agile Testing: A Practical Guide for an introduction.