Alleviating Booking Management in the Activity Industry - Startup Stories with Daniel Steele
Keep reading for the transcript of our talk with Daniel.
Anton Oparienko (COO, Upsilon): Today we have another episode of "Startup Stories", and I'm thrilled to have Daniel Steele, the co-founder and CTO at eola, a booking platform and schedule management system. Welcome, Dan.
Daniel Steele (Founder and CTO, eola): Hello, thanks for having me.
Anton: How are you doing today?
Dan: All good, happy Friday! We just won an award, so I'm feeling pretty good.
Anton: Great. I've heard about that. That's a big thing. So, Dan, I think we can go and start with your background and your story.
Dan: I have been a developer for many years now, which feels weird to say because it feels like the whole thing is still so new (the imposter syndrome is definitely real). Over six years ago, I began a booking and management platform for the activities industry called eola as a co-founder and CTO. Since I wrote the first line of code, we have built a solid team of engineers, and we process about two million requests a day. I am extremely passionate about what we can bring to our customers and really enjoy working in this space.
Anton: On your LinkedIn profile, you stated that you wanted to be a pilot, and you even gained a pilot's license. What made you change your mind and look toward programming?
Dan: In hindsight, my journey to get here makes a lot of sense. When I was five years old, someone asked me what I wanted to be when I grew up, and I said a pilot. Fun fact, I was too young to pronounce the word correctly, so she thought I said pirate! My parents were very supportive of my plan to be a pilot, and I still believe it's a cool career for a kid to aspire to.
But as I approached my teenage years, my parents made it clear that they wouldn't pay for my pilot's license and encouraged me to start saving. So, I started taking on side jobs too, and that's when I began to discover ways in which I could make and save money.
My very first company was built around teaching people how to fly using Microsoft Flight Simulator. It was an ideal crossover between my passion for flying and the need to earn some cash! I also had an IT call-out company because I had a knack for computers. I couldn't code at that stage, but I would provide IT support for people in their homes. And that's how I managed to scrape together enough money to get a pilot's license.
Before going to university to study aero engineering, I approached a company called Chiltern IT and asked for an internship during the summer. I simply walked up to them because they had IT in their name, and I thought I could work with computers!
To start with, I was given some standard intern tasks like sorting spreadsheets, and quickly realized things were not as efficient as they could be. So I started teaching myself how to code to solve the problem - but that didn't quite work out, so I ended up subcontracting the work, which my boss had mixed feelings about! Nevertheless, I ended up getting a full-time job there. I got really into it because I had a space to teach myself how to code, so I started enjoying it more and more. Shortly after I joined, the company announced financial difficulties and let go of the wider tech team, so it was just me, someone who was self-teaching themselves basic coding.
Their big plan to save the company was to ask me to re-engineer the way they worked, and I must admit I had no idea where to start. Thankfully, I was able to do something vaguely useful and helped them out of a tight spot! However, the main thing that I learned was that I really enjoy doing this. From there, I bounced around a decent amount. I got some slightly more formal training and moved away from the whole pilot career idea because I fell in love with programming and the tech industry as a whole.
I ended up starting a web development agency where I specifically worked with startups. I felt that I could contribute not only with coding but also to the product development side of things. It's somewhat similar to what you guys do but on a much larger and more formal scale. We would talk to founders and help turn their vague concepts into actionable steps and minimum viable products (MVPs). I definitely enjoyed working with founders and translating their initial big ideas into something truly achievable.
Anton: We talk with a lot of co-founders without technical experience and ask if it is harder to start a business without any tech background, and if you really need a co-founder who knows how to code. What do you think about this? Is it necessary to have two co-founders, one of them a tech guy and another more about marketing, sales, etc.?
Dan: I think it's one of those situations where it depends on the individuals involved and the specific goal they are trying to achieve. Personally, I would never start a finance-based company without a co-founder who has a deep understanding of finance. Similarly, I wouldn't recommend starting a tech company without a co-founder or highly experienced leader from day one who truly understands how to bring your vision to life.
Based on my experience at my development agency and beyond, I have noticed that non-technical founders often face unforeseen challenges. It's understandable because you can't anticipate problems until you encounter them, and without someone to guide you, it becomes even more difficult. Therefore, I strongly encourage anyone starting a company in any industry to ensure that at least one member of the founding team has the ability to think about how things are practically implemented and executed.
If I were to start another company after eola, I would definitely choose to have a co-founder again. Not only does it provide a broader range of knowledge, but it also offers emotional support. Having emotional support and validation of your ideas, being able to talk to someone who understands the nuances of these challenges in the moment, is far more valuable than simply checking in with a friend, as they may not grasp all the intricacies. That being said, I have a great friend who's a solo founder and seems to be doing an excellent job, so it is possible!
Anton: That's good advice. You've talked a bit about the idea and the validation, so let's talk a bit about eola. So what does the product do? What problem does it solve? And speaking about validating, how did you validate the idea of your product?
Dan: Initially, we felt that there were not good platforms out there that aggregated activities and made them bookable - that was the problem we wanted to solve. While there are online travel agencies like GetYourGuide, Booking.com, and Viator, they didn't have significant market penetration in the outdoor activity space. So, we aimed to build a marketplace that would aggregate all these activity centers by working with their existing backend systems.
As I started building the functionality, I had to consider which systems we wanted to integrate with. Through extensive market research, we found that the existing functionality didn't meet our expectations. So, we invested more time and gradually shifted from the marketplace idea to building a platform that could become the backbone of the industry.
Anyone who wants to start a new activity center, whether it's for surfing, hiking, rock climbing, or whatever, can do just that with eola. The majority of the value lies in the end-to-end management we can offer.
We shifted our efforts onto the management ecosystem rather than the marketplace, as it offered more value and functionality. And although the marketplace still exists, it is not a priority for us. We are able to take care of activities, rentals, vouchers, class passes, instructors, schedules, reporting payouts, financial flows, and much, much more.
So, to answer your question about the problem we solve, it's not just one! We tackle a wide range of problems, taking a comprehensive approach. Some people refer to us as a one-stop shop. You can use eola to set up your business or migrate your current setup to work with our platform, leveraging modern technology. This transition brings significant benefits, especially if you don't have a booking system in place already, are relying on spreadsheets and pen and paper, or you're using outdated backend management tools. We offer advanced features like AI, super dynamic functionality, and industry-leading reliability. Plus, whether you're a solo entrepreneur or a large multi-center operation with hundreds of instructors, our platform is designed to be highly scalable.
Anton: I see that you're really proud of your product and the results it brings. We use Gmail, Slack, Reply, and Mailchimp, but ultimately, one of the things I do is integrate them all together through integrations or similar methods. If we come across a solution that brings multiple elements together in an effective way, we generally switch to it because it saves us a significant amount of time and reduces the hassle of managing 20 systems simultaneously. So how much time and money did you spend on building an MVP that you showed users for the first time as an actual product?
Dan: I want to start by saying if I was giving advice to a company about their MVP, it would be to not follow our example! However, in order for us to succeed, we had to set it up the way we did because we wanted to take an approach where we could solve a wide variety of problems with a full stack.
To reach the point where we could offer the whole end-to-end experience, from adding and presenting activities to managing bookings, we had to consider that customers were actively visiting our clients' centers based on their interactions with eola. If we made mistakes, it would directly impact our clients' businesses. Therefore, we needed to have enough functionality to build trust in our ecosystem and handle edge cases, such as cancellations.
We spent approximately nine months on the MVP, starting in the summer of 2017. By early 2018, we had reached a point where we could legitimately go to market. At this stage, we weren't just seeking feedback, but actually offering people to use the platform and provide their thoughts. Throughout all of this, we continued iterating and closely listening to our customers' feedback.
It was in 2019 that we officially launched commercially. Our MVP stage was significantly prolonged, which carried a substantial risk in terms of time and money. What if our bet was wrong? We would have wasted everything. Therefore, I wouldn't recommend this approach to others. However, in our case, it took over a year in terms of MVP cost to prove that our platform was more than just a marketplace listing or a booking system, but had additional functionality that actually worked.
The benefit was that during this time, my co-founder and I didn't take any salary, so the direct startup costs were minimal. It was mostly an opportunity cost for us. Within that time frame, we also brought on two other developers, initially without salaries. They were aware of the risks involved, as we have always been transparent and open about it with anyone joining us. We understand that it's a high-risk venture, as most startups don't succeed. Basically, we won't mislead you, but let's strive to build something amazing!
Anton: Interesting. So you said that you spent about nine months until you actually started showing it to your clients. Who were your first customers? Where did you find them?
Dan: The first customer we had was Frangipani Sup, a paddle-boarding business in Essex. They didn't know they were our first customer until about a year ago, and I'm pleased to say they're still a happy customer to this day!
We solve problems for the activities industry, which includes a wide variety of businesses such as climbing, water sports, hiking, skiing, and many others. However, we initially focused on the water sports vertical because we needed to start somewhere and gain market penetration. We had some vague connections in the water sports industry, so our first five customers were surf schools and paddle boarding places. Although they were small businesses, they understood that we were trying to do something different as an early-stage company. Importantly, they felt well taken care of, as they should.
If they discovered a bug or issue, they would communicate directly with me, and I would strive to fix it within half an hour. Every piece of feedback they provided was valuable to us.
When we implemented their suggestions, they could see that their input mattered. If we did not implement their suggestions, we would make sure to take the time to explain why. We maintained a direct and engaged relationship with our customers, which we continue to do today, creating a strong community of customers.
Anton: That's interesting. And your current ICP is Small and Midsize Businesses (SMB) because, as I understand, you work with a variety of different sizes - including the government? Where are you looking to take this?
Dan: It's quite difficult to describe because enterprise business in the activity space is obviously quite different from enterprise business in a SaaS space, but we're primarily going after SMBs.
The market is fragmented, and we are looking for businesses that generate a significant amount of revenue and operate reliably. With our more mature platform, we can now target larger businesses with higher revenue and more employees, such as those with 10 to 30 instructors. This would be an average customer profile. Although we still experience some seasonality, we aim to expand our offerings during the off-season. Additionally, we want to establish stronger connections with the skiing industry and evergreen sports that remain popular throughout the year.
Consumer spending patterns are changing, affecting everyone. With the rising cost of living, people are less likely to spend a significant amount of money on an activity that only lasts a few hours. Therefore, lower-cost activities with higher volume are currently performing better.
Working in this industry is fascinating because we can observe the impact of various factors on the macroeconomic level. Moreover, due to our extensive collaboration with numerous businesses, we can genuinely identify industry trends and determine what strategies are effective. We pass these trends on to our customers and encourage them to capitalize on these trends as much as possible.
Anton: How did COVID influence your business and your clients' businesses?
Dan: It was really mixed. Initially, it was horrific for everyone, us included. Our primary revenue is from commission. So, when our customers' bookings are down, our revenue is directly affected.
When the first lockdown started, and people were just sitting inside, I remember looking at the graphs and thinking that even on the worst days, we were still receiving a good number of bookings. But then there was a day when we didn't receive a single booking, despite having hundreds of businesses in the UK. That was wild. It really highlighted how severe the impact of this is going to be in our sector.
Luckily, we mainly focused on outdoor experiences. This meant that there were activities that could be done while maintaining a few meters of distance from each other, allowing them to continue with COVID restrictions. So many of our customers were able to resume their activities as lockdowns eased and rules changed. Some of them even experienced higher demand as people were so desperate to do something with their time.
I remember we had a small fishery join us, a business with just one or two people, when the rule change allowing people to go outside was announced. As soon as the news came out, we witnessed a huge spike in bookings for this company in real-time. I think they ended up being fully booked for the next six to nine months, as fishing was obviously the perfect activity to do during these restrictions. You were paying to go outside and sit alone for a while!
So we had a very mixed response. Some centers recovered quite strongly, while others were hit so hard by the initial impact that it couldn't make up for it at all. It was a bizarre time for everyone.
Anton: I see. That's an interesting story because I was always kind of curious about what happened to more niche things. You also mentioned that you've launched and added AI to eola. What does AI do in your product specifically?
Dan: We currently have two AI tools that are accessible externally, as well as a few internal tools. The first tool we launched is an activity description generator that does exactly what the name suggests. We gather metadata from the internet about your business and the activity in question. With a simple click of a button, the AI then generates an engaging, SEO-driven description for your activity.
We developed this tool because, among AI applications, it is relatively easier to create as it focuses on text generation. However, it addresses a real problem in our industry, especially for smaller businesses. In these cases, there are often 5, 10, or maybe 15 instructors, making it unlikely that someone skilled in writing, marketing, or creating engaging content is present. Typically, activity descriptions are created by the instructors themselves, the business owner, or a receptionist-like individual. The activity description is crucial for engaging customers and encouraging them to book an activity that matches their expectations.
This tool was one of the early AI implementations during the current AI hype. From my perspective, it served as a technology test and a means to evaluate our delivery capabilities. The response we received far exceeded my expectations. I initially thought it was cool and would solve a problem, allowing us to move on to the next project. Thankfully, we received a lot of positive customer feedback! Many customers found it to be an awesome time-saver, especially for creating content across their 20-30 activities. It was gratifying to hear.
When it comes to our second tool, it's all about solving a very human problem. I'm sure you have participated in activities where you have made an online purchase. Upon arrival, you are typically required to complete a questionnaire that may pertain to health issues, swimming ability, mobility, pregnancy, etc. We have learned from our customers that even those with formal processes, such as a health and safety committee, only have a 60% chance of an instructor reviewing the questionnaire. This is the baseline engagement rate.
Now, let's assume you have completed a 15-question questionnaire. What is the likelihood that an instructor will notice an issue with the seventh question? The chances are minimal, given the initial 60% engagement rate. This lack of attention can have direct consequences for your safety as a customer and the center's compliance.
Our latest AI tool analyzes every customer response to identify potential concerns for center managers and instructors. Once enabled, our system evaluates what the reviewer should be concerned about. This tool is currently in beta, and while we have received positive initial feedback, we are gradually expanding its usage. It is proving to be genuinely helpful and improving safety for businesses who use it.
AI implementation alone is no longer a differentiating factor. It has become an expectation from customers for platforms that are technically advanced and mature. The question now is, why aren't you utilizing AI? The focus has shifted from whether it can be shipped to how it can be applied effectively to solve specific problems within a product.
In the case of our questionnaire analysis tool, scalability was a significant consideration. It intelligently reviews each question, taking into account metadata and self-referential problems. Furthermore, it seamlessly integrates with the backend. The challenge lies in building a framework around this AI tool that actively contributes to the platform's logic. Additionally, we need to address any shortcomings and continuously improve it.
I believe that people will soon expect text generation as a standard feature. Realistically, individuals will use browser extensions and similar tools. The timeframe for claiming AI implementation by merely adding text generation is closing. It no longer provides a mechanical advantage over copy-pasting content into a ChatGPT and then copying it back. The key is to identify unique value propositions that are specific to your platform and leverage the available metadata.
Anton: The AI hype is, or was, absolutely real. Some products that I use just slap an AI tag on the front page, but when I look at that, it either overpromises or does too simple stuff that does not help me. And in both cases, I have my ChatGPT window open, where I like to do things in the way I know will work for me. Do you have further plans on AI, or what is your overall vision of where eola is going?
Dan: We have a pipeline of projects in the field of AI that we are currently working on. Our current focus has been on internal tooling, which has been very exciting. It's quite remarkable how we have developed our internal capabilities to harness AI. Personally, I have a strong passion for AI, which is why I became interested in GPT-2. I got caught up in the hype and also had concerns about its potential dangers. We were among the early adopters and even organized a hackathon about a year and a half ago to build a description generator.
We have been proactive and heavily involved with AI, whereas many developers I've spoken to seem indifferent. I find this quite strange because as developers, we are usually at the forefront of technology and constantly engage with new advancements. We can generally recognize when something is challenging to develop.
The AI language models that we have now integrated as a normal part of our work are incredibly difficult to build. They require massive amounts of data, and we have gone through numerous iterations to reach our current position. The possibilities that have been unlocked are even more astonishing. There seems to be a lot of apathy, perhaps due to people being tired of other new "tech trends" like NFTs and crypto. AI may sound like another buzzword, but it has a significant impact on the end user. It's not just about shipping an NFT, which could simply be a record in a database. AI fundamentally transforms the user experience in a clear and obvious way. I believe people are starting to recognize this more.
Anton: I agree with you about the many possibilities and the potential dangers. Can you give some advice or share some main lessons you've learned while building your own company? What would you tell people who are thinking about starting their company or working on their idea or MVP validation?
Dan: The most common advice I give people is that their idea doesn't really matter. It obviously matters to some extent, but what matters much more is their execution. They shouldn't think that coming up with an idea will automatically lead to wild success.
They need to transform that idea into something that becomes a successful business, but there are many obstacles in their path. For instance, people may not believe in them or the idea, they may struggle to secure startup funding and build a team, or they might face interpersonal issues that could hinder their progress. It's a challenging journey, so the idea itself is expected to be at least decent. They probably won't end up with the exact same idea they started with because execution is key. They mustn't become too fixated on the idea, as they may lose sight of what truly matters.
Luck also plays a significant role in success. To improve their situation, individuals should maximize their opportunities and take risks repeatedly. Meeting as many people as possible is crucial because one of them may be extremely beneficial, whether as a potential hire, collaborator, or investor. Building strong connections within the industry and founder communities is essential.
Anton: These are probably all my questions. If there is anything you want to say or add about eola, you're welcome.
Dan: With eola, I wanted to build something that I could truly be proud of from a product perspective, and I believe we have definitely achieved that. It's what keeps me going. I'm extremely proud of what the team has accomplished. We have experienced many ups and downs, like any startup, but the team has been absolutely phenomenal, scoring a perfect 10 out of 10. We have created something that many people seem to genuinely connect with, and I'm incredibly pleased with that.
Anton: Thanks a lot, Dan, thanks for your time, advice, and insights. It was a real pleasure talking to you!