The KUBE mantra is to incubate and accelerate start-ups in hospitality. We understand that in order to affect substantive change we need to reach a tipping point for the growth of start-ups. In technology, we are witnessing impressive growth in startups, meanwhile, for hospitality, we're not seeing that same growth.
So our question to you is: "How do we encourage a start-up culture in hospitality?"
Start-ups need a strong ecosystem to nourish them. Good financial funding upfront is important to help build a strong foundation, but investment from the hospitality community in the form of strategic guidance, introductions, references, and just taking a chance on a new thing is the fuel that helps them grow. If entrepreneurs see that the hospitality industry has a well-nurtured start-up ecosystem, they will feel much more confident pouring their time, energy, and money into building the next big thing for us.
To create such an ecosystem in hospitality, we first have to break down our industry's unique barriers to start-up success and make ourselves an attractive target for investment.
- Mindset: I have heard numerous times at industry conferences that "No CIO ever got fired for putting in insert name of really large tech provider here." This mindset has to change to one that focuses on solving actual business needs with technology versus choosing a product and then trying to make your business work around it. This starts at the top of the company with an analysis of how you want the business to run and what you want the customer journey to be. Then you select technology that solves your problems or is extendable enough to allow for other integrated systems to close the gap. On the vendor side, start-ups that extend the functionality of your products should be viewed as a strategic advantage that makes you even more sticky with your customers. Even if that start-up is providing a component you have already built, you should embrace this - it is better to lose the component than the customer.
- Integrations: There is inevitably a session at every hospitality technology conference on the challenges of integration. Inability to easily integrate with large software providers in the industry makes the cost of building new products which extend the functionality of these applications very expensive. It also makes the cost, risk, and time to implement much higher for any hospitality company looking to try out that product. APIs need to be open and comprehensive. We've seen a shift the past several years now to this philosophy, but we still aren't there yet.
- Guidance: There needs to be a network of well-connected mentors and strategic advisors with an active interest in helping start-ups grow that are willing to share their expertise, experience, and network (often for free) to help entrepreneurs outside of hospitality bring in fresh ideas. Participation by C-level executives in the industry in this network signals that their organizations are open to start-ups and helps entrepreneurs focus on actual versus perceived problems.
I love the hospitality industry! We are wonderfully social, entertaining, and creative problem solvers. Yet we haven't changed much in the way we do things, at least for the several decades of which I have been aware. My experience is that most of us are slow to change and so there should be a great need for and space for a start-up culture as long as we can learn to value it.
We can start to encourage a start-up culture by first accepting that our industry needs it in order to stay relevant and attractive to guests who are looking for “something new”, which is more congruent with their lifestyle and needs.
Then we can support new ideas and the start-up companies that are championing these ideas. We can add positive comments wherever we see new ideas posted. We can ask employees in our own companies to start thinking about, and sharing ideas on, what we can do that is fresh and new and different, and then using some of those ideas, even when we are not sure they will work. The greatest inventions have come to pass after mistakes have been made and learned from.
We can also offer resources to start-up companies who are venturing into uncharted waters, who are breaking the mold of what we think “hospitality” is.
Each of us has resources we can share, so our challenge is to break out of our own way of thinking to really embrace the new possibilities before us.
Innovation and transformation are taking place at a rapid pace all around us. Technology allowing for a true digital revolution, environmental and social being the middle point of attention and the covid pandemic making us all aware of what quality time and life are all about.
How does our industry respond to these new demands, especially as so many are just trying to stay afloat given the financial impact of 18 months of economic downturn? Start-ups could play a major role if we let them and more importantly help them. Incubating a new product or service is just passion and the start of a long and complicated journey.
So as an industry let's embrace these start-ups, assist them in trial and error of their product or service, and patiently partner with them.
The spin-off will not only be the new creation/innovation, but it will hopefully also inspire our teams, suppliers, and other constituencies and we all come jointly out ahead.
I say go go go start-ups and help us speed up the transition needed in our industry.
CHTA ( China hospitality and Travel Innovation Alliance) whereby I'm the founder and CEO, from what I have learned from our numerous start-up programs in the past 5 years and so, it has been very difficult and challenging to launch anything new from both hotels and startups perspectives.
For startups: To deeply understand the real pain points of hotel services and operations, what hotels need are solutions to remove real pain points and problems, not just fancy technologies.
For hotels: Hotels need to adapt changes SOP wise, skillset-wise and services-wise etc by technology solutions for the sake of serving the guests better that they consumers already enjoy and appreciate in other public segments during their day to day life.
“The hospitality industry is difficult as it operates across multiple businesses (rooms, F&B etc), it is volatile, capital and labor-intensive and has high fixed costs! Such “handicaps” and complexities can be for a part overcome through innovation. Those who will innovate and be able to respond to those challenges will benefit greatly as the hospitality industry has not yet reached the technological maturity level prevailing elsewhere.
Under such circumstances, the diversity of needs of the industry and its low maturity level offers numerous opportunities for those who are keen to bring innovative solutions to an industry that is in dire need to boost its performances, specifically in a post covid era!”
Start-ups ignite transformation. Any industry that is either embryonic or in dire need of change has to deconstruct and regenerate in a more coherent, dynamic form. This is what happened to the food industry in many countries and to the many industries pre the advent of technology. Start-ups were formed through individual applications that were then adopted by the larger organizations. Individual chefs began the transition in the food industry. They have created a culture of desire and, individual restaurants, each one a start-up, have adopted the creativity of a handful of chefs to create food cultures that 20 years ago were unimaginable.
Today the same is true for the hospitality industry. A group of start-up brands began emerging about 20 years ago. They began what is now known as the lifestyle revolution. In fact, they have just equalized values and brought back desire and joy to the hotel experience. They have taken away the dull standardized box room and lobby and created desirable spaces. In technology, the archaic property management system structure is being eroded through the creation of a system of individualized apps (each one a start-up).
We need to create more advanced thinking for human resource management and through a start-up culture, we will inject dynamism and shared values into operational structures. Marketing itself is being reinvented through an accumulation of start-up ideas and technology.
It is an accumulation of startups that come to a tipping point which then drives that substantive change.
It's all about beliefs, culture, and behavior. Companies must have a purpose—and that purpose must be authentic, inspiring, actionable, and consistently shared across the entire organization. It's important to understand (and celebrate!) the power of diversity versus the challenges of sameness. Attracting and empowering team members from different backgrounds and cultures is fundamental to success.
All leaders must embody these values, empathize with their team, and carry this passion to a future client's needs, wants, and behaviors, both known and anticipated. This startup-inspired approach can create a foundation for future accomplishments.
In a fast-rapidly changing world, an open-minded culture towards innovations and changes is key to survival. In my opinion, the most important issue to encourage a start-up culture is a safe environment. People should be feeling safe and free to do new things without the fear of making mistakes. That requires a non-hierarchy structure and a strong leadership where everybody can contribute from their own strengths. This also requires the willingness to learn from each other and all the mistakes. This requires a different kind of attitude in relation to the traditional top-down thinking that the hospitality industry is used to.
Our great industry is lagging behind in innovation and needs to fully embrace sustainability and digitalisation across the entire value chain. We need to get out of our comfort zone, make quantum steps and dare to try out new ways. Start-ups are the incubators and need to get the financial backing, organisational freedom, and time to challenge the boundaries. The ideas are there, the young generation is eager to make their mark and contributions - let's give them the tools to get to work!