Reach.ly builds Twitter tool for hotels to find and engage new guests

TLabs Showcase on travel startups featuring Latvia-based Reach.ly, a Twitter-focused direct marketing tool for hotels to identify and engage with potential guests.

Who and what are you (including personnel and backgrounds)?

Reach.ly is a real-time social media filtering startup.

We are a handful of energetic, kite-surfing entrepreneurs from Rīga, Latvia, who have figured out how to extract from 200 million tweets per day a very focused and manageable stream of tweets that a hotel can market to directly in real-time – and built a tool that lets them do this easily.

Our backgrounds are in internet businesses and high tech. Three of our co-founders, Ernests Stals, Kaspars, Kalniss and Martins Latkovsksis have worked together before in the social media space.

We have been joined by co-founder Andris Berzins, an experienced entrepreneur and high-tech executive and Stanford Business School graduate.

What financial support did you have to launch the business?

We have closed an angel round of funding that secured Reach.ly the capital to launch the business and see it through the initial growth phase.

We will be raising more capital in due course to scale the business.

What problem are you trying to solve?

Times are changing as you may have noticed and communication tools are becoming more real-time.

Potential customers, guests for hotels of course are adapting these new technologies. We provide hotels tool to tap into this real-time communication.

For them it also means bypassing middle-man like online travel agencies and save on booking fees.

Describe the business, core products and services?

Our core service is a platform for hotels to login, see a highly filtered and targeted stream of tweets, and to very easily select which Twitter users to reach out to and send a personalised message.

The hotels can also select to receive in an email form a daily summary of the relevant tweets.

Who are your key customers and users at launch?

We have several of the world’s top hotel brands registered as users and testing our service.

Did you have customers validate your idea before investors?

Of course, we had good indications from potential customers of the value, but nothing beats putting a product out into the market and letting customers play with it.

What is the business AND revenue model, strategy for profitability?

The business model is eventually to charge for premium services, but today our focus is on building the service and growing usage.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• We have unique experience in filtering and mining Twitter traffic in real-time, for which we found the first obvious application in the hotel & travel business. We are also a small and nimble startup and can move quickly to take advantage of market and technology opportunities.

Weaknesses:

• We are a startup, so of course we don’t have unlimited resources to play with. But that keeps us highly focused on our customers and what it takes to keep them happy.

Opportunities:

• Twitter traffic is still growing rapidly, which keeps it as a great public social media channel, but continues to make use of this channel for marketing more and more difficult. That is where we come in – to turn it into an effective marketing tool.

Threats:

• Our main threat is not being able to take advantage of all the great opportunities in this market fast enough.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

Many friends and colleagues told us we were crazy to think that consumers would react positively to tweets addressed to them and communicating a marketing message.

However, we found that consumers are tremendously responsive to such direct outreach via Twitter.

Our test results show that 9% of guests receiving a message actually make a booking!

About 20% more respond that they appreciate the direct communication. We are listening carefully but evaluate everything and try to test and measure our assumptions.

What is your success metric 12 months from now?

We will measure ourselves based on the number of hotels using our services actively and then being willing to pay for premium services.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.