Q&A with buuteeq founder and CEO Forest Key
buuteeq has developed a unique digital marketing and booking service for hotels around the world. The service not only provides hotels with a web presence and the ability to manage reservations in the cloud, but it also enables the integrated management of social media channels. The Seattle-based company was founded in 2009.
SUB: Please briefly describe buuteeq, and the value proposition you bring to the hotel marketing and booking market.
Key: buuteeq is a Software as a Service (SaaS) digital marketing system for hotels that powers a hotel’s online reservations and marketing through the web, mobile devices and Facebook. With buuteeq the hotel staff can quickly and easily make changes to their website at any time, and those changes are immediately updated to their mobile and Facebook materials as well—making it much easier and cost effective to maintain a great online presence. With buuteeq’s digital marketing system powering a hotel’s online experience more prospective guests will learn about the hotel, and a higher proportion of them will book directly with the hotel, delivering more aggregate reservations at lower commissions.
SUB: How does the service work, for both hotels and travelers?
Key: Hotels sign up for a free evaluation of buuteeq via our website, www.buuteeq.com, and configure their hotel settings in our “BackOffice” interface which they access through any web browser—the system is entirely cloud based and accessed from any computer, no need to install any software locally. Typical set up takes just a few hours—the hotel uploads photos, room descriptions, pricing and promotional information, and any other details they’d like to mention including restaurant, spa, activities, and transportation information about their property. When the hotel is ready to go live, we help them redirect their existing hotel website domain (eg: www.my_hotel.com) to their new buuteeq-powered website—their website address doesn’t change, all future visitors see the new and improved website powered by buuteeq. Any guests that visit the new website from their mobile phone or Apple iPad will see a mobile optimized version of their site, and the same content will appear within their existing Facebook page—if they don’t have a Facebook page, we will set one up for them for free. buuteeq includes an excellent integrated booking engine that ties into web/mobile/Facebook directly, or, hotels can integrate buuteeq with their existing booking engine from a third party. Guests will now see the same information across web, mobile and Facebook, all superbly designed and optimized for converting prospects into direct reservations via the online booking engine.
SUB: Who do you consider to be your competition? What differentiates buuteeq from the competition?
Key: Our biggest competition today is the legacy relationships that the hotels may have with a web design agency. These agencies tend to be very small, often individual proprietors, and provide custom design and development services to the hotel, usually charging $60-150 USD per hour. No matter how good these agencies might be, the economics just don’t work out—the budgets of the hotel do not provide enough hours for the agency to deliver the complete, high performing materials that span across so many new and ever changing technological surfaces. Very few hotels have a working solution today to fully serve information about their property to guests using their mobile phones, even though the industry expects more than 50 percent of reservations to be made via mobile phones by 2014; even fewer hotels have a Facebook strategy. Hiring a small web agency to figure out new technologies for hotel marketing that go beyond design and into reservation systems and integrated mobile and Facebook presence falls short from both a cost and expertise perspective—it takes too much money to build a custom solution for each hotel and different capabilities are needed. buuteeq has already invested well over $1m USD in our system, with many millions more to come in the next few years, whereas a typical hotel has a budget of no more than $10,000 to $25,000 USD per year. By subscribing to buuteeq the hotel gets a cutting edge system that is second to none in design, speed, manageability and most importantly, in the performance of attracting traffic and converting prospects to reservations—which is after all the goal of online marketing.
SUB: What was the inspiration behind buuteeq?
Key: I lived in Beijing, China for two years while I ran web technology platform business development for Microsoft in Asia, and during our time as expats in the region my family and I did a lot of travel within China, Korea, Japan and Southeast Asia. Like most travelers, we love staying in unique hotels wherever we go—who really aspires to staying in a big chain hotel other than a business traveler obsessed with frequent guest program points? Planning our hotel stays during our trips was an absolute nightmare, so initially we used expensive tour companies to plan our trips. After a few such trips, I realized that there were amazing hotels all over the region, but that they all had really poor websites and no idea how to connect with me as a potential guest directly so both they and I could enjoy higher efficiency and lower-costs that otherwise went to the operators as commissions. After visiting the LiAn Lodge , a lovely hotel in Guilin area of southern China, I asked the front desk staff for the owner’s name, and reached out to him to start asking some questions about hotel marketing and the challenges he and other owners faced. That conversation led to 20 similar conversations with owners—and a clear vision in my head for creating a software platform which would help owners improve the quality and efficiency of their online e-marketing.
SUB: When was buuteeq founded and what were the first steps you took in establishing it?
Key: I founded buuteeq the day I left Microsoft in the fall of 2009—my family and I moved to a rural part of northern Chile and lived in a lovely little wine producing town while I wrote the product design specifications and put together the first prototypes for our first three hotel partners. I set up a team in Beijing China to do the design and development of the system, and I worked with hotels in Mexico, China, USA and Chile as early customers so that I had a good breadth of different requirements and needs to guide our design of the system. It was a great way to build a travel product—to have to deal with time zones, languages and communicating by web and telephone—all very real issues that face hotels when they market themselves via those same channels; I like to think that starting the company this way really defined our team as a multi-lingual, multi-cultural, multi-time zone ready organization.
SUB: How are you marketing buuteeq’s services?
Key: We advertise online as well as reach out to hotels directly via phone calls and events. We spend a lot of time with hotels showing them the system via web-meetings from our two offices in Seattle, where English is the primary language, and Santiago Chile with a Spanish, Portuguese, and French speaking staff. We are also setting up partnerships so that web agencies can resell our product to their existing hotel customers and use it as a platform—this will improve the quality and cost-efficiency for the agency, while allowing them to continue to serve their customers with more specialized strategic advice and consulting.
SUB: You recently closed a $3.5 million Series A funding round. How do you plan to use the funds?
Key: We launched our service earlier this year and are already serving customers in 10 countries in 6 different languages. Our customers range in ADR (average daily rate) from as low as $20 USD to above $500 USD, and in size from just a few rooms to over 100. We are growing very rapidly and our recent fundraising of $3.5m USD in new capital which we closed in May 2011 is going to primarily go towards expanding our sales capacity so we can ramp up even faster and get more customers live. Our ambition is to serve 1000s of hotels worldwide—we are investing in an innovative product that will be transformative for hotels, and our early adopters have told us that the product delivers more online reservations and is much more empowering for them to manage.
SUB: Why was this a particularly good time for you to seek a funding round?
Key: We started buuteeq during the fallout of the 2008 global economic meltdown—I remember some friends asking me if I was crazy to start a travel related business during a bad economy, but of course, down-economic times are great times to invest in new businesses that will benefit from the improving economy as
it returns. Our timing looks to have been perfect in that sense—we now have a great product ready for market, at a time that travel is rapidly growing, especially in markets like South America, Asia, China and Eastern Europe, which are all ideal hotel markets for the buuteeq service.
SUB: Do you plan to seek more funding in the near future?
Key: For now we don’t have plans to raise more money—we have a great team, a great product and cash in the bank…now is time for focus around go to market. I’d add that this is an entrepreneur’s dream moment in the life of a business: we have nothing but ourselves standing in our way for success—raising money is a huge, albeit necessary, distraction from the more interesting task of actually running the business!
SUB: What have the biggest obstacles been so far to building buuteeq?
Key: Call me an optimist, but there haven’t really been any obstacles—just the hard work that comes from seeing something in your head and then going off and making it real. But I think like many entrepreneurs, I see that as a big part of the fun, and certainly for me it is a joy to come to work every day to face the challenges of building our team, product and business.
SUB: What is the next big milestone you see ahead for buuteeq?
Key: Our business is about delighting our hotel customers, so I see the next three milestones as all being related to number of hotels that we serve. I remember the scene from The Social Network where Facebook’s staff has a big screen in the office that ticks off the number of users as it approaches 1 million, then 10 million, then 100. In our case the numbers won’t be as large (there are less than 1m hotels in the world), but the psychology will be very similar…it’s all about how many hotels are using and benefiting from our platform.
SUB: Finally, as an entrepreneur who has so far successfully navigated the bad economy, what advice do you have for those just now starting out with new ventures?
Key: I prefer not to lecture others about the dos and don’ts of business, because there are just too many right ways to build a business and what’s right for me and buuteeq may not be appropriate for another business, and vice versa. I would say that at the heart of every business is a really valuable and tangible benefit for your customers: in buuteeq’s case, we are confident that we have something super meaningful to share with our customers that will make their business fundamentally better. If you have that confidence in your product, it is a lot of fun to start a business even in a bad economy, as both you and your customers can win.
buuteeq – www.buuteeq.com