What Launching a Hospitality Tech Startup Looks Like, with Logan Nicholson.

Episode Transcript

Logan Nicholson: You should do the best to figure out why your guests are unhappy if they’re not happy. And you should do the best to have your guests sing your praises to everyone else if you did make them happy. It’s kind of a good principle of businesses. Turn your customers into advocates. So what we want to do is we want to help hoteliers. We want to give them an incentive to handle these negative experiences with care rather than, Oh, well, it’s already on Google. Oh, damage is done. So what’s the point of repairing the relationship. 

Robin Trimingham: Welcome to the Innovative Hotelier podcast by Hotels magazine with weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the innovative hotelier brought to you by Hotels magazine. I’m your host, Robin Trimingham. Starting any business can be an exciting and challenging venture. But in the current economic situation, and given the hospitality industry’s reputation for being a laggard in incorporating new tech, what does it take to successfully launch a new app for the hospitality industry and gain sufficient traction to expand your business? My guest today, Logan Nicholson, the co-founder and CEO of LocalEyes, an AI powered guest experience manager app, is here today to offer his perspective on what it takes to design, fund, implement and grow a tech startup in the highly competitive hospitality industry. So if you’re a startup executive in hospitality or just wanting to bring some startup mentality to your organization, this is the episode for you. Join me now for my conversation with Logan. F.O.H Is a global food service and hospitality company that manufactures smart commercial grade solutions. Headquartered in Miami, the company designs and manufactures all their restaurant and hotel products. They have showrooms and distribution centers located throughout the globe, and their products are always in stock and ready to ship from any of their distribution centers worldwide. Welcome, Logan. Thanks so much for taking time to chat with me today. 

Logan Nicholson: Yeah, absolutely. I’m excited to be here. 

Robin Trimingham: I was very interested when I was reading about you in order to prepare for our conversation. You’ve got a marketing and computer science background. What got you interested in designing and launching an app for the hospitality industry in Utah? 

Logan Nicholson: Yeah. So great question. I’m actually less technically inclined. My computer science experience was not super extensive. So that’s kind of funny for someone in the AI space. Most of the time, people that are very technically inclined. But really what happened is we had started with a different business model with a low tech solution. And through networking and creating so many relationships with hoteliers, we discovered the need for the high tech solution that we now offer. And then it was just a matter of finding the right people and putting the team together. But yeah, I mean really what it boils down to is we saw we knew people personally and were friends with hoteliers that were dealing with issues that are serious issues, and we felt like we could create a solution to really tie the loose ends. 

Robin Trimingham: Well, I wouldn’t be too concerned about whether or not you have a huge amount of computer science background. Believe it or not, back in the dark ages when I went to university. Once you put in your program into the computer, you had to get out of your chair, run all the way down the hall where there was a printer that took up an entire room. I kid you not. You’d be standing in this great long line with all the other kids trying to get your bit of paper out of the computer. So things are certainly come a long time in my own lifetime. And I think as a CEO, leadership is really about leading the people and not whether, you know, every last single thing. So talk to us a little bit. How did you go about conducting your market research and things like brand development? What led you to believe that there was really a need for an AI powered guest experience manager? 

Logan Nicholson: So, yeah, it’s a great it’s a great question. And there’s a little bit to unpack here because like I said, the great thing about this opportunity for us is it came straight from the source. We didn’t really have the idea and go out and validate it. It was like the idea was kind of formulated on accident because we knew so many hoteliers that were telling us they were struggling with occupancy, they were struggling with rate, they were struggling with customer satisfaction. A lot of times what it boils down to is hoteliers that are just so understaffed that they don’t have the time, they can’t dedicate their time to the things that are important. So it was just through relationships. It’s almost like if you have family members that struggle with things, you get to know that problem really well, even if you don’t experience it yourself and you want to step in and help them and give them advice and everything. And so that’s kind of how we felt. We had just good friends in the hospitality space that we’re struggling. But I think what bridged the gap was I started looking into people are under staffed, what could we do to save people time? And that’s when I came into the picture as I as a time saver. But then it evolved and we just ended up finding all these little rabbit holes of things that we could use AI to solve. Hospitality is a great market because it’s behind technologically and it always has. Definitely it’s a laggard industry. But you know, we’re we live in a time where AI is evolving rapidly. And this kind of technology is not just for five star resorts or anything like that. This is the technology that’s helping everyone across all industries, big or small, whatever it is. 

Robin Trimingham: Yeah, it’s fascinating to be involved in the hospitality space because there’s something new for the industry relating to AI just about every other week coming across my desk. I’m interested in the fact, though, that you’re a startup. What’s your experience been? Have you had to do fundraising and developing the business plan? What’s the process been like for you guys? 

Logan Nicholson: Well, we’ve fundraised and we’re fundraising right now just to support some of our recent growth. But one thing that I will I’ll die on this hill like start ups is it is a game of rapid adaptation. And the great thing about start ups is you’re so small that you’re really in a unique situation to rapidly adapt. There are large companies that have tons of resources and tons of capital and they’ve done amazing things, but the crutch that they experience is they’re not as agile because they’re so big and there’s so many things going on behind the scenes. So that’s why big companies don’t just wipe out start ups whenever a good idea is created, start ups are. They can move quickly and they’re agile. So you have to match that speed. As a founder, you have to be high, fast paced, kind of high motor. And sometimes that means working 70 hour weeks or 80 hour weeks, whatever it is. Not always. I have a little bit of balance. 

Robin Trimingham: It’s funny how much Covid’s changed all that, particularly in my kind of work. I work with people all over the world, so you know, I may have a podcast at seven in the morning my time because the person’s in Australia or India. It’s fascinating what happens. Talk to me a little bit about why your app is different than something that’s say, much better known like Yelp or maybe Expedia. 

Logan Nicholson: So great question. And there are a couple of comparisons that you could draw between Marie by localized and that’s we called her Marie. This is a funny story. We named Marie the I guess, experience manager after an episode of The Office. We couldn’t decide the name for her. And I was watching this episode, and then Michael goes on a vacation to Canada and the concierge at his hotel is named Marie. I was like, Oh, there we go, Marie. But the big differentiating factor. We’re providing an service that is customized in every way, shape and form to the property that we service. So one of our key objectives is to help guests have a really memorable experience to experience peak things while they’re on vacation. And that could be finding great restaurants, finding fun things to do. And so that’s something we focus on, but it’s actually not the only focus. We want to improve the operations of the hotel and offer on demand information. So if you ask Marie about the Wi-Fi password or your checkout time or anything you might need, she’s going to give you immediate assistance. And then if you need someone on the property to assist you further, if you need towels, Marie will communicate with hotel staff for you so you don’t have to pick up the phone. So that I would say the two differentiating factors are number one. Marie. We deploy Marie for your property and she learns about your property and everything about your guests and how to best serve them. And that’s something that’s not really out there. And then the other thing is now this goes back to the roots of the company. We’re called localized because we believe in local value. And so we do a meticulous research prior to launching Marie at a new hotel to know what kind of guest experiences should we recommend, What are the locals like? What restaurants are people going to appreciate the most, or what experiences are people going to remember? And that sort of. Education and research that we do is something that I don’t think is very common and people really enjoy it. And you’ll see it in your Google reviews and all these things. You’ll see people that really have experienced those memorable and peak experiences and then they want to come back because they’ve created a good experience. They want to relive it. 

Robin Trimingham: You’re making me think of another question I’d love to ask you. Your startup and I understand you actually do have customers and things are going well. Supposing this thing really catches on. How are you going to handle scalability? Are you going to be able to onboard multiple properties as you grow? 

Logan Nicholson: So great question. So we’re actually right now are in a phase where we’re growing more rapidly than we ever have before. So this is actually you bring up one of the discussions in our leadership meetings that we have frequently. And the answer to that question is scalability is very important. One thing that I sort of live by that I’m like a big believer in is attention to detail is never too expensive. That’s something that I believe in. And so if you take, for example, some of the things that we do for our customers are maybe seen as less scalable because I’ll give you an example, we provide each of our customers with the cell phone number of a team member where they can text or call at any time rather than call a support number. And that might be seen as something that, oh, well, it might be a lot more efficient if you do a contract, a call center or something like that. Well, that’s true. But I can tell you the reflection of that service in our customer loyalty is huge. Well, our customers are friends. We know them personally and we are working on their behalf. And they know that. And they feel they trust us to do a good job. So that’s something that I think some people will look at things like that and be like, Well, how is that scalable? And while that’s a valid concern, what we’ve found is scalability is friends with customer retention, that working capital from retaining your relationships and customers is so beneficial. When you’re scaling that for us, it’s totally worth it every dollar. 

Robin Trimingham: It’s one thing to have a fantastic idea and to launch it. But it’s a business. There has to be a revenue model. Talk to us a little bit about this. How do you guys earn revenue or how will you earn revenue? 

Logan Nicholson: Yeah. So right now we have kind of a cool two pronged model, basically where the hotels that we work with are under contract to use Marie and that represents a portion of our revenue and then another portion of our revenue. And this is where we got a little more creative. Another portion of our revenue is based on the hoteliers recommendations and qualifying local experiences. We will select a couple of restaurants or local attractions that we can partner with and we can drive traffic from the hotel to those attractions and then that revenue. From there, we’re able to use that to subsidize the cost for the hoteliers. So we’re offering a very high tech and cutting edge solution at a price that’s affordable for the smallest of properties. And I’ll give you an example. We actually work with a property that’s only six rooms, but it’s affordable for them because we’re able to subsidize that cost via the second revenue stream. 

Robin Trimingham: Established in 2002, F.O.H is a woman owned global food service and hospitality company that manufactures smart, savvy commercial grade products, including plateware, drinkware, flatware. Hotel amenities and more. Driven by innovation F.O.H Is dedicated to delivering that wow experience that restaurants and hotels crave all while maintaining a competitive price. All products are fully customizable, and many are also created using sustainable eco friendly materials such as straws and plates made from biodegradable paper and wood and PVA free drinkware. F.O.H Has two established brands. Front of the house focused on tabletop and Buffet Solutions and Room 360, which offers hotel products. Check out their collections today at www.fohworldwide.com. Well, I’m a believer in starting small, so you can work the kinks out of the thing, if you will. So I’m sure you’re having a couple of interesting experiences at the moment. When your website if I’ve got this right, it says Post de curated feedback to publish five star reviews while avoiding negative reviews. Explain to us what this means. 

Logan Nicholson: Yeah, I’m glad you brought it up. So a little story about this guest feedback feature. There are entire companies built on the basis of guest feedback and successful companies of that, like companies that are growing rapidly and they’ve locked in on certain industries where guest feedback and reviews are everything. Hospitality being one of the major ones. So we stumbled upon this idea of, well, what if guest feedback was a big function of Marie by kind of adding a little review curator function as an afterthought? And basically how it works is Marie surveys each guest and she’s able to determine have they had a good experience or maybe more of a neutral experience, or have they had in some cases a bad experience and she’s able to treat them accordingly. So if they’ve had a good experience, she says, Thank you, that’s great. Would you mind leaving us a review on Google or TripAdvisor? If they’ve had a neutral experience, she can chat with them to try to figure out how can we do better next time? And if they’ve had a negative experience in certain cases, she’ll even connect them with someone on property to help resolve those issues. But what she does is she allows hoteliers to generate positive feedback on Google and TripAdvisor in those platforms that are so crucial to both occupancy and rate. But she’s allowing the hotel to handle any negative experiences internally before they hit public platforms, because I think everyone is happier that way. The guest is happier, they are heard. They get to talk with someone about what their experience was like, and then they don’t get that standard response that everyone puts underneath Google reviews, right? They get to actually get connected with someone on the property if necessary. And then for the hotelier, they get to handle that before it damages their business. So that is like a key feature that has helped us grow a lot. 

Robin Trimingham: So I can understand why a hotelier or a restaurant would appreciate this. How are the customers reacting to this? Are the customers viewing this as an authentic, level playing field? If you take something like TripAdvisor, TripAdvisor is the good, the bad and the ugly. And it’s it’s all there for everyone to see if they want to do their due diligence. Is your system comparable? 

Logan Nicholson: So great. Great question. So our system is really designed as a tool to help hoteliers provide the best experience for their guests. So when you look at something like reviews and how do you get the best reviews, you know, this is our policy. You should do the best to figure out why your guests are unhappy. If they’re not happy. And you should do the best to have your guests sing your praises to everyone else. If you did make them happy. It’s kind of a good principle of business is turn your customers into advocates that will go out and really promote your brand for you. So what we want to do is we want to help hoteliers handle. We want to give them an incentive to handle these negative experiences with care rather than, Oh, well, it’s already on Google, go on the right. It’s like, well, oh, damage is done. So what’s the point of repairing the relationship? It’s actually what we’ve seen is hoteliers have been making an extended effort to resolve these issues so they’re more. 

Robin Trimingham: Vested in the outcome. 

Logan Nicholson: Yeah, yeah, definitely. And like we’ve found that it’s not really a matter of hiding your negative experiences and promoting your positive ones. It’s actually more so a matter of promoting those positive experiences, but finding out why these negative experiences went wrong and then resolving it for them and bringing it full circle. So we’ve found that people who’ve had negative experiences have even mended that relationship and come back to stay again because all it was was a simple matter of communication. A great example of that is some people will have an issue on property and they won’t. Tell anyone about it until after this date. That’s so true. Yeah. Hoteliers, they know this. They mean they. It’s like, what a bad feeling to know you could have done something and you just didn’t know. This is an opportunity both in the postal survey, but also people will text me about problems. There are three times more likely to text than they are to call, so they’ll text me about problems that otherwise would have gone untreated or unaddressed. And it’s a big difference maker when someone’s able to just say, Yeah, I mean the bed was uncomfortable. It’s like, Man, I wish I would have known this. Like if all these people are telling us the beds are uncomfortable, let’s look at maybe some new mattresses or something, or let’s maybe give them a little bit off their stay or do something to make this better. Sometimes it’s as avoidable as there were no shampoos in the bathroom. It’s like, Oh man, we could have brought those up. But sometimes it’s just that type of thing doesn’t come out until the end and it’s important to collect that feedback. 

Robin Trimingham: So that side that interesting feature because when people leave without saying anything, I call that voting with your feet. I read somewhere that a great quote about startups. I read that building a startup is like trying to build a skyscraper which already has tenants who won’t stop setting the building on fire. 

Logan Nicholson: I’ve never heard that one, 

Robin Trimingham: But believe me, I’m more for one of those along the way. 

Logan Nicholson: I liked it until the fire part and then I loved it. I know that. 

Robin Trimingham: As a leader of a startup, how do you prioritize your day and hold your own self accountable for the goals that you’re setting? 

Logan Nicholson: Good question. I love what I do. I think if you choose entrepreneurship and particularly startup entrepreneurship as your career because of money or because you want to get rich or something like that, I think you should pick a different avenue. 

Robin Trimingham: That doesn’t work. 

Logan Nicholson: Yeah, it doesn’t always work. And many entrepreneurs do become wealthy because they get successful what they do. But I can. Promise you that like the motivations that lead you to become good at being a startup, founder and entrepreneur are not related to money. You have to love what you do because ultimately you’re doing one of the hardest jobs out there, which is your skyscraper analogy, was spot on. You’re trying to build something and you’re trying to put out fires and you’re trying to solve problems. And at the end of the day, there’s no one to be accountable to by yourself. So you have to be extremely disciplined with yourself and know what are my goals, what are like if I don’t have tangible goals that I accomplish today, what steps did I take to get towards those goals? So a piece of advice that I would give. Anyone in my shoes or let’s say you’re not an entrepreneur, but you’re an entrepreneur and you’re trying to innovate and create value within your own role, even if you didn’t start a company, because I think the principles are the same. To create value and innovate, you have to be a ruthless problem solver and you have to be extremely empathetic. Like you just have to work so hard to understand other people. That is the key. Mean, if you don’t understand other people, how are you going to understand customers? How are you going to understand employees? I’m not a shining example of this all the time because I’ve had hard lessons learned where I wasn’t big enough, but learning ruthless problem solving and empathy. And when I say problem solving, I mean problem solving for the people to whom you are empathetic. That’s the key. Very well said than done. But that’s my piece of advice. 

Robin Trimingham: That kind of leads me to my next question. What’s your take on things like employee training and team development? Mean it. You’re relatively young for the huge position you’re holding, and I would imagine that some of your colleagues are also young. How do you set the boundaries there and get everybody up to speed and rowing in the same direction? 

Logan Nicholson: Yeah, it’s an interesting topic because I am pretty, pretty young and a lot of what I’ve learned and a lot of my skill set I attribute to the decision to jump in to this venture at a young age. There’s only so much you can learn from. I don’t know if this makes sense, but there’s only so much you can learn from learning. There’s a lot you can learn from doing. Now, as we’re building a team, I have to remind myself what’s my skill set and what have I learned in the past two, three years? And then if I’m proud of what I’ve learned and if I think I’m capable of doing my job, which. Everyone. I don’t care who you are, what you do, but what you do. If you don’t have confidence in yourself to do your job well. Fix that right away in that verse. So it’s not arrogance, but it is confidence. Have confidence yourself. So if I have confidence in myself to do my job and I’ve learned by doing, I need to have the same confidence in every member of my team to learn to do their job sometimes by doing. And that includes some trial and error. Like you need to afford the same patience to to your team members as you did to yourself when you were learning and growing and evolving, which all of us on our team still are. But I’m very proud of our team. Like our team is young. We I have nothing against college, but right now no one on our team has a bachelor’s degree or a master’s or anything. Several of us are working towards that. But I am proud that the people on our team have learned what they’ve learned through hard work. Persistence, and in many cases just trial and error. 

Robin Trimingham: I think you’re making an excellent point. We’ve got time for one more quick question here. I’m sure that because we’re going to put this on YouTube eventually, lots of other young entrepreneurs, startup CEOs, are going to see this. If you could talk to them directly, what would you say regarding your advice for how to handle the pitch? How to handle talking to investors, looking for partners, that kind of thing. 

Logan Nicholson: Yeah, great question. My thought right off the bat. Is the greatest salesperson believes in their product more than anybody else. That’s something I’ve learned, and we have to remember that a lot of times when you’re pitching to investors, partners, employees, anyone, your product is your company. So you have to believe in your company more than anyone else because belief and like faith in in that is transparent, very transparent. So if you talk to someone who you know is not fully bought in or if you have doubts first you need to develop a high level of confidence in your company and what you’re providing. And if it’s not there, figure out why and dig into that first. I have been in a situation before where I had doubts and worries about the company, and what we did was we dug our heels in. We looked at the places that were creating the most doubt. And we created solutions until we landed on something that we felt like without a doubt would provide value to every single one of our customers. And so if you wouldn’t personally buy your product as a customer of your business, that is the first thing you need to solve. And that level of confidence, I mean, there’s tons of you read books about fundraising. You could read books about all sorts of things related to sales, negotiation and all that, but nothing will sell your company to other people, like confidence that it is going, that you’re going to realize your vision. So create a vision. If you don’t have a vision, create a vivid vision of what the future of your company is going to be. And if you don’t believe in that vision, 100% diagnose that. And fix that. Because once your belief is there, forget the learning about fundraising and learning about how to do all these things strategically. You’ll just talk to people that will see in your eyes that you believe in your company 100% and they will buy into you more than your company and they’ll know how passionate you are about it. And that’s the ship they want to get on. 

Robin Trimingham: Excellent answer. Logan, I want to thank you so much for spending time with me today. It’s been a pleasure to meet you. You’ve been watching the innovative hotelier. Join us again soon for more up to the minute insights and information specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by Hotels magazine. Join us again soon for more conversations with hospitality industry thought leaders.