It’s a common temptation to want to hide from difficult experiences. But it’s an equally common discovery how often that causes more problems than it solves.

Mews was in the midst of enormous expansion, in its mission to simplify and automate the running of a hospitality business. Then, Coronavirus hit.

When that happened, we pulled the whole leadership on a call on Sunday afternoon and said we need to turn the ship around from 2 to 3 million euros a month to a profitable business. And that was drastic. So we literally said okay, what does that new company look like in terms of budgets, and then you work backwards.

For me, this story from Matt Welle is a bracing walkthrough of what to do next when you have to rebuild your business while still accelerating.

It shows how confronting things head on is your duty as a founder.

Read on for the full story, as told to Max Tatton-Brown.

Business as usual

We raised funds around the middle of last year with Battery Ventures, Notion and henQ, and pre-Covid we were 420 employees in 12 countries. It was really about being a global force to be reckoned with because our competitor is Oracle and in order to compete, you have to be everywhere.

We’re a SaaS-enabled payments platform and because payment is transactional, we saw an impact immediately. The moment Donald Trump closed the borders, the next morning we saw a 350% increase in cancellations of hotel bookings. An average day of payments was processing €2.5M and that dropped to €50,000.

When that happened, we pulled the whole leadership on a call on Sunday afternoon and said we need to turn the ship around from 2 to 3 million euros a month to a profitable business. And that was drastic. So we literally said okay, what does that new company look like in terms of budgets, and then you work backwards.

Trust and openness during cuts

It has been super rough on our culture because to become profitable, we need to go from 420 people to 180. And generally when you do cuts, you do them fast, you do them deep and you do them one time. That’s the rule. But when you’re in 12 countries with different legislations that’s impossible. 

We use Office Vibe to measure employee Net Promoter Score (eNPS) and one of the things we’ve really seen is the drop in trust. When you suddenly see people leaving, there’s this anxiety about whether they will lose their job next and it has really impacted the culture.

We made it so that on the ‘all hands’ you can ask anonymous questions and I’ll answer them every week. It’s a really tough call at the moment, because you get really hard questions. But I think it’s the right thing to do. 

We’ve taken the openness that we had pre-Covid and actually taken it to the next level, which makes it really hard for the leadership team. But I think openness is the only way to really rebuild that trust of the teams. 

If they see everything I say, and I follow through on it, and I commit and I actually do it, that is such a big part of regaining the trust. And I’ve always believed in openness, and even more so today.

Pivoting product

We had just been cutting, cutting, cutting, cutting, cutting for like four weeks straight and at one point, the leadership cornered me and Richard, and they said, Can you just agree on what the future looks like? 

So across another weekend, we pulled together a vision document for what we feel is the future. Firstly: we go upmarket in enterprise, because we understand that hotel chains are the only ones really innovating at this point, and they have money for it. 

So we put product teams on building features for enterprise customers, which is the core product and required to bring these big deals in. 

On the other side, we separated out a team and said: we want to diversify our business in the future and reduce that risk of whatever crisis comes next.

We thought: Currently, we book in bedrooms in hotels overnight, but why couldn’t we do parking spaces? Or why can’t I go to my hairdresser salon, having booked on my smartphone on a booking engine and paid for it there and just walk out? 

We always knew that we wanted to build this — it just was never a priority, because you are always ruled by customers. If you looked at our public API three years ago, we’d already named things in spaces instead of rooms and had integration partners ask why it’s called that. 

So the plan was there, but you just accelerate it.

The benefits of tighter teams

We’d heavily invested into the tech and product teams in the last year. But that actually slowed down productivity for a very long time because bringing in tech guys who get the architecture is a painful process. 

So when we got into Covid, we basically said let’s focus on the most agile and talented team members, and what was left was a really, really strong team. And we didn’t feel we lost productivity over it, there were just fewer distractions for the really good developers and product managers.

It’s not just the tech team where I see this — our sales team was about 70 people and we brought that back to 15 people. We still have a huge funnel and we’re just declining customers, whereas previously 70 people working 2000 leads were engaging with junk leads. Because there were so many salespeople, they kept engaging to show that they were busy. 

Suddenly, you’ve got 15 and they have to choose which one is going to convert and if they’re not going to convert, you walk away from it as fast as you can. So conversion has been surprisingly great in sales at the moment.

Marketing priorities

We need to redo our brand and were in the middle of the process so we said fine to get that across the line so that once we get on the other side of this crisis, we have a fresh brand and want to be the one that really stands out from the crowd. 

In terms of content, that agenda really changed — now it’s all about social distancing. So the whole of June, all we will talk about is all of these magical tools that we created for online check-in, online checkout, do everything on your personal device, housekeepers on personal devices so they don’t knock on doors encountering guests.

We built these tools before but there was always resistance to it, because hotels always said they want a personal relationship. So we just need to change the narrative. And that’s really where the narrative is going in our webinars and our content to drive that discussion. 

Equally, it has been driving a lot of interest in our business because our competitor is an on premise Oracle solution, so the moment you shut the hotel down and people work from home, you have to dial into a remote server to even access your data or maintain your integrations. 

People are like: crap, I really actually need to innovate, I should have done this 10 years ago.

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About the Author

MaxTB

Max Tatton-Brown is founder and MD of Augur, the entrepreneurial communications partner for "unsexy" tech.

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