Second part of the interview between current IMBA student Jacob Huber and Joe Haslam, founder of the startup Hot Hotels.
Did you have any previous experience in this industry?
Two of my co founders were both veteran travel guys, O’Connor had set up a company called hoteles.es which is very close to what we are doing now, only on the web. I started off writing software in a consulting company and I´m still very interested in complex backends and how all that knits together. The value Hot Hotels is in the backend, not the frontend. The frontend is just a way of showcasing a new way of behaving, to a new supplier base. We currently make bookings through the apps of third parties and eventually we will do much more through them than actually through the Hot Hotels app itself.
What advice would you give to aspiring entrepreneurs in the context of a potential MBA exit with significant amounts of debt?
First of all, I am completely against debt of any kind. Debt leads to slavery, Haven´t you seen Spartacus? The best way to pay for an MBA is to build a company before and sell it so you do not have to worry about debt. That being said, it has never been easier to raise money, and you can never really look at those things as a constraint. As an entrepreneur, you turn problems into solutions meaning when you are raising money you can raise a lot more money and if a guys asks you why say “because I have some MBA debt I need to clear and I need to be paid a salary of X to live and Y to pay back y student debt.” If you are upfront with your situation and have a compelling idea that is fine. Everything is about turning problems into solutions, which basically means that before you take your first round you can be cheap, but is suddenly not OK to continue to be like that and investors are suspicious if you do. If you continue to have an office in a warehouse in the suburbs rather than something that is a bit more upmarket they are suspicious. The thing that Conor and I have most in common is our obsession with capital efficiency. The companies that survived the dot com crash all had it. I am mentoring a startup here in the Venture Lab and I found out that they paid for lunch with the VC, and I think that is all wrong because you are the startup. They have the money and you want it, so they should be paying. I think that entrepreneurs can be slow to understand the strength they bring, because they are effectively giving VCs an education in terms of what approaches and business models are interesting, and VCs are learning just as much as you are. The more startups you do, the more you push back against your VC. They are an important part of the ecosystem and can do a lot for you but you should never be afraid to ask them to help you with more than funding.
Have you been in the position of a VC?
I was a VC before we started Hot Hotels, but that experience turned me off. I think one of the problems was being in the tough Spanish market. Spain just does not have any break-out stories, there is no Facebook, and what depressed me was that the best case scenario was not that impressive. Even if we found guys with the best companies, ideas and execution, none of them were thinking NASDAQ like in Ireland and Israel. Until Spain has a garage to NASDAQ success story (and not just a spin off) overseas investors won´t have the fear-of-missing-out that they have in Silicon Valley.
Can you tell me about your experience mentoring in Venture Lab?
Mentoring for me is mostly coaching, you do not give them solutions but the drive to find them themselves. You tell them what they are doing is worthwhile, that people value what they are doing. Sometimes you need to make a connection for them, but mostly you teach them how to fish instead of feeding them. If you try to teach them, you can give bad advice because you have only been in a limited amount of similar circumstances. In mentoring you get back what you give, if you give them a good experience they will also talk good about your startup and help spread the word. The hardest part is letting them go like “lions into the wild” (Born Free was on Irish TV a lot when I was growing up), telling them that you will not mentor them anymore. Everyone I have mentored I am still in touch with, and we are still talking about their issues. This is good, because people who are attracted to entrepreneurship are just by definition interesting people, they are curious and helpful and considerate, not toxic. Companies can be toxic, because they just want to get and not give. People in the world of entrepreneurship are prepared to give to get. The problem with entrepreneurship in Spain is that people are only starting to realize how interdependent they are, there is still a problem with envy of other’s success. The truth is that if anyone invests in any Spanish company, it is a win for the whole ecosystem. Investors’ perceptions are shaped by the headlines they see and in the case of Spain that is everything from “Spain is incredible” to “there are no startups in Spain.” In our case we are trying to push the second line, and make sure people see that. Anytime anyone makes an investment in a Spanish startup I am telling everyone about it, pushing it out in Twitter and everything to say great job.
What general advice would you give to IE students wishing to start their own company?
They should look at their entrepreneurial experience as a journey. They should experiment with entrepreneurship here at business school, but their idea does not have to be the thing that takes off. They should find a crazy idea that enables them to come into contact with interesting people and use it as a learning and experimentation opportunity. There are a lot of things that you can have fun with that do not have consequences as they would outside business school. In the real world when you have employees and the rent to pay, you cannot do that. The company you setup should try to be as out there as possible so you get the learning from it; after your MBA you can go setup a new company based on all the learnings you had. The idea that you pursue here is not your only chance. I think we are all born entrepreneurs, we just do not have it fully realized. Try to discover the area of entrepreneurship that you resonate with. The feeling of having created something successful that you were a part of, and having expressed yourself is an amazing feeling of fulfillment. Make sure that the people making up your team are as different from you as possible, embrace the diversity. Once you see what is possible from other points of view, you realize how much you are limiting yourself. It is easy just to get another guy same as yourself, and you get along well telling each other jokes, but there is no learning and at the end you sit around wondering why you did not get very far. Innovation happens at the margins, and when you are forced to find unusual ways to do things through diversity or barriers, that is where the interesting learning happens and things advance.
The best help you can give to any entrepreneur is to use their product. Even after 6 startups, I still get endorphins every time that someone spends their hard earned money on something I´ve worked to create. Others get their rush from fast cars or fine dining, but for me its still an unbelievable thrill when I hear the bing, bing, bing of bookings coming in. So if you´ve liked this interview, go now to hot.co.uk, download the Hot Hotels app and stay in the hotel you have always wanted to at less than half the price. What are you waiting for?