During a particularly lousy hotel stay four years ago, Justin Effron had a vision of how the customer experience in hospitality could be improved through the application of technology. To pursue his vision, Effron, who had no hospitality industry experience (he was working a finance gig at Citibank) joined forces with Alex Shashou and Dmitry Koltunov, who added their hotel and technology backgrounds to the mix.
The three got to work raising capital, ultimately landing a $9.5 million investment led by Expedia. The resulting product is ALICE, a platform that helps coordinate communication “backstage” for roughly 2,000 hotels that together contain 500,000 hotel rooms (a number that has grown by nearly 1,000% in 2017).
I spoke with Effron about customer experience technology, human-powered service, and where the two intersect in the hospitality industry and elsewhere.
Micah Solomon: Tell me what drove you to develop ALICE.
Justin Effron, CEO, ALICE: In contrast to many other industries, the hotel guest experience has seen very little improvement on the technology side.
Four years ago, we started on a mission to improve the way hotels deliver service. At first, we believed the solution was guest-facing technology, specifically mobile apps. What we discovered, however, was that guest frustrations rarely originated from the inability to communicate a request. The true problems in service delivery stemmed from the operational complexity behind the scenes in fulfilling the request.
Solomon: What were the deficiencies in hotels’ existing backend technology?
Effron: Most hotels today are running outdated legacy technology systems, which are disconnected from one another. Operations tries to broach these silos with offline methods, like pen and paper and radios. This approach leaves room for error, and also prevents hotels from understanding how they are failing guest expectations.
Solomon: What was your solution?
Effron: To remedy this, we built ALICE as an operations platform that connects every hotel staff member and every department of the hotel. ALICE makes it easier for hotel staff to communicate with one another and stay on top of their daily tasks. In solving the staff side of the equation with ALICE, hotels can now deliver a better guest experience.
Solomon: While ALICE is at work powering communications for the hotel workforce, does it “play well with others” on the front end? I’m thinking of technology that’s changes the face of the customer-facing hospitality experience, for example Ivy, which is powered by IBM’s Watson? [I’ve written about Ivy here.]
Effron: Yes. Last year we released an open API, which vendors of products such as in-room tablets and large hotel group applications are now integrating into ALICE to communicate with hotel staff. In addition, ALICE can work seamlessly with all of a hotel’s reservation information.
Solomon: I am professionally invested, as a customer experience consultant, author and speaker, in the goal of improving the human aspect of hospitality and the customer service experience. Can you talk about how ALICE supports this, supplants this, or…?
Effron: ALICE most definitely supports, not supplants. In fact, one of our first investors was initially, ironically, hugely against ALICE coming into his own hotel; he believed ALICE would detract from face-to-face interaction that he prided his hotel on delivering. However, when he tried out using ALICE to communicate his needs to his staff, he realized just how complementary ALICE can be to human-delivered service.
At its core, we believe hospitality is the feeling one gets from the services being delivered. Giving hotel staff the right tools allows them to deliver better hospitality. With ALICE, staff know exactly where they need to be, what the name of the guest is, what the guest’s issues are, and how far along the hotel is in addressing them. With this new knowledge at their fingertips, hotel staff have the ability to anticipate their guests’ every need and reaction.
Solomon: Did you learn anything the hard way in launching ALICE and growing it into its present form? Many of my readers are entrepreneurs themselves, and they love to learn how successful entrepreneurs pull through challenges that they ran into in the earliest days.
Effron: The big one was being open to shifting our vision after, frankly, we got it wrong right out of the gate. We started with the idea that we would create a guest facing application that would allow consumers to order room service and other services from all of their hotels. We were trying to create a consumer brand. It was only when we launched our first few hotels did we realize that there was not as much of an appetite for this as there was a huge need for hotels to have better staff technology.
Not having tunnel vision on how to improve the guest experience allowed us to get to where we are today. This wasn’t an easy shift. Some of us truly believed we would lose an opportunity to create a consumer brand around ALICE. It was the most successful pivot we have ever made. We started solving the industry’s real need, not what we wanted the need to be.
Solomon: That seems like an important strategic adaptation. Any other nuggets of wisdom before I let you get back to work?
Effron: One fundamental challenge for us was process: very simply, not just what to do but how to do those things. We are first-time entrepreneurs, and that means we are often making things up. We had to build a model for “how” to make up a process to solve what we are trying to achieve.
Our process was the ALICE book club. Finding examples of others who have already solved and written about their jobs, from how to hire, to how to sell, to how to build great products. Using their frameworks as a baseline and then improving it and adapting their processes to ALICE to work for us.