A long game with no immediate payback, says Greenview’s Ricaurte
The news of Weeva’s closure has come as a surprise and disappointment to many who had been following the company’s progress since its startup in 2021.
Borne out of the pandemic by two hoteliers’ passion for sustainability, and the opportunity to help small, independent hotels manage their 4Cs – Conservation, Community, Culture and Commerce – via a dashboard, the sustainability management tool for hospitality appeared to be gaining traction with clients and partners, won awards and led conversations at conferences and trade shows.
To reach more customers, it signed partnerships with organisations such as Small Luxury Hotels of the World, Sustainability Hospitality Alliance and others, gaining it high profile at leading industry events.
With seed funding from Oppenheimer Generations and founding partners such as The Long Run and Preferred by Nature, it seemed to have a solid foundation on which to build its business model, which relied on clients paying a subscription fee to use its SaaS platform.
But in the end, it wasn’t enough to convince the board to keep it going.
The email sent by managing director Julie Cheetham to partners to advise them of the closure said the conclusion was that “the Weeva product is forging a path well ahead of the market, impacting the scalability and overall sustainability of the business model.”
Outlining the considerations, one of which is addressable market, she said, it “is well below our initial expectations with market insight and analysis demonstrating that many in the industry are not yet ready to adopt a more rigorous approach to sustainability.”
Clearly there will be many lessons to come out of this experience for Cheetham and her team.
Was it the product? She had spoken early on about “how difficult it is to run a tech company if you are not from tech. We had to learn to manage expectations – how long it takes to design and develop something, not weeks, but months to develop a new feature”.
It took on a fulltime CTO almost a year into the business and had to scrap the first version, to build a new stack.
Was the product too prescribed, based on the Long Run’s 4Cs – which may not have made it flexible enough for the diverse and fragmented nature of hospitality businesses across the world? Customising it for different customers would have been time-consuming and costly.
In her email, Cheetham addressed the tech complexity. “We set out to build an application that supported our aim of setting the global benchmark for a sustainability framework. The product’s coding complexity and the real-time changes required to meet varied needs mean there is a delivery risk and possible impact on the commercial viability of the product suite.”
Was it market readiness? You could argue the market has never been as ready as it is now – with the growing concerns around sustainability – but some are more ready than others, and you need a really long runway to stay the course. Yet, it’s only been three years since launch and three years felt too short a time frame for a startup especially in this complex space.
Addressing the market attractiveness consideration, Cheetham said: “Business model commerciality is also undermined by the highly fragmented state of the sustainability-technology market. This is expected to persist for some years to come.”
Longevity helps, preparing for the “perfect storm”
Eric Ricaurte, CEO of Greenview, the Singapore-based hospitality sustainability specialist, which celebrates its 16th anniversary this September, should know about the long runway needed in this space.
Saying he was surprised by the news about Weeva’s closure, “considering all the momentum they had”, he noted, “It’s a tough market, a tough product to sell.”
He said his company had the opportunity to make many mistakes years ago when it was lower stakes and so learnt some tough lessons. “The landscape is constantly changing, you have to be prepared to constantly move, and morph. Your tech has to be ready for that.”
And if Weeva had stayed the course, it would be embroiled in what Ricaurte calls “the perfect storm”.
“You have to meet government needs, consumer needs and certification needs, all happening at the same time. You have to be able to navigate the storm that’s coming.”
Within the storm, he said, implementation of sustainability practices has now come down to the property level. “Before it was about how a hotel company was doing it and how it would roll it down, now it’s down to what the individual property is doing, and then rolling that up.
“There’s a massive storm in the battle for hotel certification, labelling and criteria and various interests are involved. We are back to 30 years ago, myriad of labels, confusion in the market, the difficulty of interpreting what you should do.
“Thirdly, the data has to be correct. The hotel industry has got it right in the area of distribution – revenues, occupancies, attributes, sales – that’s all automated and correct. With sustainability, a lot of data is incomplete or incorrect, it needs a lot of manual interpretation now and we have to automate that.
“A lot of plumbing has to be fixed.”
The balance between funding and impact
Quoting Einstein “as our circle of knowledge expands, so does the circumference of darkness surrounding it”, Ricaurte said, “Sustainability is exactly like that. The more you know, the more you are aware you don’t know, it doesn’t stop. Longevity helps, you learn to figure out and develop solutions and products that are needed, not what you think the market should have. It is a long game with no immediate payback.”
Which is why Greenview chose to be self-funded from the beginning. “It’s a philosophical, personal, bravado position – that we want organic growth, to emulate nature and to adapt to the changing environment rather than be an invasive species,” said Ricaurte.
His comments echo those of Seek Sophie’s co-founder Jacinta Lim who in this interview with WIT this week also explained their decision to self-fund their travel marketplace of “unexpected” and “unusual” experiences. “I think when you want to make an impact, it’s difficult to find investor balance.”
Whatever the reasons for the closure, we wish Julie and her team the very best in their next endeavour. With the experience gained from this venture, they’ll surely be well equipped to take on the next journey, whatever that is.