Building a Capital Efficient Startup from Nashville: David Stange, CEO of Beachy (Part 3)

Sramana Mitra: It’s B2C?

David Stange: B2B. Our product is strictly B2B. We have a B2B2C element. We currently have hundreds of hotels that use the Beachy system. It’s a three-part solution. We have an integrated online booking engine. When I make my hotel reservation, I can see a map and I’m prompted to reserve my beach chairs in advance of my stay.

We’re working with some of the big hotel chains on exchanging loyalty points as an incentive to book directly and not book through different OTAs. For the non-branded properties or the independent hotels, they see it as an advantage as well.

They’re giving their guest a reason to book directly. Once I book my room, I can now see a map of where all the chairs are going to be laid out on that particular day, and pick one – just like you pick a movie seat. That’s the B2B2C element but it’s integrated with the hotel system. Then everything else is just B2B.

Sramana Mitra: How did you go to market? How did you sign your first customers? How did you validate the business?

David Stange: I’m not a technologist; I’m a sales guy and an operator. The first thing I had to do was find somebody to help me build the product. I asked around Nashville about different technologists who I can talk to who would be willing to help out.

I found a couple of guys who were willing to jump in and start taking on the project. A lot of the guys who I worked with when I was 14 years old were still around doing beach operations. At this point, they owned their own beach service or worked for a big resort. Our first eight customers were just friends and family.

Sramana Mitra: What do you think has been the most critical factor in your being able to build this company?

David Stange: The biggest factor has been attracting and retaining top-level talent for Beachy in Nashville, Tennessee. Nashville’s tech scene is growing. We’re getting better and there is more talent, but Nashville has not been considered a hotbed of tech talent.

Getting people to buy into this idea 427 miles away from the closest beach that we’re going to become the largest provider of beach and pool experiences in the world is a challenge. It’s something that we’ve been able to overcome.

Our CTO came from a big startup in Nashville. Him having a following of really good engineers has proven to be essential in terms of us being able to get to market.

Sramana Mitra: As a few points that I want to crystallize and underscore, what is your customer acquisition strategy? You’re a B2B2C company. So you have to sell to the hotels. Is that a telesales-oriented strategy? How is that happening?

David Stange: There’re 3,500 properties just in the state of Florida. There’re 494 locations from Panama City to Pensacola Beach. The first strategy was to put the boots on the ground. We were walking on the beach and talking to every beach boy we can to gather as much information as we can.

In four days, I walked from Deerfield Beach to South Beach. That was how we started. We just gathered information. Calling hotels wasn’t good enough. Frontdesk didn’t have enough information. There wasn’t a phone on the beach to reach anyone on the beach. It could be a third-party vendor that wasn’t controlled by the hotel.

First, it was very much boots on the ground and just talking to people. In the hospitality business, being as transient as it is, people tend to move around a lot. Now it’s fielding inbound leads. We send out a ton of swag to the beach managers and general managers.

Hospitality business is very small and transient. Our target really is 3,500 general managers in the state of Florida. We are now in South Carolina, Virginia, Jamaica, and Bermuda. We are growing outside of Florida. It started with the panhandle. In the international destinations, it’s our partners who are taking us to those destinations. It’s not us having to cold call.

This segment is part 3 in the series : Building a Capital Efficient Startup from Nashville: David Stange, CEO of Beachy
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