By Popular Demand, Mahana Expands Outside the Restaurant Industry

BY SUSAN LAHEY
Reporter with Silicon Hills News

One of the rules of startups is that you can’t always follow the rules of startups. Mahana was trying. After launching its technology that helped restaurants reach out to their best customers when they were in proximity of the establishment, it kept getting calls from hotels, sports teams, airlines and others who wondered whether Mahana could help them figure out how to use beacons with their customer base as well.

“I would always answer ‘That’s not what we do,’” said CEO Bryan Menell. “You know with a startup you have to focus, focus, focus. But after awhile of doing this in restaurants it was like ‘People keep calling. Let’s go figure out what’s going on with this.’”

They took two meetings in Dallas to see if they could help two publicly traded enterprise companies and left with plans to work on two pilot programs.

“It was this ‘Aha’ moment,” Menell said. “We need to look at opening this up to more people. We can’t open it up to just everybody…we need to pick industries that can leverage it. That’s hotels, restaurants, retail, casinos. Even that seemingly small slice is very deep. There are tons of ownership groups. We started to research verticals and it was really huge.”

Menell asked co-founder and CTO Richard Bagdonas whether he thought the technology could work with these other industries and learned that Bagdonas had built it as a larger platform that could accommodate all kinds of apps and businesses. Their advisors and investors were thrilled with the bigger opportunity. So they went for it.

According to an article in The New York Times, in October, 2013, ten to 15 percent of the customers comprise 60 percent of a hotel’s revenue. So repeat business is crucial. But few high-end hotels use standard “reward” programs because they’re too commoditized. Instead, most opt for a more personal approach to winning the most lucrative customers—frequent travelers, especially business travelers.

That’s where Mahana comes in. The beacons, and Mahana’s software can be used to notify a hotel if a guest has pulled into the parking lot so the desk staff can get his key ready. They can customize messages and offerings so that when he goes to the pool, someone brings his favorite poolside drink, that he learns about the latest gluten-free offerings from the menu and that, after a certain number of visits, he gets a free spa day or something equally tempting.
The software works with a hotel’s beacons and comes with a particular set of tools, Menell said. But it can be customized for each establishment.

The software has to be able to deal with huge amounts of data, Bagdonas said, so they used Amazon’s Simple Queue Service that’s used by Twitter, Facebook and Gmail.

“It’s a firehose,” he said. “It can handle a million beacon hits per second per app. If you want to be ready for prime time you have to build it like a tank.”

Joe Canterbury, senior vice president with Appconomy and an advisor for Mahana, said that’s one area where Mahana has shown its strategic competence. Geolocating and responding to customers is a fairly new technology which is evolving rapidly. Mahana has to make sure to stay ahead of the curve.

“The technology is all changing so quickly, it’s a challenge for anyone in the space, really keeping up and really choosing best technologies. I think they’re dead on.” Canterbury was one of the advisors who encouraged Mahana to broaden its focus. Both he and advisor Jack Tan, who has worked as director of IT for several huge hotel and resort companies, talked about the possibilities for the app in large malls and retail centers where shoppers can be lured in for a great deal when they’re already in the mall.

“This kind of technology is in a very early stage of adoption, of acceptance,” Tan said. But with more people using smart phones and tablets, they’re looking for more uses for them. With social sharing, he said, use should spread quickly. “It’s really about how the experience is from start to finish.”

With any technology that recognizes customers, Canterbury said, the company has to be careful not to make customers feel intruded upon. Bagdonas said there’s a certain amount of coaching that goes with deploying the software so as not to inundate customers. Bagdonas is fairly “touchy feely” for a CTO, Canterbury acknowledged, which may help Mahana’s ability to guide its customers to maintain the “human touch” and not rely too much on the technology. But it also is part of what makes Menell and Bagdonas a good balanced team.

“The team complements each other and they work well together. They’re insanely productive for such a small company. “
But another attribute of Mahana is that both founders have a lot of experience with starting companies and know it’s important to understand the industries they work with. That’s key as Mahana expands.

“One thing that I’ve observed and also participated in is that the team does a really good job of sitting down and spending time with industry experts to really get their input or feedback…they’re very clear that the kind of input and feedback they get is going to lead to a better product.”

Mahana has begun working with a hotel chain in Asia that has about 35 properties, Menell said.

“We’re choosing a little handful of early customers to work with,” he said. “We have to pick and choose, to be very careful, work with well-known brands doing interesting things…the enterprise class is very exciting to us.”

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