Show Notes

Imagine walking into a hotel and being able to check in without needing to speak to someone at the front desk. Well, such a scenario will soon be possible thanks to Mrunal Desai and his startup AavGo. Currently, AavGo is rolling out a variety of solutions for the hospitality industry, including contactless check-in, a work management platform for hotel staffs, a digital app for in-house guests, and more.

Mrunal joined startup coach Roland Siebelink on this week’s episode of the Midstage Startup Momentum Podcast to discuss why he started AavGo and all of the ways his startup will change the hotel experience for both guests and staff. They also talked about the many learnings that Mrunal has encountered as a first-time founder.

• The biggest key for AavGo in forging successful partnerships.
• The mistake that AavGo made during its early days that it hopes not to repeat.
• How AavGo is trying to maintain the culture of a small company despite having close to 100 employees.
• The method Mrunal uses when starting new teams or hiring new employees.
• The thing founders should get from investors beyond their money.
• Why Mrunal’s biggest success as a founder has nothing to do with the company’s success.

Transcript

Roland Siebelink:Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink and I'm a coach and scaleup ally for mid-stage startup founders. This is a great day because today we have with us Mrunal Desai, who's the founder and CEO of AavGo. Mrunal, welcome to the podcast. How are you today?

Mrunal Desai:Thank you. Doing great. Great weather out here.

Roland Siebelink:Excellent. It's an amazing mid-stage startup, AavGo, so I want to hear all about it and so do our audience founders. Let's get started right away. Mrunal, can you tell us about AavGo? How did you get started? What are you providing in the world? And what's been your traction so far?

Mrunal Desai:Sure. We started in a 2016-17 timeframe. I quit my job at SAP. I used to work in IT for the last 15 years. And then decided to start this because there was a gap in the hospitality industry where as a guest, as a customer, it was very difficult to digitally talk to the front desk. That's when the concept started that why not have a platform where guests can actually talk to the front desk without picking up the phone or without going down. That's where it started in 2017. Right now, the product has developed due to multiple different solutions. We provide contactless solutions for guests, for staff, and the hotel, right. With the new product, our software enables the hotel to be human-less and contactless.

Roland Siebelink:Okay. I was just going to ask about the pandemic, but it sounds like you've taken full advantage of the pandemic to develop a new product suite.

Mrunal Desai:Yeah, absolutely. It did work for us. As you know, the hotels were in a really bad situation. We took the time to accelerate our contactless and human-less solutions. We are in the market. We already sold a lot of them. The deliveries are starting in September, so you'll see a lot of kiosks where we provide the software. And that enables the kiosk to run the hotel pretty much human-less, so they can have remote people working through the kiosk and do everything that a front desk can do.

Roland Siebelink:Okay. Well, that's very interesting. I'm always asking when a founder has mentioned certain features or certain products that they have, what do you feel was the overall benefit you provided? Was it more safety, security? Was it more you can reduce cost? Or was it more that you could sell more rooms this way?

Mrunal Desai:This one is primarily focused on two things. One is it definitely hits the bottom line of the hotel owners. I would say they save anywhere from 30% all the way up to 60%. That's based on which area they are. And the second thing it helps is on the guest side where there is no true contactless solution right now. As you know, you have to come to the front desk to get your keys because 90% of the hotels don't have mobile locks. We provide that to the kiosk where customers can come in, scan the QR code, get their physical keys, and go to the rooms. Those are the two major benefits.

Roland Siebelink:Okay. Does that kiosk also mean you had to move from software into hardware.

Mrunal Desai:No, we don't do hardware. We have a third party that does that. We are open to put our software in whatever hardware is available or whoever wants to partner with us. We just provide the software and then the hardware has been provided by another company.

Roland Siebelink:Okay, perfect. That's very good. I've had a few CEOs on this podcast in the past who stress the importance of partnerships. What's been your experience in building these partnerships?

Mrunal Desai:These partnerships - the hardware company which we are working with is based out of the US. They have to understand our solutions before they can actually make or develop that kiosk. Similarly, on our side, we also have to understand the hardware. It took us a while to come to a point where we actually signed a contract. We said, "This is great. Now you know exactly what we need." It's just understanding each other's product; otherwise, you can not have that good partnership. That's what I think.

Roland Siebelink:In that sense, did you really choose the best possible partner to work with? Or did you have more in mind upfront, let's always be open for several partners. Let's not have them be in a power position.

Mrunal Desai:Yes, you should have several partners, but I think you should start with the best. In the past, we have failed in our early days. We have failed in the partnership in hardware where we went for cheaper solutions and not the best solution. We learned from that and we realized that you should go for the best solutions and not always the cheapest solution because it's going to hurt you eventually.

Roland Siebelink:Let's talk a little bit more about the success so far. How much traction has AavGo had so far and what numbers can you share with our audience?

Mrunal Desai:Sure. We launched our basic solutions in 2019 and then COVID hit. In the last eight months, we have seen almost 800% growth. In terms of revenues, in terms of customers,.that's pretty impressive, very exciting. We're heading into a busy time for us. A lot of traction, a lot of requests coming in. As I said, the first set of kiosks are getting delivered next week. We also have multiple other solutions. We have Starbucks, 500 locations of Starbucks using our solutions. We have casinos, which we are implementing in September. COVID was a bad time for us. But luckily 2021 just picked up for us and really accelerated.

Roland Siebelink:Okay. I'm also interested in these other customer groups that you mentioned - the coffee shops, Starbucks, and the casinos. Was that a consequence of scrambling to look for a different customer group than hotels or were you always trying to build a portfolio of different options?

Mrunal Desai:One thing is our operations platform, which we have for employees where you can digitize your housekeeping, maintenance, and other parts of your hotel or other verticals. That's where we actually partnered with Starbucks, who is using our solution, which is our maintenance platform. They are only using one piece of the whole platform. It's been going good. We have already implemented about 500 locations now and are growing from there.

Roland Siebelink:That makes me want to think and talk about your team. How big is your team by now and how have you built it up?

Mrunal Desai:We actually have a huge presence in India, a development team in India. We have a team right in Milpitas and in Houston. In India, we have about 80 people right now. And in the US, we have started ramping up in 2021. In 2020, we had to cut down on some staff, but we have been starting ramping up. Right now, we are at about 15 to 16 people in the US.

Roland Siebelink:Okay. And how do you split them between Milpitas and Houston? Is it by team or just whoever prefers to work from where?

Mrunal Desai:Those two are the offices, but right now the new hires, everyone is working remotely. We have people in North Carolina. We have people in Arizona. In Houston, we have two people and then Milpitas is the main office.

Roland Siebelink:For those founders that can only dream of being close to a hundred people, what has been your learning about what changes when you move from, let's say 10 to 30, from 30 to 70, from 70 to 100?

Mrunal Desai:A small team is always amazing because you know everybody. It's very easy to work. You can wake up anybody you want. The main part is you know everybody and everybody knows the product. Everybody knows what's happening in the company or the product line. As you grow, the distance - because people will not know all the products. People may not know all the features which are getting developed. That's one of the challenges which people like us face. When you're small, you know everybody. There's a personal connection with everybody. You lose that a little bit as you grow.

Roland Siebelink:To what degree have you been working on culture as a replacement for that osmosis that you had before?

Mrunal Desai:As you grow, you will not know that you have to set up that culture in the beginning. But as you grow, you see those issues which probably every company faces when they grow from 10 to 20 and 20 to 30. We actually have two HRs and we have a culture manager as well. We're trying to set up this - not during COVID but before COVID or now - outings or people having group meetings and stuff. That's just starting, but for the last one and a half years, it was very difficult to do that.

Roland Siebelink:Yeah, I can imagine. Is there anything specific about the AavGo culture that really differentiates you from other companies that you're proud of or want to keep alive?

Mrunal Desai:If you come to our office, it's a pretty friendly environment. Whether it's director, VP, CEO, whoever it is, everybody is very approachable. It doesn't matter what their position is, where they are, they can approach anybody they want in the company if they have anything. It's one thing we have seen. It's a very friendly company where people are very open with each other.

Roland Siebelink:That's awesome. That's really good. Would you say that those are reflections of the founders of the company, the values that people start showing?

Mrunal Desai:Yeah, thank you so much. I've always believed in openness. I used to work at SAP and Macy's and manage a lot of people in the past. Some of my team members are actually from the past.

Roland Siebelink:And how have you set up the team organization-wise? Who reports to whom? Is it divided up in engineering and go-to market? How should I imagine that? And how are the teams split among those roles?

Mrunal Desai:We have a strong engineering or large engineering team that reports to - I have a head of engineering in India, one of the founders as well. And then we have a CPO in the US, everybody reports to him eventually. And we have a marketing team now - we just started a marketing team, just starting a sales team. Currently, they all report to me right now. But as the team grows, we'll make space for other people. But the new teams, when they start, I try to lead those teams initially. And then we start structuring them.

Roland Siebelink:That's very interesting. That's a principle almost that whenever you start a new team, you lead it personally until they're ready to do things by themselves?

Mrunal Desai:When we want to hire - like a sales team - I want to try and lead it and I'll make sure that whatever our goals are, they know. And then they can start their own team and move forward. Same thing with marketing. We just hired marketing and he directly reports to me and then we work closely and then eventually he can go with sales and marketing.

Roland Siebelink:That's very good. What do you do when that new team is in an area that's not necessarily one of your own strengths or not an area you have to have deep experience in?

Mrunal Desai:I try to learn from them too. Reporting to me doesn't mean that I'm training them. Report to me means we can work closely on sales or marketing right now. I don't have any experience in marketing. I learned a lot from him. I can just throw in a few ideas here and there. But he's the go-to person for the company for marketing. Reporting doesn't mean I train him, it's just we work closely until I'm at least I'm comfortable where this is great, this is how we should move forward.

Roland Siebelink:I like how you really positioned that as a big benefit to that new hire or new leader to be able to work closely with you for a while so that you get aligned and then they can really hit the ground running. It sounds like, at the moment, your big priority is to work on the go-to market and to sign up more customers. What have you learned so far - to the degree that you can share that with our audience - what has worked? What hasn't worked? What are some things you've learned about marketing and sales potentially as a founder that may have been different from what you initially anticipated?

Mrunal Desai:I'm not a salesperson. I'm in tech. I thought sales is all about people liking the product and if they liked it, they go and sign up tomorrow. But that's not true. They can come to you. They like it. But they also need some time. There's always follow-ups needed. People have their own priorities. They forget about it. Sales cycle is something which I thought it was very quick, but it's not. We learned in my four years at a startup, that's one thing I was completely wrong about. Marketing aspect, I always knew that the online marketing and stuff was needed and that was a must. But we were not ready for it until now, so we didn't do it. From that perspective, people, if they are comfortable, they should start marketing sooner than later. But only market if your product is going to be launching at the right time. Don't come out in the market saying I'm launching in September and don't launch until March. That's when you lose confidence from the customers.

Roland Siebelink:Very good. Excellent. Overall, since you started in 2016, it's already been awhile, what would you say looking back over those five years have been the biggest successes with AavGo?

Mrunal Desai:I would say the learnings which I got which I didn't get when I was doing a job. The learnings, the failures. When those kinds of situations come again, how to not make the same mistakes. That's the only piece I would like to tell everybody. That everybody will go through failures, but try and not to make the same mistake again when it comes again. That's one of the learnings - you will fail. There's no way that everything that you do is going to be correct. There's going to be some failure. There's going to be some products which didn't work. You just have to make sure you just keep on going, make changes which work for the industry and the market that you're targeting.

Roland Siebelink:That's awesome. I like that you really say the biggest success of the company has been my learning. That really shows your openness and your willingness to learn.

Mrunal Desai:Well, it is. It's my first company. I have not worked as a founder or CEO, so it's tough.

Roland Siebelink:What was the toughest thing that you maybe hadn't anticipated of being a founder/CEO?

Mrunal Desai:Doing everything right. As I said, I'm not from sales and marketing, I'm from tech. At least in the early days - or even now after five years - you are involved in pretty much everything. You have to jump into whatever situation it is, even if you don't know. You will probably have to learn and then move forward. I think that's one of the biggest things which I learned, which was the toughest but it was the best thing that I learned.

Roland Siebelink:Let's continue with the successes from a company perspective. What have some of the biggest successes been that AavGo has chalked up as a company?

Mrunal Desai:The products which we developed. We were developing small products. We have a product for employees. Selling that individually, initially and even now, right. We have a product for guest spaces, inside the rooms, where you can put our software on top of any hardware or even install QR codes or apps for check-in guests. We develop all these small, small little products. And then eventually now we combine all of that and everything comes at one central point, which is the kiosk. The human-less and contactless check-in where you can actually not have employees and have guests. All of that is coming to one place now, which we are really happy about. That was our dream. The other great success is that we survived COVID.

Roland Siebelink:Exactly. I wondered when that was going to come up. Not everyone can say the same, unfortunately, either on a personal or a business level. What would you say have been some of the biggest disappointments or failures that you've really had to learn to overcome.

Mrunal Desai:In early days, as a founder - I am just trying to be honest out here - you may have some wrong people you hire. It's okay. There might be some backfire, which happens in hiring people because you trust a lot of people. When you start, you want to trust people. And then sometimes it happens, but that shouldn't change you not trusting people. You should still trust them because if 10% is bad, it's okay. That's one of the disappointments which we had initially in the early days. The other disappointment, as I said, is the hardware. We installed our software on tablets right inside the room. We tried to go with a cheap solution, which was a mistake. We had to replace all of them. We lost a lot of money. That must be quite a capital investment.

Mrunal Desai:Yep. That was a mistake which we did. Don't go with some cheap products just because they are cheap. Try to maintain the quality. The quality of the product is probably going to take you far. I would say those two things.

Roland Siebelink:Okay. Very good. Can you talk for a little bit about your fundraising strategy so far? I think you mentioned you had done a super seed round in 2019. And you've gotten to 80 to 100 people, so that's quite a lot on a super seed round. Is the objective to minimize attracting investment or are you just waiting for the time to be right?

Mrunal Desai:No. We have two investors. One of them is from the Bay Area, a tech company, and the other person is from the industry, which is hotels. They both are pretty big. They are the primary investors in the company. No, we are not pushing any investments. We are just waiting for the September deliveries and all that. And then we are going to the convention at Hitec and start to raise right after Hitec. We're using an AI-driven kiosk in Hitec, so we want to start the raise right after that.

Roland Siebelink:Yeah, absolutely. It's just a matter of time and then you would be open to different profiles of investors. Okay. Very good. What would be your advice to other founders coming after you in terms of how to think of whom to raise money from and when?

Mrunal Desai:Don't raise it just for money. I would definitely want to advise that. Cash is one thing, but you also need help from your investors. You also need that emotional connection with the investor because every company goes through ups and downs. There might be a few lucky ones. Most of the company does that and you need those investors to support you, to encourage. Our investors really did that. We have gone through some rough times. COVID was another one. Our investors really helped us, encouraged us, and supported us with not just the dollars but also the market. The support you need from experienced leaders. One thing I would definitely say, get those investors who can probably help you. Second thing is get those investors who are from the industry who can open some doors for you. That makes it easier to start at least the initial product, to get out in the market. Those two, I would say.

Roland Siebelink:Okay. Perfect. Very good. You already mentioned your investors can also be good advisors or sources of experience, where else do you get your advice when you feel stuck or when you just want to run something by somebody else? Are there some other sources where you get support as a CEO and founder?

Mrunal Desai:Your family. Family and friends. One thing more than me, I think it's my wife and kids giving up a lot. When I left my job in 2017, I just had a kid. He was two months old. In the initial days or months or years, you may not get that much money or salary, or you have to take a huge cut, which I did. Your wife, your kid, not having to spend time with two-year-old, one-year-old, three-year-old. It definitely hurts. But definitely your family has to be supportive. And you have to understand what they're giving up for you.

Roland Siebelink:Okay. Very good. One of my last questions, Mrunal, would be what general advice would you give to other founders coming behind you? What are some key learnings as a founder that you would like to impart to other founders?

Mrunal Desai:Yes, very important. Again, there's going to be failures. There's going to be some good moments. There's gonna be some bad moments. But every day is different. I would say, don't give up. There's going to be days where you're going to cry at night alone by yourself because things are not working out as you want. But there's going to be days where you're going to celebrate. But don't give up. That's one thing I would say. Persistence and confidence, those two things can actually take you somewhere. Failures are a part of startups.

Roland Siebelink:Okay. Very good. Lastly, Mrunal, if people want to learn more about AavGo, where should they go and what should they download?

Mrunal Desai:Sure. They can go to Avgo.com. There's some materials on there. All the product details on the website as well. But if they want to approach us, there is a demo request. My email address is pretty readily available.

Roland Siebelink:And then if somebody wants an intro, I'm happy to provide. Also, for when the round will start, it sounds like that would be next year, then if the investors are interested, of course, I'm happy to provide an intro to Mrunal.

Mrunal Desai:Actually, it will be October.

Roland Siebelink:October already. Very good. With that, Mrnual, I thank you so much for joining the Midstage Startup Momentum Podcast. Really appreciate you coming onto the show.

Mrunal Desai:Thank you so much, Roland, and I appreciate you inviting me and doing this recording for us.

Roland Siebelink:Excellent. Well, very good luck. And we'll talk to you soon.

Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.