How Otamiser (then Loreca) Reached 290 Hotel Customers Across Western Europe in Under 24 Months (Interview with CEO Bart-Jan Leyts)

Introduction and Company Overview

Nathan Latka

00:00Guys, loreca.be helps hotel chains make more money with their algorithm. They did about $250,000 in revenue last year, hoping for a million this year. They serve 290 customers paying on average 250 ish bucks a month. That would be a million dollar run rate. They're They're building this right now with a team of seven, and Bart-Jan owns a 100% totally bootstrapped today. Launched it as a student, now 23 years old. We'll see what he does next.

00:23Hey, folks. My guest today is Bart-Jan Leyts.

00:25He's a 23 year old entrepreneur who founded Loreca. Loreca is an innovative startup who it boosts the revenue of hotels by an average of 24% by giving visibility optimization for rental properties. Alright. Bart-Jan, are ready to take us to the top?

Bart-Jan Leyts

00:39>> Hi. Hello, everyone. Hello. Thanks for having here.

What Loreca Sells and How It Works

Nathan Latka

00:42So just to be clear, kick us off here. You're selling software to hotel owners just so they can make more money?

Bart-Jan Leyts

00:50>> Something like that. We are selling algorithms. So it's not really software. It's more like an algorithm, but at the end of the ride, they make more money.

Customer Profile and Western Europe Footprint

Nathan Latka

00:58Okay. And help me understand what your average customer might look like. Can you talk about a customer? Can you name one of them?

Bart-Jan Leyts

01:05>> Yeah. We have so right now, we have 290 customers all around Western Europe. So it goes from hotels from 20 rooms to hotels with sixty, seventy rooms. Most of the time, they are like hotels who really suffered due to the pandemic, due to the recent crisis in Europe, and they really need some way out to help them. The other part of our customers are really debts, like, owners who, like, try to maximize everything they have, and

01:36>> they then they use our algorithm to maximize their rent.

Nathan Latka

01:39What does that mean? Someone with an extra bedroom will use your algorithm to figure out how they can rent their bedroom?

Bart-Jan Leyts

01:46>> So we have some of them. Some of those, like, people who are, like, trying to make some extra money, like, from the beginning days where we were testing our algorithm on different kind of short term rentals. But nowadays, our focus is really to the hotels, really the the big

Pricing Model and Performance-Based Cut

Nathan Latka

02:06And and on average on average, what are these hotels paying you per month to use your algorithm?

Bart-Jan Leyts

02:12>> It's around 2,000, but it depends as we work with a no cure, no pay. So we take cuts on everything. We earn more.

Nathan Latka

02:23Okay. So people are paying $2,000 US dollars per month on average?

Bart-Jan Leyts

02:27>> Yeah. Something like that. It all depends on the, you know, the region, the number of rooms, all these things.

Nathan Latka

02:35Okay. Well, well, help us understand that. Right? So what do you price per room?

Bart-Jan Leyts

02:40>> So, like, our pricing models look look like this. So we, like, calculate based on data the probability that they will obtain, like, the same revenue as a given year. And then we, like, we put it equal, like, it's called discounting, and we put it, like, equal with market demand, inflation, all these things. And with this, we like to distribute how much money we make extra. And from this extra money, we take a cut. But this cut

03:14>> is, like, it all depends on

Nathan Latka

03:15What cut do you take?

Bart-Jan Leyts

03:17>> High to low. It's most of the time, 25%.

Nathan Latka

03:22Okay. So if someone without Loreca is gonna make a 100,000 a year, but somebody with Loreca is gonna make 200,000 a year, you'll take the delta of a $100,000 and take 25% of the upside you helped create or $25,000.

Bart-Jan Leyts

03:37>> Yes. But, important side note there is, like, when someone would make 100 and now 200, we have to, like, deduct inflation, market demand. So, like, it's never, like, an absolute number of 100. It's always, like, 80 or 70, and then from the 70, we take a cut.

Nathan Latka

03:57Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:20your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:45get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

05:06not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

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06:20the interview.

Sponsor Read: Founderpath Valuations

Nathan Latka

06:22When you look at how much revenue the 290 hotels on your platform today, how much revenue do you think they'll all do together in 2023?

Bart-Jan Leyts

06:32>> That's a very hard question as you have

Nathan Latka

06:34Why is it hard? I thought that's what your algorithm calculates. You just told me that's what it calculates.

Bart-Jan Leyts

06:39>> Yeah. Exactly. But, we have some of them who, like, are onboarded

06:46>> in in July last year, meaning that they have, like, a different time spent. So it's hard. But I think, let's say, around 22,000,000 that we earned extra last year. So this year will be hard to predict, but last year, it's 22.

Nathan Latka

07:03Okay. Just to be clear, the two hundred and twenty two hundred ninety hotels you're working with today, the ones that were you're working with last year, you helped them earn 22,000,000 more than what their base was. Right?

Bart-Jan Leyts

07:14>> Exactly.

Nathan Latka

07:15And you take 25% of that?

Bart-Jan Leyts

07:20>> Exactly.

Nathan Latka

07:21So 25% of 22,000,000 is you guys had about 5,500,000 revenue last year?

Bart-Jan Leyts

07:27>> No. That's a very good question. We we we had a very long proof of work period where we, like, we were working at very low margins just like, so we could, like, build a proper business case to go to, these bigger hotels, and ask for, like, the the revenue model we use today. So it's, like, not even that long, like, I think three months that you're working with this model. But

Nathan Latka

07:58Okay. But, Jan, I don't wanna I don't wanna I don't wanna lose my audience here because, like, this is a little bit confusing. Right? So you you told me you'd make 25%, but then you don't make 25%. And you told me you charge $2,000 per hotel with 290 hotels, which would mean you're doing $580,000 per month in revenue. It sounds like neither of those numbers are accurate. So how do you price? What do you charge?

Bart-Jan Leyts

08:20>> It's 25%, but important to know is that from all of our hotels, like, there's a big range. Due to our early days, we still have, like, little clients, bed and breakfast from three rooms, but we also have the bigger. So it's very hard to put, like, an absolute number. But the first number I saw when I popped up my screen was 22. So it's very hard to, like, really determine them.

Revenue Goals and Financial Model Clarification

Nathan Latka

08:48Well, Bart-Jan, what do you think you will do this year in total revenue?

Bart-Jan Leyts

08:54>> We hope to be 1,000,000, certainly. This is like our, like, least least that we should have.

Nathan Latka

09:04Okay. And and what does that mean? You did 200,000 last year or 300,000 last year?

Bart-Jan Leyts

09:10>> That's something like that.

Nathan Latka

09:11Okay. This is great. Well, I guess, give me the backstory here now that we understand the financial model. When did you launch the company? What year?

Bart-Jan Leyts

09:20>> July 2021 as a student. It's like an extra holiday merit.

Nathan Latka

09:27Okay. And now are you still in school? Did you drop out to build the company?

Company Founding Story and Background

Bart-Jan Leyts

09:32>> I graduated a couple of months later, and now I have a full time team who is building the company with me.

Nathan Latka

09:39How many folks are on the team today?

Bart-Jan Leyts

09:42>> We are seven in total.

Nathan Latka

09:46Seven people. And are you the only founder?

Bart-Jan Leyts

09:49>> Yes.

Team Size and Sole Founder Structure

Nathan Latka

09:50Okay. So you're sole founder. You own a 100%. No cofounder?

Bart-Jan Leyts

09:55>> Exactly.

Bootstrapped Status and Capital Raise Decision

Nathan Latka

09:56And are you bootstrapped today, or have you raised capital?

Bart-Jan Leyts

10:00>> We are bootstrapped. We are raising capital is still on the plans, but, it's something we have to decide.

Nathan Latka

10:07Why do you need capital to build this business? Why not keep a 100% and bootstrap?

Bart-Jan Leyts

10:11>> Exactly. That's the thing we need to, decide if we are going the way we are because we we are already obtaining wonderful results.

Revenue Generated for Hotels and Loreca's Share

Bart-Jan Leyts

10:22>> Or are we going to raise capital? This is still a question that's on the table, and we hope, like, in the soon future to make a decision about this.

Nathan Latka

10:31Who who is we, though? I mean, you're the sole owner. Right? So you're making all the decisions.

Bart-Jan Leyts

10:35>> Yes. But I have, luckily, a wonderful team who is assisting me with the big questions.

Nathan Latka

10:41Do they own equity, though, or no?

Bart-Jan Leyts

10:44>> Not yet.

Nathan Latka

10:45Not yet. Okay. Interesting. Okay. And I guess, how did you get to this pricing model? Know it's very difficult. We heard you sort of trying talking through it earlier. It's very difficult, this pricing. It's hard to model. Why not just do something very simple? A price per room, per year, or something like that.

Bart-Jan Leyts

11:01>> Because, like, for us, of course, it's a very good sales perspective. We say, like, we are certain our algorithm works. Sounds a bit arrogant, but, like, we are certain that it works. And that's why we just take a cut of everything. We earn more. So in the worst case, a hotel that uses and we don't work, we don't earn extra money for them, they don't need to pay us. So, like, a hotel by this by this

11:30>> pricing model has nothing to do with working with us. And also, it incentivize us to, like, make the most money for the hotel.

Nathan Latka

11:38Yeah. But it's not just that. It's so much extra work because you have to defend the extra money you're making the hotel. The process to actually capture the revenue is so much more difficult.

Bart-Jan Leyts

11:49>> Exactly. Exactly. But luckily, software is pretty advanced in this kind of things.

Nathan Latka

11:55Well, I mean, we heard you talk through the calculations earlier and you kept using words like it's confusing, it's hard, it's tough, it's hard to estimate. I'm not sure. I mean, why not just charge a flat fee? And if you're not delivering value, they'll churn and cancel.

Bart-Jan Leyts

12:09>> That's also an option that's on the table. Like, for us, of course, we are with this pricing model, we are bound to seasonality. So if hospitality is doing bad or business will be doing bad as well. But it's still something we're exploring. But as of today, this is our revenue.

Growth Tactics: Press, Newsletter, Blog, and Word-of-Mouth

Nathan Latka

12:28Okay. Talk to us a little bit about growth here. It's impressive that you've got 290 customers less than twenty four months after launch. How did you hustle to get 290 paying customers already?

Bart-Jan Leyts

12:39>> So I launched a student, which so I'm from Belgium. And in Belgium, like, if student launches a company, they they get, like, a lot of press, a lot of, like, magazines. And so so this is where, like, all the start came. And then I did, like, the basics, really, like the Mailchimp, blog writing, the podcasting, all the basic things and this led us to having two ninety. We are also in an industry, so the hotel industry,

13:07>> which is very familiar so like you know, one hotel and one street says, okay, these guys, you have to work with them and then it starts spreading. But marketing and rebranding is something that's for this month actually.

Nathan Latka

13:22Mhmm. What you mentioned podcast. Do you have your own podcast or you go on other people's podcasts?

Bart-Jan Leyts

13:29>> I have done some podcasts before or some podcasts before, and we always had some wonderful results.

Nathan Latka

13:36Bart-Jan, the question is, do you have your own podcast or do you only go on others?

Bart-Jan Leyts

13:40>> No. No. I don't have that.

Email List and Click-Through Performance

Nathan Latka

13:42Okay. And how many subscribers do you have on your Mailchimp list today?

Bart-Jan Leyts

13:47>> That's a hard question. I think it's around 8,000, but we were in a collaboration with some local government where we were able to get a big portion. So it's not 8,000, like, that subscribed to our website, but we received some of them.

Nathan Latka

14:09Okay. Well, I mean, is the email list a way that you get new customers?

Bart-Jan Leyts

14:15>> Yes. We send out, like, a two weekly blog. So a two weekly newsletter, and we always have wonderful, like, click through ratios.

Nathan Latka

14:22How many folks usually open and click?

Bart-Jan Leyts

14:26>> We are around 30%.

Nathan Latka

14:28So 30% open. So that's about 2,000 out of the 8,000 open. And then how many click?

Bart-Jan Leyts

14:36>> No. Two sorry. 30% of everyone clicks through our website reader blog.

Nathan Latka

14:43So if you send out an email to 8,000 people, you're saying two thou that's gonna generate 2,000 clicks to your website?

Bart-Jan Leyts

14:50>> Yes. Exactly. We're seeing every time we send out a blog, it's crazy.

Nathan Latka

14:56Are you sure that's accurate? That would be almost, like, six x the top click through performance I've ever heard of from an email list.

Bart-Jan Leyts

15:05>> Yeah. I can check it right now.

Nathan Latka

15:07So just to be clear, you send an email to 8,000 and, you know, six, seven thousand of them open, and then, like, 2,000 of them click in the email through to your blog. That's what you're saying?

Bart-Jan Leyts

15:16>> Exactly.

Nathan Latka

15:19That's a really high click through rate. How do you get so many people clicking?

Bart-Jan Leyts

15:23>> We are lucky that, like so we are only, like, doing some local blogging and local newsletters. So, like, our blog is in multiple languages, but our newsletter is like, the people we send it to is not. So we are lucky that we are in Flanders and Belgium that a lot of people need services like us. Like, we really need companies like us to, like, help them

15:49>> move to the next step. And this is why our blog is, like, heavily writ.

Nathan Latka

15:53Explain to me how your process is. I mean, you're a startup with constrained resources. Writing takes a lot of work. Your last blog post on October 16 is titled The Seven Most Important KPIs in the Hotel Business. How did you identify that title as something you should write about?

Famous Five Rapid-Fire Questions

Bart-Jan Leyts

16:10>> I will be honest. I had, like, several marketing people already in my company. Now the last one left, and the new one is awarded last week. So it's something they decide to do some research about it, but it's not not my expertise.

Nathan Latka

16:27Okay, Bart-Jan. On that note, let's wrap up here with the famous five. Number one, what's your favorite business book?

Bart-Jan Leyts

16:34>> Oh, it's the book from Jordan Belfort. I can't remember the name. So let me

Nathan Latka

16:42Alright. Number number two, is there a CEO you're following or studying?

Bart-Jan Leyts

16:47>> Oh, I really like a Belgian guy called Bart Verhaeghe. He has, like, a construction company.

Nathan Latka

16:55And what's the name of the company?

Bart-Jan Leyts

17:00>> Uplace.

Nathan Latka

17:02Alright. Number three. What's your favorite online tool for building Loreca?

Bart-Jan Leyts

17:06>> It should be Webflow. I spend a lot of time on our website just because I want everything to be perfect.

Nathan Latka

17:13And number four, how many hours of sleep do get every night?

Bart-Jan Leyts

17:16>> I I'm happy if I get around five.

Nathan Latka

17:21Five. Okay. And what's your situation? Married, single, kids?

Bart-Jan Leyts

17:25>> I have a wonderful girlfriend.

Nathan Latka

17:27Not married. Okay. No kids. And you're 24. Right?

Lessons Learned and Closing Thoughts

Bart-Jan Leyts

17:31>> 23.

Nathan Latka

17:3223. Last question. Something you wish you knew when you were 20.

Bart-Jan Leyts

17:40>> Not to be too naive in business. It's something I had to learn the hard way and something I wish I knew a little bit more early.

Nathan Latka

17:50Guys, loreca.be helps hotel chains make more money with their algorithm. They did about $250,000 in revenue last year, hoping for a million this year. They serve 290 customers paying on average 250 ish bucks a month. That would be a million dollar run rate. They're building this right now with a team of seven, and Bart-Jan owns a 100% totally bootstrapped today. Launched it as a student, now 23 years old. We'll see what he does next. Bart-Jan, thanks

18:13for taking us to the top.

Bart-Jan Leyts

18:15>> Thank you.

Nathan Latka

18:16One more thing before you go. Have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday, one pm

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