HeyLets co-founders Justin Parfitt (CEO) and Dean Kelly (COO) recently raised $1.6 million and are currently seeking another round.
Their new app connects users with real world experiences with a Twitter-like character limit (pushing reviewers to get right to the point, thankfully).
Recently, Dean talked to Anthill Online about everything that’s going on in his world.
Here’s how that conversation went down.
Anthill: How did we come about the idea of HeyLets? What is it?
Dean Kelly: Justin Parfitt, my co-founder and the CEO of HeyLets, was travelling in Italy and using Trip Advisor to find the hotels on his route. It was a time consuming, frustrating process trying to tease out which reviews were relevant. At one point he read a one-star review for a stunning converted mansion in a medieval town in which the reviewer complained that the building was old and the staff spoke poor English, and went on to describe the Sheraton at Milan airport as the highlight of their stay. Justin thought, “Why am I reading negative reviews from people I have nothing in common with?” I could relate to Justin’s story.
As an ex-management consultant at Booz, I was frequently working overseas, and I would find myself in an unfamiliar city, struggling to find inspiration online for things I could be doing after work. Online, there is so much information, most of it telling you what not to do, or what is only a 3.5 rating out of five, and none of it is tailored to my interests.
HeyLets is a free iPhone app that solves this problem by connecting users to experiences recommended by people with similar interests and demographic profiles. HeyLets is mobile first. Each recommendation consists of a photo and up to 200 characters so it’s quick and easy to use wherever you are, or wherever you’re going (there have been over 100,000 experiences posted in 91 countries since November 2014).
AH: Why build this business? Who uses it?
DK: Society places increasing value on the consumption of leisure activities and experiences. HeyLets is the first social application for sharing preferred leisure activities and experiences.
There are literally hundreds of apps that focus on places, with reviews, tips or comments hidden on secondary screens. HeyLets emphasizes the experience first and foremost, so what you’re seeing in your feed is a sequence of ‘this is awesome!’ moments from like-minded people. It’s more personal and entertaining than seeing a list of places.
We also think that no one else has really cracked personalization yet. Foursquare has made a stab at it, but we feel that they’re hampered by legacy data and content. We think that your ‘recommended’ feed on HeyLets, even at this very early stage, does a better job of inspiring you to try new things. HeyLets can be used by locals looking to rediscover their city, or tourists in a new city looking for inspiration from locals and other similar people. We think that HeyLets is an app that should be on every single person’s phone in the world. And that is a pretty exciting prospect.
Ultimately, there hasn’t been a breakout product to challenge Yelp or Trip Advisor, which both feel old to us. We think that there is everything to play for and that focusing on experiences rather than places, recommendations rather than reviews and delivering true personalization is the way forward.
HeyLets answers the question, “I want to do something, but I don’t know what.”
HeyLets is about inspiration. Wherever you are, and wherever you’re going, HeyLets inspires you to try new experiences, whether its food, nightlife, shows, hikes or travel tips. Your feed is personalized to your interests and demographic profile, so you can scroll through a feed of “this is awesome!” moments posted by like-minded people. Each experience consists of a photo and up to 200 characters, so it’s quick and easy to use.
There are 3 main points of difference on HeyLets…
First, we focus on experiences instead of places. Each person’s experience is a unique social story, so a feed of experiences is more personal, insightful and interesting than a list of places
Next, we focus on concise recommendations instead of reviews. When you’re on a mobile device you’re looking for something to do, not things to avoid. Negative reviews are a waste of time
And, lastly, we focus on personalization over ‘one-size-fits-all’ star ratings. What’s right for one person isn’t right for another, so Hey Lets uses powerful machine learning to match you to recommendations from like-minded people.
Both Justin and I have founded and scaled previous ventures by leveraging strategic partnerships, so in addition to building a product that our users love we have advanced plans with some amazing partners in the hotel, travel, and transport spaces. We hope to be able to make some announcements about this is in the very near future.
We’re also seeing businesses become powerful advocates of our product. Unlike the conflicted relationship some businesses have with current review sites, user content based on recommendations rather than ratings removes the incentive for businesses and their competitors to game the system, and we have yet to see any significant trolling. Businesses that don’t deliver a positive experience to anyone just don’t get any exposure.
AH: How have you raised capital so far?
DK: We launched in Australia as a beta market to ensure we had the correct product market fit before launching in the USA and globally. After our soft launch in Australia, we asked our users for feedback and continued to change HeyLets until we started to see more and more users come back every day. At that point, we were able to raise a seed funding round of over a $1.6m from an Australian based VC called BlueSky Funds as well as some sophisticated angel investors.
We actually were offered in total $2.5m from various investors, but we were looking for partners who could add value long term beyond just providing us with money. I think that our investors recognised the size of the market we are playing in (the global market for leisure actives and experiences is over two trillion dollars), believed that the product we were building would have a good chance at capturing the opportunity, and also believed that Justin and I were capable of leading the company to do so.
The fundraising process took about four months, and started slowly. With fewer VCs in Australia, competition for funding is greater. However, once the first investor came on board, it was a much quicker process. Also, there are an increasing number of sophisticated angel investors in Australia, who instead of trying to squeeze a low valuation out of co-founders, recognise the sort of prize that exists by working together. BlueSky Funds, and in particular Elaine Stead, has been extremely supportive since backing our team.
AH: What are your plans for your next capital raise?
DK: Now we have a product that is growing and consumers love using, we will be looking to raise $4m in the next few months to help us with both product development and user growth. We will be looking for a venture capital team most likely in the USA that can partner with us and work closely as a team as we scale globally.
To raise capital, we will highlight HeyLet’s utility and global potential. We are seeing this in our high engagement and usage metrics. Not only are we now already in over 91 countries, but we’re also seeing great community engagement (DAU/MAU = 44%) with users returning to the app around 14 times a month. The metric that we are most pleased with, and speaks to the long term success of the app, is that over 12% of users go on to post content. When we dug into this a bit we realized that most of the photos used were from peoples’ photo gallery, and typically spanned several months and even years.
What this is telling us is that HeyLets is piggy backing off an existing habit, namely the habit we all have of using our smartphones to take a picture when we’re having a good time or eating a great meal. It seems that people see HeyLets as a natural home for these ‘good times’ pictures. Posting on HeyLets is saying, “I had a great experiences, you should try it too”. People seem to be really comfortable sharing in this way.
Check out HeyLets right over here.