Sacrifices It Takes To Build A Strong Startup Culture — The untold story of Climber by the CEO Mario Mouraz

Climber is a smart Revenue Management tool that helps hotels increase revenues by implementing dynamic pricing. We work with from smaller independent hotels to large hotel chains with a presence in different countries who are looking for efficient ways of attracting more and better clients, want to diversify their distribution channels and want to implement a culture of Revenue Management within their teams. Climber is a 5-year-old startup born and raised out of Portugal with presence in Portugal, Mozambique and Brasil.

This is the untold story of Climber by the CEO Mario Mouraz.

The Beginning — Idea, Founders and Advisors

It was January 2015 and I had just left the startup I had myself created one year ago, TripDashBoard, a company that sold touristic demand insights to hotels, due to incompatibility with my partner at the time, resulting from different perspectives on how the startup should be managed. It was a difficult moment since I did not have much savings, and I felt quite guilty for having “failed” again. It was my second startup and despite having tried twice and not had success, I knew what I wanted the most were to try again and this time, succeed. This time I was better prepared and had several lessons learned. I had some savings with the exit from the prior startup and I knew the need hotels had for a solution that would automate the calculation of the best room prices.

I met JP, my current co-founder, in an arranged dinner and at the end we agreed to test out working together for 3 months, to see if we would get along. At the end of the first month, JP quit from Nokia, took out a personal loan and came full time to work with me at Climber.

We were completely different people, JP all into meditation, yoga, surf, logical reasoning, prudent, while I was the hustler, the go-getter, who acted on impulse, the strategist.

We had another partner in the company who ended up giving up in the first three months.

The first thing we did was to get an advisor who had already gone through what we wanted to go through, and that handheld us in the first 6 months, chatting on a weekly basis.

First 2 years — Office, Crowdfunding

In the first two years, our office was a desk in the cave of the Lisbon Startup Factory, with no natural light, cell phone network and sharing the space with other startups.

Neither I nor JP received salaries in the first year and a half, and in the two following years, we paid ourselves 800€/month.

I had been living and working for a year in Burkina Faso below the poverty line of $1.5/day, so my standards were very low. For JP it was a complete downgrade.

Due to being stubborn and to save money, only in November 2019 (almost 5 years), I allowed Climber to buy me my first laptop.

We invested 30 thousand euros from our own capital, which sustained the company and the salaries of two employees until our first official capital raise of 100,000€ in July 2016 through crowdfunding.

Going through the Founder Institute acceleration program was important because it forced us to validate our business idea with 150 potential clients in a week. We would end up interviewing 1000 hotels in Portugal and in Brazil in only 3 weeks.

one day I found I only had 6€ on my bank account

During the first two years, we frequently worked from 7am to 11pm at night and frequently JP had to run in order not to miss the last boat back home. During that period we took a tent and slept in the office. It was a period of sacrifices. JP burned his savings account, we abdicated from vacations and from our hobbies. In the first three years, none of us went on vacation until an investor, Marcin from Innovation Nest, recommended that we take a break for a few days. We both started renting a room on Airbnb to help pay the bills. All the money we had was fully invested into the startup and one day I found I only had 6€ on my bank account.

In 2016, we applied to an “Internationalization” P2020 IAPMEI fund for 382,000€, which was approved but we never actually received the money. It was a very unpleasant situation that dragged on for 2 years, and which almost killed the company due to the financial problems it caused and by the friction, it caused in the relationship between the founders.

The founders began to give more attention to the mind, body and spirit. Meditation began to be a regular practice in our lives and at his best peak JP had meditated on average for 50 minutes a day for 600 straight days, a practice we maintain to this day. Together with the regular practice of yoga and a practically vegetarian diet, I believe we became better managers.

Casting errors, first clients, first risk investor (VC)

The first round with VCs and business angels took 14 months to close and was a torture, and at the same time a huge learning experience. At a certain point, already with no money in our bank account, the lead investor that was already committed presented us with miserable terms and we gave up on the deal. With no lead investor, we were going to lose the other investors. As a last resort, we went to Poland to meet a VC, and the meeting went badly because we were not prepared. We came back to Lisbon and after a lot of hard work to be able to answer those questions, we’ve managed to get that investment of 200K€. At the same time, we went to Málaga to meet an investor and I ended up sleeping in a hammock on the beach because we did not want to spend more money. We managed to obtain another 100K€ in investment from that trip. Later, most of our investors told us they had invested mainly for the people and for our resilience.

Receiving the money into our account was another drama. In one case, in particular, it took 10 months for us to receive the money in our bank account and thus we had to get a bank loan for 30,000€ to bridge that gap. Also, a possibility that emerged of us being bought by Trivago fell apart in the first negotiations.

We changed the name from Climber Hotel to Climber RMS in 2018 and we also changed offices. I myself got on my knees to clean the toilets and the floor of the WC while we did not have a person to do the cleaning.

Climber maintains to this day a tradition of making every Monday, Wednesday and Friday a team snack that was labelled “Mário’s bread” (“o pão do mário”).

At the end of 2018 and the beginning of 2019, we went through tough times. Two important members of the team decided to quit in the space of a week, the founders had communication issues which generated much friction, an investment round to be closed, a roadshow in the USA, a mutiny at Climber resulting from the dissatisfaction of the employees and chest pain I had been having for the last month got worse to the point I had to be taken to the hospital in New York. Fearing having a heart attack at 30, I decided to stop and take 2 weeks of vacation, the first since we had created Climber. And I am grateful that I did!

We worked with an executive coach to solve the communication issues and little by little, and with a lot of patience and inner work, we managed to resolve the issue and restore trust between the founders and most importantly, the team. Something as simple as the introduction of a 15-minute daily check-in between the founders did wonders, the founders were aligned and the team was united once more. Delegating and empowering the team internally was another factor for success. We created an executive mid-layer of team leaders that began making decisions without having to go through the founders. All employees assumed greater responsibilities, the company strategy was now discussed with the TLs and communicated periodically to the team. A matrix of responsibilities was created with first and second persons responsible, we made strategic changes like leaving the United Kingdom market, we made changes internally and started to better manage our decisions, supported on data and specific targets.

“Taking care of people so they can take care of your business” became our mantra. Nowadays we have a top-notch team, very united and super aligned. And this makes all the difference.

Our Culture

Having alternative plans B, C, D, E, F, if plan A fails became “normal” at Climber.

Every time we sign new contracts with clients we buy plants for the office and we made a habit of having lunch together every day.

Our culture is Informal, fun, young but mature. Delegation and responsibility are crucial, no micromanagement, profanity is used and some dark humour makes a good mix, we display constant care to improve communication, we celebrate wins, we incentivize trying-failure-learning loops, and we also incentivize collaboration. We challenge the status quo every day, we are straightforward, walk the talk, bullshit-allergic environment, when we see an opportunity to improve we go for it, we are proactive, dynamic and flexible.

We look outside for advice. We love a good challenge. We use an analytical approach as much as possible in our decision making. We are conscious of our limitations and we like to keep our focus. We think the client first. We help others by being at our best, but first and foremost we are a family, a team and we listen. Our biggest assets are the people and our brains.

The bankruptcy of a partner, pandemic and the moment to reinvent Climber

At the end of 2019, our biggest partner closed its doors, and suddenly we were forced to reinvent ourselves. The theory was not enough and we had to learn from experience that one should not place one’s eggs all in one basket.

This event, together with the delay in the reception of funds from investors, lead us to be out of money again, which in turn brought existential doubts such as “what the hell are we doing (…) Why are we doing this?”. JP borrowed money from his mother and his sister instead of paying interest to a bank. He was considering to sell his house so he could keep going. Gladly it didn’t become necessary.

In February 2020, we closed part of a new round of investments, raising the total accumulated investment to 1 million euros, we increased team salaries and JP’s retirement savings were all gone And we could finally breathe!

We were always transparent with the team in hard times, and this gave us an advantage at the moment we had to give bad news when the COVID-19 pandemic emerged. With all our client hotels closed, we had no alternative but to announce a lay-off, salary reductions in the recovery months and cancel the bonus, and even so, the team was still united. The decision was to do this or to fire people. We fired no one.

The pandemic was also the moment where we had to reinvent ourselves. We activated “emergency mode”, we cancelled the office indefinitely, we cut all costs to the minimum required, we redefined processes and priorities and we became even more efficient, focused and creative. We created a virtual space very close and true to what our pre-COVID physical reality was, and we now have a space called “tavern” with music sharing channels where each employee can be the DJ for a day, I began providing virtual yoga classes on Saturdays to the team and the founders started making even more frequent updates to keep everyone up to speed on current events. I moved to the countryside during the greater part of the isolation and discovered another way of living. City life stopped making so much sense.

Conclusion — 5 years of existence and vision for the future

We feel proud of what we have achieved, but we are not even close to our ambitions. The challenge is what moves us. The challenge of growing a global-level project, of creating a positive impact in the world, of working with good and smart people, in a positive and learning environment that challenges us every day. What other reason would lead super smart and dedicated people, PhD’s to dedicate themselves to Climber, working more than what is asked from them in a so-called “normal” job, if we do not pay salaries that are twice the market average!?

During our journey, we had more rejections than times we heard “yes’s”. 170 investors said “no” to us in the three investment rounds we held, dozens of applications were rejected and even so Climber continues to grow and the ambition has never decreased.

What satisfies me the most is this team. We might be in a tight spot but we always figure out a way to make it happen. We don’t get discouraged by bad turnaround events and we continue climbing. Just as nobody would climb Everest alone, we’ve built a cohesive team that is willing to accept sacrifices for the success of the summit. We aren’t the best at celebrating important events, as we just completed 5 years of existence and didn’t remember to celebrate it with everyone at the company with a video call. Still, we demonstrate an attitude of resilience in tough times, we execute fast, we learn fast and we delegate big responsibilities and empower each other to follow through. We are organized, we follow-up, we’re detail-oriented and communicative not only within ourselves but also with our clients. When the crisis hit we proactively reached out to our customers suggesting that if they were foreseeing financial troubles to let us know so we could negotiate more favourable payments terms. We are also generous. At the beginning of the pandemic, our team members quickly made themselves available to cooperate volunteering at the #Tech4COVID19 movement that was launching tech solutions to stop the virus spread in Portugal.

We are diligent and we act thoroughly, we are adaptable and we understand that the new normal requires different courses of action. We are not afraid of changing directions when necessary, we make rapid iterations, we are very pragmatic and we are aware that developing “the right things” quickly is what is important since we know that the strong final products are the ones that will succeed when this storm passes.

Deep down, we know that people are our company’s most important asset and, despite the current challenge, I have full trust that we will come out stronger and manage to grow our list of clients. We understand that resilience is the name of the game and that is the stuff we are made of.

If you are a startup founder reading this and you are going through the pandemic and feeling lost or find yourself doubting about whether you should really be doing your startup right now please remember this sentence from Winston Churchill that says “if you’re going through hell, keep going”. Whoever manages to come alive out of this crisis, will have better chances of succeeding.

Abraço,

Mário

Originally posted by Mario Mouraz on Medium on May 13, 2020. Full Portuguese version here.

Photo by Rosie Kerr on Unsplash