‘Ridiculous’ massage business raising millions of dollars

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Like many start-ups, Zeel was founded with one business in mind and then pivoted when we identified an unmet need. In 2010 we launched as a health-and-wellness booking platform targeting the alternative wellness market, which included consumers of massage, yoga, acupuncture and more.

However, our early market data told an interesting story. The vast majority of our customers wanted massages, and they wanted them right away — typically, in four hours or less. But the massage industry wasn’t set up to take same-day, on-demand appointments.

A lightbulb went off. I was confident that we had identified an untapped segment of the $50 billion global massage industry — on-demand massage, wherever you are. Most people, including a few Zeel employees, thought the idea of on-demand massage was ridiculous. But after completing more than 25,000 massage bookings, the data was clear. We had spent considerable effort learning from customers and massage therapists what was necessary to make an on-demand, in-home massage successful.

In 2012 we built and launched Massage On Demand, inventing the on-demand and in-home massage category, and have been building and improving the business ever since.

As the creator of our category, we’re often asked about competitors. Initially, there were no direct competitors. We were first to market. But we got a lot of press and public interest right out of the gate, and within a year a dozen imitators sprang up around the world. Yet traditional spas continued to be, and still are, the main provider of massages. As soon as Zeel launched, we were immediately compared to Uber. We were the start-up disrupting the spa business with on-demand in-home massage.

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For the first few years of Zeel Massage On Demand, we focused solely on providing massages to customers at their location — at home, a hotel, their workplace or at an event. We assumed we’d go head to head with the spa industry, like Uber with taxis or Airbnb with hotels.

But in late 2015, after discussions with spa owners and directors, we realized we had an additional opportunity: We could partner with spas to expand and improve their businesses. In just under 12 months, we launched Zeel Spa, partnering with 70 spas.

The Zeel Spa platform allows spas to book appointments that would normally go unfilled, either because of last-minute absences by staff therapists or unexpected demand. Spas are now able to say yes to customers more often and increase their booking capacity at peak times.

So how do you go into business with the competition?

1. Keep listening, and be flexible.

We could have accepted the verdict of the spas themselves when they said there was no common ground for a partnership. But we listened to their pain points and goals and realized that there was a fit. We are experts in attracting and onboarding only the best massage therapists — the ones spas want — and offering high-quality, customer service–oriented on-demand massage. Couple that expertise with the last-minute needs of spas, and the fit for a partnership was there.

2. Maximize your assets.

Zeel is a massage business, so our biggest asset is our network of vetted, licensed massage therapists. Twenty-two percent of Zeel’s in-home massage appointments occur after 9 p.m. (when spas are closed), and more than 40 percent are on weekends. Spas mainly need therapists Monday to Friday, typically during the day. We identified a mutually beneficial opportunity to maximize the utilization rates for the Zeel Massage Therapists. Now they can get more work, and the spas can get quality massage therapists when they need them.

3. Be unsexy. Go B2B.

Zeel Spa took an adjustment for our team. Entrepreneurs and consumers are often attracted to flashy, trendy things. Staffing isn’t sexy, but it’s a multibillion-dollar business in the United States. Spa staffing is a crucial component of the spa business and a space Zeel is uniquely situated to fill.

— By Samer Hamadeh, founder and CEO of the on-demand wellness company Zeel and a member of the CNBC-YPO Chief Executive Network

About YPO

CNBC and YPO have formed an exclusive editorial partnership consisting of regional “Chief Executive Networks” in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO’s global network of 24,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenue.

Source: https://www.cnbc.com/2016/11/27/ridiculous-massage-business-idea-raising-millions-of-dollars.html

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