Marriott International acquired Starwood Hotels for $12.2 billion, this is a significant event in the hospitality space. I am not sure if there has been a larger deal in this space before this one. According to the announcement, the combined entity will have over 1 million rooms and be the largest and #1 hotel group in the world.
I think this was bound to happen, the onslaught of Airbnb and the “Software eating the world” metaphor has to have victims in the hospitality industry as well. In my previous life as a Management Consultant, I had the privilege of living in Hotels, I had the platinum card in the Starwood Preferred Guest program and the Marriott’s Rewards and Loyalty Program as well. I think I did not complete the triple crown of Hilton Rewards program as most of my travels were to New York and California and I preferred to stay in Westin hotels. I enjoyed Westin’s Heavenly Bed and their Speakman Double Shower Heads. You know the time when all you really cared about was the bed and the shower? anyways, nostalgia sets in and I digress. I actually preferred Starwood hotels to Marriott, although I enjoyed the Courtyard Marriott experience.
Lets think about why Starwood Hotels capitulated. I thought their product was good and I think they were doing a good job with their growth and expansion, so what happened? Are there learnings for Startup Founders who have found product to market fit? because once you figure out product to market fit you are in the same boat as a company that has a stable product and customers. I think so, here is my 2 cents worth… I think Starwood lacked the Mission, Vision and Values that is so important to build endurance for the long run. I think when Starwood started switching CEOs and the leadership teams, the winning Startup culture kind of died with it. This is one of the biggest challenges that Startups face once they start hitting escape velocity. This is also the very reason why I believe Founders of technology companies need to stay in the company to keep the Fire alive. When founders leave, the spirit, the mission, the values and pretty much everything else that was embedded in the culture dies.
Another learning to founders and startups is that, if you don’t have a culture that is built on enduring values and a mission, the chances are your startup will start facing headwind as well. You need a strong purpose and mission to push forward. This is also the reason why Yahoo is struggling and Twitter has a better chance of surviving.
When you are building a startup, you have an Ants view of the world in the early days, however, you need to have a much bigger perspective if you want your startup to survive and endure. Think about if your company will survive the next 100 years, that is long term thinking. The paradox of being a founder is you need to think long term and short term at the same time.
