Meeting Package’s COVID Gambit: Why They Cut Everything Except Engineering During the Pandemic
When COVID-19 hit the hospitality industry, most companies slashed engineering budgets first. Meeting Package did the opposite – they doubled down on product development while cutting everything else. This contrarian bet would reshape their entire trajectory.
In a recent episode of Category Visionaries, CEO Joonas Ahola revealed the strategic thinking behind this unconventional move and its long-term impact on their business.
The Pre-COVID Context
Meeting Package had already made one pivotal shift, transitioning from marketplace to enterprise software in 2018. By early 2020, they were gaining traction with their new model. Then the pandemic hit.
“What happened in our industry was Covid-19 quite heavily impacting our operations. All hotels are closed. Nobody’s booking meetings or events or group business,” Joonas recalls. For a company focused on meeting venue management, this could have been catastrophic.
The Strategic Gambit
Instead of across-the-board cuts, Meeting Package made a focused bet on engineering. As Joonas explains: “We decided that, okay, let’s rather shut down customer success and marketing and completely focus on engineering and R and D at that point.”
This wasn’t just about survival – it was about seizing an opportunity. “That gave us the freedom, posted pivot, to kind of get our product to where it should be,” Joonas notes. They saw the pandemic as a chance to clean house, removing “Legacy from the marketplace times… whether it was mindset related from people or whether it was technology related, marketing material related.”
Funding the Strategy
This approach required conviction – and capital. “We raised a convertible capital loan from our existing investors to bridge that kind of period during 2020 to 2022, when Covid was impacting our industry heavily and to still keep investing on our technology,” Joonas shares.
The pitch to investors was straightforward: “We truly believe on our vision statement. We saw that from 2018, 1920, were on high growth mode. Now this happens. It’s nothing to do with us or the company. However, we feel that if we raise now and invest, we can be much further ahead of any competition out in the market once the industry recovers.”
The Engineering Focus
With customer success and marketing paused, the engineering team could focus entirely on product development. This wasn’t just about adding features – it was about building the foundation for future growth.
“A lot of vendors might have during COVID kind of froze all of engineering and kind of shut down engineering at first,” Joonas notes. By taking the opposite approach, Meeting Package could emerge from the pandemic with superior technology.
The Post-COVID Payoff
The strategy paid off. As the hospitality industry recovered, Meeting Package was positioned with better technology than competitors who had cut engineering during the pandemic. Their conversion rates soared to “60% to 70% on average,” up from below 10% in their marketplace days.
This technological advantage also strengthened their partnership strategy. As Joonas explains, their enhanced product became crucial for distribution partners: “They have the demand but they dont have the technology that we have for the inventory.”
Lessons for Founders
Meeting Package’s COVID strategy offers several key insights for B2B founders:
- Market downturns can be opportunities to build competitive advantages if you’re willing to make contrarian bets
- Having strong investor relationships (and their trust) is crucial for executing unconventional strategies
- Sometimes the best time to invest in product is when your market is temporarily frozen
Their experience shows that the conventional wisdom of cutting all costs during a crisis isn’t always right. Sometimes, the better strategy is focusing resources on your core competitive advantage – even if that means making deeper cuts elsewhere.
The key is having the courage to make that bet – and the clarity to know which capabilities will matter most when the market recovers.