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Travel Startups Challenges and Opportunities

Valentin Dombrovsky for Software Engineering Conference, Kiev03.09.2016

1. Online travel landscape - find your niche. 2. You've got an idea, now what? (Or why you shouldn't do a travel startup) 3. B2C and B2B startups - where's the biggest potential? 4. Disrupting the market - understanding key opportunities. 

http://www.tnooz.com/article/the-online-travel-ecosystem-infographic/

But in fact there’s no such clear path

•Booking websites might become source of inspiration

•Meta-search websites enable booking

•Travelers read reviews to do their research and planning

• Lots of activity happens offline (we think about travels all the time ☺)

•Major players tend to build (or acquire) solutions for all parts of the trip planning process

•Etc.

Traveler

f

Airlines, Hotels, Cruises, Tours & Activities, Transfers, Airport Parking, Car Rentals and Insurance

OTAs

Search

Corporate Travel & Traditional Agencies

Hotel Search Engines

GDS

Distribution, Loyalty & Ancillary Platforms

Metasearch

PMS

Cruises

Channel Management

Traveler

Airport Transfers

Multimodal

Tours and Activities

Car Rentals

Peer Markets

Insurance

Travel Inspiration

Airport Parking

Travel Media/Marketing

Travel Itinerary/Planning

Are you doing b2b or b2c (or b2b2c)?Are you doing it for leisure travel or for corporate travel?Are you doing it for specific niche?

Things to take into account on travel market

• The product costs are high• There’s high sensitivity to the product price• There’s high sensitivity to company brand• Travel periodicity varies

“The barrier for entry is low – the barrier for disruption is high” (Tnooz)

Build for the market – not for yourselfDo customer developmentUnderstand your nicheDo the things that do not scale

vs.

Starting B2C Travel Startup:

Start with sales (tour agency)

Start with content

Focus on specific destinations/target audiences

“Social”, trip planning, inspiration usually don’t work

Think about “adding value” to other travel companies

Why b2c travel planning doesn’t work?

Let’s assume your product/R&D execution was perfect. You nailed it. You built the ultimate travel planner/travel content site for a sizable audience.• Now all you need to do is:• Get a lot of people who travel to hear about it, just as they are getting ready to plan a trip• Quickly get them up-to-speed on your product so they realize their investment in learning your

workflow will pay off, so they actually use it to plan their trip• Make sure they use it for the actual hotel bookings etc. so you get the affiliate fees• Invest the affiliate fees you got for those bookings to acquire the next customers (bidding

against the company who paid you those fees)• Done!

https://www.tnooz.com/article/why-you-should-never-consider-a-travel-planning-startup/

http://www.tnooz.com/article/travel-startups-cling-to-inspiration-sector-yet-massively-out-of-sync-with-investment/

http://www.tnooz.com/article/travel-startups-cling-to-inspiration-sector-yet-massively-out-of-sync-with-investment/

B2B Travel Startups

Long sales cycles

Product should solve business problems and do it well

You need trust + salesforce for traction

Your offering needs to be really compelling for business even to start analyzing it

Still, if you’re doing B2C, think about B2B2C

Where’s disruption?

Disruption

•Right technologies at right time

• Something “truly new or 10 times better”

•Compelling offer – truly simple solutions from customer POV

•Understand your potential but start small

Trends

•Big Data

•Machine Learning

•Personalization

•Mobile

•New markets

•New audiences

https://www.linkedin.com/pulse/travel-tech-trends-2016-valentin-dombrovsky

This could be useful:

https://www.facebook.com/groups/travel.startups.russia/ - Travel Startups Communityhttps://www.facebook.com/groups/travel.startups.intl/ - Travel Startups Intl. Community

Online travel eco-system:http://www.tnooz.com/article/online-travel/ http://www.tnooz.com/article/the-online-travel-ecosystem-infographic/

Travel Startup Lessons: http://gillian.im/2014/08/hitchhikers-guide-travel-startups.html http://www.tnooz.com/article/why-you-should-never-consider-a-travel-planning-startup/#comment-4202129http://www.tnooz.com/article/10-lessons-learned-building-travel-startup/ http://www.tnooz.com/article/travel-startups-cling-to-inspiration-sector-yet-massively-out-of-sync-with-investment/ http://www.tnooz.com/article/startups-barriers-low-disrupt-high/ http://www.tnooz.com/article/travel-startup-lessons-from-exit/ https://medium.com/what-i-learned-building/the-user-is-always-right-eab73c620e7d#.fhyisxxcxhttp://www.travelstartups.co/5-techniques-to-create-the-next-hot-travel-startup/

B2B Travel Startups:http://skift.com/2015/10/05/startups-stories-series-the-pivot-to-b2b-is-not-the-promised-land/ http://www.tnooz.com/article/travel-startup-airline-partnership/

General Startups Wisdom:http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://paulgraham.com/ds.html

Growth Hacking and Viral Marketing: http://www.slideshare.net/mattangriffel/growth-hacking http://www.slideshare.net/DavidSkok/the-science-behind-viral-marketing https://growthhackers.com/growth-studies/http://www.ignitesocialmedia.com/social-media-examples/viral-marketing-examples/

Useful Reading

http://traveltechcon.ru

Thank you for being awesome! ☺

valentin@travelabs.org