Travel is the white whale of tech startups. It's very alluring to tech entrepreneurs since it's:
A) Sexy - the idea of running a travel startup sounds exciting. It feels like an opportunity to periodically escape from the humdrum life of staring at a computer screen in the office all day, while still doing what you're best at.
B) A broken business - travel booking, planning etc is very confusing and flawed in many ways
C) A "big pie" to take a bite out of - it's a multi billion dollar market, so there must be opportunity in there somewhere.
The problem is, every tech entrepreneur has these same thoughts, and everyone has tried to execute on them at one point or another. It's a ridiculously competitive market, and for the most part the big $$$ for revenue are locked up by monolithic travel booking networks, that are only willing to relinquish a teeny tiny piece of the travel $$ pie to newcomers.
Then drop in this hard truth - recreational travel isn't actually all that commonplace amongst average people. The average joe goes on one or two major vacations in their entire life. So if you want to make money, you need to cater to either travelers with a lot of disposable income (the wealthy or retired), or business travel. Those niches are already very crowded but dominated by big, established, aggressive players, that you and every other dreamy-eyed tech entrepreneur eventually have to compete with for attention.
It's a long, nearly impossible battle to wage for anyone who hasn't spent their life in the industry. Winning in that space is a war of attrition competing with businesses with decades in the travel field, all in hopes of this grand and naive vision of striking it rich while on permanent vacation. Unwinnable. The white whale.
> Then drop in this hard truth - recreational travel isn't actually all that commonplace amongst average people. The average joe goes on one or two major vacations in their entire life.
is similar to what sama said about why his local startup (Loopt) failed[0]:
> Most people are too boring I think--they're at the same places most of the time.
Some serious judgement from sama in that comment. Maybe "average people" would like us techies more if we weren't so sanctimonious in addition to being affluent and insular.
Man, I've been wanting one of those for years. Even just searching for interesting concerts is a tedious chore on most sites. The lack of anything like this means I basically have a few favorite local venues, and I try to keep up with their programs. It's really not ideal.
There is a small site that maintains an event calendar for my city, oriented towards a certain subculture. That's by far the best thing I've seen for discovering new things to do.
I don't know if there's an actual business model in any of this. That's definitely the hard part. But it would be such a useful resource.
Yeah I'm curious too. Did you try Zvents, the company mentioned in mrbirds link? Which city? I normally live in London where a big problem is filtering the events for the cool stuff as there's >1000 things/week. Never heard of Zvents before.
If you're in New York City and enjoy house, funk or soul music, I highly recommend DanceDeets[0] for a carefully curated list of events, some of which would be difficult to find otherwise.
> Then drop in this hard truth - recreational travel isn't actually all that commonplace amongst average people. The average joe goes on one or two major vacations in their entire life.
The vast majority of people who go on a vacation, especially with children, just get into a car they own and drive there, typically to a place they are familiar with for some historical reason like family, etc. There just aren't that many variables involved.
Yup, exactly. The other scenarios are visiting a friend / family member, who holds the responsibility of "tour guide", meaning the only thing the family books is a flight and maybe a rental car. Or they book an all-inclusive package deal to lower the risk of a national lampoon style vacation disaster.
Either way these types of middle-class family vacation package trips are pretty well locked up online by the likes of Expedia and big corporate partners who have a lot of volume resale power like Costco. The remaining sliver of the family travel market - wealthy people & retirees - are actually still mostly the domain of the legacy travel agency business. Licensed travel agents not only still exist, but they're thriving in some cases. And get better commission $$ per sale than integrating with an affiliate partner, to boot.
The ironic sad reality is that anyone thinking of making a living running a travel app/site, is probably much better off getting travel agent certification instead...
>The remaining sliver of the family travel market - wealthy people & retirees - are actually still mostly the domain of the legacy travel agency business.
Even if it's not traditional legacy travel agents, you also have all manner of adventure travel and similar organizations that will arrange private small group trips. Ultimately, if you're doing something complicated and obscure, dealing with an experienced human is often the best thing--even if it flies in the face of "do everything in software" which is SV's answer to everything.
The average American travels 2.9 times/year, defined as an overnight trip >100 miles from home. The average European travels 4.9 times a year by this definition. So yes, a huge gap - add to this that the majority of trips Americans take are to visit family rather that to visit somewhere new. The early stage travel startup scene in Europe is much more vibrant than the US, but fewer of them get funding because European VC is so cautious and travel is universally acknowledged to be a tricky industry. I guess this means there should be more American startups that target European travel markets...
I read the comment as one or two major vacations that require all sorts of complicated planning that isn't well-served by current sites. Depending on values of "average," I suppose that might be true. If you're driving to a beach cottage you rented for a couple weeks every summer, you don't really need a fancy app for that. I travel a lot and even I have maybe one or two trips a year tops that aren't pretty straightforward.
I think it's also false for the U.S., but the "major vacation" is for most people not a skiing junket to the Alps, or even a week at Disney World, but a few days at a nearby KOA, or long weekend at the hunting camp, or at a regional amusement park. There's still a middle class in this country, and it still takes vacations. It just doesn't leave its home state very often.
That's definitely true. Probably a few more times than that actually, since it's pretty common for people to take a weekend off in a nearby country (like say, France if you're in the UK).
Question is, is it enough to support a business model? Popular services tend to ones where the user's return on a regular basis, not where they check in every now and then if they even remember it exists.
What "degree" of trips? People in the US make lots of trips within their state or to a neighboring state- maybe five hours in the car, or a 90-minute plane ride. But 18-hour trans-oceanic plane rides do not happen every summer.
In New Zealand most people leave the country once every 2-4 years (Australia, Fiji, Thailand, Bali, Pacific Islands being most common) for an extended holiday.
These are the types of problems that a 22 year old with a BS in Comp Sci are capable of solving. Which is why both spaces are so crowded: there isn't really anything difficult about the business, the consumer experience sucks, and they're decentralized enough to actually break into. The reason the industry sucks is further down the value chain, and you have no realistic shot at changing any of it unless you can also break into the (much bigger, much more profitable and much more competitive) business travel services market.
But neither of these businesses leads to "sticky" customers: people don't travel frequently enough to develop brand loyalty to a travel site, and for a dating site, the ideal scenario for your customers is that they find someone and stop subscribing to your site. This is the kind of business problem that's not readily apparent until you start to dive into the customer lifecycle and personas.
As a result, dating and travel sites are essentially branded experiences where the only difference between many of them is the advertising.
I remember thinking the only way to avoid your best customers dropping from a dating sight was focus on friendships vs. romance. Which would have a huge network effect and active users would stay on the site yada yada, only problem was by the time I was done adding useful features I had just recreated Facebook... Dammit.
Yeah; which is why ideas on their own are worthless. Any idea worth having has been had a million times before: you become rich by converting that idea into a profitable business better than anyone else has.
Make a catchy video, presenting the idea, create an kickstarter. Hope to get viral (hire an ad agency who can make that happen). Research the market. Know the market. Hire someone to build a sound business plan for you.
Go begging for that money shower. Cry for the thousands of dollars and hundreds of hours already spent which you may never see again.
"Someone" ought to make a list of the white whale ideas. Not that nobody should ever try one, but I firmly believe that if you're going to try an idea that has been tried a lot already you should go in with eyes wide open.
And I was pretty down on the whole "tablet" idea for a long time because it kept getting tried and tried and tried, and failed each time. Then Apple made the iPad. And while the tablet market may have slowed down and failed to conquer the universe or destroy all other laptop-like form factors, it is a solid market segment that isn't going to disappear that has made a lot of money since then.
There are exceptions. That's why I don't phrase this in terms of "never ever try". I say you ought to go in with eyes wide open. Look at what has failed, see why, see if you've got a story that you can do better. It's basically very, very expensive market research that you can get for free. If you then want to put your money on these numbers and spin the wheel, at least you did your due diligence and hopefully maximized your chances.
Let's hope not. It's not the e-mail that needs fixing, it's the whole rest of the Internet. E-mail is one of the few things that have not yet been captured and walled up by private companies. Slack "fixing" (i.e. killing) it would be a very bad thing for humanity.
Email is also literally one of my favorite things about the internet, once you get your incoming spam rate down. Flexible, multipurpose, venerable, and embodying all sorts of good engineering like excellent tolerance for spotty connections or disconnected clients.
I disagree with this blanket statement. Slack may fix the fact that people are bad at using email at work, but it's not going to let me carry on irregular correspondence with old friends and family, and it won't let people send me receipts, bills and newsletters.
It's a little tongue in cheek. My flippant point was that these sort of "white whale" tech ideas don't seem to get fixed, they get replaced. But, yeah, I'd bet that a lot of travel gets replaced by some sort of immersive tech experience.
It's an allusion to Moby Dick the white whale. A whaling captain, Ahab, is obsessed with killing Moby Dick, because Ahab lost his leg to the whale.
Ahab sacrifices everything in his mad pursuit. Moby Dick ends up sinking the ship, killing his crew, and Ahab himself. It cost him everything for something that was foolish.
Maybe the moral of the story, try a travel startup, but be willing to pivot.
My definition would be a startup in a space that's aspirational in terms of both social status and wealth, yet success is nearly impossible to reach. To the point where the obsession over it's pursuit has a track record of causing repeated self-destruction.
I've created a business that tries to do this before. Well, the business was an events aggregator in NYC, but we envisioned that would be one of the future features.
When you learn how to force people to check-in to a club and broadcast it, you'll have this app. Until then, it's really difficult.
I once had an idea was that you would open up the app and it would have two buttons: (1) MALE (2) FEMALE. Clicking one would check you into that club. This would solve what a lot of people want -- where are the people & who are those people?
Even something that simple though -- what's the reward for the user checking in? On Foursquare, it was awards and badges and stuff. If you could do that around night-life, you might have something.
You have to make this sort of thing effortless (symbolic rewards lose their appeal over time). E.g, use background location or iBeacon so users are checked in without having to pull out their phone. The first time they enter a club, they get prompted for permission to check them in now and any future time they're at the club. Specifying male/female should only need to happen the first time they use the app.
I have on the my todo list a skip the line at clubs app of which I see there are many although I think I may have a novel idea for it. More something I want to build out of frustration at the horrible club line experience than because I think it's a good business model.
Check out BarEye in the App Store. I think they've narrowed down to a single geo now for advanced features like "send a drink", but the basic features like "which club are my friends at" work everywhere.
Nah, the real best example of this is the entertainment industry. Like, video game development, or maybe film/TV production. The industries where people are so desperate to get involved that they're willing to work insane hours for often little pay in harsh conditions just for the potential exposure and popularity. Or in some cases, work for nothing on the assumption it might pan out at some unknown time in the future.
There's a reason why so many people in Hollywood are working low paid jobs with the aspiration of becoming an actor or actress at some point in the future. Or why sites like Youtube are littered with the attempts of becoming the next big thing by hundreds of thousands of creators and small teams/companies. Or why every video game market in existence is filled with tons and tons of indie games of every possible level of quality.
All those things are seen as glamorous, have huge multi billion dollar markets and have flaws people think could be fixed in some way or another.
And yet again, they're all ridiculously competitive, are incredibly hard to make a decent profit in and then have the added problem that the product is extremely easy for people to avoid paying for.
>Those niches are already very crowded but dominated by big, established, aggressive players
e.g. Concur buying TripIt (which isn't as good as it could be but I still find it invaluable). And, having said that, I still just use the free version.
If you recall when TripIt came onto the scene there were several other competing services (remember Dopplr?) that all got pummeled into dust during the recession. TripIt is pretty much the sole survivor of that era, though the product is more or less frozen in time.
Want to build a profitable travel planning startup?
Hire a competent (and preferably multilingual) salesperson to approach regional tourist boards. After securing your first contract, develop your travel planning app as white label product and sell to other regional tourist boards. There are plenty of them, and they spend a lot of marketing dollars, usually subsidised by the regional government.
You won't be a "unicorn", but you also won't be battling deep-pocketed giants over paid search or juggling hundreds of distribution relationships. (Your clients will, but it's their raison d'etre and they're not expected to turn a profit)
As someone who travels for leisure quite a bit, I never fully trust commission-driven booking sites to show me the full selection, the real quality ranking, etc. I can't really imagine ever using a single site and trusting that I'm getting the best options (as one well-known example, Southwest flights not showing up in searches on third-party booking sites). When I am spending thousands of dollars on a trip, I need to know that I'm seeing the full picture before I make my decisions.
I invariably end up searching for options across several sites, manually checking directly with specific airlines and hotel groups I know, reading reviews from across the web, etc. Once I've done all of that legwork to find the absolute best flights and hotels for my needs, why would I go back to some aggregator site to book? I'll just book directly.
This of course takes me a LOT of time, and if there were a way to reduce the time consumed, I'd do it. But only if it got me the exact same result, and I can't see how a commission-based travel planning site could effectively replicate that process.
I felt the same way as you and I built a site that aggregates accommodations, including absolutely everything, not just companies paying commmissions. We have couchsurfing, Airbnb, all the main hotel sites, Groupon, Hotwire, and most other sites you might ever bother checking. It's called http://AllTheRooms.com.
+1 for alltherooms.com being a good service, it's my go-to for accommodation booking. Seriously, being able compare even couchsurfing options is a godsend.
Something about travel is deadly alluring to some category of entrepreneur. I once went to a party in Silicon Valley, where I met multiple people working on "it's sort of like WikiPedia for travel" (this was a few years ago, when "wiki for X" seemed like a reasonable business idea and occasionally even got funding and actually launched something). And, I said, "Oh, I think I just met your co-founder a few minutes ago." and, they replied, "No, my co-founder isn't here", or "no, I don't have any co-founders". Multiple people, multiple conversations. None of them knew the others or had any awareness that they were competing with, seemingly, thousands of people who had the same brilliant idea.
By my calculations, something like 10% of all the people at that party were working on a fucking travel wiki. That's kind of a microcosm of Silicon Valley, in general, but yeah...travel seems like a weird black hole for entrepreneurs.
> travel seems like a weird black hole for entrepreneurs.
Not that weird at all actually -- it's an easy to understand business with an overly-complex buy flow they think they can fix. It's the kind of problem that many entrepreneurs are likely to have run into themselves and said "Well I can do this better".
There are lots of successful companies in the space too. Must be >20 large ones. Skyscanner just became I think the first Scottish unicorn a week ago and I'm sure there will be more. Just a lot of competition.
Yup. It'd be trivially easy to make a better dating app than what's available - all the incentive issues for guys to spam girls go away if you have each side rank the other for who they'd like to meet, then pair everyone up with their highest ranked person that can't find a better match. Dating is a classic matching market, and there's excellent mechanism design for making good matching markets.
Unfortunately, good mechanism design is one of the least important factors for whether or not a dating app succeeds - what is important is whether or not you can convince people to use it.
ThrustVectoring is referring to the Gale-Shapley algorithm, also used to match medical residents to hospitals and in a few other places. One of the more interesting days of Algorithms class.
I've played around with dating apps, but never found one that was even close to being useful.
Finding someone you want to be around is such a complicated thing. Speaking as a dude, what these dating apps all get wrong is I don't want someone like myself. Yea, I verbalized I want this quality, and this, but in the end; I really don't know what I want. People change. People are not their profile.
The long term relationships, I had, were with people who were my exact opposites. People I thought I would have nothing in common with.
When I walk into a room, I just know who I'm drawn to. It has nothing to do with looks. It's just feeling I get. I don't think an app will ever replace this evolutionary mechanism.
Plus, some people just photograph horridly. I'm a Photographer, and there's people who photograph well, and there's people that don't. If I'm doing a free photo shoot, and the model is only going to pay for sent head shots. I always ask for a candid picture of the future client before I shoot them. Before I waste a day shooting them, I want to see if they have a chance in hell of getting a job in the future. (I make money off the sent head shots. Free studio time, but they don't get the negatives/RAW files.) Some beautiful people in person--just photograph horridly.
>The long term relationships, I had, were with people who were my exact opposites. People I thought I would have nothing in common with.
You are an outlier as far as research on attraction. Studies show that people are attracted to very similar people on all dimensions, except for the opposite sex.
Maybe there needs to be "The Opposite" dating app:
The point isn't to put a huge amount of investment into finding someone - that's dating's job. The point is to quickly and efficiently schedule things that have a better chance of going well. There's an additional knock-on effect from being able to treat the dates lightly: if you're not a good match, you've lost something like ten minutes of scheduling and a half hour of date prep.
There's a lot of good detail in the article, but I have to believe that the fundamental problem is an implicit one--namely that most people effectively tolerate commission fees baked into booking prices but they're not willing to explicitly pay for travel services. Even back when people still widely used travel agents, personalized advice for complicated trips was effectively subsidized by all the people booking cruises and simple air travel.
And no, free user acquisition schemes like SEO do not work in 2015 at scale in established markets.
This is the big takeaway from this article for me. In fact I think this whole article is great if you are trying to build a new way to do something in an established market.
We aren't in the travel space, but we are in the retail home goods space, which is arguably even more established. It follows the same pattern: 1-2 times a year someone needs something and it's a fairly large purchase.
We learned early on that the most important thing is getting in with manufacturers and having them promote us.
A white-label/tech-vendor strategy works if your product is indeed relevant within the incumbents’ offering, hard-to-build, reasonably easy to integrate and doesn’t step on too many toes.
Paul Graham's essay on plausible, but ultimately bad startup ideas comes to mind [1].
"The danger of an idea like this is that when you run it by your friends with pets, they don't say "I would never use this." They say "Yeah, maybe I could see using something like that." Even when the startup launches, it will sound plausible to a lot of people. They don't want to use it themselves, at least not right now, but they could imagine other people wanting it. Sum that reaction across the entire population, and you have zero users."
one of my favorite Warren Buffet quotes: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."
Fortunately for entrepreneurs, this idea seems to be catching on.
Unfortunately for consumers, it seems that the user experience is stuck in 2007. I still can't find a good app which allows me to plan a full trip at once, especially when I haven't entirely decided where I want to go yet. As someone who travels about once a month, I'd love to see something better than Kayak.
If you haven't decided exactly where and when you want to travel, Hitlist (hitlistapp.com) makes it easier to compare options across variable dates/destinations.
I don't know that it would scale up well, but I wouldn't mind travel booking as a personal service:
* Planning the trip: Someone who has expertise in all the sites, options, services, loyalty programs, hidden-city fares, likely delays, smaller nearby airports, fare-tracking, best seats on the plane, best hotels, etc.; who learns my preferences; and who then books everything for me, with absolutely minimal time and effort on my part. I don't want to look through all the sites and gather the options; it seems like a waste that so many people spend so much time gaining a little expertise in the nightmare of travel booking.
* During the trip: Monitor their customer's trips for delays, cancellations, etc., find out before everyone else (i.e., while seats on the next plane still are available) and respond appropriately (find alternative flights, rebook, reschedule ground transportation, obtain refunds, etc., or simply update me). I just want a text message telling me the new plan, or if absolutely necessary, a couple of options.
* At the destination, some concierge service: I need dinner delivered, food waiting in my hotel fridge, a tennis game Wednesday morning, a doctor, another shirt, a bar showing the game back home, etc. It's time consuming to do all that in an unknown town and time is more constrained due to the usually crowded schedule of a traveller.
Every time I have to deal with this stuff, I think about how someone who developed expertise in it would be much more efficient. Just getting to know the resources well would be a big advantage.
As for tech: An app that displays and syncs your current itinerary (including delays, etc.) with the vendor, and with a prominent 'Talk to me!' button that opens an immediate video chat: A friendly, helpful face in a crowded, strange airport, amid cranky flight attendants, during a frustrating trip would make customers very happy. They might pay for that alone.
Also, I have found that destinations punish you for not booking on their site. Want to cancel that hotel reservation less than 24 hours before you were supposed to check in? Sorry, we "don't have enough information" because you booked with an aggregator site. Free checked in luggage? That's only if you book with us.
In the relatively early days of Expedia, I had a major travel headache because the airline and Expedia were pointing fingers at each other, each saying I needed to deal with the other one to fix the problem (which was not of my doing in the first place - the airline changed the schedule, making my connection impossible). In addition to the reasons I described in my first comment (not trusting that I am seeing all of the options), this is the other thing that puts me off of booking through third-parties. The benefits of booking through someone other than the direct provider need to be huge before I will consider it, and they never are with these travel planning sites.
Alternatively, wait for Airbnb API to open up[1] and then make a travel planning website that rides the back of Airbnb.
In general, you shouldn't create start-ups in markets with high barriers of entry. However, the fun part of start-ups is learning how to cleverly bypass barriers while building up your own.
If one website was the website to plan an Airbnb vacation, it would have its own barrier that would grow with Airbnb. This would leverage a popular strategy of growing out of a larger, more successful host.
No but for real, where is the travel planning service that actually does all of these things laid out in the article? I've been wanting this for years, and all I'm reading is about how I should never build it. And there seems to be quite a few stories where some startup tried to build a trip planning site, and they pretty much succeeded, but they got acquired and shut down! That's so frustrating.
> The Priceline Group spends over $2 billion per year on Google Ads alone.
WOW, that's unbelievable.
> even when one of them sends a link to some vacation rental he’s found on Airbnb that’s not available on your app.
I thought this hypothetical app was supposed to be amazing in every way, and it doesn't even support AirBnb
I've seen no middlemen that deserve brand loyalty, just a bunch of half-decent search sites with crappy service. Beyond basic price comparison of flights and hotels, I don't see anybody providing value.
I guess the lesson is don't try to do something where loads of people are doing the same stuff if you're not differentiated. That said a year or so I ran into some guys doing a travel planning startup and they seem to be doing ok - Triphobo. Raised $3m. They are a little different I think. Not that I've surveyed the space. http://yourstory.com/2015/03/triphobo-raises-3-million-fundi...
A) Sexy - the idea of running a travel startup sounds exciting. It feels like an opportunity to periodically escape from the humdrum life of staring at a computer screen in the office all day, while still doing what you're best at.
B) A broken business - travel booking, planning etc is very confusing and flawed in many ways
C) A "big pie" to take a bite out of - it's a multi billion dollar market, so there must be opportunity in there somewhere.
The problem is, every tech entrepreneur has these same thoughts, and everyone has tried to execute on them at one point or another. It's a ridiculously competitive market, and for the most part the big $$$ for revenue are locked up by monolithic travel booking networks, that are only willing to relinquish a teeny tiny piece of the travel $$ pie to newcomers.
Then drop in this hard truth - recreational travel isn't actually all that commonplace amongst average people. The average joe goes on one or two major vacations in their entire life. So if you want to make money, you need to cater to either travelers with a lot of disposable income (the wealthy or retired), or business travel. Those niches are already very crowded but dominated by big, established, aggressive players, that you and every other dreamy-eyed tech entrepreneur eventually have to compete with for attention.
It's a long, nearly impossible battle to wage for anyone who hasn't spent their life in the industry. Winning in that space is a war of attrition competing with businesses with decades in the travel field, all in hopes of this grand and naive vision of striking it rich while on permanent vacation. Unwinnable. The white whale.