Since big startups like Airbnb and Uber disrupted the startup industry, there hasn’t been a major travel startup. I’ve noticed everybody seems a bit more sceptical when it comes to travel startups. Time to hear from an insider how travel startups do. Lobke Elbers is Executive Editor at TravelNext.nl, a platform for travel eMarketing news about tourism and hospitality. Daily Lobke receives mails and pitches from startups stating to be the ‘next big thing’ in travel.
Interview Lobke Elbers about travel startups
S: After Airbnb and Uber, it’s been a while since a travel startup really disrupted the industry. Is travel less innovative?
L:‘When Airbnb and Uber came to the Netherlands (mostly Amsterdam by then) and shaked up the hotel industry and the world of regular taxi’s, both companies where seen as one of the enemies. However, disruption, innovation, or how you like to call it, is never bad for the travel industry. In fact, it creates the urge to talk, think and debate about legalisation, monopolies, the power of certain companies and of course, the definition of the travel industry and innovation.
Airbnb redefined the sharing/networked economy, which is in fact nothing new (sharing houses and personal belongings happened long before). But Airbnb was and still is very smart in creating a global community with a cool image and more important, a very smart user interface for both home sharers and users. Consumers loved it for those reasons since day one. For a long time Airbnb focused on a single product and service, as well as Uber did. Now we have overcome the first years of Airbnb and Uber operating in our own country, anxiety has brought more perspective. We now talk about disruption trough knowledge and statistics. The travel industry actually started to open up to a new approach: ‘what can we learn from those innovators?’
Travel as an industry is labeled as less innovative too often. The travel industry is an industry which is (or can be) very innovative. But, and here comes the side note, companies who operate in the industry are not always innovative in their mindset or do not have the capacity to be innovative in their core. That is exaclty the point where startups can be of major importance.’
S: How important is tech for travel?
L: ‘The travel industry is almost a synonym for collecting data. Companies collect huge amounts of unique data which can be used to optimise all sorts of products and services as part of how we communicate with our clients. It all started with websites, social media, mobile websites, apps and API’s. Now it is time to focus on maximising each and every channel for every product or service.
Therefore all participators in our industry need to understand the golden triangle of data, technology and marketing.
The other aspect of technology is laid in the consumer experience trough tech. Traveling is all about experiences, so this is why the travel industry is also very keen on the latest development in media, devices, digital communities, platforms, phoneography, virtual reality, 360 video, programmatic buying, programmatic creative and so on.
I think it is safe to say that tech improves travel and travel makes tech more lively. However to maximize the effect of this interaction, decisions about technology can not be made with losing sight of the customer experience.’
S: Booking.com only started their accelerator program this year, is the Dutch market not relevant for Dutch startups?
L: ‘Booking.com started an accelerator programme in The Netherlands; they are Dutch so of course, it is interesting to start this here. Other global companies are also coming to The Netherlands to introduce their accelerator programmes and to meet Dutch entrepreneurs, or expat entrepreneurs living in The Netherlands. Recently Marriott Hotels came to our country to meet startups. The doors for innovations are wide open.
It is very good that companies like for example Rockstart exist and play a role in this. The Next Web (a non-travel industry event) hosted some pitches for Dutch travel startups too. Last year I joined a few Dragon Dens during the Phocuswright Amsterdam event and Emerce organized a Dragons Den too during their annual Emerce eTravel conference.
Also this year, TUI and Transavia where sponsor of the Reiswerk Studenten Challenge, a challenge created to discover future talent (students) and to elaborate an innovative business concept. In august this year, the winning team is joining a professional design sprint, together with TUI and Transavia, at Transavia headquarters.
A few well-known Dutch travel brands also work with Dutch startups. This is not necessarily done through accelerator programmes, but simply by receiving a lot of e-mails and inviting the people with best ideas. Once in a while, they sit down and talk about the concepts. This is not public, but it is definitely happening.
In my opinion, the industry is willing to hear the ideas which can solve a problem or make a certain service better or less complex or more fun. But what we need in The Netherlands is a more diverse landscape of facilitators where the travel industry and startups can openly meet.’
S: What trends do you see in travel startups?
L: ‘The fun thing is, that I do not see a lot of trends. And I am happy with that. Trends are temporary. It is a fact that the travel industry likes trends a lot, but in general travel companies are not very hasty in adopting them right away.
What travel startups understand very well over the years, is that one solution doesn’t have to fit all. With adding a service within the customer journey, and all things related to the travel cycle, your idea should have the potential to work out really well.
Startups who embrace micro moments and specialism (dare to choose) are the travel startups that will stand out from the crowd and also get the most media attention. It is not who screams the hardest; it is who shows the clearest product or service.
They are also easier to explain to consumers and clients, and this is a really important point. Complexity made simple is a trend that we will see in the startups I will mention in this article. A lot of startups are using that ‘less is more’ mindset also into their designs and user interfaces.’
S: Srprs.me, Hotelchamp and Tripaneer are candidates for the LOEY 2017 awards. Is niche the magic word?
L: ‘I honestly think it is really well deserved that those startups related to travel, are nominated for the awards. For example software as a service for hoteliers to boost direct bookings is where Hotelchamp has been very good at since the very beginning. Providing an experience like Srprs.me is something which is literally so old as traveling but attractive to the generation of internet and mobile; not exactly knowing where you go and what to expect is gold for them.
I think the word that should come for niche is market: to what kind of market do you want to provide your service? Do you want to help the consumer directly (B2C), or do you want to help the industry to compete against and with their competitors (B2B). The nominated companies made their choice in providing a B2B or a B2C solution and offer their products in a completely different and unique approach.
After choosing B2B or B2C (or maybe both) of course it is smart to pick your niche, or how I would like to call it, the challenge or the problem related to this market.’
S: You receive lots of startup pitches, how can they stand out in the crowd?
L: ‘This may sound like a cliché, but doing your homework is the best way to standout. The travel industry is not an easy one to understand. You have to read a lot and dive deep in the developments, but also in the day to day challenges. I sometimes receive an e-mail from a startup in my mailbox, and I actually have to call them to check what their idea or solution exactly is.
A nice text, app or website, fancy images and global description of the idea is not a reliable startup concept if there is still missing a hint or clue to where the industry or consumer is helped with on a day to day base. As a startup, there is a company story to tell, which could be strengthened -in a smart way- with facts and sources to make this more complete. I speak here with a little experience.
Last year I joined a travel startup team as communication advisor and strategist, and I had to dive deep into the core thing of what the DNA of the company would be, the mission, company vision and the core of the business according to the entrepreneur. What do you want to tell and to sell? That distinction is what is really important to pitch. And if you are in doubt, I would advise to spend a few hours with an expert.
Authenticity does the trick for me in triggering my curiosity. When I receive e-mails, I actually love it when people took care of telling a little bit more about themselves, including a picture, short story about the team and why they came up with the idea. Also names or statistics of users/ clients won’t make a bad impression.’
S: Is there a Dutch travel startup you think we should watch carefully and why?
L: ‘I have seen some ideas, but it is too early to say keep an eye on them, they are in too early stages. However a few concept ideas are worth sharing, such as an independent travel advice tool (Stairway to Travel). They won the Startup Challenge pitch stimulated by ACE Venture Lab and IXA at UvA, during preliminary rounds.
Looking to the startups we know right now, I would say Oaky, a review/feedback app to customize the hotel stay experience, both interesting for consumers and hoteliers. The concept of collecting feedback and seeing upsell as a service to work on a better customer experience, is something where every company in the travel industry is happy with. Their mission is to speed up technology in the hotel sector and recently created an open platform for hoteliers together with Mews Systems.
TRVL launched a new concept of a peer to peer booking platform, where every person can act as a travel agent and earn money on the commission. The startup has Dutch roots and the founder sold his previous company Prss to Apple (now Apple News). With his knowledge, this brainchild could develop into something bigger the coming years. I am curious about that!
In the light of travel gadgets, I would definitely keep an eye on Travis the Translator. It is a stand alone device, helping travellers speaking difficult languages on their travels. It is in fact a small pocket translator, powered by artificial intelligence. Go global and speak local, in 80 different languages. The company is featured in lots of national and international (tech) media.
Another travel related but totally different startup I follow is Flamyngo; the founder started CityShare earlier, but decided to build a new concept with Flamyngo. Flamyngo is based on an application to collect travel tips from friends or share your tips with them. The startup created the Amsterdam guides during The Next Web event this year. The application integrates with Google and Foursquare. I personally always have my eye on this one. They work very silent, but still a lot of things happen.’
S: What do you think will be the next step in travel innovation? How about AI, Blockchain?
L:‘Definitely, AI and blockchain are the steps where the travel industry is focusing on. Together with an expert group, the travel industry and ANVR are currently researching this topics for a new Travel Tomorrow report. I am also joining this expert programme. The relevance of both innovations and the knowledge about it, differ from each other and from company to company. There is a lot to found out and there are not so many Dutch cases yet, which makes it even more interesting.
In the meantime, for example KLM and TravelBird (two typical Dutch travel brands) are experimenting very well with AI. Voice is of course the next step where the industry also talks about. Alexa will play a major role in this.
When it comes to blockchain, still the definition itself is a challenge. For now, the chain of blocks with automatic validation of transactions and excluding the middle man is interesting. It creates a new type of internet. Also the difference in the public keys and private keys is calling for more research and of course raises some interesting questions. We can talk hours about the smart part and the whole framework of blockchain to create a more open market for the travel industry.
Looking at China and how mobile e-commerce changed the way consumers’ book, pay, get information and communicate with brands and peers in just one app, is also still relevant. The whole process of complex steps integrated in just one user interface made the lives of the users so easy.’’
S: From an investor point of view, what should a travel startup keep in mind before asking for money?
L: ‘Not being an investor myself, but joining travel startup pitches, accelerator programmes and Dragon Dens, I will share my knowledge and the feedback I have heard most often.
Always keep in mind a random round of the following questions:
– How does the team look like? What kinds of expertise do you have on board?
– Where do you want the money for?
– How is this idea scalable?
– What problem do you solve and for who?
– How can we make money from this?
– What are the risks and how do you eliminate them?
– How are you going to get, build and keep your client, user and customer database?
In this light, it is smart to take a few steps ahead and create a roadmap. The following insights are coming from what I heard personally talking with successful startups.
Here is what they did before they asked for money.
After going live, pitch your idea at three different stakeholders to collect the most valuable feedback.
The stakeholder with a lot of feedback is probably the one you need the most and have to keep close.
With those insights, it is easier to define your proposition for your final pitch.
Plus the diversity of questions is input to rely on when you do a tailored pitch for future clients.
From my network of companies working with startups, I learned the structure of how they liked pitches the most.
Describe the obvious problem and pain
What will the world look like when you solve it
Market size (facts from source) and revenue (calculated)
How are you going to make money
Almost everyone has competition, tell them why you are better
Marketing plan with channels and time pad
Show who you are
What have you done to date and what is coming
Close with a contact slide
To end with, I have an important question startups should ask themselves before reaching out to investors. Some travel companies are more interested to own a startup or adopt the idea, instead of working with an API for example. Keep that in mind. Do you want ownership or co-creation?
About Lobke Elbers
As industry expert in digital, travel, tourism and hospitality, Lobke shares her knowledge with professionals and companies related to the travel industry. Since her start as Executive Editor and Director of Community Relations in 2013 at TravelNext, she developed a national network of Dutch Travel Professionals. TravelNext grew in a few years from a Dutch travel marketing community into a well-known industry travel platform under her supervision.
Follow Lobke on Twitter, connect on LinkedIn and read all her articles on Travelnext