
Never consider a travel planning startup - prostoalex
http://www.tnooz.com/article/why-you-should-never-consider-a-travel-planning-startup/
======
rwhitman
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.

~~~
fs111
> The average joe goes on one or two major vacations in their entire life

That might be true for the US, but it is def. more common in Europe, where
people go on trips every summer.

~~~
geverett
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...

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notahacker
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)

------
zippergz
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.

~~~
wbeckler
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](http://AllTheRooms.com).

~~~
geverett
+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.

------
SwellJoe
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.

~~~
exelius
> 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".

~~~
tim333
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.

------
corybrown
"The problem is a better product is not necessarily a good business"

Hear, hear. This gets lost oftentimes when you hear the whole "build something
people want" mantra.

~~~
ThrustVectoring
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.

~~~
marincounty
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.

~~~
tacon
>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:

George Costanza Does The Opposite

[https://www.youtube.com/watch?v=cKUvKE3bQlY](https://www.youtube.com/watch?v=cKUvKE3bQlY)

------
wooyi
@garrytan said it as well in 2012: Travel planning software: The most common
bad startup idea

[http://blog.garrytan.com/travel-planning-software-the-
most-c...](http://blog.garrytan.com/travel-planning-software-the-most-common-
bad)

------
ghaff
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.

------
AndrewKemendo
_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._

Man that hits home

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J-dawg
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."

[1][http://paulgraham.com/startupideas.html](http://paulgraham.com/startupideas.html)

------
rajacombinator
Silly article. Life is hard - why try anything? Just because this guy's idea
didn't work doesn't mean there isn't a killer app for this.

------
bigchewy
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."

~~~
maxlamb
Love this quote, it pretty much predicted the on-going situation with Marissa
Mayer and Yahoo.

------
morgante
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.

~~~
geverett
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.

------
hackuser
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.

------
tomcam
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.

~~~
zippergz
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.

------
joslin01
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.

[1] - [http://all-about-airbnb.com/post/127856658166/airbnb-
public-...](http://all-about-airbnb.com/post/127856658166/airbnb-public-api-
coming-soon)

~~~
Marazan
And when AirBnB close their Api that is your business sunk. Basing your
business off of one other person's Api is a hugely risky gamble.

------
nathan_f77
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

~~~
Marazan
There is zero brand loyalty to the middle men in the travel industry. Only the
providers get brand loyalty.

~~~
TillE
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.

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tim333
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...](http://yourstory.com/2015/03/triphobo-raises-3-million-funding/)

~~~
tim333
"user generated travel itineraries" I think they are the only (or leading)
startup doing that.

------
busterarm
How is CruiseSheet doing?

