Three of the travel industry’s most active corporate investors have shared tips for startups on how to attract their attention.
Speaking on a panel at the WebInTravel conference in Singapore, moderated by Agoda vice president of corporate development, Timothy Hughes, Amadeus Ventures’ head Suzanna Chiu says her focus is on early stage startups with a talented team, a scalable product and relevance to Amadeus’ strategic goals.
But it is comments from AccorHotels’ deputy CEO for Asia Pacific, Louise Daley, which show that errors can occur when trying to match ambition with the reality of buying from the startup community.
Daley acknowledges, despite all the time spent before making an investment, mistakes are made. She cited investments by Accor in OneFineStay (€148 million in 2016) and John Paul ($150 million in the same year) – two acquisitions the company has since had to write off at a loss – as two examples.
“Perhaps there wasn’t as much tech as we thought in those companies, or the actual ecosystems moved on a little bit. There was a whole list of reasons, but these were two in particular,” she says.
Still, she says the company is looking for startups “to have great enthusiasm and urgency about their product, but great patience in working with us.”
The panelists say they use a variety of strategies to identify startups that might be worthy of investment, including networking at events and hosting accelerator-type programs.
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Jerome Gauvin, senior principal UX strategist for Singapore Airlines Group, says his company’s new digital innovation lab, KrisLab, which launched in January, is creating an opportunity for airline staff to innovate in partnership with startups.
“We’ve removed the gates,” he says.
When given an opportunity to pitch, Chiu urges founders to have a clear message with no more than 10 to 15 slides, that demonstrate they understand Amadeus’ business and answer the critical questions of, “What is the problem you are solving? Why is your solution unique? What is the potential market size? Who are your competitors? And what are you asking us for?”
Daley says startups also need to recognize the difference between pitching to them versus traditional venture capitalists, which bring deeper pockets but less industry access.
“We’ve got something different than just money. We’ve got millions and millions of loyalty members, we’ve got thousands and thousands of physical locations, we’ve got hundreds of thousands of employees,” she says.
“So which one of those are you pitching to us on? Is it one or all of them?”
When asked how they evaluate the quality of the technology from a startup, Chiu says they have an internal team separate from the investment team that does that assessment. Daley says AccorHotels relies on both technologists from its current portfolio of startups and also external partners to run tests