Are consumer-facing travel startups on a road to nowhere?News / OnlineBy Kevin May | February 20, 2015Share This article was originally published on Yes, it's an incendiary question (and headline) - but it's also a particular element of the ecosystem surrounding travel startups that is rarely addressed.There is no definitive answer, of course, but it is worth pondering how B2C travel startups manage survive their first few years and what the secret to that success is.Furthermore, perhaps there is a natural bias in the travel industry against so many of the new kids on the block achieving even a modicum of success.Unscientific analysisA year ago, CBInsights published a study into the reasons why new businesses from many verticals had failed.Fallen into the dreaded "dead-pool", as it is often called in startup circles.CBInsights tried to measure this by analysing the post-mortem essays penned by founders as they wave goodbye to their business dream(s).It is hard to understand what purpose these often heartfelt treatise (the latest trend is to use the Medium platform) serve - perhaps they are just an opportunity for those behind an idea to blame someone or something else and demonstrate that "hey, I'm pretty damn good if you fancy hiring me!".The kinder explanation is that the startup community does have a tendency to wear a big heart on its sleeve and if lessons can be learned for the greater good, then it is worth a 2,000-word outpouring.Still, as a result of reading through 101 of these missives, CBInsights identified the following top 20 reasons why startups fail:Any one of those 20 explanations could be applied to the countless travel startups that have gone the same way in recent years.We have even seen a few of the Medium-esque confessions published here on Tnooz, most notably when Joobili was wound up by its enthusiastic and likeable founder Jared Salter or the always-destined-to-fail TripFab was closed (not "shuttered", please!) without ever really getting off the ground, despite the promises of the equally enthusiastic but far less amiable Michael de la Rosa.And there was also the story of TraceMyTrip, a social travel (!) website which didn't really like the cross examination it received by Tnooz readers about its figures and then closed shortly after.Or the bizarre case of TripSwarm, which lasted all of a few weeks after its co-founders spectacularly fell out with one another.State of the nationIt is actually difficult to accurately determine the fate of so many of the travel startups that have emerged in the past few years.Our guess is that of the 600+ startups that we have covered by way of our TLabs series, at least half to two-thirds are no longer in operation.And that is an extremely conservative estimate.The reason for that difficulty, as Tnooz Node and TourCMS CEO Alex Bainbridge wrote in 2013, is that unless a company is bought, continues to raise or fails, many can just chug along quietly, "following the tough path to success (or mediocrity)".We do think that it would be fair to say that the vast majority of the failures are travel startups of the consumer-facing hue.That's not to say that success has passed everyone by at all (although it depends on your definition of success).For every trip planning or social travel startup that has come and gone sooner than you can say "where's the revenue going to come from?", there's a HotelTonight or its kin which have grown steadily (and raised millions).Read the same for brands such as GetYourGuide or Hipmunk, both of which have raised plenty of money, are surviving and could conceivably be acquisition targets for one of the big brands of online travel some way down the line.Consumer startup realityA back-channel conversation between Tnooz and a group of seasoned entrepreneurs illustrated the problem.One wrote: "I see so many great ideas but they are really nowhere because of the light-sucking that goes on. The only thing I can back these days is something with a built in customer base. "Customer acquisition cost is now REALLY so high as to be prohibitive."Share this quote Another agreed: "Even if a Newco develops something interesting, it doesn't really matter. It's just so hard to get traffic nowadays. "The big sites are like planets, with infinite mass and the ability to suck in users from all over the universe. "New sites, even if they are very cool, are like tiny little bits of space junk, unseen by most if not all travelers."Share this quote Now some might argue that the "seasoned" nature of these private commentators just means they are jaded by the state of the nation and don't have the youthful zest which shines on the faces of almost every founder of a travel startup.But they do have a point which cannot be denied.In the consumer travel space, getting eyeballs to a new brand (even with mountains of gushing PR in the media) is a long and expensive slog - not least when the likes of Expedia are spending $2.8 billion on marketing in just 12 months.What to doThis is not to say that travel startups should just give up on their consumer-facing fantasies - far from it.Some might argue that the travel industry would be without the likes of brand new market segments spearheaded by the likes of Uber and Airbnb if innovation and seizing on an opportunity was left to the incumbents.But these two brands in particular did what so many other travel startups have not: they found a relatively untapped - or even virgin - market and just went for it, turning themselves into multi-billion dollar valued companies in the meantime.It goes back to the number one reason why, according to the CBInsights analysis, so many startups never get off the ground: "no market need".Perhaps it would be unfair to say that many travel startups have not bothered with any in-depth market analysis of customer discovery, but it sure looks that way sometimes.Still, it would be easy to say travel startups should not follow their dreams (barf!!!!!), but they - and especially the countless incubators who push new brands in certain directions - should have some form of a very solid reality check built in during the early stages.Is a brand REALLY going to do it and its founders and backers justice? Is it REALLY worth the pain and trouble?The middle groundPerhaps travel startups should be more realistic and opportunistic.So maybe one way is to develop consumer-facing products or services which may not have any potential to "go big", but coming up with the idea is solely to put the founders and the employees in the shop window.Those working at the established brands in the travel industry should be challenged - even threatened - by the bright young things at the head of travel startups which seem to emerge almost on a weekly basis.The startup culture doesn't truly accept this, sadly. In our mind there is nothing wrong with acqui-hires or startups getting bought relatively early in their life-cycle (the "soft-landing" label given to many startups who end up being snapped up by other businesses is unfair, arguably even insulting).So let's keep building - and championing - consumer-facing travel startups, but let's also have a few swigs from the Realism Medicine bottle at the beginning and at regular intervals throughout.There are opportunities out there, but let's not struggle by playing a game of Monopoly where realistically we can only ever buy the Old Kent Road and Whitechapel (ironically, the area in London now at the centre of the UK's startup culture!).NB:Travel startups nowhere sign image via Shutterstock.