Common mistakes of startups entering travel

Startups angling to break into travel can’t win without knowledge of the so-called travel funnel.

Timothy Hughes, vice president of corporate development at Agoda, speaking at the WebInTravel conference yesterday in Singapore, says startups will win or lose depending on their understanding of the funnel and their place within it - whether they’re aiming to enter at a specific level or disrupt the funnel altogether.

“Too many startups would draw the funnel and say that’s a nice place to be, but they don’t know it,” Hughes says.

Stephan Ekbergh, CEO of Travelstart, says startups also underestimate how hard it is to aggregate supply. “It’s a bloody tricky thing to do, and to do it properly,” he says.

“Then of course you have to get customers. Those are the two biggest problems.”
 
Hughes says startups also make the mistake of attempting to sell services more than is necessary. “I don’t need to be told travel is a trillion-dollar industry; I don’t to be need told Asia is different. If a founder is in the door, tell me things that are genuinely good or bad.”

Knowledge is everything

Bart Bellers, founding partner and CEO of Xpdite Ventures, says many startups don’t understand their markets - for example, “if you’re doing business intelligence, that space is your market not the travel market.”
 
Bellers says talking to the wrong venture capital firm and looking for money vs. looking for investment in vision are also common mistakes made by entrepreneurs.
 
Mizuho Hiraguri, corporate development at Recruit Holdings, says entrepreneurs also make the mistakes of not having enough insights on the risk side, not having enough interest in their clients and their reactions and underestimating paperwork.
 
So why do startups attempt travel given these challenges? “It’s fun,” Hughes says.
 
Google, however, should be on anyone’s radar looking to enter the space. “Google will eventually come up and eat our lunches,” Ekbergh says.
 
Bobby Healy, chief technology officer of CarTrawler, echoes the sentiment: “Google is destroying value on the industry.”