Death of Postcard & Tag is the consumer travel app challenge in a nutshellNews / Technology | OnlineBy Kevin May | March 11, 2017Share This article was originally published on Another week, another consumer-facing travel app goes to the busy startup graveyard in the sky.Postcard & Tag will close in a few weeks in what its CEO Ruth Thomason says is a "heart-wrenching" decision, amid sadness over letting down its "users, our employees, our board and advisors, and our shareholders".The company had raised a seed fund of $168,000 and an angel round of $600,000 in its three years in business.The brand came up with the idea of encouraging users to snap a picture, give it a review, position it on a map, add some details and tag it with a category.Other users could of the service could then discover places and recommendations from fellow travellers, either on desktop or on its mobile app.Thomason says the idea was a cross between Instagram and TripAdvisor, although there is a fair amount of Pinterest thrown in through the tagging element around types of services.Still, Postcard & Tag has headed in the same direction as countless other travel apps and will be forgotten fairly quickly.Some might point to the long-standing analysis of many startups: a solution that is desperately in need of a problem to solve.Yet in the inevitable postmortem article from Thomason, there are a number of other elements that she points to as being key influences on its demise.The obvious one is a lack of users to achieve, as Thomason puts it, the "classic hockey stick curve" for growth.It had some users and some engagement, but nowhere near enough traction.This trend is something that hundreds of fellow B2C travel startups will recognise, but there are some other indicators.Thomason says they tried to build too much, in terms of having both a desktop and mobile app as part of the brand.Instead, she says, development should have focused on solely an app and concentrated on one operating system. In its case, Android - the most popular of the two platforms in the core markets where Postcard & Tag operated (South East Asia).Soon the company found itself in the "precarious post-angel-pre-Series A, catch-22 fundraising situation", she says.In other words: needing more funding to grow but needing to grow to get more funding. "We tweaked the proposition: reworking the app designs to optimise gamification and improve interaction; adding video and virtual reality into our strategic plan; and shifting the business model to be more data and marketing based. "However, potential investors were looking for more traction, and although we had some commission revenue, and had built relationships with local businesses, we did not yet have enough revenue or traction to meet the VCs’ expectations."Share this quote One byproduct of the financial issues, not least because it accepted an offer of investment that was less than what it was originally pitching for, was that the company was then in the position of having to "skimp on a few things".This meant, according to Thomason, the company had to pay lower salaries for important roles in the company.