As entrepreneurs tasked with delivering the future, we need a simple model that we can use to evaluate opportunities and determine where we should be building technologies and functionality.
We may even dare to use the word "innovation"!
If we don't understand the evolution of the business and how others (new and existing) fit in, we're in trouble.
The model needs to be more comprehensive than "web wins" or "mobile" or "social", but still be practical and useful for decision making purposes.
The evolutionary model that I base my thinking on is as follows:
Phase One - High Street/Main Street
Customers went into a shop and were generally asked "where do you want to go?". Travel agents had technology with many many suppliers and choices.
The technology challenge was to get the choice down to a selection that the customer wanted to book. The subsequent booking then flowed from the travel agent to the supplier.
Phase Two - Online travel agents (Expedia etc)
Customers went to a website and were generally asked "where do you want to go". Online travel agents had expensive technology with many many suppliers and choices.
The technology challenge was to get the choice down to a selection that the customer wanted to book. The subsequent booking then flowed from the travel agent to the supplier.
Phase 2 was NOT revolutionary. All it did was solve the SAME problem that phase 1 solved just in a more efficient manner.
Phase Three - Inbound/Supplier direct
Customers began to go direct to suppliers (hoteliers, airlines, local inbound tour operators). Metasearch become dominant as these services could answer the "where do you want to go" question - while letting the customer book directly with the supplier.
Itinerary management services (such as TripIt) became the glue to tie multiple supplier direct transactions together (rather than travel agent reservation systems)
Phase Four - I am here!
Location is known (where you are). Date is known (today / tonight). Services such as HotelTonight launched and began to achieve traction. No longer is the question where do you want to go and on what date... but it is, instead, here and now.
This phase should not be confused with mobile services that improve access to phase two and phase three.
To reach its phase four potential, mobile is not about accessing existing phase two/phase three web services on the move, but instead MUST use the inferred location to provide a new service previously unimaginable.
Much of the existing industry structure is based around solving phase one and phase two problems. If the customer behaviour shifts primarily to phase three and phase four then the existing travel industry mega-structures become obsolete.
What is Google doing?
Google is leading the charge on phase four.
Some previously announced projects:
- City Experts - Google is currently recruiting "Local Insiders" for their City Expert program. These individuals will "have access to fun, exclusive events. Free custom swag. Special online recognition".
- Field Trip - A location aware app that tells you interesting things as you walk around a city. Also acts as a geocoded travel blog aggregator with many travel blogs integrated). Give it a go. Hundreds of travel data providers are involved.
- Helpouts - "Real help from real people in real time". That's the tips-from-a-local thing we constantly hear about.
So now Google has experts and a location aware app. Put those two together with its consumer facing traffic streams and you have a insurmountable combination.
For example, imagine you are in a city and you need advice. You could turn on your phone (or Google Glass spectacles), and immediately you are in live video contact with a local city expert. They answer you and you are satisfied.
Let's face it, this is several travel startups that Google has wiped out, just there. In a flash.
Along with Google Flights and Hotel Finder (which look more like conventional phase three metasearch) effectively Google looks like it is going to win phase four.
It is pretty much the only leading travel company (let's face it: Google is a travel brand now) that is even COMPETING in this game, let alone looking like a winner.
The real question here is if Google is already winning phase four, why on earth now would it want to buy your travel startup?
Travel startups were used to being ahead of the larger players. Now Google is ahead of the startups. Not a comfortable position for the newbies in travel to be in.
NB: Boot crush image via Shutterstock.
NB2: Wondering how Google Glass and Field Trip combine? Here you go: