Startup Pitch: Sépage sees semantic as the answer

Milan Stankovic was frustrated that the semantic web was failing to break free from academia. Disparaging remarks from a Google director about the potential of the semantic web in the mainstream prompted him to take the plunge and found Sépage.

The idea is to use semantic technology to take personalization, inspiration and recommendations to the next level. With a SaaS business model, using proprietary and patented technology, its core product GlobeAdvent came to market within 18 months of the business' launch. Enhancements and new products are in the pipeline.

Have a look at Sépage's Vine submission before reading the Q&A below...

Tell us how you founded the company, why and what made you decide to jump in and create the business.

As a semantic web researcher, I’ve always believed the next stage of the web is about making data accessible for artificial intelligence to analyse and serve humans in their everyday lives. The semantic web would be a fantastic opportunity to make more knowledge available for people and use it to answer almost any query and perform almost any function.

But nothing was happening to truly achieve that promise. As I became a well-respected researcher, I found that semantic web remained something for universities and academic conferences -  nothing was happening to make this technology, which has been around since the very beginning of the web, available to a greater audience.

It struck me when I heard Peter Norvig, Google R&D director, publicly saying that semantic web was a dream that could never come true, with “incompetence” of developers being one of the main issues. That’s when I decided to gather a team of competent engineers and researchers to create Sépage.

The idea of adapting these technologies to the travel sector came about naturally. We are all big travellers, and we have experienced the hassle of finding and booking holiday destinations. It seemed to us that destination finding should be a pleasant and natural experience, and semantic web could help solve that problem.

Size of the team, names of founders, management roles and key personnel?

Sépage's team is composed of ten members, drawn from different horizons.

• Milan Stankovic – CEO & Chief Science Officer

• Fred Cecilia – Chief technical officer - Fred worked as a CTO for different web start-ups. Before they created Sépage, Fred and Milan helped developed the start-up Hypios, which leverages semantic web technologies to solve R&D problems.

• Thomas Houriez – Chief of Marketing & Communication - Thomas graduated in Business Development and sociology. He brings to Sépage his ambition to find new business models for these advanced technologies.

We have committed business angels who have invested over $300,000 in the company during its first year, the time we needed to create the technology. Now the technology has become a product that sells and after only a year and a half of existence we are already at break even. Independence is important to us and we are not looking for further funding.

Estimation of market size?

According to various sources, 30 to 50% of travel companies’ margins are allocated to marketing spending, which represents over Euro 3 billion in Europe alone. Today, an important share of this amount goes to traffic acquisition, but the trend is towards personalization and conversion tools like ours. In fact these technologies are already a must have for most e-commerce websites.

Competition?

In terms of semantic web based technologies there is no direct competitor. Other personalization/recommendation technologies exist of course, but they are usually based on statistics and big data approach. This is problematic for the travel sector because the recommendations resulting from these technologies tend to be very converging, while travellers are seeking inspiration and need serendipity.

In terms of what our product offers - ultimately, more conversions - we are competing with every type of services that aims at improving the user experience (UX design, etc).

Revenue model and strategy for profitability?

GlobeAdvent, our technology for travel, is a SaaS solution with dynamic pricing. Businesses can easily integrate the personalization engine into their website and pay only for the visitors who are inspired by the recommendation GlobeAdvent provides.

What problem does the business solve?

It’s actually a two-fold problem. One regards the travellers, the other the travel websites.

While travellers are seeking inspiration and travel offers that match their needs (70% of travel websites users don't know their future destination when they start searching online – Google/Ipsos, The 2013 traveller), travel companies struggle to convert traffic that is becoming increasingly expensive. Apprehending the modern traveller, always more informed and saturated by travel offers, is becoming a challenge.

In this context, semantic web technologies can simplify the relation between users and travel websites, introducing the first 100% granular knowledge of individuals, enabling sites to suggest destinations that match the user's profile.

How did the initial idea evolve and were there changes/any pivots along the way in the early stages?

At the beginning of Sépage, once we had developed what would be the core of our technology, a big question was how should the travel recommendations integrate on the websites. Our first guess was that companies would want a plugin, an “onsite application” where people could go seek inspiration.

But our experience with our first clients taught us one cannot alter so brutally people’s habits ; change should always be seamless and natural. The challenge was to build a system that is disruptive and yet cognitively natural to the users. Today our solution easily integrates to the web sites, under the form of a recommendation sidebar that changes according to the user’s interaction.

Why should people or companies use the business?

Because it’s the future of digital marketing! There is no way around it: the web is becoming more and more people oriented and web sites need to adapt to their customers. In that way, the type of technologies we provide is central, enabling businesses to understand their customers to provide only the content that match their needs.

What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?

By definition, technological advances are hard to evangelize. But we are surprised to see how most people in the industry already have a very clear idea of the issues they’re facing. Everyone is aware that the technological transition is inevitable, although there is still a bit of uncertainty as to what type of technology will be.

Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?

We will continue developing new technologies for the travel sector, like a search bar where you can ask complicated questions, like “get me a ticket to the cheapest flight to go anywhere near the beach where I can find great seafood restaurants”. We already have an early version and we are aiming at commercializing before the end of the year.

Ultimately, we want to build a customer knowledge solution for companies, which will result in an ubiquitous digital assistant who knows what you want before you ask for it.

Building that platform will be a difficult task and our ability to grow and attract talented AI engineers will be crucial, but with the type of results that we have today (about 10% of websites visitors click on our suggestions -that's twice as much as Google ads or Outbrain for instance), we are looking at the future with serenity, and maybe we will go public in a few years.

What is wrong with the travel, tourism and hospitality industry that it requires a start-up like yours to help it out?

I partly answered that question above, regarding the problem of users seeking inspiration and companies struggling to convert their traffic on the other hand.

What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?

We are actually very much inspired by luxury brands! We admire both the culture of French brands like Hermès and the know-how of Italian brands like Fratelli Rossetti, or even Ferrari. We believe most technologies companies today terribly lack culture and style and have a lot to learn from these brands. We want to be the first luxury software brand!

Which company would be the best fit to buy your startup?

We are looking beyond the travel sector. Ultimately, the sort of technologies we have developed enable much more than recommending destinations; it’s a customer knowledge platform, offering businesses the chance to truly understand their customers because we understand their language. This type of knowledge is priceless to a lot of companies: the software giants like IBM or Salesforce, but also classic advertising companies like WPP Group or Publicis who are more and more engaged in a process of technological reorientation.

But Sépage is not for sale. We believe we have the ambition and technologies to achieve a lot more by ourselves.

Describe your startup in three words?

The Must Have

Tnooz View

Semantic search, as Milan points out, has been around since the dawn of the web but has never really taken off. The Holy Grail for many travel sites seems to be the ability to answer natural language queries and for the search box to operate like a digital assistant. That's one part of the problem which semantic could solve. But perhaps more exciting is the idea that search can not only be inspirational, but specific to you as an individual. This is the world of pretargetting, not retargetting. Many tech innovation start-ups struggle to fill the gap between having a great idea and having a great business. Sépage has got a product to market and is at break-even within eighteen months, having only received relatively modest funding of around $300,000. It also appears to be hitting the sweet spots - personalization, inspiration, recommendations, conversions. Travel tech giants ( to say nothing of ad tech firms) with a few extra noughts on their research and development budget are looking at the same areas and for many of them $300,000 is loose change. Independence and self-determination for Sepage might be hard to maintain.

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