There are few large problems left in travel that aren't being tackled in some way by a startup somewhere on the planet - and yet, there hasn't been a startup attempting to change the way that travelers manage smartphone usage and network access while traveling in a foreign country.
That's where Explora Phones comes in. Explora is a startup that wants to eliminate the scourge of roaming fees and problematic, spotty network access via decentralized, customized smartphone rentals.
Gone is the airport kiosk model that not only overcharged to recover concession fees, but also was wildly inconvenient. In its stead is a smartphone delivery service that brings a locally-networked smartphone for travelers.
Explora will deliver the phone, and travelers can simply return it after using it during their journey. No need to risk roaming charges - or theft of a personally owned phone - while also leveraging the full complement of locally-relevant apps preloaded on the phone.
The team breaks down the service in the following straightforward Vine video and full Tnooz Q&A with co-founder Raj Patel.
Tell us how you founded the company, why and what made you decide to jump in and create the business.
The concept behind Explora came from my own personal experience. I love to travel – and as anyone who has ever done any extended traveling knows the two biggest problems to overcome is staying connected and navigation. I was literally sitting at my desk one day reflecting on a recent overseas trip (and my huge phone bill) and thinking “there has to be a better way”.
So I founded Explora to make connectivity ubiquitous, cost effective and convenient for travelers.
What is the size of the team, names of founders, management roles and key personnel?
We currently have six team members. Key people include:
Founder & CEO, Raj Patel. I’ve lived in New Zealand, Australia, India and the United States. I got my passion for travel passed down from my parents who were often posted overseas for work. I was an investment banker before starting Explora.
CTO, Raquel Bujans. A friend and resident developer at Explora. She lives in Brooklyn and is the brains and good looks behind the technical side of our business. She has over 10 years of Android development experience.
Head of Sales, Carl Cochrane. I was introduced to Carl via a mutual friend (who I met traveling of course). We hit it off straight away. Carl was the first to join Explora and has been there since almost Day 1.
Please share you funding arrangements.
Raised a seed round of funding in October 2013 from two angel investors. Based on the success of our launch, a further investment is being made via our existing network of investors and advisors.
What is your estimation of market size?
Global international roaming market size in 2013 was estimated at US $57 billion, forecast to grow to US $90 billion by 2018. (Source: Juniper Research).
What is your competition?
No other US-based competition, however we do compete with substitute goods, which vary from those who simply use no mobile device when traveling, to those which we coin “WiFi jumpers”, more traditional SIM card, calling card and burner phone operators and of course global roaming.
Please describe your revenue model and strategy for profitability.
Our revenue model and customer value proposition is straightforward and transparent. US$8.00 per day rental fee.
In the future, there are potentially additional revenue streams from promoted apps, advertising or product placements. A “freeium” model is one thing we are working on. But we won’t be doing anything that negatively impacts our user experience.
What problem does the business solve?
We allow travelers to be connected. We do it in a new and innovative way that ensures it is significantly more cost effective than global roaming yet more convenient then international calling cards or burner phones.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
The concept and business model of the business hasn’t changed since its inception, however we have made significant product iterations as we received customer feedback during our paid beta phase.
For example, we found customers were willing to pay a little more for brand new – latest generation mobile devices.
The speed of the data connection was also a key point of feedback and moving from an unlimited 3G to 4G LTE service improved our customer response dramatically.
We had a few logistical hurdles with our initial shipping provider. But we knew time was of the essence for our customers so we moved to FedEx quickly to ensure on-time delivery.
We’re sure that further pivots and product iterations will be required; it’s a constant case of product improvement and re-investment.
Why should people or companies use the business?
We give travelers cost effective and convenient access to the benefits of mobile communication and applications.
We’ve spoken extensively about the monetary savings of our service versus global roaming, but the other half of the equation is equally as important to our users.
The last thing anyone wants to do after a long flight is to waste their valuable holiday time looking for, or worrying about SIM cards or burner phones. They want to get out of the airport, to their hotel and relax.
We are aiming to make that whole experience seamless. You should be able to fly into New York from Sydney, arrive at your hotel and an hour later be walking out of the lobby with your phone in hand - connected and navigating to your first adventure.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We currently have several customer acquisition strategies which fit in to one of two buckets, B2C or B2B:C.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
- Direct to consumer: Via online marketing, social and more traditional SEM.
- Hotels: Hotels offer our product to their customers in a variety of ways, whether via the hotel concierge, packaged into their rooms or white labelled.
- Travel agents / tour groups: Often based on commission structures or packaged into their offerings as a value-added service.
- Online travel agents: An ancillary offering similar to car rental or travel insurance shown to pre-qualified users.
- Airline / CC loyalty: As a redeemable travel related benefit (e.g. via miles) or attached to premier status as an inclusion.
I hope to see us with distribution locations in all the major portal cities into the United States (e.g. Los Angeles, Miami, San Francisco – we are currently located in New York). We also hope to be well advanced on international expansion opportunities into other markets such as Europe, and Asia.
The challenges of scaling for our business are varied. We have significant logistical systems to put in place to ensure we are utilising our inventory correctly. Product development will need to continue as new apps arrive on the market and consumers demand more features and the latest technology.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
It’s not so much an issue with the travel industry as it is how another industries practises are being applied in the travel space. Telecommunications companies are using travelers as a high margin market to make amazing profits.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
Our inspiration at Explora is really drawn from one amazing company and that’s Zappos. Although not travel related we admire their success, but most of all as users of their website, we love their customer service. It’s something we are constantly looking at aspiring to.
For us the core to everything we do is: “how can we solve this problem for our user” – because the last thing anyone wants on their vacation is to be dealing with problems. We hope to be in the business of making this one really big and annoying problem go away.
While this product won't likely appeal to corporate travelers with already-existing international plans and a large appetite for communications-related expenses, the target leisure traveler will quickly see the value in the product.
Not having to worry about running around to get a local SIM card, or incurring any unexpected overage charges, is a serious benefit to the consumer. Receiving a smartphone preloaded with specific destination content is also an added appeal.
For brands, that pre-loaded reality is extremely exciting - and hugely lucrative for Explora. The company could even offer a paid and ad-supported model for the rentals, with the ad-supported phones coming pre-loaded with specific tour operators, brands and other travel apps that pay for placement. This could boost in-app conversion for these brands, as they don't have to spend money to get a traveler to download an app - especially a traveler that might tethered to WiFi and not freely downloading apps while traveling.
Even the elimination of liability of carrying one's own phone will be a powerful selling point. Granted, the startup is still struggling to find an insurer to protect the phones - and thus eliminate traveler liability for lost/damaged phones completely. Many travelers are already used to paying for travel insurance, so protecting a rental phone for a few extra dollars is not a huge burden - especially given the already affordable rate for the rental.
Overall, this business is quite compelling. While it targets a specific slice of the leisure travel market, and might require some change in behavior away from an owned-device, it offers significant growth potential as travelers are increasingly inseparable from their smartphones. It's priced very competitively, and with the delivery service makes it quite hard to beat - especially for hotels/hostels/operators seeking ways to better serve guests with added services at little to no cost.
One could even envision city guide tablet rentals, offering tablets for rent with specific trips curated for travelers.
Of course, scale is a huge challenge for Explora. It's no easy feat to deal with not only purchasing devices, but also the essential logistics of country-specific distribution and warehousing. Getting buy-in and the required licensing from telecom companies around the world will take time, patience - and likely some further fundraising.
NB: Smartphone image courtesy Shutterstock.