It was Penroads' founder Harry Fu first solo backpacking experience that got him thinking about a way to facilitate meeting fellow travellers and sharing experiences.
During a trip to Thailand he initially felt a little out of it all as others around him found it easier to form groups and on his return to Singapore sought to develop build a platform for people to share their experiences.
The team is four-strong including Fu as chief executive, an intern, marketing manager and fellow founder and chief technology officer Kean Chuah.
To date the startup has received $25,000 in angel investment as well as $50,000 in government grants. It is currently raising a seed round.
Penroads strategy for revenue is twofold - advertising revenue from small businesses such as local restaurants and bars and 8% commission from hostel bookings.
The startup estimates the Southeast Asian travel industry to be worth $127 billion.
Rivals in the space, it says, are Tinder and WAYN.
What problem does the business solve?
The primary means for travellers to connect with each other now are via Facebook groups and travel forums (most notably, Thorn Tree Forums by Lonely Planet). They put up posts that state who they are, where they’re going and when they’ll be there.
These posts receive little traction, they are unorganised, and it’s very improbable that they get positive responses that actually turn into travel plans. In other words, a waste of time. But people still persist at it.
Why is that? Because it’s the medium that is immediately accessible.
Penroads was built as an answer to this problem. We put travelers into direct user-to-user connection, and allow them to chat with each other. They can even join a country chat board to mingle with everyone going the same destination.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
Penroads started off as a social hostel booking platform, where a person could make a booking and then chat with other travelers staying at the same hostel prior to arrival date, to share tips or do stuff together. But we found out that building a hostel booking engine is an insurmountable task, so we pivoted to focus on the social aspects of travel.
Why should people or companies use the business?
There is no faster way to engage directly with travelers who will be at your destination during the same travel dates. Additionally, the user base boasts of enthusiastic locals who are eager to meet with travelers coming to their country. It’s a great social experience, and arguably the best way to find travel partners.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
We work primarily with travel bloggers. Especially those with popular communities that demonstrate high social engagement.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years, Penroads is expected to have a presence worldwide, moving beyond Southeast Asia. Scaling on network effects can become difficult, and I expect a significant increase in marketing spend.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
A lot of travel technology innovation is seen around booking platforms. Flights, transportation and accommodation focused solutions. I believe social travel, perhaps backpacking and hostels in particular, has been largely neglected. It’s only in the past year that we’re seeing an emergence in this space. It’s puzzling, especially since it’s a $98 billion industry.
The people we meet traveling can have a profound impact on the overall experience. I know that, because I’ve experienced it first-hand. Technology should be used to dramatically improve the way people meet before and during travel.
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?
Airbnb. Its mission is to create a world where you’d feel at home no matter where you go. It’s both ambitious and admirable, and it has succeeded. I think a strong part of that is because it genuinely believes in what it is doing.
The guys working at Penroads feel the same way. Except our mission is to create a world where friends can be found anywhere.
Which company would be the best fit to buy your startup?
Describe your startup in three words?
A smaller world.
It seems as if Penroads might have had a business model in building a hostel booking engine but has abandoned it for the social travel holy grail.
The thing is many startups have started in social travel and not been able to make it work in scale or revenue or anything really.
Many of the reasons why and some insight into the way forward are here in this piece from two years ago - they're still valid today. And, the question of whether we need a travel focused social network remains.
So without wishing to rain on Penroads parade too much maybe it should revisit the hostel booking side of things.
There's definitely something in social travel in terms of tips, advice and sharing of experiences but it's getting to it and making it pay when Facebook, Instagram etc are already so pervasive.
Perhaps Penroads is banking on the Southeast Asia market being able to sustain a social travel service. It's certainly exciting times in the region in terms of the thirst for travel.
Hopefully it can get some traction in terms of building a community, attract some advertising revenue and generate some bookings and thus build momentum.
We wish it luck travelling the startup road.