myRealTrip, Korea-based startup is into the business of connecting travellers with local guides or destination experts.
The company is currently focusing on the Korean market - both inbound and outbound travellers. Very soon myRealTrip is planning to cater to the Chinese and English speaking market in Asia.
Q&A with the co-founder Minseo Baek below.
Tell us how you founded myRealTrip, why and what made you decide to jump in and create the business.
Travelling to places where we have local friends makes the trip a memorable one and it gives a different experience altogether. I realized this in my travel experience.
But, we didn't put this insight into a concrete business plan until we bumped into an angel investor at a startup seminar.
Only did then we, together with the angel investor, exchanged ideas about possible new business ideas.
The angel investor (being a time-strapped and DIY person) too always had a huge pain point about travelling to destinations where there are no contacts. On that day, on that spot, our rough idea turned into a concrete business proposal.
Size of the team, names of founders, management roles and key personnel?
There are five key members and two interns.
- Founders: Dongkeon Lee (CEO), Minseo Baek (chief strategy officer)
- Key personnel: Jaehyun Shin (CTO), Sungjae Lee (operation manager), Hyerim Song (design manager)
- Interns: Saemna Jung (marketing), Hyunjung Park (operation)
Funding arrangements?myRealTrip was founded on February 29 2012, with seed-money investment from Primer, a top incubator in Korea for early stage startups. Primer consists of serial entrepreneurs and founders of successful IT companies (Daum Portal, Inicis online payment system, etc.).
In April 2013, myRealTrip raised additional funding amount of $400K from BonAngels, one of the top early stage and Series A venture capitalists in Korea. At that time, there were only two founders and interns in the team, and the funding was mainly used for recruitment and service development.
We would like to get additional funding early next year, for extensive marketing and service expansion – both in outbound and inbound travel markets.
Estimation of market size?
The total size of Korean outbound travel market is nearly $13 billion and the percentage of Free Individual Traveller (contrast to package tourists) is 73%. We estimate that at least 10% of that amount is spent on the travel experience.
We are planning to expand our service for Chinese and English speaking Asian travellers. Therefore, our estimation of market size should include Chinese and other Asian outbound travellers as well.
Competition?
- Traditional travel agencies like Hana Tour and Mode Tour mainly focus on package tours.
- Group guide tour companies like Free Walking Tour are only available for large groups in a pre-fixed format. Well-versed guides, yet highly limited in themes.
- Startups that are similar to myRealTrip include Triip [TLabs here], Voyagin, Travspire [TLabs here], etc
Instead of western travellers coming to Asia, we are targeting at Asian travellers going abroad. Our differentiation points:
- Not limited in ‘local’ or ‘off the beat’ experiences: We understand that travellers are looking for genuine local insights and recommendations from real locals, but that does not necessarily mean that the experience or travel course itself should be very ‘unique’. Even if the travel course is very standard, as long as the trip guide provides real local insights and makes it ‘not just a superficial photo-taking trips’, it is perfectly fine on our website.
- More proportion of professional guides: Asians (especially the more mature ones) tend to value convenience and quality of experience when they travel, so we are listing more professional guides than any other places.
- Personalization gets easier: We encourage travellers to communicate with guides so that they could personalize the trip according to their needs.
- More senior audience: Our target audience are mainly people in the age range of 30-50 with more purchase power, not the young backpackers.
Revenue model and strategy for profitability?We charge a transaction fee in the range of 10-20% of the total guidance fee.
We are also planning to expand our service range (from guide tours to private driving, customization, accommodation and air ticket booking, etc.) and possibly monetize our rich content about local areas.
What problem does the business solve?
myRealTrip brings qualified local experts/guides to be a traveller's personal tour guide. Anybody with local expertise – both professional guides and ordinary people – could list their own tours and offer guide service.
Below are the two existing forms of travel:
- Package tours: It is convenient and cheaper, superficial, and usually not reflecting individual travelers' needs.
- Free individual tours: It is flexible and in accordance with a traveller's need, yet it is very time consuming and hard to prepare on your own. We, at myRealTrip, are trying to solve this kind of dilemma by directly connecting travellers with local guides. The latter is convenient, and also guarantees flexibility and personalization.
myRealTrip is mainly for people who are tired of package tours yet are too time-strapped to prepare on their own, who are in need of some help from the locals – parents with kids, young professionals, etc.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
There were two times when we had significant changes along the way:
- February 2012: Before launching our very first website, our focus was more on offering “unique experience” by letting people from various backgrounds to mingle and get in touch with. Here, more emphasis was put on "meeting people from different background" than on "travel" itself. We discovered that this approach aims at too niche-market, so since then, we have pivoted to concentrate on travel experience.
- December 2012: We found that contrary to our hypothesis that young, adventurous and avid backpackers will love our service, the actual customers turned out to be (mostly) people in the age range of 30-40 on their family trip or free holidays. We discovered this by conducting in-depth interviews with our users, data analysis and investors’ advice. Then, we tweaked our marketing messages and channels to cater to our target audience, and noticed dramatic increase in the number of reservations.
Why should people or companies use the business?- It is convenient; with a click of a mouse, users can connect with the local guide of their own choice
- It assures genuine local insights and authentic travel experience, unlike what package tours and other guide tour offer
- It offers personalized guide service at reasonable and lower price
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?Making the most out of SNS – especially the ones our target customers rely heavily on in the preparation for their trips. For this, understanding the behaviour pattern of target customers and localization is very important.
Meanwhile, we want to keep our brand as recognizable as possible, so rather than partnering with existing travel tycoons, we want to build and establish a brand of our own.
Also, we approach our marketing as "travel experience" as a whole, not limited to specific offers and guides of our website.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years time, we expect to become a leading tour guide service platform for Asian travellers. Just like an Airbnb for personalized guide tour, we would really like to become a truly global yet very nimble company in the field of travel experience.
Currently, our service is available only in Korean language (for domestic and outbound travellers in Korea).
However, starting next year, we are going to launch the service for Chinese or English speaking travellers coming to Korea, and using that as a stepping stone we will expand our service for Chinese or English speaking travellers to go all around the world.
To achieve that goal, we hope to have overcome the issues of quality control and scalability for guide recruitment.
We aim to have built an innovative system that enables travellers to easily connect with guides, discuss travel plans in a much easier and faster manner with the help of technology and IT. For this to happen, we are currently working on a mobile application that will be released early next year.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
Currently, the vertical structure between local guides and travellers (along with cutthroat competition) demotivates guides to offer high quality tours.
myRealTrip is disrupting the travel industry by getting rid of all middlemen and directly connecting travellers with guides.
Especially, the Korean travel market is divided into package or free travel, without enough alternatives for hybrid format. While air tickets and hotels are getting much easier to book online, it is still not the case for travel experience, and that’s the gap myRealTrip tries to bridge.
What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
Airbnb; we love its vibrant culture and emphasis on the humane and unique experience. Its successful expansion in global scale is also very inspiring.
Tnooz view
The peer to peer sharing economy in travel industry has taken various forms - connecting travellers to local guides is one such form. This model especially is booming in Asia Pacific. This is very evident from the number of travel startups that are operating in various regions in APAC.
Apart from the list of similar-model-startups that are already featured in Tnooz, there are at least five new startups (watch for TLabs soon) that are operating in APAC region.
Quite a number of similar service startups in APAC are focusing on a particular region (for example: Singapore) from inbound travel standpoint.
myRealTrip already has tour listings for about 15 Asian and 10+ European countries.
In myRealTrip model, the outbound travel service is especially interesting. This has a lot more challenge to solve when compared to inbound model. Few challenges include:
- How to ensure the quality of guides abroad
- How to market myRealTrip to non-Korean markets and bring local guides into the platform
- When the company opens up its service for markets outside Korea, bridging travellers with the (right) locals would also be a challenge. For example: A Chinese traveller might want to travel to Paris, and he might want to talk to a Chinese tour guide who lives in Paris. What if there are only English-speaking guides available in Paris?
Vine video of myRealTrip