TLabs Showcase - QGuide

TLabs Showcase on travel startups featuring US-based LGBT travel network QGuide.

Who and what are you (including personnel and backgrounds)?

Co-founder and CTO Scollay Petry has 20 year of online experience, having joined AOL as a small company in 1993. There he built the company’s first marketing database, first user behaviour data mining systems and the online industry’s first interactive reporting systems (pre-Web). Previous to AOL, Scollay was a consultant with Booz-Allen & Hamilton.
Co-founder and COO Jack Gonzalez has 25 years of IT and marketing production experience. Jack worked in Spain as the IT Director for Continental Europe, Middle East and Africa at Bovis Lend Lease, and in marketing production roles he delivered intricate direct marketing and media campaigns at Time Life, International Masters Publishers UK and The Micro Marketing Group.
Marketing and data mining systems advisor Tom Donegan is a former VP of direct response for AOL, having managed an annual marketing budget in excess of $400 million and delivering over 300 million direct mail pieces. Tom also managed telemarketing, call centre sales programs, and niche marketing strategies to high-value demographics.
Huw Griffiths serves as a director and advisor. As European operations manager for Google Book Search, he set up and managed sites at Oxford University and in Germany and Spain. Prior to Google, Huw helped to develop and launch the Nectar Loyalty Program which now covers 50% of UK households, and he worked in IT and business development roles at Dell EMEA. Huw currently works to develop innovation and strategic projects within Suncorp, one of Australia’s largest financial services groups.

What financial support did you have to launch the business?

To date the company has been funded by the founders and a single angel investor.

What problem are you trying to solve?

The initial problem we were trying to solve was the lack of relevant content, information and advice available to gay travellers. We found that most gay travel information online and offline focused on bars, clubs, a "gay street" or small gay-owned B&Bs.

Missing was the broader travel and tourism experiences from a gay perspective – what we call "Travel through a Gay Lens".

Also missing were clear channels to ask for and receive advice from socially relevant sources. One’s Facebook "friends" are likely to include mothers, young nephews, school mates from the distant past, work colleagues…

Mining this Facebook social graph for gay travel advice is not likely to yield very relevant results. We were also interested in meeting other travellers who share our interests, hobbies, and sporting passions.

While one can meet people through any number of online "dating" sites, those meetings typically carry a sexual context.

Finally a problem endemic to the travel industry as a whole is the lack of truly relevant e-commerce offers we receive in our email. Emails from major suppliers pitch us on "great travel deals from Chicago to Orlando" but we don’t live in Chicago and have little interest in Orlando!

Describe the business, core products and services?

We have developed QGuide, a site that allows gay travellers to build and explore their social travel graph.

Through profiles, personal maps, meeting and activity preference profiles, blogging and other integrated utilities, we are able to develop a view or graph that details a person’s:

Places – planned travel, wish lists, favourite places, placed visited
Activities – arts, culture, sports, adventure, games, bars, parties
Style – independent, group, event-focused, “gay scene” vs. “non-scene”
Content – blogging/tips platform purpose-built for travel (integrated GPS)
Niche Context – gay travel

The overall value proposition of defining and then matching peoples’ social travel graphs is very clear.

Travellers can find great content from a gay perspective – for example a number of locals have written extensively about Buenos Aires or a traveller going to Sydney who’s interested in sailing can find dozens of locals and past visitors to query about sailing.

The real power lies in the fact that the site, audience and results are wrapped in the context of gay travel.

Who are your key customers and users at launch?

Our customers are gay travellers, widely recognized as one of the most lucrative demographics in travel. We estimate that globally there are 80 million gay people who are internet-enabled.

Gay travel is worth $142 billion a year globally, and with generally higher disposable income a gay traveller in the US will spend $2,300 on a holiday versus only $1,500 for non-gays. Gay travellers are also 25% more likely to travel abroad.

Gay travellers are also transacting online: 80% bought their last holiday online, 78% used a smartphone when travelling to research local resource, and 74% and indicated they would like to receive travel offers before and during their holiday.

Gay travellers are active in social media and influenced by it:

69% share travel experiences online
50% share photos and videos online
78% indicated user-generated content was a major travel influencer/motivator.

Did you have customers validate your idea before investors?

The founders’ own extensive international business and personal travel experiences first led them to identify the need for a gay-focussed travel service.

The first site – a Gay Guide (Web 1.0) to Australia – provided the foundation, experience, test-bed, and consumer validation for creating the Web 2.0 social site.

What is the business AND revenue model, strategy for profitability?

Very simply our model embraces relevance – content, social, and ecommerce relevance – which we believe in very straight-forward ways can be monetized.

We have identified nearly a dozen types of revenue, largely through affiliate programs which include advertising, hotel bookings, tour bookings and other travel-related products, and have focused on several "delivery" methods:

Passive Placement: our user-generated content and destination feature pages provide high quality content for contextual targeting from Google Ads. We are seeing excellent response and click revenue as travel in general provides high-bid keywords, and we have the added benefit of serving a highly sought-after demographic.
Search Placement (pull): we deal exclusively with vendors who have geocoded their inventory or whose inventory can be easily geocoded. With this in place we offer hotel search capabilities unlike any other site. For example, search on “Sydney” and you’ll very quickly identify the gay neighbourhood from the points on the map (reviews), and from there you can click to centre the map and find hotels, sorted by distance. Wherever possible, our content pages have GPS search links coded to the location of the article, and all of our member’s personal maps contain these search links as well. http://petersin.qguide.com/
Opt-In Data Mining (push): In addition to geocoding, we have also created a standard data dictionary that normalizes keywords between all of our member profiles and our travel inventory. Through smart, timely connections, we will be able to send members Opt-In (wanted) emails alerting them to content, people, and e-commerce relevant to their planned and wish list travel. For example, a member with wine in his profile could receive an email about wine tours a week before leaving for Paris, or a skier with Whistler on his wish list could receive updates about gay welcoming hotels with skiing facilities.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

From a growth perspective we’ve found an excellent promotional partner with millions of gay members around the world, which is making our member acquisition very targeted and efficient. Our gay niche provides strength as a demographic widely recognized as being social, trendsetting, and receptive to marketers who reach out to them in smart ways. The founders and advisors of our company each have years of experience in online services, marketing, retention, production, and data mining, which will make or end product unique and effective.

Weaknesses:

Although the data architecture is in place, our service hasn’t been rolled out to a mobile platform yet.

Opportunities:

Gay travellers spend on average $2,300 a year on travel. We believe that our members’ social travel graphs offer tremendous segmentation opportunities, so while we can serve budget or "average" travellers well, we can also identify higher-value prospects and provide more thoughtful and lucrative travel offers. Our site is built on a platform that can be easily extended to reach other (non-gay) high-value niche markets that are likely to be social, such as adventure travel, wine and food, families, or single women (several female friends have suggested a travel site around shoe shopping!) We can easily seed and develop other sites and brands to service many different travel demographic and special-interest groups.

Threats:

As with any Internet business, the low cost of entry for potential competitors, and the ever-changing nature of the internet.

Who advised you your idea isn't going to be successful and why didn't you listen to them?

Numerous people advised us that building site membership would be a difficult and expensive proposition, and that an "empty" social network would have a very difficult time getting initial traction.

"Who wants to come into an empty bar?" said one staff member of our start-up incubator. Of course, even Facebook and Twitter started with 0 members, so we knew it would be a challenge, but we also knew that we were offering something unique and needed in our market.

Through viral marketing and a strategic partnership, we’ve increased our growth rate from 70 new members added in December 2010 to over 1,600 new members added this month, March 2011.

We still have a lot of work to do to achieve critical mass, but we believe we have established a low-cost, sustainable marketing mechanism for even faster growth in the coming months.

What is your success metric 12 months from now?

Success will be continued site and member growth and monetization to make the case for creating our next niche site.