TLabs Showcase - YuuponNewsBy Dennis Schaal | April 20, 2011Share This article was originally published on TLabs Showcase on travel startups featuring US-based flash sales and local deals service Yuupon. Who and what are you (including personnel and backgrounds)?Yuupon is a new kind of flash deal site for travel offering accommodations at a 40% to 90% off published rates.We’ve unbound the high-pressure restrictions that most flash deal sites use, giving travelers new freedoms while also protecting the supplier’s interests in participating in a flash sale environment.Consumers get substantial deals on a wide variety of accommodations from budget to luxury and everything in between - with time to select dates later, and no need to worry about a minimum number of sign ups in order for a deal to be valid.All packages are fully transferable, and can be used by friends or family, regardless of who purchases the trip.Yuupon is led by Mary Song, an online travel veteran and respected entrepreneur. She was the founder and force behind Rent101 (one of the founding sites of Homeaway) and has a history of launching successful businesses.Other members of staff: Amy Peterson, director of business development - formerly of vacation site BookIt, Amy leads a growing team of market managers at Yuupon.Kevin Williams, regional market manager - Kevin has over 20 years in the travel industry, including business development at Hotels.com, Director of Hotels for OneTravel, and Vice President at TravelWorm.Scott Gierum, senior market manager - A travel industry expert, Scott comes from Mark Travel where he put together vacation packages for clients like US Air Vacations, Spirit Vacations and Southwest Vacations.What financial support did you have to launch the business?We’ve invested our own money into Yuupon for launch right now – we run a profitable consulting business (travel marketing) and are using some funds from the business to support Yuupon.I previously sold Rent101 to HomeAway and am using some of that capital to fund Yuupon, as well as proceeds from HomeAway stock after it goes public.We haven’t yet sought angel investment but plan to do so later this year.What problem are you trying to solve?Most flash deal websites focus narrowly on local deals, services and entertainment and many impose undue restrictions on consumers and suppliers.The largest, Groupon, only occasionally offers travel deals, Living Social primarily offers very small properties, and neither allow consumers to purchase deals for specific travel dates. The hefty 50% commission charged by Groupon to travel suppliers (i.e., hotels, airlines, etc.) presents a significant financial problem.Travel suppliers spend a lot of money on marketing without knowing the return in advance. We have developed Yuupon to allow consumers to get the deals without making them "work for them" while giving suppliers the foresight and protection they need.Describe the business, core products and services?Weekly travel deals discounted up to 90% off, plus side deals and significant discounts on tours and local activities.Members create a free account, earn money from referrals and promotional credits and social credibility and community visibility (by way of badges and public ‘thank yous’ from Yuupon).Yuupon offers a wide variety of accommodations from budget to mid priced to luxury and high end. Yuupon deals are available in many cities and locations from action packed hot spots to remote US beaches and the Caribbean.Yuupon offers a full cash refund within eight days of purchase, or credit toward a future trip for cancellations made after eight days, before the expiration date listed on the voucher. Vouchers are typically redeemable for six months to a year, giving travelers plenty of time to redeem.Who are your key customers and users at launch?Yuupon will attract value and price sensitive travelers who are frustrated with the restrictions of other deal sites and who will book additional trips via Yuupon because the deals can’t be beat and they enjoy trying new destinations.Our supplier customers are primarily mid-priced lodging suppliers but range from budget to luxury accommodations.Did you have customers validate your idea before investors?Yes, in fact we are going to market before we go to investors.What is the business AND revenue model, strategy for profitability?Our commission rate allows Yuupon to earn considerable profit while facilitating a closer partnership with, and higher revenue for, our travel suppliers.This allows our travel suppliers to experience a valuable branding, marketing and profit-generation opportunity while ensuring our customers best-in-class pricing.SWOT analysis – strengths, weaknesses, opportunities and threats?Strengths: We’ve watched and learned and are bringing a more satisfying experience to customers and suppliers. Our team’s long-standing relationships allow them to negotiate the best possible travel deals and/or group buying opportunities. Yuupon offers flash deals that convert site visitors to deal purchasers. And unlike most other flash deal sites, we are exclusive to the travel industry and don’t focus on one type of customer. Weaknesses: Self -financed compared to most other sites’ VC backed funds. We see this as a double edged sword. We aren’t building Yuupon for an early exit no matter what. Opportunities: The flash deal space is in its infancy with huge growth year over year for the next several years at least. According to a survey only 15% of the population is aware of Groupon. Consumers are not loyal to a particular site and will follow the deals and the best user experience. Threats: Flash deals are a very new advertising vehicle for hotels and lodging establishments so there are some operational challenges that haven’t yet been addressed for the larger brands.Who advised you your idea isn't going to be successful and why didn't you listen to them?Everyone said we were crazy to try to compete with Groupon and flash sale sites, however we see plenty of room for competition.I’ve thought about this idea for two years knowing the financial commitment this would take and decided I would regret it more if I didn’t go for it than if I did and failed.What is your success metric 12 months from now?1,000,000 registered members, consistently reliable exclusive deals better than can be found anywhere else for our members, and a reliable, profitable marketing avenue for our partner suppliers. NB: TLabs Showcase is part of the wider TLabs project from Tnooz.