TLabs Showcase focus on startups featuring Oregon, US-based travel auction website itsyBiD.
Who and what are you (including personnel and backgrounds)?
ItsyBiD is a new travel auction website where the average winner will save 90-95% off of retail price for their travel. itsyBiD was founded by Stephen Matthews and Graham Keavney.
Both very passionate about travel, they have very different specialities. Steve focuses on everything operational, while Graham runs sales and marketing.
Their backgrounds include experience in the hospitality, wine and retail industries and specialities in materials and operations management.
What financial support did you have to launch the business?
Initially, we financed this ourselves and brought on people who were willing to work with us because they believed in the product.
As we approached the launch of the site, people around us came forward interested in backing the company. We’ve had some opportunities for larger investment, but to this point, have not taken on a major investor.
What problem are you trying to solve?
The travel industry has mirrored the overall economy. However, we don’t believe that people’s desire to travel has changed at all.
This change in the travel industry has allowed hotels & resorts to think outside the box and sell through different avenues.
We’re pleased to have developed a way for people to be able to save a substantial amount of money on their accommodations, be it for business or pleasure, while also increasing bookings for our hotel and resort partners.
Describe the business, core products and services?
ItsyBiD is a new kind of auction website, specifically for the travel industry. We partner with hotels & resorts across the country to offer discounted vacation packages and experiences (golf, ski, flexible gift certificates) to popular destinations (Park City, Utah; Napa Valley) and high-end properties (The Canyons Resort, The Benson Hotel), not just overnight accommodations.
Our auctions always begin at $.01, and each bid raises the sale price in increments of $.01 per bid. Before bidding, you must purchase bids in bundles of 20-500, for $.75 each. These bids can be used at any time, on any auction, and they never expire.
The auctions last for 24 hours and each time a person bids, as much as 20 seconds are added to the timer. When the timer ends and you are the high bidder, if nobody else bids, you win! Winners will average a savings of 90-95% off of retail.
Losing bidders are able to use their lost bids on that auction toward the purchase of the auction item they were bidding on, and will save 10-20% off of the retail price if they “buy it now”.
Unique to itsyBiD, a percentage of bids goes to non-profit each month (first month is Our Children's Homestead). The sponsored charity receives 5¢ from each bid.
Who are your key customers and users at launch?
Most of our auctions are to travel experiences in major destinations, so vacation travellers will be our primary users.
The users of our site will be people already booking online and regular online shoppers. We have destinations across the country, so anyone anywhere will enjoy our site.
Did you have customers validate your idea before investors?
Yes. We have had multiple focus groups and site demos. There will be constant upgrades of product and process, but the auction method is already proven in the consumer goods market.
What is the business AND revenue model, strategy for profitability?
Current and future sources include: purchased bid packets; commission from hotels we partner with; and auction packages purchased with lost bids at the end of an auction.
What makes itsyBiD unique is that our financial success immensely benefits the nonprofit organizations we partner with, as they receive generous proceeds from our bottom line.
SWOT analysis – strengths, weaknesses, opportunities and threats?
- No pre-paid inventory.
- Easy opt-out contracts with hotels if not profitable.
- Few competitors.
- Low cost leader.
- Partnerships with Non-Profits.
- Limited investment capital.
- High-risk industry.
- Online trust issues.
- “Too good to be true” impression.
- Travel market is huge.
- Niche business – combines entertainment, shopping, and travel.
- Economy is down, people looking for savings.
Who advised you your idea isn't going to be successful and why didn't you listen to them?
- Confusion by new users as to how it works.
Very few people have said this wasn’t going to be a success. The biggest issue we’ve run across, pre-launch, was getting hotels to understand the model and how it benefits them.
There have been investors and others that have said that the travel industry won’t accept this model. We simply believed that the travel industry needs a fresh way to book, and people want to save money.
This is just a very fun, engaging, and exciting way to win a dream trip, and we knew that it would be a hit.
What is your success metric 12 months from now?
In 12 months, we would like to be hosting five auctions per day, with values of $500-$1500+ for each.
We would also like to be in all major cities in the US, and beginning our international expansion, and we want to be in the conversation with the major online travel sites.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.