Setting up any startup is about breaking rules and having the confidence that you are right and the tenacity to see it through to reality.
Entrepreneurs tend to be passionate people and suggesting someone is wrong or their vision could be improved is the fastest way to get yourself considered as negative, arrogant or worse.
Having said that, there are still some common themes that I use to evaluate whether a proposed business, in particular in the tours/activities/inspiration sector, makes sense.
[Feel free to throw stones in my direction]
1. Inbound trumps outbound IF trust can be generated between customer and incoming supplier
For example UK customers will book straight with a NZ based company (agent/operator) if going to NZ (rather than an outbound, UK based, travel agent).
2. Suppliers trump agents/distributors
This is especially the case when selling complex multi-day tours (hence metasearch more likely to win long term vs distributed transactions where the sale takes place on a 3rd party website)
3. Curation trumps aggregation
Its a very low barrier to entry to setup as a tour guide or a tour operator (much lower than to setup a hotel or an airline). Curation therefore is key.
Curation requires product/destination knowledge to be done right. If you are going to aggregate you need to have the balls to say when a supplier or product is rubbish (or use consumer reviews to do that for you)
4. Don't overcomplicate inspiration functionality on your website
The product is inherently inspirational - let it shine. Instead focus on tools that aid product comparision and let the product do the inspiration rather than the UI. Video works too.
5. Customers rarely travel to the same destination regularly
Hence CRM and long term relationship building using social layers much less useful than in chain hotels / airlines (where a longer term multi transaction relationship can be built up).
Tough therefore to build a communitiy around your website (NOTE: Tough, not impossible)
6. In multi-day tours, efficiency trumps automation - in day tours, automation trumps efficiency
Understand that they are not the same and require a quite different approach technically, marketing wise and in how you can create partnerships for onward distribution.
For example automation indicates commoditised product, efficiency is much more about human tailor making services in a clever way.
7. Be aware of agent requirements
Agents of small tour operators (who will create a sale every few weeks) will never learn your product sufficiently to have confidence to sell without contacting you.
Therefore when planning an agent interface, unless they are a high volume agent, consider their needs just like a consumers coming to a product for the first time.
8. Don't launch a startup without thinking about the industry foundations on which it is built
Very easy to build a website in a month that looks great but has stale / poor / limited data or doesn't have an automated feedback loop to keep data constantly correct.
Data is the rock on which you can build a startup with value. Better to have a smaller number of products where you have great data on than hundreds of products where it is just a listing.
You can build a business without solid foundations, but a funded startup needs to solve a problem in a way that scales in order to attain the ultimate value that taking funding needs.
9. Don't get distracted by products that never sell
This sector is unique in that you can create products (eg. tour itineraries) that never sell. They sit there on websites and don't do much (except attract a few search engine visitors who then buy your core tours).
Airlines, hotels etc when they are featured on travel websites tend to only list products that exist! Bear that in mind when counting tours on a website etc or conducting market research into a new destination.
10. Don't reinvent the wheel
The hotel/airline distribution verticals have already addressed many of the distribution issues that we are just hitting in tours/activities.
Not enough people in tours/activities have spent any time in hotel/airline distribution so there does tend to be quite a bit of wheel invention going on....
Summing up...
These rules may not be right for every situation but breaking them should be a conscious and considered decision rather than made accidentally.
What other fundamental rules have I missed?
