If there's one thing travel startups like, it's sexiness. Not the raunchy kind, but something that sets them apart from the status quo and has some kind of wow factor. Or at least that's the aim.
As a studious reader of every Tnooz TLabs Showcase for the past year and a half, it's always great to read a startup trying to create a new market, kill an industry giant, or create a new sector entirely.
But what many startups know (or should know) is that their chances of success are small. And while it's always great to swing for the fences, it's often a great idea to play in the part of the field where few others are playing.
And in this industry, the field has many empty spots. But before we get into the where, let's take a look at the why.
Antiques = Profit
It's no secret that there's a ton of companies in travel which are based on tried (read: old) technology.
- Mainframes? Yeah, still plenty of those.
- Built on Active Server Pages? Yup.
- "Requires Internet Explorer"? It's out there.
The startup crowd out there might be thinking "So what? They'll eventually die and go away". But the interesting thing about a lot of these companies is that they consistently turn a tidy profit, and have been for decades.
Year after year, these antiques keep generating cash, with little or no innovation required.
Not what you were thinking
If you've been in travel for a while, you might be thinking I'm referring to GDSs. But there are tons of other sectors in travel that are ripe for some restoration. Here's a few on my list:
- Tour operator systems
- Hotel property management systems
- Meetings and conventions
- Ancillary products and services
- DMO systems
- Cruise systems
By no means comprehensive, the above list is just a sampling of sectors where large, established players are in what could best be described as maintenance mode. Old, antiquated systems with decades of patchwork offered for tens -- if not hundreds -- of thousands of dollars per install.
These are classic opportunities for startups, but few are successfully attacking them.
It doesn't have to be sexy
Why? Likely because these are sectors where there will be no Techcrunch love on your launch. No furious investor bidding for your first round of funding. No coverage in the travel section of your favorite media publication.
As a startup, would you be willing to trade all of that for a significant increase in your chance of success? If your answer is no, you should probably just start buying lottery tickets instead.
Sectors with low barriers to entry and incumbents that are funded by support contracts required by their blindingly complex systems are about as good as it gets for startups.
These opportunties are as boring and vanilla as it gets. As a startup, you can build a modern and competitive solution for one hundreth of the cost it took the established guys to build theirs. You can define your success by old fashioned selling - not having to get a million pageviews.
You can make a whole swath of customers happy that currently have no choice other than to buy expensive antiques.
Not just B2B
While the above examples mostly fall into the B2B category, don't assume that's where the opportunities end. There are numerous examples of B2B startups using tried and proven B2C methodologies to widen their markets.
Further, the lines between B2B and B2C are starting to blur across many other industries. Travel won't be an exception.
Cash money
And finally, you'll be able to work on converting paying customers. Your revenue model will be clear - whether SaaS/monthly or whatever you chose, you'll be counting on a tried and true model: People buying your stuff.
The glory of eyeballs, page views and tech blog coverage will be replaced with money in the bank. A pretty good trade-off.
How to get started
So, you may be convinced to take a crack at one of the above (or different) sectors. But where do you start?
I recommend following some of the guidelines I outlined a while ago in Life Lessons for Travel Startups, especially Lesson 1: Customer development.
Get out there, network, and find a customer of one of the dinosaurs in your chosen sector. Find out what's making them unhappy, and what features they've been missing.
Then, go out and find someone in a similar boat. Pretty soon, you'll start noticing some trends. The rest is all about iterating on your product and finding product/market fit.
Conclusion
I hope the above has inspired some thought and shines the light on some of the rather dusty nooks and crannies of the travel industry. Which sectors do you think could use a bit of startup love?
I'd love to hear your thoughts in the comments.