In The Big Chair - Ross Veitch of Wego

Wego operates with two models: traditional metasearch, with customers booking on supplier sites, and also direct booking on Wego for some of your partners. What’s the breakdown of those two models and where do you see that going in the future?

We’re about 70 to 75% mobile app now. We think of Wego as a marketplace, and the inspiration really is Taobao, Amazon. It’s one of our objectives to get as much of the bookings done without the user having the leave our app. Even for the click-off partners at the moment, we are basically handing off to a mobile web version within our web view.

These transactions are happening on our partners' own websites, but it’s still within the Wego app. We are working to improve that and make it a little less clunky. It’s less than 20% of the total today, but I’d like it to be the overwhelming majority within 12 to 18 months.

What we are trying to do is allow the user to register with us once, give us their payment credentials once, all their travel itinerary information that they are banging in over and over again once and then it’s a couple of clicks to fill in a booking form with any of our partners. There’s about a thousand of them on the platform now.

When we spoke about a year ago you mentioned that, for those direct bookings, Wego needs to continue to develop its payment mechanisms and things like fraud prevention and also loyalty. Tell us what’s happening there.

A lot of that is still very much under development. We are trying to screen out fraud across the whole marketplace regardless of the booking mechanism. Whether we’re doing click-outs to partners or integrated booking, we would like to filter out bad actors.

So we’re plugging in a bunch of third parties to see what we can learn, but we’re also developing our own systems. We see most of our users in the app, so we collect data from those users over years. We think we’re in a pretty good position to figure out who is a legitimate customer and who isn’t.

In the past you’ve said that in hindsight you may have been “too early” in Southeast Asia – the consumer economics weren’t strong enough to support. Why is that and is the region more suitable now?

We’re running a marketplace business and for it to really work, you need a critical mass of sellers operating at scale. That didn’t exist 15 years ago when we started. But I think that’s definitely true of most of Southeast Asia today, so we’re excited about the opportunity ahead of us here.

We’ve got partnerships with all the significant players in the region. And in pretty much every country, there’s nice healthy tension between the local guys, the regional guys, the guys coming down from China or Japan, the States, Europe. It’s healthy competition.

Those are the necessary preconditions for the meta or marketplace model to flourish. We took away some of the resources from Asia about five years ago and sort of went all in on MENA. We’ve gotten that up to a nice scale and it’s nicely profitable. So we’re taking some of those profits and reinvesting to scale up Southeast Asia. And India actually.

In 2012, you expanded Wego into the Middle East. What portion of your business does that region now provide?

More than half. It hasn’t slowed down. The business overall this year we’re at about 62% top line year to date, the year-over-year. We’re aiming for 65% overall global. Growing pretty fast. Not too many online travel businesses are growing that fast.

Any complications for you with some of the political challenges in the Middle East?

I spend a lot of my time keep track of what’s happening with geo-politics. Operating in the Middle East is never dull. We basically stay out of politics, but we are very aware of what’s going on. We are big across the region, so within the region we are diversified - which is good - both by country, but also across the different nationalities that are resident in most of the big countries.

It’s interesting - in the whole time we’ve been operating in the Middle East, there’s been instability or wars going on in one place or another, but life goes on.

Wego has partnerships with several tourism boards - in Great Britain, Thailand, Oman, Jordan, Singapore, Azerbaijan. What services are you providing these organizations and what are you getting in return?

Tourism boards have always worked with travel agencies. The traditional model is they each put some money in a pool and do some marketing of the destination and drive people to the agency to book. So we took that basic idea and evolved it for the digital age.

We partner with the destination, and we create content, we take assets from the tourism board and we increase awareness for the destination, drive interest in it. We do that by retargeting our audience, with ads on Wego, we do it through third-party platforms like Facebook, Instagram, Snap, there’s a whole bunch of influencers we work with. So we are stimulating interest in the destinations and then we drive them to Wego to convert.

It’s like up upper funnel and lower funnel. Tourism boards like working with us because we are neutral. We work with all of their stakeholders - the hoteliers, the OTAs, the airlines - and we provide them with tons of data. We can tell them how many visitors came, what they paid, where they stayed, economic value for the campaign. We give them an audience pool to retarget against.

Their stakeholders can use the same audience pool. It’s win-win. We do it because it keeps Wego top-of-mind. We’ve been doing it for five, six years now; there’s probably two dozen tourism boards we’ve been working with for the last 12 months.

Looking ahead, are you more focused on partnerships such as these and possibly geographic expansion, or are you prioritizing new product features and updates?

We have a very packed product roadmap. I’ve got stuff on there that goes out to about five years. I think of it in two dimensions. There’s new types of travel products. I would like Wego to be one-stop shop. We do flights and hotels today. We’re in the process of adding everything else we think travelers want to buy.

And then while we are adding more types of products, we are trying to make more of those actually bookable without leaving the platform. We have a huge backlog of partners, we are just working through the API integration processes with them.

Geographically, we are not actually adding new markets, but we are just scaling up some of the markets we are already in. So you’ll see a lot more of us in Southeast Asia this year and next year. India is actually one of our fastest-growing markets. We’ve done about 250% year-over-year in India, off a smallish base but it’s growing fast and it’s profitable.

And then partnerships are a big part of our strategy. We’ve always had very successful partnerships with some of the mobile handset manufacturers, so we work with them to pre-load Wego when you buy a new phone.

How do you think about customer acquisition, given the size and marketing war chests of the competition in the online travel agency world?

We try to be differentiated in our approach to customer acquisition compared to our OTA partners. We do some Google SEM, but we invest a lot in our brand. So we do a lot of TV advertising. We work with the mobile handset manufacturers to make sure Wego is preloaded when you buy a phone. We work closely with Google and Apple and the other app stores to make sure Wego is top-of-mind.

Something like 85% of our sessions are coming from unpaid channels at them moment. These are people who already either have the app installed, or they are typing in Wego to their web browser. So they’ve got a relationship with us already and they are coming directly to us. It’s not like we are competing with our partners in the same channels.

It’s also a conscious strategy to differentiate to make sure we are not dependent on Google for traffic. Google is clearly coming into the travel search and now booking game. It would be crazy to be dependent on someone who is clearly competing against us for users.

I look at our marketing spend every month, there are probably 50 different channels we are using. I deliberately staff our marketing team so we can try a lot of different things. We run a lot of experiments. We are relatively quick and nimble. When we find something that works, we are able to scale it up quickly. I like to think we are ahead of the pack - if everybody’s doing it we probably want to be doing something else.

We’re continually hearing about the rise of super apps, particularly in Southeast Asia. Would you consider partnering with one of them to power their travel?

Absolutely. When I think of the super app you really break it down so there’s the chat platforms: WeChat, Line, Facebook Messenger. These are all interesting candidates. Then there’s the payments players. Then there’s the ride-hailing guys.

So anybody who’s got a tight relationship with a user, high frequency, they’ve already got payment credentials on the platform and they know who they are - they’ve gone through some sort of ID or registration process - then they are in a very palatable position to start layering on other services. So absolutely we’d consider partnerships with all these people.

Most of them are smart enough to not try to do travel directly themselves, so partnering is the model most of them have in mind. I think of them in a similar position today to the old horizontal models from 20 years ago. I cut my teeth at Yahoo!. Back in the day, any service would come to us and we’d cut a deal and white label it or integrate it in some shape or form, and there’d be some sort of revenue share or payment. This is similar. The gatekeepers are changing, but the models are the same.

Is there an IPO in your future?

Quite possibly. I’m running the company to give us the possibility of going public something like a 2022 time frame. I think we will be at the scale where that would make sense.

All the great online travel companies in the world, most of them trade on NASDAQ or the New York Stock Exchange, so that’s what we’ve got our eye on. But you need to be at a certain scale for that to make sense. So we’ve got a couple years of growth ahead of us to do it.

We’re keeping our options open. We’re growing fast, we’re profitable. We’re the biggest marketplace across the Middle East, which is actually the fastest-growing region in the world. So lots of good options.

You've sat through many a pitch competition over years. What's your general analysis of the quality of new businesses coming into the industry? 

It’s hard to generalize. By the time we get to those that are shortlisted to pitch here at WIT, a lot of the weaker ones are weeded out. So there’s a bit of a selection bias there. People are still finding interesting niches, but there are very few people trying to wholesale take over the roles of the current gatekeepers.

A lot of the newer startups are thinking partner from day one instead of coming at the incumbents head on. That’s probably smart I think. But there’s lot of different models. There’s still lots of value to be created in travel for enterprising people.

[Compared to the U.S.] on this side of the Pacific, things are changing a lot faster. And in many markets, like Indonesia - it’s big, there’s a lot of capital that has gone into it, there’s some really great companies being created, but it’s still relatively early in the bigger scheme of things. I mean India is relatively early in the bigger scheme of things.

Now nearly 15 years in, what have you learned that might be helpful to founders that are just trying to get off the ground today?

My meta advice would be take advice from everybody but take it all with a big pinch of salt. The world has changed a lot over 15 years. For most tech startups today, I wouldn’t even bother going to talk to investors until I’ve built my version one and gotten serious traction with users. I think you’re just wasting your time.

If it’s your first startup, pick something you can bootstrap so you’re not completely dependent on raising outside capital. Find people that have done it before, pick their brains but take the advice with a big pinch of salt. You’ll often find advice is conflicting, coming from different perspectives.

And timing and luck count for a lot. Idea and team are important but being lucky and being in the right place at the right time is also as important. And if you are reading the tech press, you should always keep in mind that there’s a survivor bias built in. So all the companies that get the most ink A) survived and B) are probably the rocket ships.

I’d encourage anybody who’s a founder to find yourself a couple of other founders, ideally co-located so you’ve got somebody else who’s going through something maybe similar to you that you can unload on and ask for advice. Spouses, families, your employees are not necessarily going to understand, and it’s not always going to be appropriate. People who are trying to do something similar - I’ve found that useful.