The company was founded in November 2018 by former tour operator Christian Watts. The startup has financial backing from Viator founder Rod Cuthbert as well as Venture Republic.
Magpie Travel is a content management system for tours and activities. The startup enables suppliers to upload and manage their content while distributors can tap into the service and keep their listing up-to-date.
Describe both the business and technology aspects of your startup.
Before an end-user hits the book button to reserve a tour, attraction or activity, they spend time shopping through the product information displayed on sites like Expedia, Viator, GetYourGuide and hundreds of other resellers. That product info -- text and images -- is produced by operators and distributed to their reseller partners, but the process they use is clumsy, repetitive and prone to errors that result in loads of customer service issues. Larger OTAs have tackled the problem by implementing their own proprietary CMS systems and giving operators access -- the so-called “extranets” -- but each new extranet just increases the distribution and maintenance load on the operator. Magpie sits between the operators and their distribution channel, providing a single location to load and distribute their content from.
From a tech viewpoint, Magpie is a specialised CMS for tours and activities. It features a broad, flexible taxonomy that allows operator information to be mapped to the specific needs of each reseller. Future releases of Magpie will include direct API connections to OTA systems.
What inspired you to create this company?
There’s such a gaping hole in the market! Both tour operators and resellers are spending ridiculous amounts of time on tasks that are entirely repetitive; in other sectors of e-commerce this problem is solved by CMS and PIM systems, but no such solution exists for the tours & activities space. We’re stepping in to fill the gap.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
Because the founders are industry veterans, with many years experience on both the operator and reseller sides of the market, we have that “insider” advantage. And, we’re first to market with a 100% focused solution -- through there are a couple of other companies who offer some of our functionality as part of a larger product offering. We think that laser-focus is a real strength.
Our weakness is that with a small team and lots to do, it’s challenging to prioritise tasks.
The opportunity is huge: over 100,000 operators, most of whom recognise this problem as a very real challenge for their business.
Biggest threat: a larger competitor coming in from the PIM space with a product that can be modified to suit our industry.
What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
For operators: every time they add a reseller partner, they have an additional burden in terms of onboarding and maintenance of their product information. The complexity of this task and the associated costs become a disincentive to adding new distribution.
For resellers: Adding new operators and their products is tough; the content is supplied in many different formats, it’s often incomplete, and quality is patchy. As more resellers strive to load more product, there’s a real content crunch that Magpie can solve by making the production and distribution of content easier.
So you've got the product, now how will you get lots of customers?
We’re fortunate in that we know many, many operators; and many, many resellers! So we have personal connections to leverage; in addition, we’ll build relationships with OTAs and other tech companies which provide them with incentives to introduce Magpie to their own customer base. We’ll also be at each Arival Conference to do demo labs, and we’ll make product announcements via the accepted industry PR channels.
Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.
Our founder, Christian Watts, has 20 years experience as a tour operator; this is an issue he’s discussed with many operators over the last few years. We’ve also held detailed talks with resellers, for whom the problems are different but no less real. There’s no doubt this is a problem worth solving in our industry.
How and when will you make money?
Most operators will come on with the free service, but we will be actively enticing them onto our paid model, at $99/mo, with additional services. It’s a very standard Saas business model. We expect to see the first revenues flowing in from subscriptions by mid-year; until then we’re happy for everyone to be on the free or pilot plans.
What are the backgrounds and previous achievements of the founding team, and why do you have what it takes to succeed with this business?
Christian is well known as the founder and operator of City Sightseeing SF, an operator of some 20 years standing in San Francisco. Founding investor Rod Cuthbert was the founder, CEO and Chairman of Viator, the first and still the leading OTA in the tours and activities space. We think we’ll succeed by staying focused, maintaining the great relationships we have with so many friends and colleagues in the industry, and not trying to do too much too soon.
What's been the most difficult part of founding the business so far?
Working with our tech team, which is based in the Czech Republic, is challenging because of time zones. It means a lot of late nights / early mornings. But they’re a great team, know the industry well already, and have been continually responsive to our needs.
Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?
Well, this is a big problem that costs both side of the industry a lot of money. If we can help keep distribution costs down on both sides, it makes distribution more attractive. That’s good for everyone.
Phocuswright Research & Executive Roundtable: Experience This!
Hotelbeds, Booking.com, Musement and Touring Bird (Area 120 - Google) discuss tours and activities at Phocuswright Europe 2019.