STARTUP STAGE: Tango targets “mass affluent” travelers with AI-based booking platform

Tango

Tango combines artificial intelligence, machine learning and human curation to provide design, booking and servicing of hyper-personalized trips. 

The founders were formerly executives with Carnival Cruise line as well as several other large brands including WeWork, Old Navy/Gap, Nike and Audi.

What is your 30-second pitch to investors?

Tango is the OTA killer for the mass affluent traveler. We’ve re-imagined the travel marketplace and built a generative AI-native platform that designs, books and services hyper-personalized trips at scale, combining a beautiful digital UI with light human touch. Our successful beta has proven that travelers want to buy this way. Turns out, buying trips can be as inspiring as taking them. 

Describe both the business and technology aspects of your startup.

• Business

Tango’s journey-based commerce platform adapts to traveler’s different trip stages - from dream to book to anticipate to travel - and offers contextual, hyper-personalized options and destination-specific information, powered by a hybrid ensemble of generative artificial intelligence, machine learning and human experts. 

Initially, travelers answer our Trip Intent Quiz, based on the “OCEAN personality model.” After paying a fee, they receive a beautiful, personal Tango web app with a bespoke trip menu of curated stay and experience options and an asynchronous video from their advisor. Travelers can edit or book a complete trip in seconds. Prior to and during the trip, their Tango custom menu is continually updated with relevant, tailored add-ons, resulting in multiple booking cycles per trip.  

• Technology

The generative AI hype cycle has produced its first wave of UI skins on noisy foundation models with little meaningful success. Tango’s generative AI / ML ensemble approach is the new frontier. Our proprietary hyperlocal models are built with a corpus of trusted sources and trained by reinforcement learning from human feedback (RLHF). We’re generating not only high accuracy results, but also repeat & referral customers, in a way that allows us to rapidly scale. 

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

• Strength: We understand mass affluent travelers exceptionally well. We completely re-imagined their ideal trip purchasing experience - something that advances in AI / ML has allowed us to do. It’s not about incremental changes to a marketplace model - it’s about creating an entirely new paradigm in how we buy travel, one that prioritizes traveler delight. Having integrated generative AI / ML from day one, we’ve outpaced the hype cycle and created real business value by strategically applying automation that creates highly resonant, trusted outputs. 
• Weakness: We’re creating a new category, hyper-personalized commerce, that is neither an OTA nor a traditional agency. That makes us hard to describe at times! 
• Opportunities: While our product is B2C, we’re getting a lot of attractive interest in B2B applications from consortiums, DMOs, agencies, hotels and cruise lines. 
• Threats: We’re in “fast moving water” and firmly believe the traditional OTA buying experience will be relegated to MapQuest status in less than 24 months. As such, we’re moving fast to reinforce our leadership in this space!

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

• Traveler: People don't want more choices. They want confidence in the choices they make.
  
  That’s where Tango comes in. Travelers see trips as a horizontal experience that starts at the moment of ideation and lasts through execution (about one year to one month). OTAs meanwhile have verticalized the journey by narrowly focusing on the moment of individual bookings to capture the highest transaction value. In this model, they focus on increasing supply at low prices while relying on the travel attention economy to pump volume through their channels. In doing so, OTAs (and Google Search) have created “The Valley of Despair.” 
  
  We rescue the traveler from the travel attention economy’s “Valley of Despair,” where they are besieged by noisy, low-quality affiliate content, bot user-generated content, intrusive ads and limitless options. Instead, we take them on a journey that only surfaces personalized, curated, actionable, cohesive option sets that showcase a sense of place. We match these to their trip’s “why” and “how,” not just “what.” Importantly, we allow them to book multiple items, from stays to experiences to transfers, in seconds and are with them along the entire journey, providing support & services when needed.
• Industry: As part of our curation process, we bring visibility to high quality experiences from local small business owners who have a hard time standing out in the competitive marketplaces. We’re motivated to help keep the money in the destinations we're privileged to service. 
  
  Time and time again, our local partners inform us that Tango travelers arrive informed, confident and willing to spend money on high quality experiences. We also love partnering with luxury travel agencies and DMOs to help direct the right traveler to the right stay & experiences for them.   

So you've got the product, now how will you get lots of customers?

We already know that when travelers use Tango, they come back, tell their friends and share their Tango web apps widely, activating product-led growth. We segment our customers into flywheel target groups and tailor acquisition channels and messages accordingly.

Currently, we have a growing relationship with luxury travel advisors who turn away travelers who do not meet minimum spend thresholds. Not only do we help travel agencies monetize those leads, we also provide them with a valuable answer to the travelers who often qualify for their more white-glove services down the line. 

In terms of paid media, we focus on highly targeted look-a-likes of our core customer segments and their rich CRM profiles using a cost-efficient mar-tech stack. However, at this early stage of the business, we haven’t needed to lean heavily on paid search and social.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

We’ve been blown away by the interest in and results of our beta. There's a tremendous appetite for buying travel this way. Not only from within the US, but also from Europe and Asia.  We’ve also serviced a much broader age range - from early 30s to 70s - than originally anticipated. We estimate our TAM to be around 17% of U.S. and 12% of European households.  

How and when will you make money?

We launched with profitability and a clear business model in mind. We charge an upfront trip fee ($95, $125 & $600 tiers) and also earn commission from some of the hotels and experiences we book. 

Of note, not all our offerings are commissionable as we look to offer the best options for the traveler, period. We view trips as portfolios and our main goal is to have satisfied travelers who will not only return for their next trip, but refer us to their friends and family. We’re already seeing that flywheel take effect. Make sure travelers are thrilled and growth follows.     

What are the backgrounds and previous achievements of the founding team?

Most recently, Gaby Gonzalez Bux was vice president of member experience transformation for  WeWork, establishing the global NPS System and directing the C-level strategic retention initiatives. Prior to that role, Gaby was the vice president of digital and guest experience for Carnival Cruise Line for over 5 years, managing $500 million P&L across multiple platforms, from the site where cruises are booked, to the pre-trip site where experiences are sold, to all the digital interfaces onboard (including the award winning app). Her experience building Carnival’s journey-based data driven digital platforms, with a relentless focus on traveler satisfaction, is what inspired building Tango. She’s originally from Puerto Rico, spent part of her childhood in Thailand and has lived and worked across the U.S. and Europe, Middle East and Latin America.

Taylor Bux’s background is in brand, product and growth marketing, digital and operations in Europe, Asia and the Americas. He’s done this on the brand side: Carnival Cruise Line (vice president of brand and growth marketing) and Old Navy / Gap, Inc (director of digital, social and mobile marketing). In addition, his marketing agency portfolio includes industry leaders such as Nike, Converse, Audi, Cartier, J&J, FedEx and L’Oreal among many others. He sold his previous startup to a marketing conglomerate in Asia. Taylor is from Philadelphia and has lived and worked across the U.S., London and China. 

How have you addressed diversity and inclusion within your business?

As a remote first company, we have assembled a cross-functional team with members in the Philippines, Brazil, South Africa, Slovenia, Japan and Germany.  

From day one, we’ve looked for individuals with global and growth mindsets, who are open, kind and intentional and are (or seek to be) at the top in their respective fields. Across the board, these curious individuals are fiercely committed to helping our travelers have inspired and easy trips while building strong, sustainable relationships with local partners. Regardless of their roles, everyone has a seat at the table and actively impacts how our experience is built. 

What's been the most difficult part of founding the business so far?

Not the most difficult, but perhaps the most initially surprising for us… There's a lot of pessimism around travel startups! 

In the very early days, we had many conversations with senior veteran operators and investors who graciously cautioned us about the space given the “dead bodies”. But here’s the thing: when ideas keep coming back, it’s because the problems have not been solved!

Those early conversations inspired us to think critically about how we might solve traveler pain points within the physics of the industry. We sought to more deeply understand the traveler's problems, studied adjacent industries such as fashion and home design, and found a solution that was 100x better than the status quo and succeeded financially from day one.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

Luck is always a factor and timing is on our side. Expedia launched 30 years ago - when the Macarena was on the airways - and while whatwe buy has been disrupted (hello, Airbnb) how we buy travel hasn’t changed. Right now, with the advances in generative AI and the soaring demand for travel propelled by shifting work patterns, it’s hard to bet against a big disruption in the buying experience.  

So why us? Our backgrounds are in customer experience, marketing, business strategy, tech, data and operations and thus we come at the opportunity from multiple, holistic angles. We know our customer.  We understand the problem both as expats and travelers ourselves, and have also learned from the amazing travelers we support.  

We also understand the business physics necessary for Tango to succeed: low CAC, high baskets sizes and efficient operations. And we execute quickly. We know how to attract travelers efficiently, build world class digital products, use data ethically to personalize the experience, and run profitable operations with high performing, cross-functional teams on a limited budget. 

Finally, we feel very privileged to be able to pioneer AI in this space and build our platform natively versus integrate it into what was already built; we are incredibly inspired by the results to date. 

A year from now, what state do you think your startup will be in?

The theme for 2024 is to use our beta architecture and insights to expand our geographic footprint widely, servicing over 25 geographies, in order to support many thousands more travelers.  

What is your end-game? (Going public, acquisition, growing and staying private, etc.)

Our goal is to build a travel experience company millions of people love (not just like), and do so profitably and sustainably. We’re focused on that North Star and will evaluate opportunities with that lens in mind.