Which (Online) Startup has potential?

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Permalink Reply by Andrej on February 24, 2010 at 11:42am

Hi Carsten,
Personally I like the Travel Research Service idea. I think there is genuine value to be added. In a way, this is really just a travel agency service - just using the up-to-date tools.
Significantly, the three or even four ideas are complementary. You can start any one of them and gradually add the other "functionalities". A Travel Concierge is perhaps just a more dressed up travel researcher and answering travel questions may be a good way to promote any of the other services.
Andrej

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Permalink Reply by Carsten Huebscher on February 24, 2010 at 11:54am

Hi Andre,

thanks for your thoughts! What Du you mean with "..using the up-to-date tools?" This service woul require human beings who surf the web for great deals and packages. Probably very hrad to manage it profitably, it`s a little bit the way travelzoo does his research. I know that there are al lot of metasearchsites and other automated sites which also deliver specific results.

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Permalink Reply by Bruce Greig on February 24, 2010 at 11:53am

(3) using StackExchange as the Q&A engine. Travellers ask questions about deals / tours / activities / recommendations; experts (other travellers, tour operators, whoever) answer them and build up reputation.

Revenue could come from allowing those experts with strong reputation, and with something to sell (tours, etc.), promote their product within their answers. Or sell access to proven local experts to people that need them (operators, other travel recruiters). And highly targetted advertising around the topic being asked.

(The original StackExchange site, StackOverflow, makes money giving IT recruiters access to those users (IT developers) who have already shown they are expert in their field by building up a high reputation score)

(Might not meet your no-investment criterion though. Hard to build up dominant site, and would have to be dominant to have ciritical mass, without $$$)

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Permalink Reply by Carsten Huebscher on February 24, 2010 at 12:10pm

Hi Bruce,

great advice. I thought about charging the potential traveler a small fee for real EXPERT advice (like justanswer charges the consumers looking for answers). The problem I see with this revenue model: Why shoul some pay for information which could be delivered for free on websites, forum etc. Think the only USP could be that the answers comme from real experts like agents, operators etc.

You are rigt with the investment part, but I didn`t think about setting up somethin like this with no money.
The most important thing would be to build up a community...that takes its time an money on advertising, SEO etc.

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Permalink Reply by Peter Syme on February 24, 2010 at 3:36pm

I reckon any subscription based travel service is going to be a very, very hard journey. The web correctly or wrongly gives everyone the perception they can find out everything for free.

A payment or subscription based research service targeting travel businesses may work in the B2B sector

Agree that a concierge service is just like a paid travel service, I have know a few try this and both faded to nothing

Given your restraints ie no significant investment and as important or maybe even more so only part time hours I would suggest identify a niche or a niche within a niche and then attack that as it is much easier to establish and then move on to dominate. The services you are suggesting target a very wide market and hence will require significant resource and time to be established.

Another option if you have the funding is to buy and existing outfit in a sector you are interested in and can see value in and grow it.

I have done both the purchase route and the start up route with different companies and I would always go purchase if the right deal can be struck

Regards

Peter

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Permalink Reply by Carsten Huebscher on February 24, 2010 at 3:45pm

Hi Peter,

interesting thought about buying an existing outfit. The thing in online travel ist mostly in the B2C sector that you have to relay on a transaction fee model, which requires a lot of traffic and the market is fully loaded with lots of competitors. Personally I´m also not a fan of the advertising model, but a lot of new online travel startups try tpoo do just this. Probably they hope to be bought in the near future.
Do you agree with that?

Which companies did you found and buy?

Carsten

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Permalink Reply by Peter Syme on February 24, 2010 at 11:51pm

The advertising model works but only if you are aiming really big and then you have to put significant resources in to make happen and it is still a huge risk as online advertising is a dynamic beast and can move very fast for good or bad!

The transaction model works if their is a market that is willing to pay , but that is getting harder and harder on the web as the free model is being pushed by so many companies it educates the market to expect for free , especially the B to C market

You really have to start with the end game in sight. What is the objective? To build a really big company and sell it ? To build a small to medium sized company that produces decent profits etc etc. Way to many do not consider these things when starting out.

Since 2003 I purchased the following

www.rafting.co.uk ( it was bust and needed a turnaround)
www.rannoch-adventure.co.uk
www.perthshirepaintball.com
Another company going through as we speak

Started as start ups
www.liquidlife.co.uk
www.moroccoadveturetours.com
www.aceadventures.co.uk

Unless it is a really really good opportunity I will only purchase going forward as start ups are very very hard and do not always represent the best value compared with purchase when you take in all the costs

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Permalink Reply by Alex Bainbridge on February 24, 2010 at 3:58pm

Hi Carsten,

Howabout coming and joining the TourCMS Marketplace as a partner - http://www.tourcms.com/mp/
You could build a nice niche tour operator meta-search site
Got some code examples http://www.tourcms.com/support/api/mp/examples.php
Easy :)

Re Q&A - Do follow what happened to Triplogy
http://www.tnooz.com/2010/02/03/news/tripology-loses-investor-halts...
(Although they are coming back now, good for them)

Q&A works but I would be tempted to make it based around questions going to ultimate suppliers - not to agents.

Subscription based travel service - tricky! (I know that from running one!). It also takes a *long* time to build something that people want to pay for.

What may be helpful to know is - are you a developer? A marketing guy? A web guy? That would help us steer you in the right direction

Thanks. Alex

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Permalink Reply by Carsten Huebscher on February 24, 2010 at 4:19pm

Hi Alex,

thanks so far. The idea behind tripology sounded pretty cool for me and the publicity they got is pretty much! But I don`t know about the potential because i heard they sold approx. 10000 leads to Travel Agents (each for 5 )..sounds not much in terms of revenue (the`ve got a funding of 1,5 Mio!).

Do you think dealing with travel agents is a hard way?

Personally I am a sales and marketing guy with a basic knowledge about the technology of portals etc. And the most important thing: I like to travel..;-)

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Permalink Reply by Alex Bainbridge on March 1, 2010 at 9:15pm

I think working with travel agents is great - but not AS great as working with end point suppliers.

End point suppliers have similar difficulties getting to consumers (via the web) but have larger product margins. Hence you can earn more from them to solve a similar problem - than helping an agent - who will only give you a tiny fraction of a percentage of their revenue - regardless how great you are

I still believe Tripology would have been more successful if they had worked more with destination suppliers - perhaps they did - I dunno - I wasn't watching that closely - but the current homepage is certainly all about travel agents - so that is what made me think they are about travel agents!

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Permalink Reply by Neil Lapping on February 25, 2010 at 9:38am

Hi Carsten,

I think the core question that you have to ask yourself about all your ideas is "Am I meeting a customer need and will they pay me for satisfying that need?".

Peter hits the nail on the head when he says that "The web correctly or wrongly gives everyone the perception they can find out everything for free." This is why so many travel start ups based on a subscription/advertising model have failed. They are trying to satisfy a need which can be satisfied for free elsewhere. Most of your ideas would seem to fall into this category.

I would also be very wary of setting up anything that relies on advertising from the travel trade as you will always be up against Google and their extremely high ROI that SEO and PPC offer.

Well, it was never going to be easy was it.

Best of luck.
Neil

There are a large number

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Permalink Reply by Carsten Huebscher on February 25, 2010 at 9:42am

Hi Neil,

thanks for your posts. It sounds there are almost no chances or possibilities in the online travel sector, right?

Or Do you see a segment where you see opportunities?

Carsten

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