Getflight profile: exchange with Getflight founder Ian Cumming

Below is a Q&A exchange with Getflight.com.au founder Ian Cumming (pictured here on stage at WebInTravel). This is an instalment in my profile series on Australian travel search start-ups.

BOOT: Date founded

Cumming: January 2011

BOOT: Name of founders

Cumming: Ian Cumming

BOOT: Name of backers/investors

Cumming: Timothy O'Neil-Dunne (t2impact), Gill Hazel (travel industry advisor), Don Takaya (PR and media relations)

BOOT: How much money have you raised

Cumming: None.

BOOT: Description of the business

Cumming: Multi-channel distribution of sale airfares across web, social and email.

BOOT: What is the revenue model

Cumming: On the B2C side - Affiliate advertising (hotels, tours, car hire), and on the B2B side - Licensing of a white-label solution.

BOOT: Any success metrics you are happy to share (traffic levels, customer numbers, revenue numbers, number of searches)

Cumming: 8,723 alert subscriptions, 52,597 deals found, 268,652 deal alerts sent, 70,972 unique visitors, 47,935 searches to airline websites.

BOOT: Something you learnt along the way

Cumming: Online distribution of airfares is complex and innovation is in a stale-mate with the conversion rate.

BOOT: Something you wish you had done differently in launching a business

Cumming: Launched in an emerging market.

BOOT: What's next for the business. What are you working on that is exciting

Cumming: We are focused on developing a licensing model which allows OTAs to re-brand and integrate the GetFlight technology platform to increase distribution of their inventory and increase user engagement.

BOOT: Favourite non-travel website

Cumming:: readwriteweb.com

Flightfox profile: exchange with Flightfox founder Todd Sullivan

Below is a Q&A exchange with Flightfox.com founder Todd Sullivan (pictured here right on Mt Kilimanjaro with co-founder Lauren McLeod ). This is an instalment in my profile series on Australian travel search start-ups.

BOOT: Date founded

Sullivan: January 2012

BOOT: Name of founders

Sullivan: Todd Sullivan, Lauren McLeod

BOOT: Name of backers/investors

Sullivan: Startmate Startup Accelerator

BOOT: How much money have you raised

Sullivan: $25k to fund proof of concept

BOOT: Description of the business

Sullivan: Flightfox is human-powered flight search; we use humans to beat machines. For a finder's fee, flight experts all over the world compete against each other to find you the best flights. Unlike most flight search engines (and travel agents), our experts search all the major airlines, budget airlines, special offers, newsletters, forums, and frequent flyer programmes. They use their many years of flight "hacking" experience to route you through the best cities, get you on the best flights, and save you as much money as possible.

BOOT: What is the revenue model

Sullivan: We take a cut of the finder's fee, but with future investment we'll also generate commissions on flight bookings.

BOOT: Some examples of savings and interesting routings that people have comp up

Sullivan: Our most unusual trip was for a customer travelling with 3 cats. Of course, Expedia and Kayak don't cater to cats, and most travel agents will direct you to the airlines, but on Flightfox, our experts had experience travelling with pets and knew all the tips and tricks. For example, there are strict regulations regarding weather; in winter, many airlines restrict travel for pets. In terms of savings, we've saved people over $5,000 on complicated and premium class trips. Even on short domestic trips, our customers offload the searching to us and have peace of mind that our experts have found you the best price. On our average trip, which visits a few cities internationally, we save customers 27%.

BOOT: Any success metrics you are happy to share (traffic levels, customer numbers, revenue numbers, number of searches)

Sullivan: 5,000+ users and over $30,000 in finder's fees, all in our first 8 weeks since launching our beta product.

BOOT: Something you learnt along the way

Sullivan: Firstly, Startmate is the best decision we ever made. The pace at which we iterate and the access to successful mentors, seems to make start-up success so much more likely. Our other big lessons are all to do with marketplaces. But we're only a few weeks in, so I imagine we've barely scratched the surface.

BOOT: Something you wish you had done differently in launching a business

Sullivan: we'd learned many lessons from a previous travel start-up, so there's nothing significant this time. For example, this time we spent no effort on logos, business cards, company registration, SEO, social media, etc, until we'd proven the concept and had confidence in its sustainability.

BOOT: What's next for the business.

Sullivan: What are you working on that is exciting - we're currently raising a seed round of investment to catapult our growth. We don't necessarily need investment, but we have big plans and want to make the most of the opportunity. Specifically, we have a plan to multiply revenue per customer, but for that we need investment. We have pitch days in Melbourne (27th March), Sydney (30th March), then San Francisco (3rd April) and New York (17th April). Investors are more than welcome to contact us for more info.

BOOT: Favourite non-travel website

Sullivan: 99Designs.com

Adioso profile: exchange with Adioso founder Tom Howard

Here is a Q&A exchange with Adioso founder Tom Howard (pictured right with co-founder Fenn Bailey). This is an instalment in my profile series on Australian travel search start-ups.

BOOT: Date founded

Howard: January 2008

BOOT: Name of founders

Howard: Tom Howard and Fenn Bailey

Both of Melbourne, Australia

BOOT: Name of backers/investors

Y Combinator, Paul Buchheit (Gmail, Friendfeed, Facebook), Alexis Ohanian (Reddit, Hipmunk), Stephen Bartlett-Bragg (Qantas, Sabre, EB2) and a handful of other investors from Australia & Silicon Valley

BOOT:How much money have you raised

Howard: $380,000

BOOT: Description of the business

Howard: Adioso is a travel search & discovery site that allows you to:

- search without constraints on dates & destinations ("Sydney to South East Asia late May", or "Brisbane to anywhere under $400")

- 'follow" destinations and search phrases to receive alerts as soon as new inventory is found that matches your interests and budget

BOOT: What is the revenue model

Howard: Initially, commissions on transactions facilitated via the site.

Later, services to airlines and suppliers.

BOOT: Any success metrics you are happy to share (traffic levels, customer numbers, revenue numbers, number of searches)

Howard: We don't consider our traffic particularly boast-worthy at this stage, but our we're approaching 100K visits/month, and we refer about $2million/month in leads to airlines. We're expecting much more rapid growth in coming months once we start rolling out the new features we have in the pipeline.

Our favourite stats are:

- Avg session is > 8 minutes

- Average active visitor worth >$45 in referred airline revenue

- Our user-satisfaction survey told us that 95% of visitors would be at least somewhat disappointed if we didn't exist; 50% of those said they'd be very disappointed.

BOOT: Something you learnt along the way

Howard Travel's an awfully tough business for start-ups as you're up against decades-old technology and business practices. But if you can persist long enough to find a way through, the opportunities are vast and exciting.

BOOT: Something you wish you had done differently in launching a business

Howard: Though a lot has gone wrong, I wouldn't wish it to be any different. We'd be better off if we hadn't taken so long to get our back-end technology working properly, and sometimes I lament the 12-18 months we've been delayed due to going about that the wrong way.

But because of that challenge we've been forced to learn so much more about the fundamentals of the travel industry and of building a great company, and have had to do it on a shoestring budget, so overall we're much better off,

BOOT: What's next for the business. What are you working on that is exciting Howard: Just last week we turned on the new version of our site UI. It doesn't actually have any major functionality over the previous version, but it gives us a platform to start doing a lot more cool stuff.

We're in the process of finishing our new search platform, that will enable us to scale to handle global airline inventory, including full-service carriers via GDSs (to-date we've been limited to low-cost airlines).

We've been trialling a hotel search feature, using HotelsCombined and Airbnb as suppliers, and we'll soon be adding this into the new version of the app.

We've also been trialling our "following" feature, that allows people to subscribe to alerts on destinations, flights, hotels and activities that are of interest, and get highly focused notifications when relevant products and deals become available.

Finally, we've conceived a new approach to browsing, sorting and filtering search results, that is testing very well with users.

We're gearing up to start rolling out these features steadily over the next few months. We're pretty excited to get it all out there.

BOOT: Favourite non-travel website

Howard: HackerNews

BOOT: Where did your name come from

Howard: It was on a brainstorming list that Fenn came up with. "Adios!" seemed to nicely represent the idea of finding a cheap flight to an exotic destination and spontaneously taking off out of town.

We wanted something that was short, had the .com available, and wasn't overly literal like so many travel product names. Most of the discarded options were things like "Save-o-flight". I'm so glad we didn't go with something like that, and I'm surprised even today how many travel start-ups have these kinds of name

Revinate Sessions - talking social media monitoring with Revinates Michelle Wohl

In my annual predictions I called 2011 as the year in which social goes from an internet media platform to a core part of retail decision making through becoming part of the revolution in search and discovery.

I have published a series of posts around this theme. I published 5 tips for suppliers looking for an online social media strategy (via Tnooz), the role that social and other factors will play in the future of the Google search algorithm (also via Tnooz) and a PhoCusWright Innovation Summit piece on competition between start-ups Revinate and Trustyou to help companies search and monitor social media.

That post led me to virtual meeting with Michele Wohl (photo top left), Revinate’s VP of marketing. Michelle gave me a demonstration of the Revinate social media monitoring tool for hotels and we discussed social media, semantic reasoning, klout and more. Here is what we discussed

The Revinate Product

At first Wohl and I discussed the product. I like it. It needs a few more elements to be the complete package (see below) but I saw a very useful product for a hotel to understand what is going on in social media and user generated content around the hotel brand.

The product allows a hotel to track, monitor and respond to user generated content on site and social media platforms. Wohl spent 30 minutes taking me through what a typical hotel client (pty level or chain) can do with the tool. Basic tasks in the tool include:

• Monitoring and responding to reviews;
• Tracking commentary/updates through twitter; and
• Track consumer sentiment about a property and competing properties.

That is – an aggregation, tracking and social media monitoring tool.

It was some of the higher end features that impressed me including:

• “Add a ticket” and respond feature: A workflow management process that allows hotel to operationalise the information/review by assigning it to someone within the hotel and track the response. For example if the review or comment is about the restaurant it can be “ticketed” to the F&B manager to address. Very useful at bringing all elements of the property into the social media environment without over burdening staff;
• Filter and compare: The ability to filter commentary/reviews by various categories and themes. For example to see how often the “pool” at a particular property is mentioned compared to the pool at a competitor property. Allows the hotel to be able to see how they rate against a competitor at a feature and facility level, not just overall;
• Scorecard systems: Allowing data and trends to be compiled overtime and compared to competitors. Different time periods can be mapped against different competitors and different social media point. Creating the ability to set targets for staff members against measurable goals;
• Chains can roll up and deep dive: Chains can see whole of chain level and then rankings between individual properties helping to drive internal competition and improvements; and
• Pricing: The price of the product is based around the number of rooms and hotel ADR. It ranges from 1-3 times ADR per month. I like how Revinate have targeted the price of the product to be clearly measurable against a potential gain.

General Social media tips

Wohl and I also discussed some general tips and concepts around social media. Here were her tips:

1. Monitor before you create: much like the recommendations from my 5 tips for a hotel building a social media strategy Wohl says “First thing to do is the monitoring – find out what people are saying about you. Only then do let people know you are listening. Don’t sign up for Facebook or Twitter if there is no one there at the property to look after it”;
2. Respond to all reviews as long as the responses can be unique: On the question of responding to reviews, Wohl said it was critical that hotels reply to all reviews with unique responses. Even those from clearly contradictory (read mad but incoherent) consumers. She said “you are not responding to the person writing the review but the people reading it. Future bookers are making decisions to book based on management’s response to reviews and including that in their own post booking reviews.”; and
3. It is not all about TripAdvisor…but: Wohl was able to show me a series of real time client examples. In none of them was TripAdvisor responsible for more than 45% of the reviews out there on that property. Some as low as 23%. Put another way more than half of the reviews about those properties were on a site other than TripAdvisor.

More to do

As I say I like the product and it is useable right now against the volumes of UGC being created. However there is more that needs to be built to match the future quantity and iterations of content.

1. Authority/Klout measurement: There is nothing in the tool at present that prioritises one review/comment above another based on the authority/popularity/reach/klout of the creator. Wohl is aware of this and says this is one the product roadmap (update - Wohl has since told me that "Klout integration should be released in the next couple of weeks");
2. Sentiment analysis: Expanding the search, tagging and monitoring to determine whether or not the use of a word is in a positive or negative. For example is someone wrote “this hotel is the least romantic place” then being able to tell that this mention of the word “romantic” is a negative not a positive. Wohl says that volumes are manageable at present without semantic analysis ““Clients are not yet asking us for sentiment analysis as so far the review volume is manageable that they are focused on reading and responding to every review”. Clearly this volume management will not last for ever; and
3. Foreign languages: At the time we spoke the tool was tracking only English language reviews. Since we spoke - hotels can now request to have language reviews in their native (non-English) language fed into the system. The next step is the ability to combine information from foreign language and native language reviews. For example taking a foreign review that mentions the swimming pool and combining it with native language reviews in the aggregation tool. Wohl says this is "on the roadmap".

Wrap up

With social media there has to be a balance. Each dollar spent on social media is a dollar not spent on paid search. Each person hour spent on replying to a TripAdvisor review is an hour not spent on CRM analysis, on property client management, on managing an existing sales channel and other critical sale and customer retention activities. Now is the time for social media focus and work. But it is not the time for sacrificing online marketing and client management in favour of chasing every tweet down the endless social media rabbit hole. I like what I have seen in Revinate as a means for helping find that balance.

Any hoteliers out there with experience using Revinate or a competing product with any comments?

Dave Cunningham of OurExplorer on sale to Viator

Recently we read through Tnooz and TechCrunch that destination activity specialist Viator had bought human tour guide search and booking engine OurExplorer (press release here). Once the deal has closed, Viator will own the main assests of OurExplorer. An emerging start up brand and a rating system, search engine and booking functionality for 2,400 individual guides.

I had a chance last week to talk with OurExplorer founder and CEO Dave Cunningham about the sale process and what he learned as the boss of an online travel start-up. [for more background on the company see my 2008 interview with Dave]

BOOT: How was the sales process?

Cunningham: It took about fourteen weeks to complete. Six weeks of work in the background then eight weeks of due diligence to confirm the value and the legals.

BOOT: 14 weeks to do a deal – that’s quite quick?

Cunningham: It felt very long. For a small team due diligence is a lot of work. It is a massive risk as a start-up to engage in a sale process. The company we lost 10-15 weeks of growth in the process.

BOOT: What did you learn from the sale process that would benefit other start-ups?

Cunningham: Three steps to us building out OurExplorer

1. Build the platform an website
2. Establish the supplier base (guides); and
3. Build demand

Of these - do not underestimate how hard the work is to build out a supplier base. Need dedicated sales people – start-ups constantly underestimate how hard to get a quality supplier database. Only once you have a decent supplier base can you drive traffic – which is difficult enough.

I wish I’d had more paper evidence of supplier’s commitment. Both in terms of contracts and exclusivity. OurExplorer would have been worth a lot more with paperwork on supplier.

BOOT : Did you user a broker or advisor? If so, do you have any advice in using an advisor?

Dave: Yes. If getting biz broker to help – insist that they take less up front and more on the back end. This made it easier for us to see who had the contacts in the industry. We negotiated to double exit fees and reduce upfront. Any company that said yes to the deal provided us with confidence of the value of their network.

Too many start ups have the same number of companies on their power point deck as the exit. In Australia everyone has Fairfax [large AU media company] or News [News Ltd, the AU arm of News Corp] on their slides as a buyer. Need to have a profitability strategy in your plan. Cannot be reliant on a sale exit – especially in Australia where there are limited buyers.

BOOT: What are the integration plans with Viator?

Dave: Viator have confirmed that they will keep the brand. Viator had two options

1. integrate product – select the top 1000 or so guides (out of 2,400) and add them into the Viator product set; or
2. keep the OurExplorer brand and dedicate effort to grow the business and brand

Viator are doing both. Integrating and keeping brand alive. Viator have around 5,000 products. By adding 2,400 guides to the product list this is a big add.

BOOT: What’s next for you?

Cunningham: One job left. I am going to the World Tour Guide Association conference in January for a good quality hand over. Then done. Then looking to buy into another start up. To help them drive sales and marketing.

My Take

OurExplorer are the definition of the long tail in travel (I mean that in a good way). They are the first (that I know of) to provide searching, rating and booking of individual guides. I think it makes a good addition to Viator.

For my 2008 interview with Dave see this post

Thanks to Håkan Dahlström via Flickr for the photo

Tnooz: Zoombu introduces door to door search

Latest Tnooz post is live "Great way to search yet five big challenges for door-to-door site Zoombu". My thoughts on UK travel search start up Zoombu. Their product is one of the first to do “multimodal door-to-door search”. Check out my interview with founder Rachel Armitage, thoughts on the product and challenges they face. Full post here.

Introducing the "Tastegraph" - discussing recommendations with LikeCube's Emmanuel Marchal

After a post on Tnooz about non-destinational search I spoke with Emmanuel Marchal a Director of recommendation based B2B search provider LikeCube (Crunchbase profile here) about the future of travel search and the power of recommendations.

I have not doubt that the future of online travel is recommendations. Finding a way to give people a targeted recommendation based not only on their demographic or individual wants but on their wants at a particular moment in time. I call this my EveryYou principle (EveryYou definition here, more articles here). Developing a way to do micro targeting at scale.

Marchal's LikeCube is a B2B software as a services solution that purports to provide travel review and retail sites with targeted recommendations and search. His opening sales pitch for LikeCube is similar to that of any search site - give me your data and I will give you the best results for a search string. The LikeCube twist on traditional search is that answers are based not on links and page ranks but on the commonality between the likes and preferences of the content contributors. Marchal pitched this to me as targeting results based on the users "Tastegraph" rather "Sociograph". Instead of linking recommendations and results to the thoughts and feedback of those in the same social network as a user (sociograph), LikeCube targets recommendations and search results from those with the same likes and preferences of the user (tastegraph).

He gave two great examples of how standard approaches to reviews on a content or retail sites do not result in a useful recommendation. The first example was the reviews around TripAdvisor's Dirtiest Hotel of 2010 - the Heritage Marina Hotel in San Francisco. It won the "dirtiest" award in part because 174 of the 330 reviews ranked the hotel as "Terrible". Clearly - according to this rating - no one would ever want to stay there. But 48 of the reviews rated the hotel as "Very Good" or "Excellent". That means 15% of the reviewers of the dirtiest hotel of 2010 think the Heritage Marina is a fantastic place to stay and are keen to stay there again. People with different tastes and needs can see the same hotel in a very different light. Review sites are trying to manage these contradictions by helping users to refine a recommendation by reviewer demographics. The plan being to allow a consumer to see reviews only from people of the same demographics to maximise the chance of getting a recommendation form people with the same interests. This leads to Marchal's second example. He showed me two reviews for the same hotel on Booking.com. Both reviews were by people self classified as "young couples". One rated the hotel a four out of ten the other a nine point five. Additional classification and demographic criteria is not the answer to making reviews more relevant. As Marchal says (and I agree), these two examples highlight the need for a next generation of recommendation search.

That's the theory of LikeCube. I like the theory and enjoyed the conversion with Marchal. The challenge is seeing LikeCube in action. The first implementation of LikeCube is Qype ( a European Yelp clone).

Unfortunately as a B2B solution that requires access to a client's data source, it is impossible to review LikeCube in action outside an implementation. With only one implementation to view it is very hard to make an accurate assessment of LikeCube in action. In LikeCube's defence they only launched last November (at World Travel Mart).

LikeCube's challenge is not winning over people to the idea of targeted tastegraph based search results, it is building scale and proving that their technology can do what is promised. Winning more implementations and proving the case behind the technology (and as a result winning more implementations). Is the standard challenge for a B2B software start-up - made harder by the consumer facing nature of a LikeCube implementation. If they can do it then I predict this to be a very valuable space to be in.

Drew Patterson Interview - Jetsetter CEO talks to the BOOT

I have re-read the Tnooz predictions for 2010 to confirm but as best I can tell none of the online travel punderati mentioned online private sale companies in their predictions for 'what's hot 2010'. But if the buzz around Jetsetter, Voyage Prive, Kayak Private Sale and more is anything to go by then clearly we should have. After I wrote a post on Tnooz called "Non-transactional travel sites are chasing the online agents on unique product hunting" I decided to do some more investigating into this area. From that I had a chance to talk last week with Jetsetter CEO and ex-Kayaker Drew Patterson.

As a reminder, Jetsetter offers a selected list of limited time deals at high end travel product to a member only list. To get on the member list you have to be referred by another member.

My view on the business model is that it is interesting, exciting but niche. Has the potential to carve a luxury/targeted space in the online world (like Abercrombie & Kent have done offline). But it is not right to view this move as an "OTA killer". Much like boutique clothing stores have a place in the market but will never beat malls in terms of turnover and scale.

Priceline's Jeff Boyd seems to agree with me. He is quoted in a Dennis Schaal Tnooz post as saying that it believes it is "hard to see how they [private sale companies] will scale".

The clothing analogy is particularly apt case of Jetsetter as they are an offshoot of high end fashion private sale company Gilt. Jetsetter appears to be more than a division of Gilt but an independent but related company. Patterson put it this way "Gilt has capitalised Jetsetter". As well as money, Gilt has set up an "intercompany agreement regarding access to customers".

A number of benefits come from the Gilt relationship for Jetsetter. Firstly they get an insta-database of high end customers (Patterson says more than 1 million). Next they have insta-funding in that they (presumably) are getting their funding from Gilt via the $43mm raised from General Atlantic and Matrix Partners. Finally there would be some technology synergies in Gilt providing Jetsetter with insta-merchandising through a common content management architecture.

These point towards solving a lot of the distribution and establishment challenges that face a travel start-up. Leaving Patterson and team to focus on getting product/supply on the shelves.

Patterson has a clear cut vision for his supply strategy. He is not out to replicate the OTAs with the need to manage "10,000 partner, many with low volumes. We much prefer to focus on 8-9 live sales 0n the site." Hotel selection has to be very tight and controlled according to Patterson. They use a combination of "editorial judgement" from a "group of people from within the industry" and post- stay survey responses from members. Patterson says that the survey response result in partners being discarded and new ones selected.

He stuck to the consistent line that I saw in the TravelTrends post on Jetsetter of not disclosing the margins that are being charged to hotels. He confirms that it is not the standard 20-25% of the OTAs but is "more than healthy enough to run a business". It matches his Gilt customer base to target a limited number of high end products. With a focus as much on descriptions and content as rate.

The spot that Patterson and Jetsetter are targeting has parallels with some of my EveryYou posts and discussions on how to help consumers answer open ended questions in online travel search.

He sees editorial content as the key to helping consumers to discover and book high end product. Wants to be compared to publication and information sources Daily Candy and Urban Daddy rather than shopping sites. To be a "lifestyle publication as much as a travel company". He believes that "Consumers want an editor to help point them in the right direction." To be provided with "a sense of what is interesting in the world of travel. What places to go to . What is distinctive." Jetsetter what their role to be to tell "a very different story to 'here are deals in vegas'" that is market of the OTAs. He did not give much away on performance but did say that traffic in Feb 2010 was 40% up on Jan which was 40% up on Dec. With "revenue per member holding constant".

Patterson and Jetsetter have spent time and energy thinking through the business. They have money, a targeted niche and a customer base. All point towards potential success. To get to success I see two challenges for them to address.

Challenge 1 - turning retail customers into travel customers

The bad experiences of Amazon, eBay and Pricegrabber in travel have shown that that a retail database does not translate easily to travel sales. Patterson's view on this is that there is "enough congruence in the basic business model and customers" between Gilt and Jetsetter to provide Jetsetter with an advantage. That the high end product seeking customers of Gilt will transition from buying expensive clothes to expensive holidays.

Challenge 2 - generating scale (in sales and data)

The first of these (scale in sales) is not that big a deal. While targeted sales will never be as big as mass market, there is plenty of money to be made trying to be the Abercrombie and Kent of online travel. High per booking values make revenue per transaction healthy and customers can be very loyal. Keeping supply numbers tight means that per hotel volume should be high enough to keep suppliers interested. However scale in data could be more challenging. As I discuss in a number of my EveryYou posts the future of online travel is not just making targeted recommendations, it is adjusting those recommendations based on the different 'version' of the traveller that is making a request at a particular time. One person can be many different travellers depending on the trip (ie business travel vs leisure v VFR). To do that you need lots of data on a customer. More than I suspect you get in the tight supply context of Jetsetter. To move to a more powerful recommendation architecture will require Jetsetter to tap into other sources of data from Gilt and other places.

The biggest asset that Jetsetter has to overcome these challenges is the 1 million member Gilt database to start things off.

Steve Sherlock of Oodles: the search for funding and the deal with Wotif that almost happened

Car rental search site Oodles is part meta-search, part travel agent and part loyal program deal search site. The classic meta-search part is the ability for consumers to search multiple sites in one go. The travel agent part is that Oodles collects commission on paid bookings (when customer pays car company) not on a per click meta-search basis. The interesting loyalty program part is that if you give your Airline or Car frequent flyer number to Oodles, then they will add to the search results specialist loyalty program deals. Means that a person who is both a Velocity frequent flyer (Virgin Blue), Qantas Frequent Flyer and Hertz Gold Club member will see an integrated display including special deals from Europcar (Virgin partner), Avis (Qantas) and Hertz as well as other deals from Thrifty. This is a great and - as far as I can tell - a unique offering in car rental and meta-search generally.

I was talking about Oodles today with Founder and MD Steve Sherlock. Steve and Oodles are in the middle of a search for a new round of funding. In a true web 2.0 fashion Steve is blogging his way through the experience in series of "diary of an entrepreneur raising capital" entries over at the anthill website. Included is a story about how Oodles was almost acquired by Australian online travel giant Wotif.com. It is an interesting series of diary notes and a recommended read.

I like the different angle that Oodles has taken from others. Allows consumers to see a display of a combination of inventory (loyalty program discounted and regular) that I have not seen on any other online travel site. Oodles already have the car rental traffic lead in Australia so appear to be executing well. The challenge for them is the constant start-up problem in Australia - finding the funding to continue to feed the growth.

Interview with Joobili boss Jared Salter - Part 2 - timed search, refinement and turnips

This is part 2 of my interview with Jared Salter, CEO of time based travel discovery and inspiration company Joobili (pictured here to the right of Joobili Co-founder Tamas Gabor). In Part 1 we discussed the founding of the company including raising money in Budapest with just a powerpoint presentation. In this part Jared and I talk functionality, discovery and inspiration online and turnips.

BOOT: Your site starts of with a time based search rather than destination based search. You need a lot of data to provide consumers with information on every event and activity around the world. Where do you get the data from and how do you plan to get more?

Jared from Joobili: We started off by creating it in house with a team of writers scouring the web, collecting events and writing up. We needed to do this to get us started, however clearly there is a scalability issue with approach. Now we are partnering with local tourism offices to access their content. In this area there is a big advantage is being in Europe. We now have deals with 12 or13 European national tourist offices, 25 regional tourism boards and 75 plus local promoters. They have joined us Joobili pro members. We give them a back end to upload and manage events.

BOOT: Where are you in the evolution of the product?

Jared from Joobili: Very early. We only became visible to Google in the last month as we were so focused on the front end. I am not worried about this as I feel this is pretty common with start ups.

BOOT: A challenge with a discovery and inspiration site is to decide how to balance up front searching and refinement. How much to you request from the consumer before a search is conducted versus how much to you move the consumer information collection to the post search refinement stage. I could not help but notice that in a random search I have just conducted for Nov 11-18, the number one recommended event is the Raben-Chilibi Turnip Festival in Richterswil Switzerland. Clearly I will need to refine this search for there to be valuable information (not that I have anything against the Swiss or Turnips). How did you balance asking for information upfront versus refinement?

Jared from Joobili: It was a big internal debate and am not sure we have found the answer yet. We made the decision to err on the side of simplicity by having only a date search at the beginning. You might seem more filters on the front page in later versions but for launch we erred on simplicity with just time search up-front.

We will need a much need larger content base before pushing the filter angle and profiling. Paraphrasing TripAdvisor’s Marc Charron– when it comes to profiling “rather than figuring out who you are, it is about figuring out when you are”. Completely agree with your EveryYou idea. We are saying to the customer – “tell us when you are and then filter who you are”.

BOOT: Another challenge for a discovery and inspiration site is building customer loyalty. Getting the customer to use the product more than once. How have you through about the challenge of customer retention?

Jared from Joobili: According to Google, the online travel research process is 29 days from inspiration to book. Therefore we are planning to introduce a save search parameter. We know you want to go on holiday on a certain date – so we will let you save that search. We can then provide email notification any time a new event is added to the database. Or eventually build a recommendation engine based on that search parameter.

The next part will be integrating price into the results through partnerships with other sites. One other trend is that price is no longer the sole motivator as discounting becomes permanent. For example we have been working with Wizz air [Low cost carrier in Europe]. They offer a 50 euro flight to Rome. It is always 50 Euro. There is not longer an urgency around the discount or low price because they always a low price. Therefore Wizz need to match the cheap flight with time sensitive inspiration to build in a sense of urgency. Price is an extremely motivator for travel behaviour but it is becoming not enough to drive urgency in consumer behaviour.

BOOT: What else in online travel has you excited?

Jared from Joobili: I am so focused on the discovery space that I have not thought about other areas. Everyone is talking mobile and Augmented Reality which is going to going to be great and interesting. But there are fundamental issues with online travel that we have not yet figured out and discovery is one of them

BOOT: How radical do you think the change will be in how we search and book travel online? Are the big four Online Travel Agents facing the same sort of radical change and industry shift that the offline agents faced in the 1990s and if they are not careful the OTAs could be in real danger?

Jarend from Joobili This period of change is not exactly the same [as the 1990s early 2000s were for offline]. The big OTAs will not be the innovators in the industry but have such a controlling part of the pie. Joobili can innovate the discovery process but need the big guys to make the booking. We hope we generate more interest in the discovery stage.

This will be more than just about content – as consumers have to know what you are searching for. All of these sites are throwing in content for SEO benefits but still asking consumer to type in what they want. Is not about the content it is the interface or experience to help the consumer to discover something new.

My take and summary

I enjoyed this chat with Jared. Not least of which because it was good to get a European perspective on the travel discovery market. Joobili is still in seed stage so we need to be a little bit forgiving on the “turnip” result but it highlights that there is a lot of data collection and back end refinement/recommendation work that Joobili needs to do before the product is ready for any dramatic marketing investment. I think Jared knows this. For more on the challenges in starting a content company see my 3 rules for starting a UGC business.

Part 1 of the interview is here.

801 not out

Another 100 posts are live on the InterTubes. Time again for my regular "not out series" recap where I go through the last 100 posts and remind you of the themes that have been dominating the blog. I started almost three years ago with 101 not out and continued with 201, 301, 401, 501. 601, and 701 not out. This comes at a time that the BOOT passed the 100k visitor mark.

Two new segments for the Blog

• Seat Reviews including Qantas Economy, Qantas Premium Economy, JAL Business, BA Business, Singapore Raffles and United Business ; and
  
• Business traveller tips - what to pack, what to wear and getting through security.

Meta search action a-plenty which I tried to summarise in my post "Meta-search vs Online Travel Agents: the three main differences and why they matter"

• TripAdvisor launching air meta-search and received criticism (including from me) for allowing too many reviews from non-travellers
  
• Travelzoo launching Fly.com
• Kayak branching into content and review meta-search through expanded Travelpost
• Yahoo! went the other way and euthenased FareChase
• Cheapflights launched in Australia with a sub-par product
• Car meta-search company Oodles topped the car traffic numbers in Australia
• Sidestep founders came back with the oddly named Voyij
  

While also having time for Travel Discovery and Inspiration sites such as:

• event based search site Joobili
• the high profile Triporati
• data loving Tripbase

...and we found out how much Expedia paid for VirtualTourist and OneTime

BOOT interview mania with start ups and industry shakers

• Alfonso Castellano of TripSay (part 1 and 2)
• AsiaRoom came out of the closet, launched direct contracting and the BOOT found out more about them and their TUI ODS stable-mates including revenue numbers
  
• Jim Hornthal of Triporati
• Yen Lee of Uptake
• Reuven Levitt of Tripbase (part 1 and 2)
• Steve Hafner of Kayak
  

oh...and...a plane actually landed on water

Uptake CEO Yen Lee talks revenue plans, expansion plans and lessons learnt

Am on an interview roll here at BOOT HQ. To keep things going I thought it was time to catch up with Uptake CEO Yen Lee. Initially launched as Kango in 2007 with backing from Shasta Ventures Uptake is building a review meta-search business. They have a series of algorithms and search methodologies for collecting and analysing huge numbers of reviews for hotels and destinations (currently US only). They hit the news again in September last year having secured another round from Shasta just moments before the GFC entered our acronym dictionaries.

A year after the new round and four months after Kayak announced the expansion of Travelpost into review meta-search I wanted to find out from Yen how the company was going and what he thought about the market. Here is some of our exchange

BOOT: How is the business tracking?

Yen - four big milestones from the last twelve months:

1. 5,000 sites in the index;
2. Technology is working;
3. Raised the second round; and
4. Hit a million uniques in traffic.
   

BOOT: With 5,000 sites in the index and a significant traffic base is the focus now onto revenue, is the product ready?

Yen - want to increase the number of sites searched by 100-200 times. Beyond dramatically expanding the size of the index also want the display to be better customised based on consumer preferences.

Any other expansion plans? What about using ad networks to sell CPM campaigns for revenue raising

Yen - we are happy for now with the CPA model from click referral. Not under pressure to turn to ad networks and CPM. Areexploring expansion possibilities outside of English language but in no rush. Also to expand the product into destinations. Believes long term there is more money in destination activities than hotels. There is a third expansion plan but Yen would not share what is was.

BOOT: Has Kayak's Travelpost revamp left you worried? How about TripAdvisor?

Yen - would be flattering to think we are on radar of either of these companies [as a competitor]. Is convinced there is space for Uptake to take on both of them.

BOOT: Any worries about the fall in online advertising spend?

Yen - not really as not very close to it. Focused on CPA and lead generation revenue. While banner/brand spend is soft, performance based advertising continues to be very strong. Expects growth in CPA to be stronger than PPC as traffic is even more qualified than paid search.

BOOT: Now that you are through your early stages as a start-up what things have you learnt about launching a company and growing a business?

Yen - couple of things

1. There were some early staff members better suited to building prototypes and early products than for scaling the business. Learnt that it was OK to move people around and shed some people and move on;

2. Cash is king -"don't worry about dilution" and "if you have a choice don't spend a dollar"; and

3. Should have been more aggressive with the consumer experience part of the product. Were very aggressive on the search index and algorithms. Should have displayed the same aggression in building consumer experience and gotten to it three months earlier.

My Take on Uptake

I am not sure what it is about my most recent round of interviews with travel search and discovery sites. Like the others before him in this series Yen is sounding very confident and very relaxed. No furrowed brows and tough talk filled with reality checks and challenging growth plans. He has a comfort brought on from money in the bank and limited revenue pressure (or "lots of runway" as they say in the best Valley coffee houses). My guess is Uptake is actually more concerned about the Kayak move into review meta-search than they are letting on but Yen does have a product that is not only a year a ahead of Travelpost in functionality but most importantly a year ahead in terms of Google indexing. The meta-search model in reviews is not yet proven but the revenue model behind sending qualified leads to hotel companies and intermediaries is proven.

What do you think - is review meta-search a viable business? Can Uptake fight off product launches and marketing pushes from Kayak and TripAdvisor?

Tripbase CEO Reuven Levitt Interview Part 2 - tips for start-ups raising funds

This is Part 2 in my notes from an interview with Tripbase CEO Reuven Levitt. Part 1 was a review of the product and a discussion of the business of travel inspiration and discovery.

In this part I will share with you some of the interesting insights and comments from Levitt on this experiences in raising funding in the Valley. The trigger for the interview series was Tripbase securing $2 million in series A funding.

Tripbase is not the first time the Levitt has raised money for start-ups. In his last venture he raised $12 million through the "usual" VC routes. I asked him what advice he would have for other start-ups looking for cash. Here are his top three tips:

1. Build a prototype before you do anything else: To attract the two key elements to success (people and money) a start-up needs to build a proof of concept as quickly as possible. The fastest way to do that is to use open source technologies. It is very important to get "30%-50% of the way" to a product before looking for money. Levitt says that a lot of start ups hold back on doing a fast build of a prototype for fear that they will be copied. Levitt's view is that copying is not the area to worry about. He says there is more of a risk in going slow and hidden rather than fast and a little more open.
2. Bootstrapping is critical: Levitt could not over emphasise the importance of being tight with money as a start-up. The phrase he used regularly was "focus on spend". Putting this another way "Start ups do not tcome out of luxury. Investors need to see hunger."; and
   
3. Start-ups often look for funding in the wrong places: Levitt believes that "private people with deep pockets" are the best places to look for funding, rather than VCs. On location, there is "no comparison to being in the Valley" because "by sheer numbers you will meet people". The only draw back of the Valley is that "it is very competitive...lots of people competing for money...lots of options on where to invest".
   

Any other tips out there from other entrepreneurs? While writing up these notes I was also reminded of a post from Jeremy Liew of Valley VC group Lightspeed Ventures on Five things start ups must spend their money on.

Tripbase CEO Reuven Levitt Interview Part 1 - travel discovery, the travel genome and the magic of the slider

Am loving the recent run of interviews that I have been doing especially in the travel discovery and inspiration space. I have finally had a chance to write up my notes of an interview with Reuven Levitt of inspiration start up Tripbase. The interview and story came in part from my series of posts on the travel discovery and inspiration companies and part because Tripbase has just closed a round of series A funding, securing $2 million from private investors. I am going am going to do two posts on the interview. This first one will be on the company and the market. In part two I will share our discussion on start up fund raising.

What is Tripbase?

We have been talking on the BOOT about the different approaches that companies are choosing for generating recommendations. There is the criteria based selection process of Triporati, the event based selection of Joobili and the deal/price hunting approach of Voyij.

In Tripbase's case they have tried to distil trip recommendations critera to just five parameters - Nightlife, Dining, Shopping, Nature and Attractions. A search is then based on selecting your starting point (ie location), dates and (through using sliders) the relative positives and negatives of preferences the traveller has on each of the five parameters. For example I searched for a Spring (October) holiday from Sydney for a family of four with the following slider preferences hoping to reflect a "family" perspective (picture)

The initial recommendations in order were: Auckland, Brisbane, Canberra, Tokyo and Melbourne. [What is interesting about that is that the next trip I have booked for the family (Easter next year) is to the South Island of New Zealand].

Search results are one thing but it is the refinement that is critical for recommendations. There is a need for a balance - enough to allow the consumer to find what they want but not too much to be overwhelming. The main refinement available from Tripbase are budget, weather and continent (Levitt is promising more).

Here are the results (picture)

I like the idea of the price refinement. That said, I moved the value slider a lot and did not get presented with a much greater variety of recommendations.

Where did they idea come from, where does the data come from?

Levitt and the rest of the Tripbase team came to the travel recommendation area not from a travel background but from a history of computational biology and building recommendation engines in the biochemistry field. This led him to attempt to build a generic recommendation engine and commence work on taking that engine and modifying it for travel. As he described it to me Tripbase is made up of two components rather than one. The first is the data centre and information collection mechanism. The second is the Tripbase website itself which sits above the data centre, providing and interface for customers to access the information.

They call the data centre the Travel Genome Project (not to be confused with Triporati's Vacation Genome Project). Levitt is claiming the TGP indexes and scrapes over 3,000 websites and therefore up to 22 million reviews. As Levitt put it "we use artificial intelligence techniques to make "sense" of a destination" drawn from the huge number of data sources being scraped and searched. So while Triporati is using technology and people/editors hand in hand to determine the results, Tripbase is relying on computational data analysis to sort through the overwhelming amount of data available - including the need to estimate prices and costs.

Thoughts on the market and monetisation

He has plans for both elements of the product and there are clients for both. At this stage the plans for Tripbase are further distribution and customer experience refinement (ie general competition in the discovery and inspiration space). For the Travel Genome Project plans, he was keeping his cards close to his chest, not giving away too much. If it is true that he has with this product a unique (or near unique) way of indexing destination information then he has a powerful tool for distribution through partners. But was not sharing a plan as to how he would take advantage.

Tripbase are not yet focused on monetisation and are in no rush. Levitt says he is not under revenue pressure yet and he wants to get the product right first. He contrasts this to the Big Four (Expedia, Orbitz, Travelocity and Priceline) who he saw as struggling to innovate and grow because they are, as Levitt put it, "struggling to focus on costs and spend marketing money while trying to cut back on fees and keep the business growing"

My Take

The basis of the product is an automated way of indexing enormous amounts of travel data through algorithms that link descriptive data, price data and sorting criteria. Very interesting. But there is still much to do before the product is a hit. While the search process is easy, I found that the refinement process did not produce the variety of options that I would have expected. The search process was much less complicated than Triporati but the results from Triporati were more creative, unexpected and intriguing. That said, it is hard to say which recommendation I would actually be more likely to act on- the creative unexpected one (Triporati) or the proven more anticipated on (Tripbase). Also I liked the the "cost per day" and average hotel and flight cost information provided with each recommendation. The price estimations seemed very accurate (as far as I could tell) and varied with time of year/season.

Monetisation will be a challenge but not an impossible one. As Levitt admitted the travel inspiration business is a "distance away" from purchasing behaviour and therefore will take time to target to advertisers.

In summary the product has made a great start. Some challenges to overcome but I am definitely seeing some a very entertaining and competitive battle starting to emerge between the different discovery and inspiration players. Do you have any thoughts on this space and the emerging battle lines?

Update - part 2 of interview here

Alfonso Castellano Interview - on TripSay, content models and staying focused (part 2)

This is part two of my interview with TripSay’s new board member Alfonso Castellano. In part one of the interview Castellano and I talked through the online industry in general. We covered topics like the pressures confronting the OTAs (complexity, margin pressure, marketing costs), meta-search and the impacts of the global financial crisis (GFC).

In this part we talked about TripSay and the travel content model. Castellano believes that the next “ten year space” for travel is the 90%+ of the travel experience not captured by the OTAs – the discover, search, research and decision process that goes on before the trip and the collaboration, sharing and recording that goes on after the adventure.

His view is that TripSay will focus on the planning and sharing element using the traveller’s own community as the best resource.

Balancing UGC and Editorial Content

A challenge we discussed is finding the right balance between community generated content (UGC) and editorial content (see earlier discussions here and here). TripSay’s approach to this is to work with partners that have editorial content and combine with the TripSay community content. This does not mean doing a licence deal with a Frommers or Lonely Planet to white label the content on TripSay. Instead they propose to provide the TripSay as a white label community system for a travel company. TripSay provides the community content and platform, the distribution partner provides their traffic and editorial content. I like this idea. Giving travel companies like destination sites, tourism boards, tour operators etc to use TripSay in a software-as-a-service style model for launching a community structure. I see how this works towards a good balance between UGC and editorial content.

Monetising Travel Content Traffic

Castellano and I agree that if you can build travel content traffic (and make it sticky) then the advertising and paid traffic revenue will come. This places the monetisation pressure on the TripSay marketing team. On traffic acquisition, Castellano admitted that TripSay does not have a lot of money to buy traffic. Therefore the traffic plan combines with the biz development strategy for content acquisition. Using the partner deals for content generation to also drive traffic to TripSay. This will be driven through the acquisition of online affiliate partners but also through a push to sign up travel agents into a industry based community.

Focus and product development

The final challenge we discussed – which impacts all startups – is keeping the business focused on the product pipelines. In effect channelling the enthusiasm within the business. The GFC plays are role here too according to Castellano. Keeping an enthused entrepreneurial team focused on products that can make an immediate impact. Their hope is that they can do this faster and more nimbly than the larger companies.

I agree with these strategies but the main downside is that it places an involved (and complicated) biz dev obligation on TripSay. From my rules for content companies – this will take time. They will need great sales people and patience (read financial backing).

The last part that interested me was when asked about competitors he mentioned that the only other major player in the same space as TripSay is Travbuddy. I do not yet have my head around the distinctions between (or if there are distinctions between) the different travel content, review, planning, community etc sites. This came up in a comment in recent Tripwolf fund raising post. There clearly is some sort of categorisation between these sites but I have not figured it out yet. It is important to have categorisation because that helps with the development of competitor fighting and customer acquiring strategies. But done badly, categorisation can lead to the wrong focus – witness the distortions in parts of the online hotel sector in creating distinctions between last minute, full service, retail model, merchant model,etc when all consumers care about is booking a room. What do you think?

Alfonso Castellano Interview - current TripSay Board member, ex Travelocity and Lastminute (part 1)

Last week travel social network and planning site TripSay put out a press release announcing that former Travelocity Senior Vice President Alfonso Castellano (pictured) was joining the TripSay Board. Castellano spent nine years with lastminute/Travelocity and before than ten years with TUI. An impressive online travel resume.

I had a great chance to speak Alfonso last week about this new venture. This is the first in two posts from that discussion. In this post I will share with you the discussion we had around the online travel industry in general. In a later post will go through our discussions on TripSay and the travel content model.

Firstly to the OTAs

We started our conversation around the challenges facing the major online travel companies (OTAs). As Castellano said “Most [of the OTAs] are losing money in air” Castellano identified three themes/scenarios confronting OTAs today:

1. Complexity

The world is complex, the law, technology, fragmentation, environment, globalisation etc all ad complexity and with it costs to the big four OTAs (Expedia, Orbitz, Travelocity and Priceline).

According to Castellano, this globalisation investment bu the OTAs is not showing the benefits and gains in scale and volume and efficiency that were hoped. Instead this globalisation effort is bringing so much complexity that it is becoming a drag for the big four, placing increasing pressure on margins. Leading to theme 2…

2. Pressure on margin

Even in this economic demolition derby the OTAs are still under pressure from suppliers on margin. Castellano concedes that this pressure “might move a little now but underlying dynamic will remain. Car, air and even tour operators are becoming more and more discriminating in the on online channel.” This margin pressure is made worse due to the third theme…

3. Increasing cost of marketing

The global demand pressure will put pressure on margins but marketing costs will sill be there.

And….in a frightening prediction. Castellano is not surprised by the CEO changes recently “and am expecting more and more traumatic announcements out of the big four.”

Then to the Meta-search companies

He does not spare the bad news for other, newer players. Castellano also expressed views on the meta-search model. If we had talked months ago he would have said that the meta-search future was secured because meta-search supported the direct push by the suppliers.

Prior to this eco-madness (my words), the suppliers were able to be “discriminating about distribution”. Meta-search could play to this as “a marketing tool for supplier direct distribution rather than a complementary distribution” (ie unlike an agent). This meant suppliers could hold back from intermediaries. Today however, the “suppliers are running back to any player with distribution”. Castellano is expecting a shift “like the post 9/11 world”. Suppliers will be “desperate to pay for an extra bed to get back to profitability.” I found the discussion around the impacts on the industry of 9/11 versus this downturn very interesting. It was after the tragedy of 9/11 and resulting decimation in demand that the online merchant hotel business was born.

Finally to suppliers

I asked Castellano what advice he would give suppliers during this crisis to not repeat some of the mistakes of 2001 and 2002 where too much power was given to the intermediaries. He had even more grim news. This time for the suppliers (hoteliers). He sees a “fantastic future for hotel distribution for OTAs.” He goes on “If a hotel does not control big chunk of distribution today and is still dependent on high yield and hight cost distribution models [like agents]. It is too late, they have no room to maneuver. If they have not been building up distribution for the last 3 or 4 years, then the only option they [hoteliers] have is to keep ­ feeding the beast [online agents] then to come back and fight the bigger beast subsequently…Only a handful of hotel companies can get out of this.” Grim words indeed.

More from our discussion soon.