There’s Not Enough Innovation In Travel
Looking just at the growth rate of travel startups like Hipmunk offers a simple example of why innovation hasn’t reached it’s peak. You may like Hipmunk, you may not. What you can’t argue against is people are using it. $70k a day in sales very soon after launch is not something you can ignore. You can argue the novelty will wear off or you can argue it’s a fundamental change in how search is done. Regardless, customers are using it. That’s my point. What once was booked on X travel agency (or online agency) is now being booked on Hipmunk.
In retrospect, it’s not surprising. There hasn’t been a fundamental change in the to/from search box in years. Why is that? Have we reached the travel innovation plateau? Absolutely not.
Travel innovation is just getting started. It’s a great time to innovate in travel — but you have to do it right. There are different approaches to innovation depending on where you stand in the travel ecosystem (are you a new company or old? Is the innovation a feature or a business? Do you have a company to put the innovation to use on? Do you know how to bring the innovation to the masses?)
You don’t need to base your livelihood on investing in travel companies to realize this is the case. Though in fairness to my colleagues in travel, it’s hard to separate the trees (innovation) from the forest (the travel ecosystem) if you’re not doing it on a full time basis. Travel isn’t known for it’s innovation and limitless budgets and boundless budgets.
I had a few thoughts come to mind on what travel companies can do about the lack of innovation; sparked by Tom Tunguz’s post on “The single greatest reason for the failure of new ventures”.
Large Travel Companies
“Not to innovate is the single largest reason for the decline of existing organizations.”
Established companies don’t put enough time or money into new growth areas. They may even know the growth areas — social travel, location travel, all the things we invest in — but can’t find the time or mental bandwidth to act on it.
- Ideally take an investment in a promising travel startup. Work with a professional on identifying one if you aren’t sure.
- For the more savvy TMC’s, perhaps a skunkworks internal project that gets its own staff and budget led by a trusted member of the internal team. Maybe a mid-level manager or director that’s worth investing in who’s been yearning for extra time and money to pursue “the next big thing in travel”.
- If you can’t buy or invest in a company, become an early (beta) customer. Travel startups are always looking for early key customers to validate their business or revenue model, for feedback, for mentoring. Contact me if you’re a big shot somewhere and have an interest in doing this.
- Mentor these companies. Informal ‘help’ and advice and to be a sounding board will put a pep in your step if you’re an executive at a more stodgy travel company. Who knows, maybe you’ll like it enough to jump ship.
- Be on the Advisory Board or Board of Directors. You can choose a formal or informal structure that you’re most comfortable with.
- Contact me, I love matching travel companies with travel startups.
Travel startups face an entirely different scenario.
“Not to know how to manage is the single largest reason for the failure of new ventures.”
Which is worse, knowing you don’t know and doing nothing — the predicament large travel companies find themselves in — OR doing something in a way that is never going to succeed?
Two sides of the same coin but I’d much rather be in the first category. Yet the latter happens all the time in travel startups; particular ones without travel industry executives as founders.
Being outside of travel has it’s benefits but it also has it’s limitations. The problem is, most travel startups don’t know where the line is.
- Find a former travel executive to help you.
- Be open to new ideas and actually implement them; especially if you come across somebody who’s in the space you’re going after. If somebody from Meetings & Incentives tells your M&I travel startup will go nowhere, think long and hard if that’s true.
- Attend travel events and association meetings for your particular niche in travel.
- By all means, contact me.
- Find mentors through SCORE or through your contacts.
- Be prepared to give up equity based on how involved the executive will be.
I come across business models and revenue models and ‘next steps’ from travel startups that will never work. NEVER as in never ever. One step up are travel startups which follow a plan that may succeed but will take forever to do. Even when they get to the promise land (revenue, clients, customers, “traction”), I’ll all but guarantee it won’t be worth it.
The ones that avoid these landlines are the ones to watch (and in our case, invest in!).