Both the transaction-oriented and traffic generation business models of online travel have made significant progress, but the battle is also shifting to earn trust at the top of the trip funnel. EyeforTravel’s Ritesh Gupta hears from mygola.com is going about it.
Big data and advanced algorithms are often the backbone or secret weapon behind travel start-ups’ promise to shake up the online travel ecosystem. This is especially true for those focused on improving the trip planning process.
So what gaps are start-ups trying to address and how uniquely are they are going about it? In the case of mygola.com, the plan is to help travellers with their itineraries. It sounds realistic as travellers do spend a lot of time working out their itineraries and what Mygola.com is promising is the ability to “create custom trips in 15 minutes”.
Mygola’s co-founder Anshuman Bapna says innovation for its own sake is not interesting, but should obtain legitimacy in response to a pain-point. “In that sense, to me the most interesting development is the emergence of a ‘third way’ in travel’,” he says. Historically, there have been only two ways of making money in travel - huge volumes of content (TripAdvisor, Google) or control of inventory (Expedia, Airbnb, Viator). “If you think about it, neither of these are readily accessible to start-ups without deep insights on some specific niche. And yet, there’s clear data out there that planning a trip is a mainstream activity that is highly inefficient,” says Bapna.
In response, a ‘third way’ is emerging. “You’d see start-ups like Utrip, Citybot, Touristeye and us battling it out with stalwarts like Yahoo Travel and Lonely Planet to be the first to solve this pain,” he say but its not clear yet if there’s a solid business model. What they have to do is figure out how to earn trust at the top of the trip funnel in order to become the gatekeeper for all transactions related to that trip, says Bapna, who has also worked with Google. “I expect 2013 to be the year when this will play out fully in the marketplace.”
EyeforTravel’s Ritesh Gupta spoke to Bapna about the challenges of carving a niche in this sector.
EFT: How challenging is to come up with a break-through offering?
AB: As an outsider, it was dismaying to me to see how closed the online travel ecosystem has been to upstart developers. For instance, licencing fees for data are ‘gigantinormous’. However, slowly but surely there is now accumulated sufficient data outside traditional travel players to make lots of new travel ideas finally possible. There’s Foursquare with its check in data and Flickr with an enormous pool of creative, common pictures, events sites with the latest listings and deals galore. There are newspaper articles and tonnes of blogs that yield, with a little data-mining help, fantastic insights into what travellers do.
In fact, our pivot into focusing on itineraries was prompted by this. Our customer interviews revealed that creating an itinerary is a ‘meta’ level problem that most travellers struggle with. By combining the data sources we were able to generate a new type of knowledge (ie: what’s the best trip to take when I’m travelling with kids to south of France?) that hadn’t been possible before.
This is a game-changer. It allows even start-ups to create proprietary knowledge that is not beholden to the industry giants.
EFT: Trip and booking behaviour is evolving. How do you plan to address this?
AB: At each stage, mobile is shuffling the deck. I personally don’t believe that online travel is moving wholesale to mobile devices as much as that there’s a much bigger expectation for anything to work cross-device. As in users could initiate up their destination research on the phone in the subway, sit down with their spouse on the sofa with an iPad in the evening and transact perhaps on the office laptop next morning. As an industry, we’ve so far responded in a predictable way - break up the core experience into atomic units (‘book a flight’) and deliver it in all form factors. However, there’s an interesting new possibility - to enable behaviours that have a natural need to ‘sync’ across platforms. Travel planning is one such behaviour, and one that we’re focused on solving.
EFT: So how did you identify the current pain points?
AB: We spent last year talking to hundreds of travellers for hours on end to understand what their pain points were. One of the biggest things that emerged was the utter lack of itineraries on the web for the independent traveller.
In fact, travellers had built extensive coping mechanisms for it - like going to tour operator sites to copy the itinerary structure there. Soon, we realised that there was something unique about itineraries - folks will do a lot of work creating one (typically in a spreadsheet), carry it with them on the trip (printed out) and then share it with friends when they are back (through emails and Facebook photos). So if some start-up cracked that nut, they could solve the most vexing business problem in online travel - the long purchase funnel. And as a bonus, they would end up with the most context around a user’s actual trip. That could then open up a beachhead into recommending the right local tours and activities, and a fantastic lead-generation platform.
That’s what we're focused on. On our site (at next.mygola.com, currently in private beta), we’ve created the world’s largest database of curated itineraries from the smartest global travellers. Using our patent-pending algorithms, you can then modify them at will and take them with you.
EFT: What would you term as the most intriguing battle in the online travel space today?
AB: The most intriguing battle to me is between curation and choice. The trajectory for the past decade had been that more is better - more flight options, more hotels to choose from. However, there’s a competing narrative building up now where editorial judgement reduces the choices to a much more manageable few - sort by ‘agony’ filter (Hipmunk), stay at these handchosen places (HotelTonight). I find this very interesting as an entrepreneur because neither the existing industry leaders (Priceline) nor the pretenders to the throne (Google) excel at this kind of stuff. This requires human judgement (not collaborative filtering, which is just a proxy for it) at scale.