Tech entrepreneur with a strong background in sales and a deep interest in business strategy, CEO and founder of Voyagu.
Technology is heavily disrupting the travel industry. Travelers are changing their habits and experiencing the world in new ways, and companies must be agile and evolve quickly to thrive in today’s increasingly-crowded marketplace.
The digital transition has opened up the field for innovative ideas from both established firms and newcomers. As tech-driven initiatives become more common, renowned travel brands have begun implementing the newest creative solutions, disrupting the market the way startups had been. For instance, Marriott provides customers with an advanced mobile app to enhance their travel experience and American Airlines addresses the key challenge of airfares distribution by investing in New Distribution Capability-powered channels.
To innovate without fearing a catastrophic failure, travel giants have advantages over new players due to their financial cushion, access to world-class talent, and large audience that they can leverage to test their ideas.
As a fledgling startup, it’s likely you don’t have the same resources. Launching the wrong product can lead your cash burn rate to unsustainable levels, and potentially mean a wipeout. Gauging your audience is tricky when your brand is not yet established and people are not available to give you feedback. However, the DNA of the startup founder is to transform threats and weaknesses into opportunities and strengths. As a travel disruptor, how can you find your edge when competing against giants?
Airbnb, one of the most valuable travel companies in the world, with a market cap of $68.60 billion, fought this battle at some point in time. It was a version of David that managed to beat Goliath, with the innovator going against industry norms. Also, Airbnb started out meeting a genuine need of millions of users and the founders themselves.
As a travel tech innovator who is bound to compete against giants, you first need to ensure you know your audience. This should be specific instead of trying to reach the whole market at once. You need to identify problems that big tech companies are not solving. TripLoop, an Austin-based travel tech startup, was born out of the founder’s need to have an efficient app to coordinate the group trips he was leading, and to solve the headaches that the lack of a centralized communications channel was causing him. No big platform was providing the solution he needed, so he developed his own.
Once you have this pressing need, admit that you won’t be able to fight big tech. To stand a chance in the market, laser focus is required. Your product should be super specific and have only the relevant features, as this will have a better impact on your target audience. Once you have defined your niche and found the right product-market fit, here are four principles to create a product that ignores established rules and meets the evolving needs of travelers.
1. Embrace ideas from different industries.
Steve Jobs borrowed core lessons from hospitality to create the Apple Store, one of them being the concept of the concierge desk, which led to the Genius Bar.
In the same way, you can apply this to travel. BlaBlaCar leveraged the sharing economy to fill up seats in cars that were already on the road. Couchsurfing found success by creating a community of travelers with similar interests.
There are more ideas that can be generated. For example, an app inspired by the features of a dating platform, which provides users with personalized recommendations and exclusive offers. Other possibilities are a fintech company that provides enhanced security and financial management tools for travelers, or a health tech startup that combines personalized travel experiences with health and wellness goals.
By combining the creative flow of different industries, you can accomplish a lot more.
2. Build a cross-functional dream team.
For a travel tech startup to succeed in today’s competitive environment, it needs a team that fosters cross-functional understanding across different areas of work. The future is unclear and it is better to have a well-rounded and agile team.
As you scale, you might need to narrow your focus and develop special-purpose teams, but for startups, a successful team is one that is integrated by marketers who understand coding and tech experts who understand the principles of storytelling. Similarly, you’ll need a collaborative travel culture, one in which leaders inspire their teams to innovate, even if it means that some proposals will fail.
Let’s recall Google’s “20% time” policy, which encourages employees to spend 20% of their workweek on projects of their own choosing. Having a diverse team can inspire fresh perspectives and result in winning travel-product ideas.
3. Ignore established industry news.
The industry landscape should be used as a reference point, rather than as a limiting factor. When considering the opinions of industry experts, see them as information, but not as decisive statements that predict whether a product will succeed or fail.
Remember, most disruptive ideas have been initially met with skepticism. SpaceX, a major force in the space industry, had trouble gaining credibility for its concept of developing reusable rockets. As Henry Ford is often credited with saying, “If I had asked people what they wanted, they would have said a faster horse.”
4. Don’t follow a standardized approach to pricing.
CitizenM, a hospitality company, pioneered a membership model that was previously unheard of in the hotel industry. Through their membership, subscribers get access to exclusive perks and fixed rates.
This shows how emerging travel companies can differentiate themselves from industry norms. By pioneering new monetization avenues, companies can offer customized pricing options to individual customers and move away from fixed pricing models that are based on archaic factors like travel seasonality.
Since customer behavior is changing, and travelers have increased flexibility, the drivers of pricing in the sector also need to change, and this opens up significant opportunities.
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