“The future is already here; it’s just not very evenly distributed.” — William Gibson (science fiction author)
From how to identify valuable startup insights to the nature of tech predictions to the rise of meme apps. I hope you enjoy this week’s newsletter,
Thank you to Propellic for sponsoring this newsletter.
Travel marketing has evolved rapidly post-pandemic, but travel companies haven’t kept up. Wasted budgets, marketing that doesn’t align with traveler intent, over-reliance on a single channel, and reporting on vanity metrics – it’s a mess. Here’s the deal: it doesn’t need to be that way. Explore travel industry-leading travel SEO & Paid Media consulting with Propellic. Schedule a free performance marketing audit today.
0. The most clicked link in the previous newsletter
The most clicked link in Travel Tech Essentialist #149 was Chip Conley’s best places to visit by month.
1. Identifying breakthrough startup ideas
Mike Maples, Jr is one of the most successful startup investors. He’s worked with more early-stage startups than almost anyone alive, and his fund, Floodgate, helped pioneer seed-stage investing as a category.
His book, Pattern Breakers, offers a great inside view into the elements that distinguish groundbreaking startups and founders based on his decades of notes, decks, and founder relationships.
Maples identifies three key elements of great startup ideas:
-
Inflections: external events that create the potential for radical change in how people think, feel, and act
-
Insights: Non-obvious truths about how a start-up can harness one or more inflections to change human capacities or behaviors in a radical way. (Obvious truths don’t count. For example, an AI co-pilot interface for Microsoft Excel might be very valuable for users, but it’s not an insight because Microsoft is already highly likely to implement such a feature)
-
Founder-future fit: An alignment between the founders and the future they envision, including their skills, motivations, and network
He suggests a way to “stress test” insights by framing them on what inflections they are based on, why they are non-consensus, why the timing is right, and how they fit in the future. For example, let’s stress-test Airbnb’s insight as if we were back in 2008 (with the benefit of 20/20 hindsight) based on Mike’s model:
The Insight:
People will trust that they can book rooms with locals, in the same way they trust booking with hotels.
The different future that the insight makes possible:
People will be able to book rooms with locals. Travelers will find this empowering both because price is an important concern, and because hotels leave you disconnected from a city and its culture. Hosts will find it empowering because it will be a new way to make money.
The inflections that enable the insight:
– Facebook Connect 3rd party APIs, which allow people to interact with strangers before personal information was available.
– Online ratings and reviews are increasingly becoming an acceptable substitute for the trust that requires a mainstream brand.
– The 2008 financial crisis created a strong desire for travelers to save money and for property owners to find new ways to make money and pay for their existing mortgages.
The reason it’s non-consensus:
Most people think staying in a stranger’s house is unsafe.
Why it’s right:
The inflections described will overcome the trust barrier for both renters and hosts.
Why is the timing right:
Ratings and reviews have been gathering steam. The introduction of Facebook Connect, combined with the financial crisis, will create the conditions for this new way of booking rooms to take hold.
2. Bad predictions
When considering the future, be cautious of expert predictions, especially from those who make a living by opining. As for industry players inside the arena, always consider their incentives.
The internet will fade away because most people have nothing to say to each other. By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s — Paul Krugman, New York Times Opinion columnist in 1998
The internet is destroying travel agents. By 2005 travel agents will be gone. The Economist in 2000
Apple will probably never come out with a cell phone — David Pogue, The New York Times in 2006
There’s no chance that the iPhone is going to get any significant market share. No chance — Former Microsoft CEO Steve Ballmer, in 2007
The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is cloud? It’s complete gibberish. It’s insane. — Larry Ellison, Oracle Founder and Chairman, in 2008
In the early 1980s, McKinsey recommended that AT&T not enter the cell phone business, as it would be “niche” with a size not exceeding 900,000 subscribers because “handsets were absurdly heavy, the batteries kept running out, the coverage was patchy, and the cost per minute was exorbitant.” AT&T paid for the mistake: In 1993, it spent $12.6B to acquire McCaw Cellular. In 2000, about 900,000 cell phone subscribers joined every day.
3. The rise of meme apps
Andrew Chen talks about the phenomenon of “meme apps”: viral, single-use experiences that are easily shared on social media and fade as fast as they rise.
Chen explains that technology allows us to make app development faster and easier, leading to an influx of these meme apps that have these elements in common: instant engagement (as these apps are designed to grab users’ attention immediately to satisfy the social media crowd looking for quick dopamine hits), short lifespan due to high user churn rates, and retention issues (as these meme apps lack sustainable growth strategies).
Chen recommends:
-
Focusing on products that retain a core segment of paying customers even after the initial viral surge.
-
Recognizing that the initial excitement around new tech (like AI-generated content) will fade and that companies will need to market their products beyond the novelty.
-
Looking at successful models that integrate collaboration features and existing workflows to create lasting value.
-
Understanding the potential of creating numerous fun, “zeitgeist-capturing” apps, and considering how they might evolve into platforms.
4. Booking’s possible strategic responses to hotel price disparities
Booking.com recently eliminated the price parity clause in the European Union. This opinion article by Francesco Canzoniere addresses how Booking might respond to hotels offering lower rates on their websites to promote direct sales and how Booking could use an “algorithmic persuasion” strategy to maintain its competitiveness and profitability while motivating hoteliers to collaborate voluntarily. He expects that Booking will not explicitly penalize hotels with disparities but will take measures that indirectly increase hotels’ direct booking acquisition costs.
5. From regulatory-induced luxury to market-driven affordability
This picture was taken 30,000 ft in the air on an American Airlines flight in the 1970s.
Yuechen Zhao, Partner at GSR Ventures, offers a unique take on “the golden era of air travel” of the 1970s. He refers to it of it as the golden era of regulatory capture.
Back then, routes and fares were tightly regulated, so airlines competed with perks rather than prices. This led to some extravagant features like piano bars in the sky. Things in the US changed in 1978, when Congress deregulated the airline industry, opening up routes and fares to true price competition. The piano bars disappeared, replaced by the uncomfortable economy seats we know today. As a result of this deregulation, flying may be less glamorous now, but it’s also much more affordable and accessible to many more people. Read +.
6. Ryanair’s latest approved OTA: Expedia
In my last newsletter, I wrote about how Ryanair, Europe’s largest airline with around 15% of airline seats, has been signing partnerships with some of the largest European OTAs. On July 18th, Ryanair announced its latest “Approved OTA” partnership with Expedia Group. eDreams Odigeo remains a notable exception.
I conducted an informal price comparison between Kiwi.com (Ryanair-approved OTA), Expedia (Ryanair-approved OTA) and eDreams for a round trip from Barcelona to London, departing on July 24th (daytime, after 11 am) and returning the night of July 30th. Here’s what I found, ordered from cheapest to most expensive:
-
Kiwi.com: €121
-
Expedia: €133
-
eDreams: €207 for non-Prime members and €154 for Prime members (excluding the €55/year fee for Prime Basic or €65/year for Prime Plus)
It will be interesting to see how these moves by European OTAs impact eDreams’ results and market share and what decisions it makes as a result.
7. Getting your tours and activities recommended by AI
Christian Watts, founder and CEO of Magpie, suggests possible future best practices based on first principles for how tour, activity, and attraction operators can ensure they are discovered by travelers using AI-driven searches. He outlines strategies such as maintaining a “Single Source of Truth” for product information and targeting long-tail keywords to improve visibility in AI-generated search results. Read +.
By the way, it’s always refreshing to read this as the first sentence of his article. Honesty builds trust:
There has been a lot of news recently about the effects of AI in search and how it may or may not impact the future of Google. The truth is nobody knows what will happen to the future of ‘search’. — Christian Watts
8. Australia’s CommBank partners with Hopper
CommBank, servicing 50% of Australians, launched a new Travel Booking service within its app, a first in Australian banking. Powered by Hopper, it allows bank customers to book flights and hotels directly through the banking app, integrating CommBank’s customer recognition and credit card Awards programs. Customers can use Awards points to pay for travel, receive 10% back in travel credits on hotel bookings, and enjoy complimentary travel insurance. The app also offers Hopper features like price prediction, price drop alerts, and a best-price guarantee.
CommBank client data shows a 16% year-on-year increase in spending on online travel bookings. Additionally, travel is the most popular type of savings goal customers set in the CommBank app. Read +.
9. Who to fire is as important as who to hire
This is particularly true in small organizations such as startups. Uri Levine, founder of Waze, recommends that every time you hire someone, you should allow yourself 30 days before you ask the following question: “Knowing what I know today – would I hire this person?” If the answer is no – let them go the next day. It can be 30 days or more. What’s important is setting a deadline for making the hard decisions.
In his book Fall in Love with the Problem, Not the Solution, he also offers a straightforward approach to identifying who should stay and who should go in an organization: asking the people who work there. Inspired by the Israeli Defense Forces’ sociometric exams, where peers rank each other and those at the bottom are dismissed, this method leverages the insights of colleagues who best understand each other’s performance, likeability, and trustworthiness under pressure. Here is a flavor of the sorts of questions to ask:
-
If a new team is being built and you get to be on that team, who would you like to join you? Who would you like to lead the team?
-
If a team is being created and you are about to lead it, who would you not pick to join you?
-
If you were promoted to a senior role and got to guide your replacement, and the replacement asked, “Is there someone who should not be here?” what would be your answer?
-
Who are the top people that you will be sorry if they leave?” “Who are those that you wouldn’t care that much if they leave?”
According to Uri, startups can ensure they retain top talent and maintain a cohesive, high-performing team by asking these questions and acting on the feedback.
10. Travel like a professional rejuvenation athlete
You might have heard of Bryan Johnson. He founded an eCommerce payments company called Braintree, which acquired Venmo for $26.2 million in 2012, and then he sold the combined company to PayPal for $800 million the following year. After the sale, he built a team of dozens of medical professionals, became the most measured person in history, and achieved arguably the best comprehensive biomarkers in the world. On many markers, he is in the top 1% of 18-year-olds: speed of aging, muscle mass & function, fat mass, inflammation, cardiovascular, bone mass, sleep, etc…
If you are curious about what he packs in his bag when he travels, here it is:
Are you fundraising?
If you are a startup looking to raise a round (from pre-seed to Series D), I can help (for free). Travel Investor Network is a private platform where I recommend innovative travel startups to investors and innovators. If you’re interested, please start by completing this form.
Travel Tech Essentialist Job Board
Explore the 1278 open positions on Travel Tech Essentialist’s curated Job Board and stay ahead of the curve by subscribing to job alerts. Here’s a taste of the jobs on the board:
-
AirHelp | Senior Product Designer | Berlin, Barcelona, Krakow, Gdansk
-
Airalo | Senior Data Engineer | Europe
-
Fora | Communications Manager | New York City
-
TravelPerk | Sales Executive – Growth Markets | Barcelona
-
Flight Centre Travel Group | Scott Dunn Travel Consultant | San Diego, New York City
→ Join the Talent Network. Hiring companies sometimes ask me to help them find the best talent. If you want me to have you on my radar to introduce you to the right opportunities, join the new Talent Network (it takes 3 minutes).
→ If you’re contemplating a career move, simply curious, or an HR professional seeking job insights, subscribe to my Travel Tech Jobs newsletter.
What’s coming up in travel tech in the next 14 days?
Brought to you by Belvera Partners
-
29 July, SIGGRAPH 2024, NVIDIA and Meta founders fireside chat about AI, Colorado
-
30 July, Meta Q2 results
-
6 August, Uber Q2 results
-
8 August, first anniversary of Hawaii fires
-
10-16 August, Virtuoso Travel Week, Las Vegas
For a full view, subscribe to the Belvera Travel Travel Tech Diary
If you like Travel Tech Essentialist, please consider sharing it with your friends or colleagues. If you’re not yet subscribed, you can do so here:
And, as always, thanks for trusting me with your inbox.
Mauricio Prieto
