The travel industry has to be one of the best examples of everything old becoming new again. Imagine England in the year 1841: the telegraph was a less than ten years old; the telephone was still twenty five years away; railroads were transforming the countryside but steamships were nowhere in sight. Things were certainly very different back when Thomas Cook opened the doors to his travel company and began selling single day excursions from Leicester to Loughborough. Since then, through steamships, airlines and the Internet, Thomas Cook Group – like many other travel companies during that passage of time – has thrived on change and transformed many times. Currently, creative people continue to reinvent the travel industry. For those planning to join them with an innovative travel company or travel technology provider of their own, here are top start-up tips to help them along the way.
Every travel start-up, regardless of how unique, has one thing in common with all the others: in order to survive, people have to voluntarily give it something precious – their money. This is a daunting challenge for a new travel company, and the only reliable way to accomplish it is to provide a service and/or product those people regard as having a higher value. Of course, luck and timing played big roles for a few, but for the majority of new companies: industry & competitive knowledge; refinement; planning; evaluation and attitude are more reliable steps.
Unless a travel start-up has objective reasons to believe its product/services will bring real value to the marketplace, it’s operating primarily on hope and inspiration. Again, sometimes – infrequently, as a rule – luck and timing can make inspired hope successful, but typically an unexciting aggregation of facts will lay a foundation for determining a start-up’s concept has a valid argument for creating value within the travel marketplace. Pulling facts together and making that argument has three broad elements: industry knowledge; competition; refinement or revision.
Industry Knowledge: a start-up needs a good grasp of the travel marketplace in order to articulate why its proposed product/services make sense. It must understand travel trends in general and those likely to specifically impact what it intends to do. Wear out the Web and learn the travel landscape: air travel; rail travel; cruises; hotels and vacation destinations. Entrepreneurs should be conversant about why some travel businesses are weakening while others are gaining strength and market share – and show knowledge of how these changes reflect shifting consumer travel value.
Identify Competition: one of the most difficult challenges faced by entrepreneurs during the value stage is actively seeking out existing companies which would be direct competitors to their ideas for product/services. While identifying competitors is a self-evident; rational; step, there is a generally an undercurrent of resistance based on an emotional investment in the start-up idea. Using a third party to conduct this due diligence can be an attractive option for making sure this necessary task is done well.
Refine or Revise: armed with a solid understanding of the travel industry and knowledge of potential competitors, take another look at the product/services and re-evaluate them. Do they still seem innovative and unique? Or, do they now seem less than compelling or a step behind where travel is headed? If the latter, don’t despair – this is a ‘behind the curtain’ moment discussed earlier. Focus on what elements of the product/services are unique and are compelling, then concentrate on what you individually – or collectively with colleagues – can do to refine; revise and create more value. Knowledge should empower, not discourage; push to think in new ways. That’s what these entrepreneurs did:
Bookitlyst: this new company leverages travel technology to provide a website and mobile app which enables people to use expert travel planners to plan and book their trips, plus delivery 24/7 assistance if needed during the trip. The site is also a community of fellow travelers who share experience and tips on discovering unique experiences.
Nekst: uses profiles to present inquiring travelers with hotels choices based on their specific interests and preferences. These choices have been filtered through over 60 booking sites to support the company’s best price policy and guarantee.
However, even if your idea is imaginative, bold and fits where the travel industry is headed, that still doesn’t necessarily mean it’s a good one. It needs to be articulated and critiqued – and that requires a business plan.
Ideas Needs Plans
Business Plan: the purpose of a business plan is to express – in concrete, actionable, terms - the value proposition of your start-up idea: the goods and/or services it will provide; who will purchase them – and why; the business model by which they’ll be offered (online; bricks & mortar; from the home, etc.) and the resources (licenses, people, technology, funding, etc.) needed to operate. The plan doesn’t have to be lengthy or complicated as long it clearly covers these points.
360 Appraisal: this appraisal will use the business plan to give your start-up idea an objective review from all sides. The most critical perspective is the customer; identify at least eight to twelve people who fit your customer profile, ask them out for a cup of coffee and ask their opinion. If you don’t get real enthusiasm from two or three, consider going back to the drawing board. If you see some enthusiasm, ask your closest friends if they see you being happy in the business. Again, a tepid response is a warning sign –but genuine support is an indicator to take the next step.
That step is to find at least two friends or two good references that have strong travel backgrounds. Walk them through your concept and the business plan and ask for the strengths and weaknesses that come to mind – not their approval or disapproval. Don’t be concerned they’ll steal your idea. That risk is minimal, the value of the practical information they can provide is huge. Finally, have an informal chat with a banker and get a reality check on funding possibilities. These steps will help prevent investing time, emotion and possibly significant money into an idea that needs improvement.
Attitude Fosters Success
Everyone’s heard rags to riches stories about people who simply wouldn’t take no for an answer, who pushed on and risked everything when everyone else left and went elsewhere. The stories are true, but typically only about the small percentage who succeed, not the vast majority who should have taken no for an answer and who should have stopped pushing before the edge of the cliff arrived.
Granted, entrepreneurs must be risk-takers and should have confidence in their ventures (if not them, who?), but these traits shouldn’t be confused with stubborn, inflexible, behavior. The following attitudes strike that balance and are integral to almost every entrepreneur’s path to success.
Stay Focused & Discerning: there will never be time to do everything that needs to be done. Discern absolutely critical tasks and stay focused on their completion before turning attention to anything else.
Don’t be a Hero: trust the people around you; acknowledge superior skills; delegate tasks and get out of the way.
Be Steadfast: during the appraisal process, don’t get discouraged by bad reviews or become euphoric from good ones. Wait until all the facts are in; only then reach an objective conclusion.
Listen & Hear: successful entrepreneurs always, always, listen to- and hear – customer & supplier feedback, particularly when it’s not expected and not always pleasant. There’s no quicker way to learn what’s working and what needs to be changed.
Embrace Change: like a battle plan, business plans rarely survives a first contact with the marketplace. Few things will turn out as expected, so view setbacks and surprises as normal – not bad news.