TLabs focus on startups featuring Switzerland-based GetYourGuide.
Who and what are you (including personnel and backgrounds)?
GetYourGuide consists of five co-founders from the Swiss Federal Institute of Technology (ETH Zurich). Other than that, we have two full-time student interns, two part-time student interns and one external consultant who used to work at a key competitor.
The managing and founding team (average age is 27.4!) – CEO: Johannes Reck (MSc Biochemistry, visiting associate Boston Consulting), COO: Pascal Mathis (MSc Electrical Engineering, product manager Siemens Switzerland), CTO: Tobias Rein (MSc Electrical Engineering, many freelance IT projects), Marketing: Tao Tao (BSc Economics, president of a leading European student consultancy). Web Design: Martin Sieber (MSc Biology, freelance designer).
In addition, we have Roland Zeller (founder and CEO of travel.ch, the leading Swiss OTA) on our board of directors and as a business advisor.
What financial support did you have to launch the business?
The company is partially self-financed (friends and family) and partially funded by the Zurich Cantonal Bankâ€™s (ZKB) start-up financing programme. ZKB is the third largest bank in Switzerland.
What problem are you trying to solve?
- B2B: Lack of a standard in the activities market with its many opaque and bilateral value chains.
- B2C: Lack of product and price transparency in the activities market because you never know who the actual supplier of a certain activity is. And lack of diversity: it is difficult to book long-tail and sometimes more interesting products unless you do cumbersome Google searches. Our philosophy is to give customer as much choice as possible and as powerful filtering tools as possible.
Describe the business, core products and services?
GetYourGuide is an online intermediary connecting end customers with suppliers of tours, attractions and activities. We contract sightseeing tours, adventure activities, multiple day tours, attractions passes, and many other products for the FIT market. On our website, suppliers can upload and manage their products themselves and under their own brand.
Customers can book these products through our website and our extensive distribution network. For OTAs, affiliates and other distribution partners, GetYourGuide provides tours & activities content with real-time information directly from the original suppliers.
GetYourGuideâ€™s strength lies in sourcing and selling the full spectrum of tours & activities via transparent, automated and true e-commerce distribution.
Who are your key customers and users at launch?
- B2C: internet-savvy travellers looking for fun things to do at their destinations and willing to spend money on it.
- B2B: Any website that wants to use our content, but mainly OTAs (out of those that donâ€™t already use Viator or Isango), hotel chains (we have Hotel.de, the German subsidiary of Hotel.info, already on-board), tourism boards, and long-tail website such as blogs and destination information websites.
Did you have customers validate your idea before investors?
Our initial platform was very close to ourexplorer.com with both amateur and professional tour guides. Most of the bookings we received then were from the few professional suppliers we had on our platform.
So we switched our business model to only allow professional suppliers and focus on products instead of guides, and made a large change to our user interface. We then pitched the prototype of this second version to potential investors.
What is the business AND revenue model, strategy for profitability?
Commission fee from bookings. Ads on our destination pages: both AdSense and banner advertising with strategic partners such as official tourism boards of a certain destination.
SWOT analysis â€“ strengths, weaknesses, opportunities and threats?
- Automated and fully-fledged back-end system for suppliers, which keeps variable costs low. That means we can scale easily in terms of bookings.
- Real-time information about price and availability for B2B partners.
- Greater product diversity: Able to tap into long-tail content because we can handle both free-sale bookings for volume suppliers (e.g. London hop-on hop-off bus tour) and on-demand bookings for long-tail suppliers (e.g. bike tour through Hanoi).
- Possibilities for expansion in German speaking area where Isango and Viator donâ€™t have a strong presence yet.
- Cooperation with tourism boards because of supplier transparency
- Speed: 1100 products in 4 months and our acquisition speed is accelerating.
- Low burn-rate. The activities segment is one where timing is tricky. It is almost necessary to educate the market (both suppliers, B2B partners and customers), which takes time.
- Lacking product variety compared to Viator/Isango. We only have 1100 products, which we acquired within 4 months of active acquisition.
- Difficult to compete on SEO because we are competing here with both our suppliers and aggregators like Viator and Isango. Same with SEM.
- Acquisition speed can be a boomerang: suppliers need to be kept happy so we need to drive bookings to them fast, which can be difficult in the short-term because our strategy is long-term.
- Huge untapped market potential globally and especially in the German-speaking area.
- No online standards in the market because most of the global activities content is offline
- Trend towards value-added travel where people are not content with just staying at a hotel anymore. People want to experience more and are willing to pay for it, too.
- Customers are getting more and more comfortable with booking travel online.
- Is the market (suppliers, B2B partners, customers) really ready for booking activities online? If so, why hasnâ€™t Viator succeeded in 10 years?
- Based on Porterâ€™s 5 Forces, the threat may not come from competitors but more from substitute products such as Google Tours, Yelp, Googleâ€™s new place pages, online guides like Tripadvisor and Tripwolf, and simply better on-location procurement of tours and activities, i.e. through local tourism bureaus and better marketing presence of ground handlers (suppliers) at their home destinations.
Who advised you your idea isn’t going to be successful and why didn’t you listen to them?
Some executives at hotel chains, OTAs and large tour operators who either argued that 1) the activities sector is too crowded or 2) people do not pre-book activities online.
Why didnâ€™t we listen? Mainly because we think nobody has quite got the activities sector right yet.Â We think that none of the incumbents are striking a good middle ground between creating a complex GDS for tours & activities or simply driving bookings.
The former solutions tend to demand too much from suppliers (CRM systems, XML feeds, etc) which hinders building enough global content and the latter does not do anything to innovate the market or drive standardization (lack of transparency, lack of diversity, etc).Â Nobody has the content online and we can get that content online.
On the issue of pre-booking behaviour: we think itâ€™s a timing issue and there are lots of points of decisions for potential customers, such as pre-trip emails via our distribution partners just to mention one example (Expedia has been able to create two-digit conversion rates from pre-trip emails).
Ultimately, we think that the opportunities in this market are too large to be ignored. In this final frontier of online travel distribution, whoever can get it right, will be the next big thing in online travel.
What is your success metric 12 months from now?
Close to break-even. Close to the product variety of Viator, which Â has around 5,000 products.
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