TLabs Showcase focus on startups featuring UK-based rail booking technology provider SilverRail.
Who and what are you (including personnel and backgrounds)?
Transfixed by the matrix of travel and technology, the SilverRail leadership team comprises top travel ecommerce experts whose history goes back to the founding days of online travel.
- Aaron Gowell, company founder and CEO – Prior to founding SilverRail in 2009, Aaron built one of the largest travel technology and distribution companies in the US: National Leisure Group (NLG), a $1 billion ecommerce leader in vacations and cruise.Â NLG pioneered several early online travel technologies including the cruise industryâ€™s first online booking platform and one of the first dynamic packaging systems.Â Previously, Aaron honed his survival skills in US Armyâ€™s 82nd Airborne and at global management consultancy Bain & Company. Aaron was also a founding member of General Catalyst Partners, a leading venture capital firm in Boston where he was most recently an entrepreneur-in-residence.
- Will Phillipson, company founder and EVP product strategy -Â With a decade-plus of travel technology and product development experience, Will helped build NLGâ€™s dynamic packaging technology/product.Â Nearly anyone using web-based travel products today has seen Willâ€™s genius. In fact, NLGâ€™s revolutionary dynamic packaging solution powers 20 brands – like Orbitz.com – and integrates global distribution for more than 2,000 suppliers.Â Among many successful companies, Will had also taken the reins as the VP product strategy and technical lead at ITA Software.
- Jeremy Acklam, general manager, Quno.
What financial support did you have to launch the business?
$9 million in series-A capital from a group of top-tier investment firms including Sutter Hill Ventures, Grandbanks Capital, PAR Capital, Brook Ventures. The syndicate was pulled together by Aaron Gowell.
What problem are you trying to solve?
Developed by a team of highly experienced travel ecommerce experts obsessed with improving online travel planning, SilverRail Technologies has built the first global rail platform.
A global explosion in high-speed rail, awareness of the environmental impact of travel, hassles associated with air travel, and industry deregulation have coalesced into a perfect storm, making passenger rail the travel industryâ€™s most dynamic and fastest-growing sector.
We consolidate passenger rail products from across the globe into an integrated single-source platform that removes the complexity of selling rail anywhere in the world.
Describe the business, core products and services?
SilverRail works with railways as a technology partner and provides access to any travel seller through a single connection. Harnessing the SilverRail Integrated Technology Platform, railways do not have to invest their own time and money to implement, manage or support multiple customer connections.
Meanwhile, Railways benefit from access to new markets and distribution technologies – while maintaining complete control of their product.
Distribution channels include:
- Travel management companies
- Online and traditional travel agencies
- Tour operators
- Travel technology companies
For travel sellers:
SilverRail makes selling Rail easy! By aggregating numerous rail suppliers into a single, flexible platform, SilverRail Technologies provides travel sellers a complete rail solution that fits their business needs.
The complexity and intricacies of each carrier system – different APIs, different business rules, and different business models – are abstracted and normalized into a single common interface, offering complete product access in a familiar – similar to air ticketing – business process.
Travel sellers may choose to access the rail product via either of two technologies offered by SilverRail:
- Web service – Air-like interface, standardized queries and responses and end-to-end functionality across global rail content.
- White label – Customized websites and widgets available for immediate website plug-in, leveraging the SilverRail Web Service.
In both cases, travel sellers may use direct commercial relationships with the railway suppliers or capitalize on blanket agreements for content forged by SilverRail. At all times, the supplier and distributor are transparent, powered by SilverRail technology.
Who are your key customers and users at launch?
We have several, but in most cases we are under NDA not to disclose the partnership, given that we supply a core product/capability.
- B2B: Canâ€™t say â€“ under NDA. Five large travel distributors signed or live (three signed, live this fall, two already live)
- B2C: Our own consumer direct rail retail brand, Quno (primarily UK).
Did you have customers validate your idea before investors?
Yes. We had one client in beta.
What is the business AND revenue model, strategy for profitability?
Business model is most closely described as a GDS. We consolidate rail content via direct connections to suppliers, we aggregate and homogenise the data into a unified format/structure, and we distribute the aggregated content via a single API (or white label GUI).
The revenue model varies. The suppliers pay either a technology fee per transaction or a % commission. Distributors then pay for access to the content and pay per query or per booking.
SWOT analysis â€“ strengths, weaknesses, opportunities and threats?
- Our product platform, which is the first rail platform in the space. Connections are easy to do. Building world-class products is very difficult, which makes the business defensible.
- Time and adoption. Rail is new to many/most distributors and we expect adoption to take time.
- OTAs. No OTA has ever integrated rail into air search or hotel packaging. SRTâ€™s API enables both.
- GDSs. Theyâ€™re smart and have deep pockets and should have done this themselves.
Who advised you your idea isn’t going to be successful and why didn’t you listen to them?
Canâ€™t name names – itâ€™ll burn bridges. What I can say is that I didnâ€™t listen because the macro-dynamic trends were singing to me: huge, growing market, incredible innovation leaps (200mph high speed trains), the largest investment â€“ ever â€“ in travel (high speed rail infrastructure), plus deregulation.
Itâ€™s the perfect investment storm! Â Besides, no oneâ€™s ever tried to do this and being a pioneer is an adventure.
What is your success metric 12 months from now?
Profitability by end of Q1 2011. Â Then my shoulders will unbunch.