It’s interesting watching how startups evolve – San Francisco-based Zozi started out in 2009 as Ekoventure, an intermediary in multi-day tours and activities.
Next came $7 million funding over the course of a few months¬†and a new focus on day tour deals. Shortly after saw it strike a deal with Google Offers and¬†another with Foursquare.
Now it has announced Zozi Gurus,¬†a new platform to connect travellers with top celebrity athletes and adventure-types, for once-in-a-lifetime experiences.
This is quite an evolution, but one that makes a great deal of sense.
Multi-day tours and activities remains the¬†unconquered Mount Everest, where margins are high but intermediary-delivered conversions are minimal.
Deals have too many similar companies chasing the same suppliers and customers – so differentiation via expert-delivered experiences could be the answer.
It doesn’t come particularly cheap for the consumer, but let’s face it, so-called once-in-a-lifetime experiences rarely do. For example, $2,700 will buy you a ski experience with US Olympic gold medal winning Jonny Mosely.
From a business perspective, this latest move puts Zozi up against other VC-backed person-2-person (P2P) tours, activities and experiences marketplaces.
Why this is an interesting play
The key element here is that it that Zozi’s product is not just a ski experience, but a ski experience delivered by someone that the public would respect as a subject matter expert – an experience money could probably not otherwise buy.
One of the only other examples of a similar strategy is Sidetour – there you can also book local experiences with experts, such as¬†a Silver medal Luge winner. Most other P2P marketplaces just have regular folk – mainly destination locals – offering tours.
One problem with celebrity-fronted experiences is the lack of supply. Zozi has its ski expert ONLY¬†available¬†on a forthcoming weekend in March. For Sidetour the same problem – the luge trip is only available the same weekend in March.
One-off events and experiences also cause quite a number of issues from a PR perspective.
Journalists won’t cover trips where their readers, often reading some months later, can’t buy or recreate the same experience themselves.
However, Zozi with its $2,700 experience will at least be making more money from selling the experience versus Sidetour with its $150 offering.
Differentiation and marketplaces
An ongoing challenge that faces these P2P tour and activity marketplaces is that the product does not exist independent of the marketplaces.
This is unlike a hotel intermediary where the property itself will be attracting bookings on a regular basis, so will have a highly tuned product proposition – if the intermediary can’t sell it then the problem is likely with the intermediary rather than the hotel.
Where the product doesn’t exist except for within the marketplace the product never gets the tuning required to make it a standout experience.
It could be priced wrong (either too high or too low) or just not be sufficiently wonderful to want to book, or may suffer from lack of incorporated feedback due to the low volume of real world sales.
It is also challenging to distinguish between tuning of the product description/marketplace UI/marketplace marketing and the product itself.
This problem is reinforced by the marketplaces aiming to be the anthesis of popular, mainstream, tours and activities, hence many are trying to create highly bookable popular experiences BUT without going mainstream.
Ultimately for most of these VC-backed marketplaces, going mainstream WILL be¬†necessary¬†in order to attain the valuation the VC investments suggest, so it will be interesting to watch how this this all turns out.
Better suited systems exist that solve mainstream tour and activity distribution challenges -¬†Zozi might well dodge this conundrum by selling high-value, high-margin experiences rather than being low-value, low-margin like competing P2P marketplaces.
This could work.
2012 and the tours and activities sector is already hotting up nicely… lots more to come no doubt!
NB: Here is a Gurus clip: