Nobody particularly likes a deadpool story, but sometimes there are lessons to be learned to help out others in a sector seemingly trying to do that same thing.
And so, farewell and RIP MyGuidie, closed down in April after just four months from its TLabs debut and official launch.
The site was similar to a number of others that sprang up or pivoted in the same direction during 2011 – a platform to allow travellers to “find unique experiences run by locals”.
The site was run by three Poles, including marketing manager Paulina Wardega, bootstrapped but in the throes of trying to raise a seed round of funding.
It had so-called “ambassadors” in major European cities such as London, Paris, Berlin and Warsaw – effectively people helping users find deals for tours, activities and services.
Although the company didn’t charge locals for a lead, it did levy a 15% reservation fee to users when securing a booking.
At its launch the founders recognised its primary weakness was always going to resources, but was confident that the growing sector for marketplaces connecting travellers to local products might have some traction.
Unfortunately the inherent weakness was the trigger to an early downfall.
After posting a message in April about closing the service down, Wardega explained more via email this week.
Although the founding trio “learned a TON of things”, ultimately they just couldn’t grow the business quick enough to start making money and reinvest.
“The competition in our business is very strong and we realized that the service like MyGuidie needs a lot of money and a dedicated team (not only three geek-girls) to succeed.
“We didn’t have it, so we decided to close MyGuidie and focus on other projects.”
The speed with which the founders recognised that they should probably bail out should be applauded to some degree, rather than bootstrapping themselves into debt or luring in a low-paying investor to a business that will seemingly struggle without the big bucks that some are beginning to feel is necessary to support large networks of this kind.
Of course, marketplaces such as these will no doubt work, but it is unclear whether the only model that does support it is one where cash is king.
Related posts:
About Kevin May
Meanwhile the NYT reviews the competition: http://travel.nytimes.com/2012/07/08/travel/click-here-for-an-offbeat-experience.html
The line about 2 brothers from Amsterdam looking for mushroom-picking tours is pure genius.
+1
It’s the first time I hear about myguidie. It sounded like a great idea full of originality. I worked for 3 years on french biggest marketplace Priceminister as a product manger so I will give you my opinion on that failure. Beyond competitive markets, I see 2 explanations about why they may have failed:
1. Regarding the business model : They used to charge the traveler instead of the travel agent. Why travel agent (or local expert) wouldn’t pay a commission for additional sales? They do that all the time through all possible affiliate channels. On the other hand, being overcharged might be discouraging for potential travelers. I don’t know one single marketplace that charges the buyer.
2. Regarding the market segments : Being only 3 people, I would have targeted the big travel agencies 1st for my marketplace. Recruiting small businesses is a huge load of work and requires years to gather a correct number of offers while recruiting 1st the big OTA would have allowed myguidie to build up a very complete catalog in no time.
I wish them best of luck for their future projects.
Thomas
Thomas, TripXP in Paris is trying harder.