Entrepreneurs are generally not particularly shy people and sometimes they even border on the arrogant. It goes with the territory – he or she who shouts the loudest gets noticed.
Nothing new there.
Journalists love them and their peers in the industry often take notice and wonder what the fuss is all about, if there’s any substance behind the bluster, etc.
But even by the standards of your average mouthy CEO, TripFab’s appearance on the travel startup scene in December 2011 took some beating.
The puff worked.
When TripFab completed its TLabs Showcase in the same month [TripFab promises game-changing booking model, urges industry to buy new underwear], CEO Michael de la Rosa’s strategy seemed to work. It got everyone’s attention.
The original idea was to build a “new travel platform for buying hotels, ground services, destination tour and activities”.
Apparently backed with $400,000 in funding (a further $700,00 was added later on from a group of private investors, mostly from who had invested in de la Rosa’s previous startup, CodeMyConcept), TripFab promised the earth.
The service eventually launched a few months ago, concentrating initially on consumers looking for travel products in Central America.
Some industry watchers with more than a smattering of knowledge in the tour and activity sector said privately that de la Rosa MIGHT be on to something, but had huge challenges ahead, not least because a myriad of other startups had also woken up to the opportunities.
But still, after the arrogance shown during the initial launch phase, TripFab was one to watch just in case de la Rosa came through on his promise to make the industry collapse into fits of, err, something.
Unfortunately and with perhaps huge inevitability, it hasn’t worked out for de la Rosa and his team.
Less than nine months after the bluster, TripFab is now up for sale.
De la Rosa writes via email:
“It was fun, but I couldn’t hit the mark with travel. I am back to my roots and working in something similar like my last company I sold last year. I know the web dev sector well. Travel was new, and I couldn’t make it happen.”
The sale sheet, which includes the domain TripHut, says:
“Our loss is your gain, and we are looking to recoup back some of the investment put in. We have tons of stuff going along with this sale, and the new owner with some experience in travel is completely setup to make revenue.”
“These products really need some love. We have poured over a year of work into them, countless hours, countless sweat and blood. We are looking for someone looking to take the whole base ready who has a marketing background and scale this up.”
As opposed to the CEO behind TraceMyTrip, who disappeared without a trace earlier this year (no pun intended) after similar puffery, de la Rosa is now humble about his failure.
Similar to ex-Joobili CEO Jared Salter, who saw his startup miss the mark but wrote on Tnooz with some valuable advice to fellow travel newbies, de la Rosa offers this:
- Credit card processing is a bitch in travel. Two weeks after launch we lost our processor and for over 2 months we were applying to every processor we could find. No one wants to touch travel. We applied to over 50. This hurt us big time not being able to take credit cards for over 2 months.
- Travel industry is expensive. Partnerships are key, getting inventory solo takes big money and lots of work. It’s really slow and expensive to innovate in travel. Flying around Latin America to signup big hotel chains for awesome pricing was expensive.
- Pricing is everything, especially online. There didn’t seem to be any travel loyalty to a product, rather a price for consumers.
- There is so much to learn with travel. So much. A year later, and I am still learning how it works. Seriously, work in this industry before you even start something in it. Go learn about it, work in it, make contacts and then go kick ass.
- We had a lot of fun talking shit and making noise in the beginning. It worked and it worked well for this industry. If I had to do it all over again I would make even more noise. We got over 10,000 signups for talking bullshit and making bold statements. People eat it up. In real life, I’m not a dick. I remember meeting with a VC in San Francisco who saw my blog posts and wanted to meet me, he was expecting a different loud obnoxious person – unfortunately that’s not me.
So, farewell, then, de la Rosa. All the best in your new venture. And thanks for entertaining us all (and saving us a trip to the local clothing store).
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About Kevin May
The startup world can be brutal to anyone. Travel is particualrly hard because of its unique peculiarities.
No one wants to see a failure – but let the lesson be learned. Don’t come here thinking that because you see a problem that you are the only person who ever discovered that.
Best of luck to the lads in their next venture
Cheers
Timothy
@TOD – +1
Sadly, it’s part of the game.
It’s not the first case I hear of payment processors refusing to work with online travel businesses. I do know there are many challenges in international payment systems worldwide that create consistent barriers to innovation in the travel industry. But can someone clarify what are the exact reasons why payment processors are simply refusing to work with travel startups? Why exactly is it that “no one wants to touch travel”?
Alice – I have to disagree. I know Vayable made a point of ranting early last year on their blog about problems getting a PayPal merchant account. They pursued relentlessly and look at them 18 months on – they have amazing funding, an incredible team and generating $40k a month in sales. Everyone wants to be involved with travel – it’s a case of persevering for what you believe in, regardless of industry
Hi Alice
Travel has big problems because…..
a) too much money laundering (well, perceived risk of money laundering, not sure there actually is a lot of money laundering!)
b) non instant consumption of the product / service (you book and then travel 6 months time…. and this exposure has to stay on the banks books in the meantime)
Alex
Hi Alice,
There is a very large number of fraudulent transactions in the travel industry, as well as a large number of chargebacks (i.e. a customer doesn’t enjoy the view from the room and contests the whole package – flights, hotel, transfers and tours – via the credit card company). This causes a major headache for everyone, including the credit card companies, the processors and the suppliers. I believe these two reasons are the (main) cause for “no one wanting to touch travel.”
9 months and they gave up? That doesn’t make sense to me. Making bold statements pre launch and being cocky – then that’s just part of the whole hype and I’m all for it! But 10k users and 9 months later = they class that as failing means (in my opinion) that they were focusing on the hype and aggression vs talking with these users, finding out WHY they signed up and what they can do to help. From this, they then strip away the ego of hype and really concentrate on customers needs. People don’t just sign up for no reason – they sign up because there’s something they’re curious about. So feed that curiosity. We’re doing something really unique at myTab.co and our traffic has grown rapidly because we’re talking with every active customer, regularly. That shows we care, because we actually do! Over 12 months since launching, that’s been our key. Customers telling their friends that myTab puts them first over ego & hype has generated organic growth. We write about them on our blog, ask them to be quoted in major articles, make them feel special – because they are! Remember, it took Airbnb over 1001 days before they nailed it and from talking with the founders, they used exactly the same one-on-one-customer-interaction formula and pampering customer love that we’re doing at myTab. I wish Michael the best of luck but if you really are so insanely passionate about your start up, you don’t walk away from your baby after 9 months. You’re in it for the long haul
There are many characteristics we look for when reviewing ideas that come to our door for VaultPad. Let me point out a few of them that are required.
1. Stamina – you have to be strong enough to go the distance. I suspect that many startups try to hide their (lack of) stamina with chutzpah and bravado.
2. Runway – you have to have a plan for the runway to be longer than your plan because NOTHING ever goes according to your plan. Do you have a runway and can you make your money work longer. Hint mentioning brown rice always gets my attention.
3. The dynamics of the team. We look hard at the team – do they fit? I often think that teams can be repaired but friends don’t always make good business partners
And now my advice for the moment – PLEASE no more cuddly fake animals.
Cheers
Timothy
Moral of the story: (online) travel business is not as simple as people think.
I experience met few investor who think it is a piece of cake to built an extranet from the scratch then having huge hotel inventory like former competitors currently have. It may be simple, technically, but another thing comes along as de la Rosa said: it is expensive to do hotel acquisition. It’s just a sample, a classic issue that people outside of tourism industry may underestimate.