One of the larger challenges running a complex, supplier-facing business within the tours and activities sector is the competitors (all startups) that are failing.
They tend to have wonderful websites that entice product suppliers to spend multiple hours adding tour descriptions to their system but, frankly, for bookings that will never come.
One outcome of all this is that it poisons the well.
It is harder for the companies that are trading well to convince a supplier to yet again spend 20 hours or more configuring their business with your service, whatever your merits.
In the same vein last week I participated in the OpenTravel Alliance‘s Travel Traction event during ITB Berlin (backed by Travelport). The well-attended event wasÂ focused on travel startups and their potential needs from the industry they are attempting to work in.
Senior research director at PhoCusWright,Â Douglas Quinby,Â started by presenting some numbers. Of the 528 startups the company is Â tracking, taking over 2.6 billion USD of funding, 8% have been acquired (between 2005 and 2012) while 8% have closed.
Many of the rest are just what I call zombies, or are following the tough path to success (or mediocrity).
What followed was a panel with a good discussion around simplified access for startups to GDS airline data. However, simplified access may create unintendedÂ consequences.
Startups need to fail
By retaining the somewhat expensive data access approach currently used by GDS companies this creates a barrier for startups as real money has to be changing hands to keep the startup alive. Only the toughest will therefore keep going.
Yes, data access fees should be reduced – they MUST be affordable to a pre-funding individual who wants to innovate – eg. $600 a year. Not free, but not $10,000 a year either.
Additionally this data fee should be payble on a monthly subscription contract with immediate cancellation ($50 a month), acting as a heartbeat and sending a signal to the GDS (and other partners) that the startup is still trading and has an ongoing need for the data.
Annual payments never give sufficient accurate insight whether the startup is still performing well or not. Regular payment will enable the startup to perhaps play for a few months without incurring larger costs.
The outcome to this approach is that the startup stops paying for the data then the site will go down.
Great! No more zombie startups!
Instead we will have fewer, but stronger startups. And this (sorry, Tnooz and for your TLabs Showcases) will be better for everyone.
NB: Zombie image via Shutterstock.