Boxever wants to bring genuine Big Data to airlines
The Boxever idea – armed with $1 million in funding from Delta Partners with angel group Bloom Equity and Enterprise Ireland – is that airlines can use its “intelligence platform” to analyse customer data from every conceivable channel in team, allowing each carrier to create “a unique profile for each customer”.
What would they do with all that though?
Using the Boxever system, airlines would then be able to use the data, once again in real-time, for customer segmentation, personalised advertising and re-targeting, and – perhaps the most important one of all – what it calls “behavioural merchandising”.
Reuniting from Datalex are Dave O’Flanaghan (ex-head of engineering at the fellow Dublin-based company, now CEO and co-founder), Alan Giles (now CTO and co-founder, ex-OpenJaw as well) and Dermot O’Connor (COO and co-founder).
The trio are joined by Henriette Thilert as vice president of business development after stints at Aer Lingus, Germanwings and Norwegian.
Of course, Boxever isn’t entirely new to the game, in that other systems such as IBM are looking at the same problem. But the company claims it is different in that the technology is designed solely for the travel industry (“no long expensive hardware and software procurement cycles, no consultants and no customization”).
Q&A with CEO Dave O’Flanaghan:
How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?
The founders all worked together at a travel technology company here in Dublin where we built and delivered multi-million dollar e-commerce solutions to some of the largest airlines in world.
What we saw was that relatively few had good analytics and insight – particularly in the online channel – and that customer insight was largely confined to the frequent flyer program.
Most had five to ten databases of customer data that are disconnected and contain fragments of information about their customers. Many had little or no personalization strategies. I felt that they really were a long way behind other online retail verticals.
We’re taking our knowledge of travel retail and combining it with the team’s experience in data analytics and the cloud to deliver a focused solution for a very specific problem in an industry we know well.
Why should people or companies use your startup?
There’s lots of talk about Big Data and the opportunities in the travel industry. We at Boxever believe that Big Data has the potential to fundamentally change how travel marketers relate to their customers – all of them – not just the small percentage that actively participate in a frequent flyer or loyalty program.
Ultimately it’s a win-win for both parties. The customer gets a better more relevant experience and airline generates more transaction revenue as customer spends more with them. Our solution is currently delivering some pretty impressive conversion uplift numbers during current trials.
Big Data and the Cloud have made aggregating and analysing customer data and behavioural data at this scale an attractive proposition from cost perspective – but it still requires a lot of expertise and experience to develop and manage these systems.
This is why a SaaS solution in this space makes so much sense – Boxever takes care of all hardware, software and operations freeing our customers up to focus on understanding and optimising the online customer experience.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
A significant part of our funding is going towards sales and marketing. We have recently hired a B2B marketer who will focus on messaging and awareness and we will also be speaking at a number of upcoming airline and loyalty events.
We are live with our first customer, Atlantic Airways in the Nordics and have a strong sales pipeline even though we are only officially launching today. We expect to have two more customers live on Boxever before the end of the year. This will also help us establish credibility in the market.
What other options have you considered for the business and the team if the original vision fails?
The platform we’ve built is designed to deliver retail intelligence and optimise online retail. We gather customer data, their behaviours and associated product data to understand and optimise marketing and merchandising.
We believe there is a huge opportunity to optimise online travel retail – particularly for airlines.
The question we have is not whether we can deliver a solution that can transform how they merchandise and market online – but whether this market is simply too slow moving and conservative to sustain our ambition to grow to a significant global company.
If this happens we do have a strategy to target other verticals.
What mistakes have you made in the past in business and how have you learned from them?
I’ve spent most of my career working in start-ups and this is my third. The first was extremely successful and exited in 2007. The second failed at the end of 2008.
One key failing in the second business was that we didn’t fully understand the market and built a lot of product without enough market validation. This was something we tried not to do with Boxever and over the last few months we worked closely with our initial customer to iterate over product / market fit.
However it was risky because technology-wise it’s a big data platform that runs scalable predictive algorithms to analyze, segment and respond to customer behavior.
It was never going to be a weekend project and it took us eight months to build the initial version of the platform. During that time we bootstrapped and leaned heavily on our previous experience to keep us on the right track.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
There are a lot of incumbents in B2B travel technology that are ill equipped to deal with the next generation of online travel retail. I believe that this is part of the reason innovation has been slow in this industry.
However, the industry can be quite conservative anyway and there are significant barriers to entry – both technically and commercially. There’s just not very many new B2B travel technology companies.
This is both a huge challenge and a huge opportunity for a new startup. For companies that can crack the market and deliver a scalable product (technically and commercially) that delivers real value it could be a very exciting market.
It’s all about Big Data, right? A year ago many would’ve raised their eyes to the sky and muttered “those techie types again”, but there is now a definite sea-change in the industry.
Social travel startups, tour and activity platforms, etc, etc, are coming and going, but ask many people where they think the real value to the industry is coming from and invariably you will hear it is in the form of number crunching of data. Big data.
Boxever maybe on to something.
Positioning itself as the young and funky startup with big ideas around Big Data, rather than what the suits at the consulting giants around the world will tell you to do, could be its biggest asset.
It has the pedigree on the founding team, too.
Of course, it will not be plain sailing (flying?) for Boxever. Alongside the usual marketing questions any startup faces, scaling up could be a challenge if it gets a sudden influx of customers who are not immediately reaping the rewards of the programme.
It is, after all in some respects, a medium-term project to dive in to the Big Data tunnel and come out the other end dripping with success.
But the model and technology is such that success breeds success. If one airline is seen to be outperforming its rivals in some areas after adopting the Boxever system, then (exclusive contracts notwithstanding) it could a home-run, as they say.
It could, of course, trigger a wave of Boxever competitors.
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Kevin May is editor and a co-founder of Tnooz. He was previously editor of UK-based magazine Travolution for nearly four years and web editor of Media Week UK from 2003 to 2005.
He has also worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology and a postgraduate diploma in magazine journalism.