5 years ago
 

Another travel startup story: Why iGottaGuide failed

NB: This is a guest article by Keith Petri. It originally appeared on his blog, KeithPetri.com. Petri is a small business consultant focusing on implementing new technologies and providing traditional consulting services for his clients in the restaurant and hospitality industries. He conducts market research analysis to implement strategies to increase customer base. Follow Petri on Twitter.

iGottaGuide was my first scalable technology startup. Prior to working with my co-founder and developer Michael Griffiths, we both had extensive experience in service-based businesses.

We saw tourism as a fragmented industry, hard to navigate with a massive amount of information and options available. While the best way to experience a new city is like a local, connecting with a local expert willing to share his insight and, more importantly his time, was not something easily accessible.

Trying to be lean, we designed, developed, and launched a beta site with limited functionality and only a handful of tour guides within two months.

Leveraging a small network of entrepreneurs in New York City (thanks to Grant Griffin’s Poor Man’s Dinner) we arranged for initial user testing and feedback on what we believed to be a minimum viable product (MVP).

Once initial feedback was gathered we improved our user experience, product positioning, and our go-to-market strategy. Unfortunately, our efforts to avoid over-developing our product distracted us from analyzing our competitors.

We officially launched on April 15 2011 [TLabs Showcase – iGottaGuide] – three days prior to Vayable [TLabs] and at least three months prior to SideTour’s first iteration.

Without seeking funding or applying for an accelerator program (Vayable and SideTour sought funding from Dave McClure’s 500 Startups and TechStars NYC, respectfully), Michael and I were supporting our venture by splitting our time between consulting and iGottaGuide.

iGottaGuide inevitably failed due to a number of reasons. While I stopped focusing on iGottaGuide seven months ago, I have not had the time to reflect on its failure and learn from my mistakes.

However, I have recently taken the time to think about my professional experiences in hopes of better understanding my career goals and minimizing the chances of repeating past failures.

Similar to my peers, I view an entrepreneurial failure as the result of an isolated issue: in this case, bandwidth. However, after a discussion with Michael, we have outlined a number of issues that ultimately contributed to iGottaGuide’s failure.

1. Bandwidth

Time is my most valuable asset. As a recent graduate, I was faced with the decision to secure gainful employment and begin paying my dues as I worked my way, over time, up the corporate ladder, or pursue my entrepreneurial itch.

All jobs are demanding. Being an entrepreneur presents unique difficulties that are typically viewed as more challenging and time consuming than employment at a larger, more established firm. Starting a business requires time to strategize, formalize processes, sell, refine, and repeat.

I made a mistake and simultaneously started a consulting firm to self-fund iGottaGuide. Splitting your time between a full-time job and a startup decreases your chances of success both as an employee and an entrepreneur.

I jeopardized the chances of iGottaGuide succeeding from day one by dividing my time. It is now 19 months later, and only one business survived.

2. Chicken versus Egg

iGottaGuide was a peer-to-peer marketplace for unique experiences. An all too prevalent challenge with technology startups, our platform was only as valuable as the number of service providers (guides) and consumers (tourists) who utilized it.

When launching we realized the importance of growing both sides of the marketplace to ensure there were equal parts supply and demand.

We leveraged our network and contacted registered guides in New York City to provide supply while creating partnerships with Eventbrite, the Roger Smith Hotel, the Sanctuary Hotel, and Gomio to increase demand. Unfortunately, our strategy of leveraging existing supply and demand within an industry created a larger issue, further contributing to our failure.

3. Compete instead of disrupt

While initially setting out to bypass existing sales channels and inspire individuals to create unofficial tours based off of their personal hobbies and expertise, our tactic of aggregating existing supply within the industry made us a competitor to everyone who could originally help.

While we did have limited success with amateur tour guides, it was hard to extract value from them without sufficient scale.

4. Positioning

iGottaGuide was one of the first open marketplaces for unique experiences. However, as (one of the) first movers in the industry we were unable to capitalize on the opportunity to differentiate and gain market share.

Within months the landscape was flooded with similar business models ranging from social networks for travellers to unique activity listing sites and many, many more (constantly updated, thanks Tnooz). Increasing competition meant that it was harder to get market participants’ attention.

We found that a slight shift in positioning proved to be an underlying reason for success between numerous, localized competitors. For example, iGottaGuide directly competed with SideTour during the summer of 2011 in New York City.

With similar listings (many guides co-listed between the sites), we could exclude supply as a contributing factor.

While SideTour advertised its platform as a way residents could explore their own city by taking advantage of local experts, iGottaGuide positioned its service for tourists exploring a destination like a local.

As a result, SideTour could centralize its marketing efforts, for both sides of its marketplace, in one geographic location.

Whereas, iGottaGuide needed to, once again, split its efforts between increasing the number of local tour guides, and garnering the attention of the most highly sought after consumer group: travellers. And, the 50 million yearly visitors to the Big Apple, do not all originate from the same hometown.

5. Vanity milestones valued too highly

From an extravagant launch party to press mentions, iGottaGuide valued entrepreneurial milestones that did not result in an increase in the number of transactions.

While having the New York Times cover your startup may make a great speaking point at the next NYTM, its message doesn’t necessarily reach your target audience.

6. Feedback

Although efficient, our operations and development procedures did not allow for real informative user testing. Both Michael and I regret not being more thorough in gathering initial feedback on mock up designs, interactive mockups, and even simple surveys.

At no point in our creation process did we have a clear understanding of the conversion funnel. While shipping-it may be important, thinking through a process to minimize the likelihood of a negative response is even more so.

Overall, I have no regrets that I started iGottaGuide. I am certainly embarrassed by creating or contributing to so many of the issues that caused its failure, but the knowledge and lessons learned from experiencing it first hand will allow for me to take on my next challenge and further explore my passion for technology and business.

By taking the time to write this reflection I am hoping to better understand my past actions. Furthermore, I am hoping that by sharing them publicly I will be able to make others more aware of potential pitfalls.

When I was starting out I’d read about similar difficulties that I was sure I would evade, but I went on to repeat them anyway. Reading about the mistakes of others doesn’t always resonate directly with the reader, but experiencing mistakes first hand will allow him to more easily avoid repeating them in the future.

I am looking forward to making a few more mistakes, avoiding repeating similar blunders, and having continued success with CNSLT.us.

NB: This is a guest article by Keith Petri. It originally appeared on his blog, KeithPetri.com. Petri is a small business consultant focusing on implementing new technologies and providing traditional consulting services for his clients in the restaurant and hospitality industries. He conducts market research analysis to implement strategies to increase customer base. Follow Petri on Twitter.

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Viewpoints

About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries.

 

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  1. Toby

    Hi Keith, apologies to drag up the past but has your analysis of the result of IGottaguide changed with passing time ?

     
    • Keith Petri

      Toby,

      Appreciate you taking the time to read my reflections. From my perspective not much has changed. While consumer mindset has shifted in regards to P2P marketplaces, I do not think there is a justified market size dedicated to smaller, niche experiences given by locals – at least not in large enough tourist economies. If there was, then larger players in the tours and activities space with the infrastructure to quickly provide a new vertical offering would enter it.

      What are you thinking? Exploring an idea?

      KP

       
      • Toby

        Yes exploring an idea and have been for some time. Really like the idea of niche experiences, for me they mean immersion in the local culture and make the trip more meaningful and therefore memorable. Whereas they may not stand on their own, could they not form part of a bigger presence?

         
        • Keith Petri

          Toby, not sure I follow. Can you clarify:

          *Whereas they may not stand on their own, could they not form part of a bigger presence?*

          Thanks,
          KP

           
      • Chicke Fitzgerald

        What are you up to now? What is Michael up to??

         
  2. Chicke Fitzgerald

    Bravo Keith for your transparency and welcome to the club of entrepreneurs with a business failure under their belt. My failure was spectacular and I was fortunate to tell my story alongside Tom Hopkins, Jack Canfield and John Christensen in a book called Bootstrap Business (http://astore.amazon.com/httpsolutione-20/detail/1600134025).

    The important part about falling down is clearly the getting up part. Toddlers actually gain strength in their legs through the process of getting up, so falling down is key to developing strong legs. It is equally important for entrepreneurial toddlers!

    I am a serial entrepreneur, and happy to lend a hand if there is anything you need as you invariably think about your next venture.

     
    • Keith Petri

      Chicke, thank you very much for the comment and metaphor! I am very glad I shared my thoughts and appreciate the support I have received as a result. I will be sure to reach out in the future.

       
  3. Ilya

    Thanks for article, I understood today much…

     
  4. Keith Petri

    Kalen, Thank you for the comment. My co-founder and I have not discussed what we plan to do with the website. We are considering all options. Thanks.

     
  5. kalen wiggan

    Wow! Great article, very insightful. I remeember reading about igottaguide when it launched. Keith, its greatof you to share your experience so openly. Question: what do you intend on doing with the platform? Have you entertained the idea of selling it?

     
  6. Tony Carne

    Wow – thanks for sharing Keith. Really interesting read. I’d be interested in your thoughts on if you think someone can crack the travel activities market in P2P? As a volume game because of the relatively low price point of each transaction and as a marketplace yourself being practically locked out of traditional travel distribution, do you think volume can be achieved by someone based on your experience?

     
    • Alex Bainbridge

      Tony – stop thinking solutions and start thinking problems! Solving the problem that P2P has highlighted is within reach now…. but but by those with a P2P solution…..
      Alex

       
  7. Drew Meyers

    Good learnings, props for being so honest.

    I certainly agree someone is going to reach scale in this area. Though there are a ton of people trying, no one is remotely close to getting over the hump.

     
  8. Keith Petri

    Perfect. I look forward to our conversation and hearing more about Travelatus. Please use my personal website to reach out and we can setup a convenient time to speak.

     
  9. Keith Petri

    Ron, thanks for the response. I agree that there will be much more consolidation within the industry over the next few months. I am very much looking forward to seeing which companies come out on top. I definitely agree with a number of commenters on a recent PandoDaily post (http://cnslt.biz/X5oqbD) in regards to integrating a convenient tool within the purchase process – having a clear monetization strategy that doesn’t shift customer behavior.

    Psycho, I appreciate your interest in iGottaGuide’s failure and look forward to seeing Travelatus launch. If you are interested in hearing about our marketing efforts I would be happy to discuss them – just reach out via email. We made a strategic decision not to focus on Facebook as a result of demographic data – our product wasn’t inherently a social travel site, it was a tradition tour guide service and thus, needed to market to potential clients (on both sides of the marketplace) through channels they utilize most during the purchase decision. Facebook was not one of them.

     
    • Psycho

      Oh, well, that makes sence.
      I’ll contact you with more info on Travelatus soon if you’re interested.

       
  10. Psycho

    Looking at iGottaGuide Facebook page I think that there were some marketing and user acquisition problems. It’s strange cause the service was started by people from consulting company who must have been experienced professionals in this spheres.

     
  11. Ron Hodson

    Great post Keith. I’m sure you can take cold comfort in knowing that you won’t be the last to try to solve the travel recommendation market.

    Which begs the question of not “why” your effort failed, but what would it take for such a service to ever succeed on a large scale?

    Money? More customers with smarter technology? A better database of “unique experiences”?

    I’m not sure if we’ll ever see an Expedia sized success in this market niche, but I know that plenty of people feel the need for good advice when they travel, so I think the market will reward someone eventually. Maybe your post here will be of help.

     
  12. Keith Petri

    Thanks to Tnooz for reposting this reflection. I certainly value my experience in pursing a startup in such a competitive industry and appreciate being able to benefit from its failures. Writing this post was difficult and I certainly hesitated before I published it. However, the response has been overwhelmingly positive and I appreciate everyone’s notes. I am very much looking forward to what happens within the space in the coming months and will continue to be in touch with my competitors, partners, and friends.

     
  13. Sceptical corporate traveller

    Keith – major kudos to you for being so open and honest. It is to be hoped your reward is not only success next time, but lasting credit and respect from those who read and act on you pearls of wisdom!

     
  14. Iain

    How refreshing to have someone so openly share their experience. Few would be so bold. Thanks!

     
 
 

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