TTE startups
8 months ago

Mixing startup and corporate cultures in travel

Travel startups take note – if your idea isn’t urgent (a problem needing to be solved quickly), pervasive and something consumers will pay for, maybe it’s time to move on and do something else.

Pretty sound advice when you look at the startup failure rate and the many me-too’s along the way in travel.

The comment came from Jason Nash, head of global marketing and product incubation for Travelport – perhaps not a company traditionally known for its startup mentality but something it is trying to address with the recently launched Travelport Labs.

Why now? Well, the rise of the likes of Uber, Airbnb and those consumer to consumer like business had got traditional companies thinking about disruption and not being left behind.

The interest is also being fuelled, says Nash, by cloud computing, meaning anyone can be up and running quickly and the ready availability of capital.

Cue startup incubators and early stage funds springing up all over the place in the past couple of years.

In recent weeks alone the Institute of Travel Managers unveiled an Innovation Lab giving entrepreneurs the chance to pitch their idea at its forthcoming conference. Similarly, Carlson Wagonlit Travel announced a partnership with Silicon Valley accelerator Plug and Play.

Both these moves come on top of Amadeus Ventures which launched at the end of 2013 and Travelport Labs in the middle of last year.

According to Nash, disruption is “starting to bite really heavily” into existing companies.

“We’re seeing businesses that have come from nowhere and in a few short years become multi billion dollar companies. The time to go from startup to billion dollar company has been compressed down from 10 years to about 18 months with the right idea.”

Those last three words are crucial, there’s no room for me-too, it’s casting the net wide for startups which have the potential to disrupt and Travelport Labs wants to be involved from the beginning.

He was speaking as part of a Tnooz-led session at Travel Technology Europe looked at why traditional companies are getting involved now, the benefits for each party and the potential pitfalls.

Travelport Labs has already had to whittle about 130 startups down to just a handful, so any fear of passing up on the next Uber?

Nash says you have to be in the market to find the startups.

“It’s the classic innovator’s dilemma, recognise what will cannibalise your business, identify them or be cannibalised. That’s why we want the net to be as wide as possible so that if we see the next Uber we will have a pretty good idea if there is a good market fit.”

Advantages from the corporate point of view are having to change the mindset, mixing the startup and big company cultures and hopefully finding and being part of an idea and helping it grow into something.

And for startups, Nash says that the expertise in terms of technology and the travel industry, mentoring, as well as the exposure to customers is where the value lies.

Startups on the panel including Cabforce co-founder and chief executive Andreas Hansson felt not having access to an incubator had forced the company, which was acquired by CarTrawler a year ago, to be non exclusive but conceded that there was a time to be independent and a time to part of something bigger.

Meanwhile, Andy Owen Jones, co-founder and chief executive of bd4travel, who has been on both sides of the startup-corporate marriage, warned big companies had to be careful not to stifle startups.

He also drew on his experience to talk about the DNA of big companies, its impact on startups and the need to play for keeping the startup mentality alive, within a corporate and plan for the inevitability of startup founders leaving the business.

“You have to have an asset that is not only identified with a few people. You have to learn to operate in a different way and protect it for long enough so you can build and get the scale out of it. It can work and you can get some benefits out of it but it has to be robust enough to survive the loss of a few key guys.”

But it’s not just about keeping the mentality alive there’s also a gap to be bridged between the how fast a startup moves versus the traditionally slower moving larger company.

Owen Jones said one of the hardest things is synchronising timetables between a small and big company.

“They might love what you do, need to see it and then you hear nothing for six weeks and then, they urgently need it. That’s the culture thing of understanding how to work with startups and that’s where an incubator helps.”

Nash added that while the secret for small businesses is agility and being able to and turn ideas round to a prototype quickly, startups need to be wary of losing control by letting one or two customers drive their roadmap.

“It might be a lucrative piece of work but it may change the trajectory of your business.”

A final question was raised on whether startups should be wary of being too reliant on the bigger company with Owen Jones saying the idea is only 20%, it’s about how fast and how well it can be executed.

Hansson agreed, only adding that an open dialogue is key between the startup and established company.

NB: Startup image via Shutterstock.

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About the Writer :: Linda Fox

Linda Fox is deputy editor for Tnooz. For the past eight years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.

In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.

Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.



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  1. Tony Carne

    The couple of statements here that stood out to me were: “It’s the classic innovator’s dilemma, recognise what will cannibalise your business, identify them or be cannibalised” and bit about the “culture thing of understanding how to work with startups”.

    Urban Adventures is a startup that has been 100% incubated inside a larger business (The Intrepid Group) from the outset. That may jar with some of the startup purists but for us has worked remarkably well and that is mainly because the culture has allowed it to do so. We’ve been allowed to run and build on totally separate systems and to not do so would’ve meant failure by having to get in line with other business priorities. Functionally the Intrepid Group to us is just one client and we work with them as we do many other partners from a pure sales relationship. The overwhelming advantages have come from the knowledge and relationships you can get access to quickly that might otherwise take forever (or never) and the fact that no management time is spent chasing funding and everything is concentrated on bettering and growing the product.

    We are now 6 years old, standalone profitable and maintaining great growth rates. We have grown within the organisation and are now an integral part of the overall organisation which means there is not the usual process of core teams fleeing the second the contract time is up as happens in often in post acquisition scenarios. All that is down to culture and mutual respect – our aim is far from reforming the larger organisation but rather giving more options and different market approaches consistent with an overall vision. I’d like to think everyone is learning a little bit from everyone else internally.

  2. Murray Harrold

    … and luck, Timothy … and luck. As Napoleon said “He may be a good General… but does he have luck?”

  3. Drew Meyers

    “the exposure to customers is where the value lies”

    Yes, that’s the key right there.

  4. Matt Zito

    Regarding the quote, “Travel startups take note – if your idea isn’t urgent (a problem needing to be solved quickly), pervasive and something consumers will pay for, maybe it’s time to move on and do something else.”, I don’t wholeheartedly agree with this.

    Yes, a sound business is built on urgency and solving a core problem. Disruption on the other hand doesn’t necessarily solve an existing urgent problem. If you look at Uber and Airbnb, two companies that we all know are disrupting the travel industry, they did not necessarily solve an urgent travel industry problem. There was not a shortage of lodging inventory and or transportation. The problem both solved, if you can call it a problem, is that they gave many more people an opportunity to make money, creating more inventory where it never existed before. Their competitive advantage created is massive improvements in efficiency through the utilization of technology.

    At Travel Startups Incubator we are excited to see corporate travel venture arms like Travelport Labs and large broad-based incubators/accelerators like Plug-n-Play creating vertical programs in the travel & hospitality space. Big names like these are bringing more visibility to travel tech startups, which is a great thing.

    Travel Startups Incubator launched 18 months ago and has invested in 16 travel technology startups to date. We’ve calculated that we have seen close to 1,000 travel startups looking for funding, advisory, business development assistance and mentorship.

    Our core philosophy and business model is much different than the above two companies mentioned. We believe that innovation and disruption can come from anywhere, thus incubators/accelerators need to be global and virtual to reach and invest in the most talented entrepreneurs, with core resources and assets accessible on a digital platform to create scale.

    For us, the proof is in the pudding. Proxce, our first investment 14 months ago, is now closing contracts with hotel brands (announcements coming this spring), and won the most coveted travel tech startup award in the world, “The Most Innovative Startup” in November at Phocuswright.

    • Murray Harrold

      I think I agree with you. The issue facing startups is finding those areas within travel that need modernisation. I do not like the word “disrupt” as it has very negative connotations and apart from that, many startups do not “disrupt” anything. AirBnb and Uber managed to identify two sectors within travel which had seen little, if any, modernisation; or indeed, any ability to bring demand and supply into any cognitive relationship. Such was not disruption but modernisation. Proxce (which is, indeed a new idea and a very good one) also looks at and modernises how people check in. It is not disruptive as there was nothing like it to disrupt. – and many hotels will, I would venture, be only too glad to have an efficient way of speeding up their check in procedures – so modernisation, not disruption.

      How you are going to continue to find startups that genuinely manage to modernise the travel experience will be quite a task. It can, as you say, come from anywhere. I would also agree that the “if your problem isn’t urgent…” statement is flawed. For many, we do not know where the travel process needs modernisation. What I do know is that any start up should be a) Genuinely new and b) Seek to modernise an aspect of the travel experience – that aspect being one that at this time, users did not know that there could be a better way. Now, you must excuse me…. the check-in queue for my flight stretches for about a mile …. I wonder …..

      • Drew Meyers

        “I would also agree that the “if your problem isn’t urgent…” statement is flawed.”

        For the vast, vast majority of startups, I’d say that statement is not flawed. I think the only way it IS flawed is if you have a crap load, and I mean a TON, of funding to give you 3+ years runway with a fairly large team to iterate, advertise, etc. Most startups will never last long enough to give a product that doesn’t address a problem with urgency a real shot at ever succeeding. Lack of urgency is definitely one of the components that is leading us at Horizon to focus on a more urgent problem:

        • Timothy O'Neil-Dunne

          I think the “urgent” or “pressing” need is a variable not a constant. So I would ignore that. Do a Gretzky analysis on it – that is much more valuable.
          I have experience in both the well funded and the bootstrapped. There is no perfection in either. I have experienced a group who were well funded and watched them drive the very good concept into the ground because of rank stupidity by the management.
          I have also experienced a totally hand to mouth project that came good – after 4 years. There are no generalities because luck usually plays a huge part. However let me tell you one characteristic we feel is essential. Stamina. Don’t even think about a startup unless you have a lot of it.
          What I can say is that most startup funders never do the right sort of due diligence. That may sound bad from someone (me) who is actually investing my own money in startups.
          Where we do think there is a trend is that the business has a utility. If the utility can be demonstrated then the business has a greater chance for success.

          We could write encyclopedias on this topic. Perhaps one day we all should contribute to one 😉



    • Nick Vivion

      I definitely think that Uber and Airbnb solved an urgent problem – the desire for people to make money from unused or underused assets. Remember, people have been renting rooms to travelers and running illegal cabs since the dawn of mobility. The way I see it, that’s the same thing that Hotel Tonight accomplished by allowing hotels to monetize unused or underused assets. The difference being that the hotels were already in the business of renting real estate to guests, whereas the majority of Airbnb hosts weren’t yet. Would HotelTonight not have solved an urgent problem? Something doesn’t lack urgency just because a large group of people doesn’t recognize it as urgent. Urgency exists somewhat on its own plane, and some are blessed with the vision to recognize those urgent issues unseen by others.

      All that being said, in a world that is rapidly urbanizing amidst the wholesale economic transformation of the 1099 majority, Uber and Airbnb did solve an urgent, real problem. I believe personally that disruption must have urgency, otherwise it’s not truly a disruptive force. I don’t believe that disruption is a slow burn. Rather, it’s rapid, explosive, and in-your-face. That’s why it can be so threatening to the status quo – almost before we know it’s even happening, things have already changed.

      Disruption comes from mining the edges of possibility, finding those connections that are often invisible to others and probing the edges of seemingly unconnected areas to find those overlaps. It’s within those overlaps that true disruptions are primed for explosive growth. Due to the difficulties of finding those unmined overlaps, real disruptions only occur a handful of times each decade.

      Innovation, on the other hand, is an iterative process that comes from dedication and commitment to a rigorous process. It’s not necessarily about the shiny new toy sitting in the corner or the “next unicorn” – it’s that long-term, challenging, disciplined process that is true “innovation.” It doesn’t happen overnight and it’s not necessarily about finding those invisible-to-most overlaps that are “disruptive.” It’s about iterating through process, solving one problem after the other until a true need is solved better than before. It’s about a fresh look at an existing problem and considering how to deliver better business outcomes through new approaches. For large organizations, this must then be baked into the DNA of an organization, managing change to infuse a “nimble now” mentality through large groups of geographically dispersed teams.

      Beyond that, there are plenty of startups and companies making great money providing services and products that are not necessarily innovative or disruptive. And that’s ok. We are so obsessed with innovation and disruption that we sometimes forget that old-fashioned solid business fundamentals are something to be extremely proud of! If you sell something that other people want, you are winning the game. As long as you keep selling things that other people want, you will continue to win the game. Those are the basics, and while periodic disruption can certainly require an “adapt or die” mentality, a relentless focus on product and customer experience is the nitty-gritty of maintaining relevance with customers. Perhaps that customer-centricity is the core of all innovation!

      So a bit of a tangent but Matt’s comment really got me thinking about innovation vs disruption, startup vs corporation and the ways that we communicate about those differences. Thanks for the comment!

  5. Murray Harrold

    Quite insidiuos, really. Todays disruptor will become tomorrows disrupted. That said, most modern startups are targeted at the sales side – not at the supply side. We have only had one real disruption on the supply side and that was Michael O’Leary. The aim of any startup up is a) Find the bit of travel that does not have an organised sales system b) Get something that works going, fast and hang any regulatory bits that may intrude c) throw enough money at it to get big quickly … so d) No-one else can get a look-in.

    I do not know why no-one has “disrupted” the package holiday business from a supply perspective (and before any quotes Airbnb et alia, tailor made holidays have been around for ages) and no-one has touched the selling of rail, for example (not in any useful way, anyway)

    What Alex says is most salient. There are a finite number of hotels and (certainly) a finite number of airlines. There are many more car drivers around and a myriad of small, localised tour operators…. As the number of startups increases, competition for product increases. All that venture capital wants a return and at some point the graphs will combine. Unless any startup has really found a unique element of travel which needs modernisation, that startup will struggle, no matter how much money is thrown at it.

    I still seem to be booking stuff, though…. can’t think why ….

    • Timothy O'Neil-Dunne

      One thing that we all know – The technology on which the industry mostly (only just) relies is from the 1960s. However the processes and structures used are almost universally from that era. And this is the issue.
      I think Gates once said “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” All companies operate at different speeds. Travel suffers because it has a lot of inefficient processes inherent.
      To condemn all startups is far too facile. The age old axiom of if it aint broke dont fix it works well for many in the chain. But its the “its too scary to fix therefore it aint broke” mentality that actually causes inefficiencies and higher costs. Particularly when you have players who have dominance. We are going to come to a bit of a halt soon. Why? because we are running out of resources. For example airports. This the technologies that power distribution and sales needs to take that into consideration. So far it isnt.

      What we need to see is a better way. Big companies sponsoring startups hoping for the patina well that frequently doesnt work. Little companies selling to big companies is more natural. They have no choice. I cannot think of any good example where a small startup has worked magic on reforming the larger entity. Perhaps this is a sign.
      So Murray’s supposition may be right but for the wrong reason.

      • Murray Harrold

        I do not condemn all startups. I do feel that (most) startups are competing within the same element of the travel industry process – where there is a finite supply of product. No-one has really tackled very much on a) the supply side or b) those bits within the sales element that do need modernisation – e.g. Rail. Startups may be, to my mind, accused of trying to take the low hanging fruit – and there is precious little of that left.

        I do not agree with the Bill Gates statement – mainly because what is and what is not “efficient” is very much a qualatitive judgement. What to some may be efficient does not seem so to others. Take our 1980’s technology, for example, the GDS – Objective: “Book a person from one part of the planet to another where, no matter what, the booking works” – and that, a GDS does remarkably well. Now, I confess to not knowing what happens twixt operators and distributors below the surface, but the duck sails along magnificiantly well. There may well be bits under the water that are not “efficient” (for “efficient” read “cost too much for our liking”). It must also be said that, if you wish to “modernise” the distribution element, then you must be 110% sure that any replacement works – and under all conditions, all the time. “Failure” may be an option for techys – it is NOT, however, an option for agents (which is why many agents are very hard to budge from what they know that works).

        RyanAir was once a startup. Made one hell of an impact!

  6. Alex Bainbridge

    This article was written from the perspective of small startups working with larger travel businesses.

    But there are few larger travel businesses out there, in comparison to the massive number of existing smaller travel businesses (hotels, local tour operators, small travel agents, taxi/ground transportation drivers) that a startup can work with

    Smaller startups tend to match well with larger travel companies (due to startup flexibility / agility), Larger startups tend to match well with smaller travel companies (due to startup tech power / network effect)

    i.e. opposites attract


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