Why travel search startups have nothing to fear from Google

NB: This is a guest article by Tom Howard, co-founder of Adioso.

Being located 17 hours ahead of Silicon Valley often has you lagging behind on the big news. On waking the other morning at home in Melbourne, Australia, the inbox and Twitters were abuzz – Google had launched a flight search product.

As the “other” YC-funded travel search startup, people just wanted to be sure we’d heard the news. Most were just interested in our thoughts. At least one feared for our future.

Over at HackerNews, once you waded past the protracted debate over Google’s evilness, several commenters asserted with certainty that this would spell death for travel startups like Hipmunk. The news had one anonymous travel startup founder proverbially throwing himself out the window.

When Google first announced its intention to acquire ITA Software in July 2010, we at Adioso thought it was a huge deal that would materially influence our prospects.

Fast forward 14 months, in the week that Google has finally launched its flight search product to the world, we couldn’t be less fazed by it, and we think every other travel search startup should feel the same way.

Let’s try and cut through the hyperbole. What is Google Flight Search? It’s just a flight search tool, that is integrated within the Google search engine. Nothing more, nothing less. It has some cool features, and no doubt it will have many more cool features in the future, some which may be truly disruptive to the travel industry.

But as a startup, to believe Google Flight Search destroys your own prospects is to believe that being Google is all it takes to own 100% of the travel search market. It is also to believe that once Google has taken ownership of the market, it will be the unassailable leader for any type of travel search, effectively for all of eternity.

I doubt those beliefs are correct.

One of the Y Combinator mantras is “Startups don’t get killed by competitors, they commit suicide”. In YC folklore, the only company ever to have been killed by a competitor was Kiko, a calendar app, that died shortly after Google Calendar launched.

You can see how that would would have happened. A calendar app is a relatively generic product, and being good enough and tightly integrated with Gmail might have been sufficient to effectively kill the rest of the market.

For Kiko to have innovated enough to overcome Google’s natural advantage would probably have meant becoming something quite different from a simple calendar app. They could have done that, but they decided to do Justin.tv instead.

You don’t get anything much less generic than travel search. Well before the internet, there were endless different ways in which people planned and booked travel. And whilst the internet has spawned a handful of dominant players like Expedia, Priceline, Orbitz and Kayak, there are thousands of other online travel search and booking tools, many with very large, happy audiences.

The travel industry is one of the biggest of all the world’s industries. It’s hard to imagine an industry with a consumer-base as vast and diverse. Yet tastes and preferences in travel search tools aren’t just diverse accross geographic and demographic segments, but even within quite narrow ones.

As Y Combinator-backed travel search companies, Adioso and Hipmunk have a significant intersect between our initial target demographics: YC founders and fanboys, if none else. Yet even among people in this rather homogeneous segment, you’ll get wildly differing views on which company has a better travel search product.

Some adore Hipmunk, some hate it. Some are excited by Adioso – its potential or its reality – and some don’t understand why anyone would ever want it. Some think we both suck and just carry on using Kayak. And some love each one at different times, depending on the type of travel and the certainty of their plans.

So, even within the one brain, there’s often great diversity in tastes and requirements in travel search products, depending on the context.

It was discovering this that made me realise we didn’t need to worry too much about competition. Adioso was never a search tool to win largely-satisfied customers away from other established players.

It was a product we built for ourselves, which then found an audience of people who agreed with our ideas on the way travel search should work. Similarly, Hipmunk is a search tool for people who agree with founders Adam and Steve about they way travel search should work.

Some of those people will be the same, and some won’t. For both of us, our success relies on finding enough people who share our views. The beautiful thing about travel is that each of these niches can still be vast and lucrative.

When we heard about Hipmunk, we naively worried they’d copy our ideas and use our secrets to beat us in the race to win over the market for, well, I guess any new travel search product. Of course as soon as we saw their product we realised it was nothing like ours and was built to serve very different needs.

Now, if I ever worry that Hipmunk might move into our product space, I just remind myself that they’re far too busy just being Hipmunk to think about being Adioso. For every feature of ours they’d add, they’d become less of what they set out to be themselves.

And now I think the same about Google. Google is building the sort of travel search product that Google would build, and it will be liked by the sorts of people who will agree with Google on the way travel search should work. They’ll probably add features conceived by Adioso, Hipmunk and any number of other travel search companies.

But they can’t do everything. They can’t please all of the people all of the time. More so than in just about any other industry, they can’t do it in travel search.

I’m not underestimating how significant and disruptive this will be for the industry. And I’m not oblivious to the implications for those who depend on Google paid or organic search for traffic, or on ITA for airline data.

But in the scheme of things, these issues matter little for startups. Building a great travel search company is really hard, not because of anything that Google does, but because building a great company is really hard.

At Adioso, we’re just getting on with building a great company.

NB: This is a guest article by Tom Howard, co-founder of Adioso.

NB2: TLabs Showcase – Adioso.

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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. The views expressed are those of the author. and do not necessarily reflect those of the author's employer, or tnooz and its partners.

 

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  1. John R.

    Great article.
    When I first read that Google was devling and fine-tuning travel search – I have to say I had mixed feelings.
    As founder of a social travel deals site, we see oursleves as travel search specialists of sorts. So, was Google now someone we had to contend with? But as a consumer and avid user of Google’s search capabilities, I was relieved. Finally, they’re at least trying to improve on what you can find when searching for travel related information on their site.
    So what’s the final verdict – am I worried? No really, or at least, not yet. I tend to agree that startups aren’t taken out by competition, at least not at the onset – they’re startups. They die from more self-induced causes.
    We’ve made it pretty far and delivering a service that more and more people are finding out about. For Google to suddenly become a threat in a niche online travel planning space like travel deals – well – I mineaswell begin to fret about crashing meteors and tidal waves. They can happen. It’s possible. But for the struggling startup, I have plenty of other things already to worry about.
    Let Google get better, and we will to.
    Either way – online consumers come out the winners!

     
  2. Pat C.

    Let us not come to any conclusions. All travel companies should work to drive innovation and customer centric solution for all the travel needs.

     
  3. Genevieve Atkinson

    Nice article Tom, totally agree that there is lots of room in niche, in serving a target audience and doing what you do well.

    Would be really nice if google spent more time on finding better ways to present these niche sites to the right people than the generic catch all results and recreating the technology themselves, but C’est La Vive. Will be interesting times ahead.

    Personally I’m hanging out for the start-up that does google better.

     
  4. AZ Flyer

    Nothing substitutes people with knowledge.
    It’s not a bad tool for research…but at the end of the day there are lots of things google cant tell you;
    Layover’s, Lateness, Seat Comfort, Value.
    As you indicated…nothing to fear!

     
  5. Brennan

    I did a quick review/feature of Google Flight Search and even though the platform was good I said in the review that I don’t think they’re a game changer or anything to fear for startups/major brands. One thing that surprised me is I did a random flight search and compared it across Google, HipMunk, Kayak, Expedia, etc and Google’s lowest price was in last place among all brands with a $10 difference in price. The big drawback on Google Flight Search is that they’re only using airline websites for comparison which usually aren’t going to give the best price or user-experience.

    http://buzzraid.com/google-flight-search-review/

     
  6. Jerry Bradworth

    Sorry Tom but that article sounded like you wanted to reassure your investors that you still have a business… Which is fine.

    I tried to use Adioso2 or 3 times now with the flights not being available. Doesn’t sound like you take Google seriously enough in this article and being the company they are I think you should.

    I hope you continue to push and create as I agree there are niches out there to explore but Adioso right now is exactly what Google flights is but just a slower version without google reach.

    Time to mix it up i think Tom. Good luck.

     
    • Tom Howard

      Thanks Jerry 🙂

      We felt the need to reassure our investors we still have a business when Google launched its bid to acquire ITA in 2010. Our investors said “don’t worry about Google, just get on with building a great company”.

      I know what you mean about the current state of our product. Behind the scenes we’re working on something very different altogether.

       
  7. @Tourabout

    Seriously one of the best founder-written Special Nodes articles I’ve read on TNooz. A great perspective for startups to help relate to the big end of town and their fellow startup. Well done.

    Ben.

     
  8. Heddi

    Absolutely agree and think this article is fantastic. Anyone who throws in the white flag before they’ve started didn’t think through long term goals. There will always be competition, and overlap in ideas…but to bail at the starting gun is an excuse to justify failure. Google is a great platform to test the ‘little people’ and make us all adopt a stronger imagination in diversifying. With http://www.mytab.co, we created that in mind – to be an ally to all OTA, Suppliers and GDS. Google relies heavily on travel advertising so are too smart to shoot themselves in the revenue foot. And I can’t agree more with you about people copying ideas. We all have to focus on what we’re excellent at… Love this article, had lots to say about it (obviously) 🙂

     
  9. Chris Patridge, Chief BACKBID Hotelier

    It’s great to hear the courage and conviction with which you all put forth your ideas. I agree, the sky isn’t falling, and there’s more than enough room for us all in the huge travel marketplace.

    As a start-up in the early stages of our business, it’s comforting to think that if you do one thing and do it well, like-minded consumers will reward you. Ideas are a dime a dozen, it’s execution that makes the difference.

     
  10. eezeer

    @SpecialNotes Wrong link on this [NB: This is a guest article by Tom Howard, co-founder of Adioso].Linking to http://www.adios.com/ like “Good bye” 🙁

    As for my comments on the article to @Adioso :
    You have a great concept and sens of combat,
    But most probably google dependant,
    Facebook will hit us harder on travel,
    No mobile app, no future.

    I run Air Valid FR, UK, DE, ES, IN, CN, US and search engine on French market that totalize 700,000 visitors per month with 55% click ratio. We were the 1st to integrate and feature for free Hipmunk on eezeer and air Valid US back in September 2010… At time we speak, Hipmunk is not able is not cashable in partnerships, because of their deal with ITA.

    In the end, my last query on Adioso on a selected route and dates sent me this page on easyjet http://www.easyjet.com/asp/en/book/index.asp

    Should I make a new search? Will you get paid for it?

    AB/

     
  11. AvNar

    It is great to see that reason does eventually prevail. The biggest surprise over the past 2 days has been that what Google did appeared to be a surprise at all (to some). It could be just that we are all too bored of waiting and the early indicators of the nature of the beast finally peaked the hype? Love the way something truly new is born, step by step, holding us breathless to check the next destination, to compare across airline websites and wonder why Delta is “unable to price”..

    Nimble, simple, natural search is what Google does for a “living” (and what a living that is) – so no wonder they embraced Hipmunk – and did not preclude all the freebies it got from ITA. True difference as the step-change we are observing in action takes a lot of resolve, size and vision. And flight search has a lot of baggage to offload – it is not the startups!

    To crowd out legacy, clumsiness and status-quo is not “evil” – it may be in fact the new “noble”, of which we are set to see more soon. So some will cry wolf – let them. This time it’s for real…

     
  12. John Pope

    @Tom

    Genius analysis and beautifully articulated.

    As you say, there are plenty of ways to differentiate and successfully mark your own territory in such a large market. There are also a number of strategies that Google couldn’t possibly conceive of, implement or copy. Their size and structure is ironically a double-edged sword.

    After all, even Achilles had an issue with his heel. Google also has very real vulnerabilities like anyone or anything else.

    I agree with you that it’s prudent to focus on one’s own product development and business models but I also think start ups are best positioned to find solutions that take advantage of the weaknesses of Google and it’s fellow industry behemoths.

    Bill Gates’ wise words and assertion that he was most worried about “two guys in garage” rather than his known competitors, I think, also applies in this case.

    Great article!

     
  13. World Hotels Guide

    Everything is fine but the only problem is that you have hyperlink “Adioso” at the last with wrong URL of your website.

    Check it here:

    This is a guest article by Tom Howard, co-founder of “Adioso”.

    Informative article and nothing to worry about because its not easy to get visitors to start up, you have to show productive tool so that visitors can come to you and this will create brand awareness to you if you provide good services.

    I had a chance to look Google Flight search, I didn’t find this user friendly..They are on the way to create a great tool but it will take time, they will come up with new features in future.

    Keep posting.

     
  14. Evan

    Absolutely true, Tom, great article.

    One caveat though: Don’t go raise a few hundred million dollars. Once you do, your VC will want you to go big, as in #1 in the market big, or enough traffic to get a $1b+ exit. At that point, you can’t afford to hide out and make money in your corner — you’ll have to take on everyone.

    The travel industry is HUGE and there is room for everyone, so start-ups should have no fear exactly as you state. But getting mass attention is notoriously difficult in our noisy industry, and crossing the chasm just became a tad bit harder.

     
  15. @TripAssassin

    Amen, brother! It’s no different than when people freak out when the stock market takes a dive. It always goes back up… Remember when people thought no one could compete against Microsoft? Or IBM, or or horse and buggys (well, I don’t remember that one), or any other market leader for that matter. Google is no different.

     
 
 

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