Tuesday, February 10, 2009

Alfonso Castellano Interview - on TripSay, content models and staying focused (part 2)

This is part two of my interview with TripSay’s new board member Alfonso Castellano. In part one of the interview Castellano and I talked through the online industry in general. We covered topics like the pressures confronting the OTAs (complexity, margin pressure, marketing costs), meta-search and the impacts of the global financial crisis (GFC).

In this part we talked about TripSay and the travel content model. Castellano believes that the next “ten year space” for travel is the 90%+ of the travel experience not captured by the OTAs – the discover, search, research and decision process that goes on before the trip and the collaboration, sharing and recording that goes on after the adventure.

His view is that TripSay will focus on the planning and sharing element using the traveller’s own community as the best resource.

Balancing UGC and Editorial Content

A challenge we discussed is finding the right balance between community generated content (UGC) and editorial content (see earlier discussions here and here). TripSay’s approach to this is to work with partners that have editorial content and combine with the TripSay community content. This does not mean doing a licence deal with a Frommers or Lonely Planet to white label the content on TripSay. Instead they propose to provide the TripSay as a white label community system for a travel company. TripSay provides the community content and platform, the distribution partner provides their traffic and editorial content. I like this idea. Giving travel companies like destination sites, tourism boards, tour operators etc to use TripSay in a software-as-a-service style model for launching a community structure. I see how this works towards a good balance between UGC and editorial content.

Monetising Travel Content Traffic

Castellano and I agree that if you can build travel content traffic (and make it sticky) then the advertising and paid traffic revenue will come. This places the monetisation pressure on the TripSay marketing team. On traffic acquisition, Castellano admitted that TripSay does not have a lot of money to buy traffic. Therefore the traffic plan combines with the biz development strategy for content acquisition. Using the partner deals for content generation to also drive traffic to TripSay. This will be driven through the acquisition of online affiliate partners but also through a push to sign up travel agents into a industry based community.

Focus and product development

The final challenge we discussed – which impacts all startups – is keeping the business focused on the product pipelines. In effect channelling the enthusiasm within the business. The GFC plays are role here too according to Castellano. Keeping an enthused entrepreneurial team focused on products that can make an immediate impact. Their hope is that they can do this faster and more nimbly than the larger companies.

I agree with these strategies but the main downside is that it places an involved (and complicated) biz dev obligation on TripSay. From my rules for content companies – this will take time. They will need great sales people and patience (read financial backing).

The last part that interested me was when asked about competitors he mentioned that the only other major player in the same space as TripSay is Travbuddy. I do not yet have my head around the distinctions between (or if there are distinctions between) the different travel content, review, planning, community etc sites. This came up in a comment in recent Tripwolf fund raising post. There clearly is some sort of categorisation between these sites but I have not figured it out yet. It is important to have categorisation because that helps with the development of competitor fighting and customer acquiring strategies. But done badly, categorisation can lead to the wrong focus – witness the distortions in parts of the online hotel sector in creating distinctions between last minute, full service, retail model, merchant model,etc when all consumers care about is booking a room. What do you think?

5 comments:

Eric said...

Hi Tim,

Great interview and thanks for mentioning TravBuddy ;) TripSay looks like a great site, very clean interface, easy to use, and already has a quite a bit of activity.

Regarding the distinction between community, content, UGC, etc -- I agree this can get kind of tricky. There are differences, but they are also all related. My take on it:

Community - I think this goes back to the real life definition of the word: A social group of people sharing common interests and characteristics. For TravBuddy, these characteristics are independent minded travelers with a passion for travel.

The social component is also important. Unless you have a certain critical mass of activity in the community, it's not a community. A community cannot thrive without conversation.

This is basically the same as in the real world, and indeed the lines between online and offline community are often blurred. As an example, over 6,000 people have met in real life through TravBuddy. The offline community is just an extension of the online one.

Content - Again, I prefer to just go to the definition of the word for this type of site. It could be any website that provides relevant information (photos, blogs, editorial content, travel tips, etc).

Content and community can be mutually exclusive. There are lots of sites that have lots of content, but little to no community. As an example, take a blog. A blog could have 1000 quality posts, which would mean that it has a lot of "content." But if there are no comments or discussions regarding the posts, if the readers of the blog do not interact with each other or with the author of the blog, then it is not a "community". The same is true for any website.

UGC - User generated content is the intersection of content and community. In an ideal situation, the two are self-reinforcing concepts. Users contribute content not just to contribute content, but to feel like they are contributing to the community.

The community responds to good content by rewarding it with conversation - comments, praise, social interaction, etc. So a good community encourages good content. This is a powerful concept, because it is a positive feedback cycle that can potentially result in more and more quality content being created.

This was a bit longer and probably a lot more confusing than I originally intended, but hope it helps!

Eric

Joe Buhler said...

Agree with Alfonso's statement that the focus in the next years in online travel will be on the 90% to 95% that happens before a booking takes place, i.e. planning, researching, communicating. This will have a serious impact on the players that were less to not affected by the first wave, the DMOs. The question will be how to monetize this area and the traffic it will generate. Also, how are these new sites different from the grand daddy of community sites IgoUgo started about ten years ago and acquired by Travelocity?

Tim Hughes said...

@Eric - thanks for the comment (and TravBuddy intro).

@Joe - spot on!

elliot said...

I am the CEO of TripCart, the Road Trip Planner. Part of the current crop, with TripSay and others.

Alfonso summed up the need and solution very well. Several others in our space - including TripWiser, TripTouch, Imin, Homeandabroad, TripIt have similar visions (or at least part of them). Frommers, Fodors are as outdated as the stacks of their books I have in my parents basement.

We have all managed to convince each other that this is the future of online travel. And it does not have to be any one of us becoming the standard, as in the facebook, twitter, google world.

I see us evolving into a cooperation model where we mesh together our products to provide real value to the independent traveler.

What is standing in the way of our revolution. Two pretty important things:

1. Users perception of online travel AND
2. Investor community

Those are some pretty big obstacles.

User perception -

Users have been dumbed-down by online travel, which is pretty amazing given that it is the biggest show in town.

The OTA's never provided much more than access to booking engines and database and have not changed much in a decade.

The travel guides did little more than scan their outdated content and put it online.

Kayak and TripAdvisor are two examples where user behavior was changed due to a new product. But even in those case, the change was not very big in the users eyes. Comparative shopping sites were around for years as were rating and review forums. Hats off, of course to Kayak and TripAdvisor from making the transition to online travel.

Users are saying we don't like what is out there. The established sites have flat traffic.

We need to figure out how to introduce the next generation of planning and collaborating tools to the travel community.

I like comparing what we do to the visit to the AAA office years ago. You walk in no even knowing where your family road trip vacation is going to be. You walk out 30 minutes later with personalized maps, guides, expert advice and maybe even some bookings. You go home and share.

Ask anyone over 40 if the web has given them what the AAA guy did and the answer will be No. Ask anyone under 40 and they may not know what the AAA did.

PART 2 - Investors

Investors have not been flocking to travel sites. I can think of a few reasons:

1. Not really new technology
2. Numbers are low when compared to social networking sites
3. Not Bay area centric.
4. Very few big exits
5. Not a field where there will be only one winner
6. Potential travel industry partners are very conservative

I have answers to all of those. I guess it will wait for my meeting with Mike Moritz!

Tim Hughes said...

@Elliott - thanks for detailed comments and adding to the conversation