Friday, September 22, 2006

Another angle on Travel 3.0

Lisa Gannes and GigaOM has an interesting post on cFares. Love the idea but the worry with this site (and other niche like Groople) is whether or not a great niche product is enough to build a business on. To use a soft-drink analogy (which I am known to do) - how often can you base a whole business on a single product that caters to a particualr market - Red Bull - vs. when does your great energy drink better sit with a full service player who can pump "free" (in incremental terms) distribution, marketing and development - such as Coke launching "Recharge by Sprite". Don't know the answer but will see soon enough.

UPDATE - July 07 cFares have just closed a series A round of $4.5mm from Claremont Creek Ventures and Garage Technology Ventures (who were also an angel)


Anonymous said...

U mean like getting a Rate-to-go ?

Tim Hughes said...

The debate is not whether or not focused/niche products work (ie RatesToGo) but whether or not they can support stand-alone businesses. For example - would RatesToGo be so successful if it did not have the initial support of the HotelClub infrastructure (and now the general support of Travelport)? Would Tripadvisor continued to thrive as a independent company without the content and fulfiment support of Expedia? The counter argument of course is that Wotif has does much more than survive and it is a single model product. Am not saying that I know the answer but do think that a lot of these emerging so called Travel 3 sites are going to struggle to get the scale needed to support the marketing, fulfilment and operations costs that are unavoidable in online travel. The owners probably know this and like much of this wave of investing and looking to be bought quickly and folded into a larger partner.