DISRUPTION IN THE TRAVEL INDUS
Europe Invented the Travel Industry, but is America Making all the Money? By Joe Haslam
W
riting in Wired Magazine about what he saw as a tech incubator boom, James Silver wrote that Europe now has about 50 programmes vying for entrepreneurs. Whether they use the name boot
camp, incubator, accelerator, venture lab or academy, the model is largely the same. Each start-up is assigned a mentor and at the end of the programme, there is a Demo Day where investors are invited to hear the companies pitch for investment. VCs like them because they act as a filter, and entrepreneurs like them even more because they can work in the company of other entrepreneurs.
But what of mentors, what do they get? Some mentors give their time for altruistic reasons. People helped them in the early stage of their start-up, so they want to give back to the ecosystem. Other mentors are in for the money, either as an angel investor or to join the team if the company looks like it could go somewhere. In my own experience, I´ve found that mentoring is great way to spot a trend before it becomes mainstream.
The first travel company that came on my radar was Tralopia in the IE Venture Lab. Following this came Tripku and now Hot Hotels, a company where I´m currently Chairman and shareholder. Starting in mid-2010, every Business Plan competition and incubator intake seemed to have one or more companies looking to do something in the travel/social media space. Not all have been successful, but incumbents in any industry should be very worried if there are many people who see an opportunity to eat their lunch. Take American Express, who announced in January that they planned to lay off 8.5% of their workforce. Most jobs would go in their Global Travel, a business which is being ‘fundamentally reinvented as a result of a digital revolution.’ We have been here many times before when legacy businesses go out of their way to try to communicate that ‘we get it!’ but as the sad demise of HMV shows, survival is not just understanding that changes are afoot but understanding that as the incumbent, you are at a competitive disadvantage. History tells us that it´s more likely that you will not survive than that you will.
San Francisco based AirBnB is one such company that came out of an incubator. Founded in August 2008, the company attracted massive headlines when a conference on the sharing economy was told that this four year old company was now filling more room nights than Hilton Hotels. As a fascinating email exchange between Paul Graham of the Y-Combinator incubator and Fred Wilson of Union Square Ventures shows, even as late as 2009 these two mavens had really nothing more than a hunch about how big and how quickly renting unoccupied living space would be. ‘The sharing economy’ is a term that deserves attention, particularly with Brian Chesky, the CEO and founder of AirBnB, going on record to say it will have a bigger effect than the industrial revolution. In an economy where large groups of people can share things like accommodation
20 entrepreneurcountry
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