Alex Bainbridge Blog

It’s interesting watching how startups evolve – San Francisco-based Zozi started out in 2009 as Ekoventure, an intermediary in multi-day tours and activities.

Next came $11 million funding over the course of a few months and a new focus on day tour deals. Shortly after saw it strike a deal with Google Offers and another with Foursquare.

Now it has announced Zozi Gurus, a new platform to connect travellers with top celebrity athletes and adventure-types, for once-in-a-lifetime experiences.

This is quite an evolution, but one that makes a great deal of sense.

Multi-day tours and activities remains the unconquered Mount Everest, where margins are high but intermediary-delivered conversions are minimal.

Deals have too many similar companies chasing the same suppliers and customers – so differentiation via expert-delivered experiences could be the answer.

It doesn’t come particularly cheap for the consumer, but let’s face it, so-called once-in-a-lifetime experiences rarely do. For example, $2,700 will buy you a ski experience with US Olympic gold medal winning Jonny Mosely.

From a business perspective, this latest move puts Zozi up against other VC-backed person-2-person (P2P) tours, activities and experiences marketplaces.

Why this is an interesting play

The key element here is that it that Zozi’s product is not just a ski experience, but a ski experience delivered by someone that the public would respect as a subject matter expert – an experience money could probably not otherwise buy.

One of the only other examples of a similar strategy is Sidetour – there you can also book local experiences with experts, such as a Silver medal Luge winner. Most other P2P marketplaces just have regular folk – mainly destination locals – offering tours.

One problem with celebrity-fronted experiences is the lack of supply. Zozi has its ski expert ONLY available on a forthcoming weekend in March. For Sidetour the same problem – the luge trip is only available the same weekend in March.

One-off events and experiences also cause quite a number of issues from a PR perspective.

Journalists won’t cover trips where their readers, often reading some months later, can’t buy or recreate the same experience themselves.

However, Zozi with its $2,700 experience will at least be making more money from selling the experience versus Sidetour with its $150 offering.

Differentiation and marketplaces

An ongoing challenge that faces these P2P tour and activity marketplaces is that the product does not exist independent of the marketplaces.

This is unlike a hotel intermediary where the property itself will be attracting bookings on a regular basis, so will have a highly tuned product proposition – if the intermediary can’t sell it then the problem is likely with the intermediary rather than the hotel.

Where the product doesn’t exist except for within the marketplace the product never gets the tuning required to make it a standout experience.

It could be priced wrong (either too high or too low) or just not be sufficiently wonderful to want to book, or may suffer from lack of incorporated feedback due to the low volume of real world sales.

It is also challenging to distinguish between tuning of the product description/marketplace UI/marketplace marketing and the product itself.

This problem is reinforced by the marketplaces aiming to be the anthesis of popular, mainstream, tours and activities, hence many are trying to create highly bookable popular experiences BUT without going mainstream.

Ultimately for most of these VC-backed marketplaces, going mainstream WILL be necessary in order to attain the valuation the VC investments suggest, so it will be interesting to watch how this this all turns out.

Better suited systems exist that solve mainstream tour and activity distribution challenges - Zozi might well dodge this conundrum by selling high-value, high-margin experiences rather than being low-value, low-margin like competing P2P marketplaces.

This could work.

2012 and the tours and activities sector is already hotting up nicely… lots more to come no doubt!

NB: Here is a Gurus clip:

The profession of travel blogging is apparently on the rise (defined as those who find employment through writing travel blogs).

There is always plenty of discussion (and a plea to stop) about commercialising the craft, but in order to make money there are two ways these bloggers can evolve:

• Solve consumer problems.
• Solve travel industry problems.

People pay to have their problems addressed and problems are a solid basis to form a business or maintain employment.

As a distant cousin of travel bloggers, travel startup entrepreneurs constantly strive to understand problems and so-called pain-points (with ideas and innovation being the by-product of understanding the problem with sufficient skill that they spot a commercially viable solution).

For travel bloggers it should be no different.

Here are two travel industry problems that travel bloggers could address in order to earn their keep:

1. Destination data

The future of travel websites (and services) revolves around data and building tools to understand this data and present appropriate versions of it to consumers.

Product data tends to be openly available in API form. Even review and other data is nicely standardised and able to built into a global travel system at scale without too much fuss.

But destination articles and data is hard to source that matches the brand criteria of the travel website (a luxury tour operator would have quite different demands to a backpacker website).

At this point travel bloggers and writers are often brought in, sub-contract, to research and write a handul of freetext articles about that destination.

So far so good. But with personalisation coming (increasing demands on data) and global websites wanting to give equal prominence to all destinations (requiring content from everywhere, globally, within a short timeframe) this can’t be serviced by just a few travel writers.

I want to see a marketplace system where, as a content consumer (a travel website), I say I want to know the top five spas in 100 destinations….. and 100 travel bloggers, each knowledgeable about their own specialist region, can answer that question for a small fee.

Quickly, I have sourced a unique database of 500 spas that I own the IP to, written up in my brand style specification, based around what I need for my new service.

Travel bloggers and writers will need to become masters of destination information, not masters of prose (or link-building). There is money to be made there, but only if they collaborate via a central marketplace such as my idea above.

2. Multi-day itinerary based tours

Specialist tour operators are crying out for help promoting their products (and tailor-made tour booking services). Many of these tours are booked at 100-130 days prior to travel.

My hypothesis is that travel blogs are often read during the consumer research phase, which happens to correspond to the same time-frame that specialist tours are booked (versus, say, hotels or flights, which tend to be booked at a month or so prior to travel).

When you have travel bloggers writing inspiration oriented content and failing to monetise it, and you have specialist tour operators crying out for more help promoting their services, and both active in same 100-130 days prior to travel phase, then someone has to be able to create a business out of this to the benefit of both sides.

Any more?

There you go, travel bloggers, two clear opportunities for new startups to focus on monetising the skills and experience of the new travel blogging industry by providing solutions to the travel industry (rather than consumers).

Any other ideas I have missed?

NB: Image via Shutterstock.