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FUTURE OF TRAVEL, BIG DATA AND STARTUPS
Hussein Kanji
September 16, 2015
Rapid growth of travel startups
1,000+ startups founded since 2005
$7+ billion raised – half of it in 2014 alone
New layer...
Why?
Huge industry: $7.5 trillion market growing faster than global
GDP at 5.4% a year, with 1 in 11 jobs
Consumers are go...
Incumbents New leaders Lots of others
3HOXTON | CONFIDENTIAL AND PROPRIETARY
For every good idea, there are lots of very similar ideas
4HOXTON | CONFIDENTIAL AND PROPRIETARY
As a result, funding isn’t distributed evenly
Uber – 22%
Didi Dache – 22%
Airbnb – 7%
Trivago – 6%
HomeAway – 4%
Others – ...
Not every startup succeeds
Only 10% of travel startups have been acquired
20% or more have been shutdown
6HOXTON | CONFIDE...
This means venture funds lose money. What
does failure teach us about stats?
7HOXTON | CONFIDENTIAL AND PROPRIETARY
Average venture fund (and startup)
performance measures nothing
Return multiples, fund sizes <$100M 1.68
Totalvalue to pai...
Truth is, averages lie
The average salary for University of North Carolina
geography graduates in the 1980s was over $100k...
Statisticians know how to deal with this
But why rely on stats when you can rely on technology?
10HOXTON | CONFIDENTIAL AN...
The market works around A/B testing, but this
is a crude way of doing things
A/B testing optimizes for the average consume...
Where tech can improve on averages
12HOXTON | CONFIDENTIAL AND PROPRIETARY
The future is hyper-personalization – using big
data across every point
Travel industry is ripe for this – gains can be tr...
Not unsurprisingly, the pioneers are the
technology companies doing travel
The smartest firms have the smartest data scien...
Airbnb need to personalize not just by users,
but around hosts who would accept bookings
15HOXTON | CONFIDENTIAL AND PROPR...
Live planner example
16HOXTON | CONFIDENTIAL AND PROPRIETARY
The best companies right now are full-stack
They own the consumer experience
They are early adopters of technology, and ar...
Why aren’t more firms doing it?
“ Big data is like teenage sex: everyone talks about it,
nobody really knows how to do it,...
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FUTURE OF TRAVEL, BIG DATA AND STARTUPS

Hussein Kanji, partner at Hoxton Ventures, sharing his insights about how big data and new technologies are disrupting the online travel business. His presentation shows how real time personalization and digital empathy are replacing “the average user approach” as a new way to market travel intelligently online.

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FUTURE OF TRAVEL, BIG DATA AND STARTUPS

  1. 1. ® FUTURE OF TRAVEL, BIG DATA AND STARTUPS Hussein Kanji September 16, 2015
  2. 2. Rapid growth of travel startups 1,000+ startups founded since 2005 $7+ billion raised – half of it in 2014 alone New layer of intermediaries being built 1HOXTON | CONFIDENTIAL AND PROPRIETARY
  3. 3. Why? Huge industry: $7.5 trillion market growing faster than global GDP at 5.4% a year, with 1 in 11 jobs Consumers are going online – global online bookings are growing twice as fast as overall market 30% of this is coming from emerging markets (China and India) and 1,800%+ growth in mobile alone 2HOXTON | CONFIDENTIAL AND PROPRIETARY
  4. 4. Incumbents New leaders Lots of others 3HOXTON | CONFIDENTIAL AND PROPRIETARY
  5. 5. For every good idea, there are lots of very similar ideas 4HOXTON | CONFIDENTIAL AND PROPRIETARY
  6. 6. As a result, funding isn’t distributed evenly Uber – 22% Didi Dache – 22% Airbnb – 7% Trivago – 6% HomeAway – 4% Others – 51% Qunar – 3% Source: PhocusWright 5HOXTON | CONFIDENTIAL AND PROPRIETARY
  7. 7. Not every startup succeeds Only 10% of travel startups have been acquired 20% or more have been shutdown 6HOXTON | CONFIDENTIAL AND PROPRIETARY
  8. 8. This means venture funds lose money. What does failure teach us about stats? 7HOXTON | CONFIDENTIAL AND PROPRIETARY
  9. 9. Average venture fund (and startup) performance measures nothing Return multiples, fund sizes <$100M 1.68 Totalvalue to paid in capital, small funds 1.75 Totalvalue to paid in capital, large funds 1.78 North American angel returns 1.8 Return multiples, $250-500m funds 1.84 Return multiples, $100-250m funds 1.85 All VC-backed startups, Horsley-Keogh 1.9 All VC-backed startups, Venture Economics 1.97 Unicorn valuations 2.13 8HOXTON | CONFIDENTIAL AND PROPRIETARY
  10. 10. Truth is, averages lie The average salary for University of North Carolina geography graduates in the 1980s was over $100k Michael Jordan, the highest paid athlete of all time, graduated from UNC in the 1980s 9HOXTON | CONFIDENTIAL AND PROPRIETARY
  11. 11. Statisticians know how to deal with this But why rely on stats when you can rely on technology? 10HOXTON | CONFIDENTIAL AND PROPRIETARY
  12. 12. The market works around A/B testing, but this is a crude way of doing things A/B testing optimizes for the average consumer The market is shifting away from average and to personalization, as computation, in-memory and cloud technologies improve 11HOXTON | CONFIDENTIAL AND PROPRIETARY
  13. 13. Where tech can improve on averages 12HOXTON | CONFIDENTIAL AND PROPRIETARY
  14. 14. The future is hyper-personalization – using big data across every point Travel industry is ripe for this – gains can be tremendous But requires a unique combination: data science and knowledge about what drives travel 13HOXTON | CONFIDENTIAL AND PROPRIETARY
  15. 15. Not unsurprisingly, the pioneers are the technology companies doing travel The smartest firms have the smartest data scientists on their payroll Are leveraging new software tools being made available Airbnb and Booking.com are some of the pioneers 14HOXTON | CONFIDENTIAL AND PROPRIETARY
  16. 16. Airbnb need to personalize not just by users, but around hosts who would accept bookings 15HOXTON | CONFIDENTIAL AND PROPRIETARY
  17. 17. Live planner example 16HOXTON | CONFIDENTIAL AND PROPRIETARY
  18. 18. The best companies right now are full-stack They own the consumer experience They are early adopters of technology, and are even building their own software packages (e.g. Aerosolve for machine learning) But as the technology matures, will become more mainstream 17HOXTON | CONFIDENTIAL AND PROPRIETARY
  19. 19. Why aren’t more firms doing it? “ Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it” – Dan Ariely, Duke University 18HOXTON | CONFIDENTIAL AND PROPRIETARY

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Hussein Kanji, partner at Hoxton Ventures, sharing his insights about how big data and new technologies are disrupting the online travel business. His presentation shows how real time personalization and digital empathy are replacing “the average user approach” as a new way to market travel intelligently online.

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