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.
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
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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
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7. Not every startup succeeds
Only 10% of travel startups have been acquired
20% or more have been shutdown
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8. This means venture funds lose money. What
does failure teach us about stats?
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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
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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
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11. Statisticians know how to deal with this
But why rely on stats when you can rely on technology?
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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
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13. Where tech can improve on averages
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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
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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
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16. Airbnb need to personalize not just by users,
but around hosts who would accept bookings
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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
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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
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