Travel planning software: The most common bad startup idea

At CMU yesterday, I heard a story about how Yahoo Trip Planner has pretty much zero adoption. It has never taken off, though it remains online even today. Yahoo keeps it around because it's fantastic for recruiting. People love to work on this idea! Yahoo recruiters lure talented engineers, designers and PMs to work on this project, then gradually shift them off to real value-creating projects once they're hired. 

Travel planning software (the kind that you would use with friends and family to plan vacations) is one of the most common ideas pitched. It has been attempted, and attempted, and attempted again. 

It doesn't surprise me that people go after this, though. The idea actually points in the right direction: founders pursuing this idea are looking to solve problems or pain points in their life. Brilliant. And practically everyone has the problem of not spending enough quality time with friends and family. Travel is the best and most meaningful way to do that. Surely this is something that solves a big problem that everyone wants. 

Yet so far, this particular idea doesn't lead to massive success and incredible amounts of value creation. My best guess is that a truly great consumer service needs to be something that is can be used every day. My friend Suhail Doshi, CEO of Mixpanel (he'd know a thing or two about analytics), recently told me that 20% daily retention is probably the baseline at which a service has legs. 

This points to the deeper problem that underlies every product or service: obscurity. I only have a finite number of slots in my brain. If I don't remember it, I won't use it. And I only remember things that I use often. Just like I order Coca Cola whenever I get a cheeseburger... the consumer web/mobile services I use need to be things I use all the time.  

Which leads us back to trip planning. How often do people really plan trips? For the typical working adult, probably once or twice a year if you're lucky. In fact, Americans are notorious for shirking vacation, clocking the lowest rates of vacation on the planet. Twice a year just doesn't cut it.

I used to think nobody needs this. That's probably not true. Lots of people want this. They just won't ever be able to remember it. 



50 responses
Great article Garry!

Though, I wonder, what about sites like redfin and autotrader? How often do people buy/sell homes or cars? Probably about as often as people plan trips, but the value add of getting a good deal is so much higher.

Maybe you don't need regular engagement if you address an expensive enough problem?

Ryan -- yeah. It might just be that the customer acquisition cost is way higher than the expected value for this particular scenario.
Garry, great post. Interesting enough, you wrote about a product that people want, but don't have the need to use. Yesterday, Bryce wrote about a product that people seemingly want to use every day, but when given a chance they don't. ( Not sure what the conclusion here is yet, but definitely good food for thought.
I could not agree more with the above post. While working a few years back with my friend on his travel planner website, we discussed this issue at length over I have no idea how many meetings. We realized later that in the end you need to create that sense of travel community and even if you are not planning a trip, make it fun for you to be helping other people plan theirs!

@kirillzubovsky fancy seeing you here bud. nice article.

I agree with the conclusion, but not the reasoning.

You say: "My best guess is that a truly great consumer service needs to be something that is can [sic] be used every day."

I'm assuming you want to go with "can be used every day," but regardless, how does this not apply to sites like Kayak and Hipmunk?

You can tell the same story. How often does the average American book trips? Once or twice a year, if they're lucky, etc.

My point is that whatever reason you have for why "travel planning software" is a bad startup idea will have to differentiate between successful travel sites which (most likely) exhibit the same retention characteristics.

There are other successful sites with similar retention characteristics, too, I bet, outside the travel space. WebMD? Just a guess.

Outside of flash sale sites, I'd also guess many e-commerce sites have similar retention characteristics. How many people return daily to ModCloth, Warby Parker, or even Amazon?

This is where your original statement appears quite considered -- "can be used every day" versus "is used every day" -- since an e-commerce site "can" be used every day. But still, they probably have similar retention characteristics, which (IMO) is the root issue.

For travel sites, the reason, I think, has to do with their position in the "travel planning funnel" and how they monetize. First, a site like Kayak or Hipmunk is necessary, whereas a "travel planner" is not. Second, because they're farther down the funnel, they can pay (or pay more) to acquire a user.

Just being farther up the funnel always means you're going to be playing for volume over revenue, anyhow.

Because sites like Kayak have an effective paid customer acquisition strategy, they don't have to be "top of mind" -- they benefit from a kind of brand transitivity. Google is top of mind, and Kayak is top of Google. ;)

But again, because travel planning sites come in before a user has even formulated a plan, it's hard to see how they'd benefit from search traffic at all. Once they started optimizing for that, I think they'd quickly morph into something like Kayak. I imagine the conversation going: "We need more SEM traffic." "We can't afford it." "Ok, how can we increase revenue?" "We should start booking flights and hotels directly on our site."

Anyhow, it's just paragraphs 4-6 I disagree with, but agree with the overall conclusion that travel planning sites or, more broadly, travel discovery sites, are by default "bad ideas."

Aw man, you're onto a good point. I actually didn't want the post to end.

This reminds me of why I wanted to study Psychology at one point.

Great post you share here.......
worked well for me. indeed it is a good itinerary maker and puts up addresses, interesting places etc. on a map.
Agree with @jessefarmer. There is a good point in here, but I don't agree with it exactly as formulated.

I look at it this way: Some products solve a pressing need, an urgent pain point, that people know they have. Others create new habits and addictions by being fun and engaging.

The more your product is toward the "new habit" end of the spectrum, the more it needs to have an everyday use case. The more it is towards the "strong pain" end, the less it needs this.

I suspect the problem with "trip planning" apps is that the pain isn't strong enough. You can plan a trip using a spreadsheet—or, more likely, a text file—or even nothing at all, if you only need to book a flight and maybe a hotel or car. Trip planning software provides a little more convenience, at the cost of having to learn how to use it.

In contrast, flight search and online booking are strong needs. That's why Expedia, Kayak, Farecast, and Hipmunk have a business.

(There is also the question of how you monetize. If you're selling flights and taking a cut, you need much less volume than if you're offering a free service and selling advertising. Free, ad-supported sites need a lot of traffic to be profitable, which is another reason they need people to visit every day.)

"The consumer web/mobile services I use need to be things I use all the time.... Twice a year just doesn't cut it."

It's funny that I read this post right as I am preparing my taxes, because TurboTax is a great counterexample to this principle. I only do my taxes once a year. But because tax software is SO MUCH BETTER than doing it myself, I remember which tax software I used before, I have brand loyalty, and companies can build successful businesses off it.

I think the initial response to your post from rsuttong is a good analogy but not a complete one. Redfin and autotrader are very large purchases, as you pointed out, but also, they are not logistics businesses, while trip planning is. Weddings are very large one off purchases and logistically intensive, but we don't see a good planning tool for that either.

Logistical tools need adoption and sensory adaptation, which means that your hunch about everyday use would make a lot of sense. I would say that a successful startup in this space would incorporate travel planning into blogging/picture posting/social media doodads or could be neatly aligned with online shopping so that it isn't a 'one off' service.

Just my too cents.

I agree with Ryan's point. On the same note check out
I like their approach, rather than using pure technology they use a mix of both crowdsourcing and technology. Since people spend a lot of money while traveling they might appreciate when a human is helping them on the other side.
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