Few companies work well for all stakeholders when they first open their doors. The process of innovation necessary to reach this high hurdle often takes months, if not years. “Overnight Success” generally takes a long, long time to achieve. Is it even possible to make a profit, create savings for customers, and help your sales channel partners make money—all on day one of operations? The answer can be yes, with the right technology. But there’s a whole host of supporting factors to be considered by anyone attempting to produce that technology. Here’s how one company not only became profitable on day one, but is approaching $2B in gross sales since opening nine years ago.
TravelPass Group is a tech company building a marketplace to increase distribution for hotels, wholesalers and travel companies, while helping customers find the best value and availability in hotel rooms (think Trivago on steroids). In looking back on the history of this company, here’s what we find.
To hit the ground running, a startup must have the right talent and experience in its leadership team. It’s no surprise that VCs and other investors scrutinize the founding team before making the decision to take a risk. In the case of TravelPass Group, the founders themselves had enough capital to start their venture without the need for outsiders. That’s a huge bonus because it preserves equity. “Our goal was to start with a team that could provide all needed resources, including capital, knowledge, experience and sales capability so that we could launch under our own power,” remembers Ryan McCoy, TravelPass Group Co-founder and CEO. “But to make it work early on, we had to hold other jobs while getting this company started. We just kept testing our sites, challenging models and changing our approach to meet customer preferences.”
Build an elegant solution to a massive problem
Some entrepreneurs put their ladder up against the wrong castle, and only after all of the startup effort of climbing that ladder, realize their strategic error. The right tech solution addresses the right-sized problem. The widespread need in a market can equal wide acceptance of the solution. But determining the proper problem and market size are only the beginning. Next comes the solution itself, which must be, in a word, elegant. When a tech solution is pleasing, simple, effective and frictionless (elegant) it is easily adopted, and difficult to stop using. Steve Jobs was the quintessential practitioner of elegance. In design as well as function, Jobs would not rest until the product was up to his personal standards. But selling that elegant solution is another thing entirely, due to constant changes in online marketing. Still, you just have to get your product out there, which leads to the next point.
Launch quickly, but not too quickly
Nothing really happens until you ship. No revenue, no customer feedback, no product improvement, nothing. So, you should ship your product as early as possible, right? Not so fast. If you ship too soon, you run the risk of disappointing early users and destroying your reputation. On the other hand, if you wait too long you could end up with a fully functional product that never reaches the market because you crash and burn at the end of a too-short runway. “The travel market moves at a breakneck pace,” declares Ryan Williams, TravelPass Group Co-founder and Chief Innovation Officer. “But in the beginning we had to set reasonable expectations, while considering contract changes, hotel and travel company consolidations and start-ups continually entering the market. We were willing to let customers dictate how they wanted to interact with us—learning their preferences and gaining attribution even through multiple sessions and multiple devices, or over the phone.”
Every company needs to determine its own sweet spot for releasing a product that’s neither too early nor too late in the development cycle, in order to start the flow of revenue and gain crucial feedback while offering an acceptable customer experience.
Innovate or die
With end-users booking hotels and online travel agencies like Expedia and Priceline selling through its platform, TravelPass Group needed to do one more thing: improve. There was only one problem, however. Early on, McCoy and Williams didn’t know what the innovation priorities were because they didn’t have a long history of contact with customers. “We needed to see and understand the pain points faster and reduce as much user friction as possible,” remembers Williams. “A pivotal moment came in 2012 when we ended a support contract to then create our own small, customer support team, available 24/7. This not only helped us improve our customer attribution platform, it also increased our conversion rates and gave us a competitive advantage over similar companies that were primarily focused on serving customers online.”
This is an important lesson for many organizations to grasp in our digital age. Nothing can replace direct human contact, especially when a customer or prospect has a burning question or urgent need. As it turns out, the now 700 call center team members at TravelPass Group, through direct customer interactions and feedback, have accelerated innovation for its sites ReservationCounter.com and ReservationDesk.com. And more customer contact is probably the answer to the question of innovation, no matter what industry a company operates within.
Immediate value creation in a startup situation is not common, but it can be achieved if you can get the right people working on the right solution that launches at the right time, and then relentlessly improve that solution. It might be a simple formula, but it will never be easy.