“leisure travelers don’t scale”

The quote “leisure travelers don’t scale” is from an interview with Rafat Ali (founder of paidcontent) at the Next Big Thing. (At the 6:35 mark in the video if you want to skip over him talking about his new venture Skift, though if you’re interested in the travel industry then you should become familiar with Skift.)

Skift also aims at informing the business traveler rather than the leisure traveler. The business person might travel several times a month. Anyone involved in a travel startup knows that it’s difficult to scale a business around consumers traveling to specific destinations. How many times does a person travel for leisure. Ali says “once, twice, thrice a year”. How many times does a person travel internationally? Only a few people do so even once a year.

Even if you build a loyal customer with your superb guide to the basket weaving of the Peruvian highlands, it’s going to be another year or more (if ever) before that fan buys your insightful, one-of-a-kind guide to the public sculpture of Odessa. Okay, that example is an extreme niche but it’s hard to grow a business by selling content to leisure travelers. You need content to dozens, if not a hundred or more, destinations if your travel content business is to sustain a staff of more than one based on revenue alone.

A core requirement in forming a startup is to spend time reflecting on the product you’re developing and, particularly, what problems are people buying that product to solve? Are there enough customers to actually build a business that can grow, or is the business so narrowly defined that it’s potential is little more than a supplementary income for one person? The latter is not a startup.

In the interview with Ali the moderator Scott Kurnit (found of about.com) asked a wonderful question, “Twenty years into the Internet, why do we get to do something new…why hasn’t it all been done…why wasn’t this done 5 years ago?”

As Kurnit suggests, it’s often because technology has changed (particularly with regards to mobile) or consumers have changed. Ali goes a step further and reveals the forumla behind his successful strategy, “I love businesses that are a layer on top of existing businesses.”

For those of us who lovel travel, Ali offers a vision at the 8.33 mark in the video as to why travel is important:  “travel is a lens that can bring understanding to the world”.

The challenge is creating a livelihood through a travel startup.

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  1. Pingback: Notes from a failed startup. Or was it a hobby? « Endless Hybrids

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