The Power of Startup - Corporate collaboration
A conversation with xCheck's founder Tim Underwood
In May 2020, I wrote a post titled The Greatest Startup Accelerator? in which I mentioned that Covid might trigger an acceleration of collaborations between startups and corporates for two main reasons:
Corporates will have gone through rounds of layoffs that could tilt the “build vs buy” trade off towards the buy side.
Corporates will have a more urgent need to bring about higher levels of innovation to adapt to a new environment.
What 2 months ago seemed like a non-urgent long term option, could become an immediate strategic imperative today.
Most airlines and hotels have had as a priority to generate more direct bookings, and this is one area where they greatly benefit from getting support from specialized travel startups. OTAs excel in marketing and customer acquisition not only in the travel sector, but also across verticals. Their ability to acquire demand at scale has been one of the key pillars behind the success of today’s largest travel intermediaries. Airlines have a difficult enough job managing their extremely complex core business of running an airline. Any help that they can get in being more efficient with their marketing spend and attracting more clicks in the hyper competitive online travel marketing landscape, deserves special consideration from airline executives.
The latest collaboration announced on March 31 2021 between xCheck and Delta Airlines is a good example of this.
xCheck has a very clear mission: to help airlines sell more through their direct digital channels. The founders are Tim Underwood (former head of product of eBay) and John McDonald (former Marketing VP at British Airways). xCheck’s main product enables airlines to provide compliant, transparent and available pricing data into any digital ad unit displayed in advertising platforms such as Google, Kayak, Skyscanner, etc. But this latest collaboration with Delta will not only improve the airline’s ability to attract direct traffic. It will also improve traffic conversion. Delta is displaying in its home page xCheck's latest product, called Maps, which combines route, legislation-compliant price, and updated Covid data in a very easy and intuitive shoppable map.
I’ve gotten to know Tim Underwood as a result of xCheck’s sponsorship of the Travel Tech Essentialist newsletter, and I have been impressed by the startup’s ability to deliver highly relevant products and land major partnerships. I hope you enjoy this brief conversation with him.
Describe xCheck in 1 or 2 sentences.
xCheck helps airlines and hospitality companies increase direct revenue and decrease operational costs by automating the process of advertising fares online.
Which type of client is a perfect match to what xCheck offers?
We have a great history of success with airlines, that’s certainly our sweet spot. But we also have experience with package operators - we work with Delta Vacations - and our platform can be deployed against use cases which involve dynamic inventory of any type.
Maybe because of my prior history with eDreams, I am a believer in the value of intermediaries, particularly in a world that is becoming more complex in terms of product, inventory and the number of variables that shape a purchase decision. How do you see the booking share of OTAs vs Suppliers evolving post pandemic?
OTAs have a big unfair advantage over suppliers - they don’t have to deal with the headaches involved in running an airline or a hotel. They can focus on technology and building new solutions - they have the opportunity to react quickly to a changing landscape while others have to figure out which desert they’re going to store the fleet in.
That’s why xCheck exists. We’re the secret weapon that lets companies without huge tech budgets close the gaps with those who do. Our latest product, Maps, is the perfect example of this. We started working on this in January; it went live with Delta Air Lines in late March. It’s the perfect example of how a large and small company can work together to deliver great products, quickly.
I have seen that you also collaborate with other startups in your product development. Can you tell us a bit about a bit more about these startup/startup collaborations?
Absolutely. Recently we partnered with Smartvel, who supply accurate, relevant entry restriction data related to COVID-19. They’re a fantastic company and a great team with an excellent solution to a really thorny problem.
Because of this partnership, our Maps product can contain information on price, network and COVID-19 entry requirements in the same place. If a customer wants to find a beach destination, open to visitors with flights under $200, our combined solution will help them do just that.
Your products today are very focused on airlines. But their application can also benefit other players in the industry. Do you envision expanding your client base to metasearches, hotels or OTAs in the future?
Yes, primarily hotels since we have some experience there by dint of our relationship with Delta Vacations. But we’re also looking at other industries - like ticketing for events - since our platform can handle any dynamic, perishable inventory.
Though we get the question about OTAs a lot, really our main focus is helping the inventory owner drive profitable, direct revenue on their own sites.
Mike Maples wrote a great post -How to Build a Breakthrough- on how great founders make the future happen by standing in the future and pulling the present from the current reality to the future of their design. Can you share with us how you see xCheck in 2031?
That’s a really interesting article and an inspiring way of thinking. It’s also useless nonsense for the vast majority of businesses.
A small number of ventures get the vast majority of attention because of how they capture our imagination. But the number of us who will start a company like that is so vanishingly small that it’s better to treat them as entertainment. It’s worth internalizing ambitious thought structures, but learning to think like Elon will not set you on a path to colonizing Mars. Sorry, you’re probably not that special.
My Dad paid off his mortgage ripping CDs onto iPods. In ~2003 when iPods started to really catch on, he figured out that there was a decent number of people with large CD collections who would want to be able to listen to their music on their fancy new iPod. He called me up - I was in university at the time - and asked me if I thought people would pay £1 per CD to get them onto an iPod. I said “maybe, but in six months it’ll all be over and after that no one’s buying CDs’.
I was ‘living in the future’. Thankfully, my Dad was living in the present. He spun up a website, spent £5 a day on advertising and used the revenue from the first client to pay for the equipment he needed to run the business. Nearly twenty years later, it’s still going. Not many startups will make that milestone or come close to that level of return on investment.
Some of us should think like Elon. Most of us should learn how to think like Jeff.
Who do you admire in the travel industry? What about outside of travel?
I have an immense respect for everyone who kept planes in the air and supply lines open during the scariest times of the pandemic. While most of us were hunkered down, sanitizing our groceries and figuring out if I could fit a desk in my closet, there were thousands of people who were putting themselves in front of an unknown danger to keep society moving. Not just in travel, but across so many sectors of society.
Given the year we’ve had, it’s hard to think of any other group of people who deserve more respect. That said, the moves made by Jude Bricker at Sun Country are very impressive.
Which would you say will be one of the world’s next great travel tech companies (not including xCheck :)?
Often travel tech companies miss because they don’t understand the industry. They’re started by people from outside the industry who see that something could be better, but don’t have the history to understand why it is this way in the first place.
Duffel is the exception to that. A clearly intelligent, talented and resilient team who are delivering on the un-delivered potential of what NDC should have been because they’re not held back by existing ways of thinking. Their current use case is great, but I’m also very excited to see what they do next.
What positive learning has the pandemic left you with?
Airlines are typically slow moving entities - they’re risk averse by design and we should all be very grateful for that. But this past year has shown how we can move fast and innovate during the toughest times. That’s great to see.
What is a small change or decision you’ve made recently that has had a big positive result (in your personal life or business)?
I don’t have anything particularly useful here, but I did change my iphone screen to show in greyscale and it’s interesting how much less interesting that awful, amazing thing is without the candy colors.
What advice would you give a young entrepreneur entering the travel sector? What advice should they ignore?
Understand that there are a thousand ways to build a business. The smartest thing you can do is understand which model is the one that gives you the best chance of success and apply that model regardless of loud voices that tell you otherwise.
And don’t forget to build a company you want to work at. I love working at xCheck. I love how we work, I love what we build and I’m so fortunate to work with extremely talented people who have taught me so much. You could be doing this for a long time and it won’t be easy. Make sure you bring good company for the journey.