Travel Tech Essentialist #110: Networks
Today’s newsletter centers around the power of networks - whether human-based, AI, or anywhere in between.
This newsletter is sponsored by Pattern
Pattern, a global InsurTech MGA, enables travel, online booking, and registration companies to design, build and embed relevant insurance offerings seamlessly in their customer journey. Pattern protections address risks associated with a change of plans, travel disruption, inclement weather and medical assistance. Pattern parametric protections dispense customer compensation automatically when an event is triggered. Find out more
1. The behavioral impact of Spring
Spring should be the best friend of travel companies, particularly those focused on outdoor activities. Research has found that mood increases with time spent outdoors during the spring. Spring makes us happier and more optimistic, makes us feel more rejuvenated, and awakens a need to get outdoors and explore the world. This post by The Decision Lab goes into what gives spring its magical powers and how you can make the most of this season.
2. How to activate your investor network
Activating your investor network could be one of the biggest untapped sources of value for your startups. Sam Corcos is Co-Founder and CEO of health tech startup Levels, and according to Lenny Rachitsky, he is in a league of his own when it comes to leveraging his investor network to help him build his company. Sam believes that it is unreasonable to expect investors to proactively find ways to add value and that it’s up to founders to learn how to ask for help. In this article, he goes over examples and tactics on how to build a great investor network and how to activate them to get as much value as possible. In summary:
Build a great network by optimizing for eigenvector centrality (eigenvector centrality is an algorithm that measures the transitive influence of nodes. In other words, it’s not about how many people you know but how many people all the people you know, know).
Make good asks by keeping them targeted, time-bounded, and specific.
If you want someone to help you, make it as easy as possible for them.
Do the work. Don’t expect to receive value without putting in the effort.
3. Expedia plugin in ChatGPT and OpenAI’s network effects
Expedia built a plugin for ChatGPT. Now in beta, travelers can plan their next trip with ChatGPT and have access to real-time information on the availability and price of flights, hotels, vacation rentals, activities, and car rentals across the world. Demo here. As David Sacks suggests in this tweet, plugins could create an interesting network effect for OpenAI, which would enable it to suck in all the world’s knowledge: developers provide the AI with more info in order to access capabilities → AI gets smarter → Developers want to use the smartest AI.
4. Opportunities in AI x Travel
According to a16z, the travel industry is perfectly positioned to ride the wave of AI. There’s a wealth of public data on almost every destination, transportation, accommodation and activity. Then there is our own private data on how we like to travel, where we’ve been, and what our favorite destinations or experiences are. The combination of this public and private information provides an exceptional dataset to power future recommendations that are customized to each individual. Generative AI unlocks the ability to converse with this data, drawing out insights and suggestions. In the coming months, a16z expects to see a wave of startups leveraging AI to make the travel experience more personalized, efficient, and enjoyable. In the article, they outline how AI can be used for inspiration, itinerary planning, booking, in-trip, corporate. Read + a16z.
5. Thirteen travel companies in the a16z marketplace ranking
Andreessen Horowitz just released its 2023 Marketplace 100, a ranking of the largest consumer-facing marketplace startups and private companies (does not include public companies like Airbnb). The rankings are based on estimated annual gross merchandise volume provided by the consumer data insights company Consumer Edge, which analyzes billions of credit and debit cards across 12,000 public and private merchants.
This year, 13 travel companies made the list. Only the Food & Beverage category, with 14 companies, had more representatives in the ranking.
6. Marketplaces with opinions
The a16z marketplace report suggests that marketplaces are entering a third wave.
1st wave 1995 - 2010: marketplaces seek a high level of supply (Ebay, Amazon)
2nd wave 2010 - 2020: marketplaces have a high volume of supply, but offer tiers for pre-vetted or high-quality experiences (Uber Black, Airbnb Plus)
3rd wave 2020→: Fully curated marketplaces. Fewer suppliers, based on the unique customer experience that they aim to provide, often exclusive to the platform.
From the 13 travel startups in the a16z marketplace ranking, 5 of them fit the profile of curated marketplaces:
- Evolve: hospitality-driven vetted vacation homes.
- GetYourGuide: incredible experiences.
- Avantstay: One-of-a-kind properties designed for large groups.
- Trusted Tours & Attractions: Tours and attractions that adhere to stringent quality control guidelines.
- Headout: Curated experiences
7. Southwest’s experiment to speed up boarding
Today the average turn is 40 minutes for Southwest Airlines’ smaller Boeing 737s and 50 minutes for the larger ones. The airline is on a mission to shave five minutes off the time a plane spends at the gate between flights in order to squeeze more flights per plane. Research shows boarding bottlenecks are the biggest detriment to turnaround times, so Southwest is testing 11 concepts to speed up boarding at gates C13-16 at the Atlanta Airport. Signs at the gates tell passengers they are entering an “innovation zone.’’ Preliminary results show the music and prerecorded jet bridge announcements about bin space, seat availability and other information are helping. Read + WSJ.
8. Airline revenue innovations and booking path magic
Jay Sorensen wrote the Airline Revenue Innovations report to showcase 8 new ideas of innovative products and services by airlines around the world.
You might also be interested in another report written by Jay -Booking path magic converts customers - featuring examples of how six airlines have built logic into their booking paths that address consumer wants and needs.
9. Communication efficiency
Shaan Puri shared in his podcast the eight things he learned from Emmett Shear (Twitch Founder & CEO).
One of the learnings was a framework for interacting with leadership. This framework came from Shear giving Shaan an instruction manual on how to properly structure their interactions. There are four ways to frame a meeting with a company leader:
- I am doing this, FYI
- I am doing this, but I need your approval
- I am trying to decide between A, B, or C. Can you help me think that through?
- Remember that thing we agreed on? Here is what happened.
Simplifying interactions to these four framings increases the efficiency of communication and makes the objective of the meeting clear.
Summary of the episode here and podcast episode here.
10. The pandemic’s impact on the aviation value chain
This report by IATA and McKinsey examines the entire aviation value chain: manufacturers, lessors, airports, catering, ground, maintenance, airlines, freight, GDS and Traveltech. The report investigates the performance of the value chain, and it dives deeper by sector to understand what drives that performance. It also assesses the value chain dynamics acting upon the airline sector and it concludes by looking at what could be done to enhance value creation in the value chain going forward.
Travel Investor Network
Travel Investor Network is a private platform for investors (VCs, Corporates, Family Offices, Angels) and innovators in travel, hospitality, and mobility. In the first five cohorts (October-February), I’ve highlighted 72 startups from 25 countries.
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