By Matt Zito, Travel Startups
I was speaking with an investor on the phone recently.
I described that we were raising capital to build Travel Startups Incubator into a $1B global business.
I could tell right away he didn’t know much about travel technology.
He had a lot of knowledge, passion, and money, but no real travel experience.
That’s OK because I knew he was a savvy investor.
He asked, “Matt, how does Travel Startups Incubator know what to invest in?”
What a great question.
Surprisingly, we aren’t asked that nearly enough.
Initially, we literally have four questions to which we are looking to uncover the answers from founders.
Founders write the answers to these four questions in our incubator application.
We don’t tell anyone what they are because then we figure everyone might just tell us what we want to hear.
If you clear all four then we get serious.
We believe we can tell fairly quickly whether what you are building can be big.
Here’s a hint:
It’s a combination of your team, your idea, your salesmanship, and your passion.
Y Combinator says that they know in 10-minutes through a personal interview with founders. I totally believe this.
Because we have had success as travel tech entrepreneurs ourselves and we’ve seen many teams and ideas fail over the years in this industry, we believe we can see real talent and understand the potential of an idea pretty quickly.
As examples, with Proxce, FlitWays, TraknProtect and Biz Airlines, it took us 5-minutes to understand what they were building, where they wanted to go with it, and how they could be successful.
We knew right away that all four entrepreneurs were the real deal, building something of real value.
It was then just a matter of how much the incubator could help them, which is a critical question to us. We only accept a startup if we see exactly how we can help them succeed.
Of course, this is assuming the startup clears our standard due diligence, and we can agree on an equity % and follow-on offering terms.
So what does it take to build a successful travel technology company from an early stage?
Primarily, it takes a great team working full time on the business. We truly believe this. 2 or more people. 3 are ideal. You can do it with 1 person but it is damn hard and very risky.
It takes at a minimum a technical co-founder and a businessperson. You can move the needle quickly with 2-4 people.
It takes a product that can scale, but that can be launched into a local or singular market to gain traction and momentum.
It takes underlying knowledge about why what you are building can be valuable.
It takes a deep understanding of competition and travel technology history.
It takes something that is really hard to build technically, or that has never been done before.
It takes a product that is simple and easy to use and that either solves my problem better than anything else or gives me gratification I can feel.
It takes a unique product, a better product.
It takes better execution.
It takes the right timing in the marketplace.
It takes passion and determination.
Nicole and I started our lives as entrepreneurs in college with the idea to get free ski trips.
When we launched we never had the entrepreneurial thinking to build a billion dollar ski travel company.
There was no Internet when we started our ski travel business.
We generated leads by running ads in college newspapers then sending our brochures in the mail (postal) when students called our 800#.
There was no TravelStartups.co blog that we could read for inspiration and guidance.
There was no travel tech startup funding.
There was nothing like the amount of resources that you have today at your fingertips.
I truly believe that the opportunities today are better than ever.
The cost to build and develop your travel tech startup has come down.
You can raise $10K-$50K from incubators, angel investors, and crowdfunding platforms and build a prototype easier than ever before, if you have a good idea.
You can sell globally.
With the right relationships, you can get access to APIs and travel IT.
Wow, what a time to be a travel entrepreneur.
You are lucky.
You better get off your butt and get going.
Read more at http://www.travelstartups.co/do-you-have-what-it-takes/