While the Nevosads were traveling around Lake Geneva in 2010, they realised that the lack of planning of their road trip was causing more stress than they were trying to get away from. Someone hadn’t thought through all the details and no one was taking responsibility! The week’s holiday turned into a brainstorming session for how they could simplify planning and save relationships in the process.
The couple set out to make planning as simple as possible and they decided to create an interactive map that builds an itinerary as you click. A beta version of Tripomatic was first launched in April 2011 and in September that year they won the WebExpo Prague competition beating 59 other startups from the region.
CEO Lukas Nevosad Photo credit: TripomaticPrior to Tripomatic the couple had been in the online travel industry since 2005 with their first startup, whichairline.com. Whichairline is a low cost carrier flight search portal that is still in operation and due to the nature of the service it provides, it exists with little maintenance from its founders. The problem for the Nevosads is that margins on flight bookings are small and as a business, it has limitations. It currently provides an income stream for the couple but an exit strategy is not out of the question. The Tripomatic trip is a much more ambitious enterprise than whichairline.com, with more features and more functionality, and ultimately a broader market appeal. The quick gestation period for Tripomatic was thanks to their previous startup experience, and it allowed the team to move to market quickly.
“It’s all we do!”
As their second assault on the startup world, the Nevosads were armed with contacts and know-how, but Tripomatic is a much more intensive development experience both front and back end. Lukas holds Master’s degrees in computer science, business management and e-commerce so he doesn’t mind hard work, and because of the relationship with his co-founder, they both work all the time. “We work together during the day and then of course at night we still chat about [Tripomatic], it’s all we do!” he explains. The business employs ten full-time staff in conjunction with the founders, and in a company this size, the CEO has to do a bit of everything. Lukas is apassionate product designer and considers it the most important aspect of what he does. And while his wife is CFO, the reality for her is that she not only manages the finances but everything from HR to PR, too. Working with a spouse can be a slippery slope, but it works for this couple because they both share the same vision of the world, and Lukas is proud of the fact that when his wife does anything, she does it 100%.
CTO Barbora Nevosad Photo credit: TripomaticHard work and experience, however, hasn’t meant that they have avoided mistakes. Lukas concedes they didn’t go into Tripomatic with a lean mindset and that it has cost them – they invested more money than they should have and they have had to do a significant amount of costly testing for big sections of the product. It was the company’s slow adoption of mobile platforms to its infrastructure that now causes the biggest headaches, “we were late with the development of our first apps, especially on Android, and that turned out to be an epic fail,” says Lukas. Their iPhone app is where it should be but after scrapping the Android app and starting again, they have some catching up to do; bringing the rest of the development onshore is one step they are taking to speed up the process. “We have learned a lot when it comes to mobile development and we have turned the whole company to now start thinking mobile first.” The renewed focus on mobile is a good option – but it should have been obvious from the start, as people don’t carry laptops on holidays.
Monetisation – theme of 2014
So far Tripomatic have had the enviable position of deep pockets, investing 500.000 euros of their own money – their profits from whichairline.com were the main contributor. Last year, their revenue was only a couple of thousand euros, while they estimate that the turnover so far this year is about 60.000 euros. Lukas explains, “even though we have not focused on monetisation very much this year, we have succeeded to increase our turnover four times since the beginning of 2013 and it has grown over 10% month-to-month in the last four months.” Nice stats for a company that says it isn’t interested in that side of the business yet. Lukas maintains that his focus is on finishing the product, with the smartphone boom showing no sign of slowing and with people using multiple mobile devices. Naturally Tripomatic is free for end users and so far they have monetised a couple of quick wins – commissions generated through accommodation partner booking.com and selling premium app content. “For next year we have a few aces up our sleeves – monetisation is going to be the theme of 2014,” says Lukas. Those ‘aces’ are likely to be more commission-based partners such as rental cars and tourist attractions. The ultimate coup for the couple would be to jump in bed with Tripadvisor.
On the road Photo credit: TripomaticCurrently, Tripomatic burns through about 25.000 euros per month, double last year’s rate with most of the cash being sunk into the company – staff and product development. The team are now looking for about 750.000 euros that would go into developing the product even further, improving functionality and features and getting the mobile apps up to speed. To expand, Tripomatic needs to make more noise and adapt to non-English speaking markets to provide the service to users in their native language. The marketing plan seems to be the leanest part of the startup with Lukas revealing two avenues of attack – social media and word of mouth. Social media is cheap and they are currently testing Facebook ads for a more targeted approach on that platform.
“Travel planning is an entirely new product category and users are not really aware that it is even possible. Once they find out, they love it. But the key challenge is to build the awareness,” says Lukas. At this stage the marketing plan seems to be sitting in the backseat of the car together with the monetisation plan for this very product-focused startup.
The two enviable things that Tripomatic have are industry experience and the relationship of the founders. It was a smart move pivoting from their first startup into another one in the same industry, as it allowed them to hit the ground running. The founders themselves are a great asset – two people sharing a passion and a drive almost around the clock. They believe that the business is just that, business – they know it has value and that it won’t last forever; exit strategies are always on the table. With so many booking portals on the market Tripomatic has to maintain its focus on the planning features. Tripomatic is a nice idea, with a good user experience that is going to get better.
At the end of the day, though, its appeal is for those who love to plan, not those of us who like to go with the wind we travel.