STARTUP STAGE: Toristy wants to make it easier for travelers to find local experiences

Steven Jackson, Co-founder and CEO

Finland-based Toristy wants to enable any travel and tourism company to offer local tours and activities via a white label service.

Toristy recently received a funding round, which it will devote towards speeding up its white label pilots with a plan to have them in place for summer 2020.

What is your 30-second pitch to investors?

We're geared up to make tour operators famous, selling activities, experiences, events and tours, in a white labeled offering on websites with high volumes of travel consumer traffic designed for in-destination sales.

Commission-based business model means our customers only pay us when they have made sales. Our model utilizes existing traffic our partners have so no need for marketing budgets. Win, win scenario for all concerned.

Describe both the business and technology aspects of your startup.

Our emphasis is on B2B services. We offer a reservation tool which has all the features necessary to manage an online travel experiences business including rentals, activities, events and accommodation. This quarter we will also open channel management.

Reselling supplier services via other partners is where we expect the main source of revenue to come from despite having a fully featured reservation tool.

We’re not selling via a marketplace like an OTA, we’re offering through our technology a white labelled marketplace for other businesses already attracting significant travel consumer traffic to certain destinations.

The technology is designed to allow any travel or transport enterprise working with consumers the ability to sell tours, activities, events and experiences as part of their own offerings.

The business model is commission based. We’ve agreed a % with every on-boarded operator we have and we will share that revenue with our partners.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

• Strengths - the product is ready to go to market and funded for the foreseeable future. Strong team versed in digital analytics, marketing, B2B sales and Travel. Extendable backend allows any experience vertical to be added to the tool.
• Weaknesses - competitive market with established reservation tools already in play requires strong differentiation. Small team at present. Finances when building without revenues (now solved).
• Opportunities - SaaS models can scale internationally. Easy to identify international target markets. Supplier abundance of services to sell globally via existing partnerships.
• Threats - existing travel tech companies start developing in-destination strategy and out spend us. Legal issues (around travel packages for instance) restrict sales. Environmental issues impact the industry/world at large. (Something that we want to address with our tools)

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

In a nutshell we’re trying to help the customer find experiences, and the local in-destination businesses to be found by travelers.

From the customer point of view today's traveler is rapidly evolving, looking less for the curated, big ticket experiences and more for tailored, local, artisanal offerings that reflect the unique offerings of the region they are visiting.

Currently unless you know exactly what you’re looking for these experiences are often difficult to find. From the point of view of the tour and activity operators, being found on Google is hard unless you have deep pockets. So by white labelling the offerings through operator businesses that can sell activities, they take advantage of operator marketing budgets and get found by travelers using operator services when in destination.

This, according to all the research (Phocuswright), is where 50% of tours and activities are bought. By operator we mean any company that provides in-destination transport services (ferries, trains, bus companies etc), but also large hotels as through concierge services and travel agents.

So you've got the product, now how will you get lots of customers?

The first job is to onboard suppliers. There are already quite a lot of companies using reservation tools and we have, for instance, setup our API to work with companies like Bokun to import supplier products and availability so we may resell services.

Once we have enough suppliers in a given area we will be able to set-up a pilot with any operator, agency or hotel, technically in less than 24 hours.

On-boarding the suppliers is manual via some tools but there are partnerships such as one we have with Priceline and other discussions ongoing allow us to import services in bulk too.

Once we get more established we expect organic growth from direct sign-ups too. We expect the first pilots in April/May of 2020, ready for the summer season.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

We did more than a year of research before deciding to develop a tool in house.

We looked at the systems out there to try and create a white labelled marketplace of suppliers and none of them cut it.

We then wrote our own system from scratch to cater for the issues we saw, like lack of customisation abilities, only working with something simple like tours, or not having resources that could be added to products.

Then we saw how deep the rabbit hole went in terms of just what was needed for the travel industry alone, as well as how big it is.

The addressable market in operators we calculate at more than €2 billion globally which we see is largely untapped (for exactly what we’re doing) at the moment from the research we’ve done.

Realistically, even as first movers we’d only be able to win market share in Europe which is estimated to be around a €1.2 billion market. Nordics and Baltics which is where we will start is a €15-20 million market.

How and when will you make money?

We make money via commission and monthly fees to use certain aspects of our tools (like channel management for OTAs for instance across experiences).

The commissions will be shared with the operators we partner with making it an attractive revenue stream for them too.

We expect we will also grow our own supplier base organically when T&A operators see the advantage of working with us. We expect our first pilots to go out this year in time for the summer season and from then we’ll see revenues.

What are the backgrounds and previous achievements of the founding team?

Steve Jackson, CEO, is the main business development and strategic lead of the business. A highly respected name in the analytics industry in his active years before becoming CEO of Quru and a sought after speaker in Europe and the USA.

Steve is also a published author (Cult of Analytics) and previously had two successful exits as CEO/founder (Aboavista in 2006, and Quru Oy in 2016 .

Clinton Deacon, CTO, is a technical developer with a strong understanding of full stack development and APIs.

He previously had one successful exit with worldcarfans.com which in 2015 was one of the world's largest online auto enthusiast publications which was acquired by MotorSport LLC and became part of the motor1.com portfolio.

Clinton was also the number two employee in Supermetrics which in 2017 received series A funding of €3.5M. He previously served as CTO of the digital analytics company Quru Oy.

What's been the most difficult part of founding the business so far?

Finding funding while the business is pre-revenue. We were successful in recently securing a round that will significantly speed up our development and allow us to go-to market faster but it was a drawn out process.

To date the business has raised just over €500,000.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

Globally we have a chance. We know it’ll be hard, we’re not under any illusions, but we have a scalable SaaS based solution that can be as deeply or as lightly integrated as required.

We understand having worked in enterprise level world class companies as consultants what it takes to perform on a global level and we have the ambition.

Many could say the same but we’ve been there and done it before in a related, very competitive industry (digital marketing) so at least we know what it takes to make an impact.

If we don’t get the #1 spot in the market we’re aiming at we still have a very good chance of becoming a big player.

A year from now, what state do you think your startup will be in?

We hope to be running pilots in at least three countries, earning revenues for ourselves and our clients and scaling up to a series A round in 2021.

Depending on the success of the pilots we could get to profitability by the end of 2020.

What is your end-game? (Going public, acquisition, growing and staying private, etc.)

Our goal is growing, staying private and making a positive impact through our tools and the work we do for the environment.

That might sound like something I’d say just to be PR worthy, but the point is I hope this will be my last start up. I’m 48.

If by the time I’m 58, I’m running a multi-hundred million Euro revenue company that is having a positive impact on the environment by teaching tours and activities operators how to do the right thing by nature, then at least I have done something that helps put right the damage we’re collectively doing to the planet.

If M&A activity happens that strengthens our position then we will look at it, but the goal is a lasting sustainable business that does the right thing. Think Patagonia but for travel. That’s what I’d love our brand to become.