Online travel site Skyscanner has established itself as one of the most influential air travel marketplaces worldwide. The Scotland-born startup has grown to a global company with more than 900 employees in 10 offices around the world, claiming over 60 million monthly active users and an equal number of downloads.
It opened its Singapore office in 2011, setting up its Asia-Pacific headquarters in the city-state, and acquired Chinese travel search startup Youbibi three years later.
But the company truly made headlines in Asia late last year, when it was announced that Chinese online travel giant Ctrip acquired Skyscanner for US$1.74 billion.
I think we’re still a company that seeks to find its ultimate product-market fit.
Post-acquisition, Skyscanner is working to bolster its position in the market against companies like Ctrip’s US rival Expedia, as well as address a market that’s changing through evolving technology and user savviness.
The market is frothing, as online travel sales generated US$564.9 billion in 2016 and the number is expected to grow to US$817.5 billion by 2020, according to Statista.
Skyscanner’s latest tech efforts include automation, developing chatbots for a variety of platforms like Facebook Messenger, Skype, and Amazon’s Alexa. The company says India has the most Facebook bot users, with the Philippines and the US following.
Skyscanner co-founder and CEO Gareth Williams visited the company’s Asia-Pacific headquarters last week, and we caught up with him for a conversation about how things stand for the company and what the near future looks like.
Below is a condensed and edited version of our interview.
I read somewhere that you couldn’t make that first meeting with Ctrip because something happened to your passport. Is that true?
I don’t think it was the first meeting! But I tried to apply for a transit visa because I wouldn’t have been able to get a proper visa in time for the meeting. Immigration wasn’t having that Edinburgh – Amsterdam – Shanghai – Amsterdam – Edinburgh was a transit, as much as I tried to persuade them that it was!
Skyscanner had been in Asia-Pacific for a while before the Ctrip deal. When did you realize the deal was the right decision for the company?
When we came to Asia, I got the opportunity to meet different travel companies here, including Ctrip. We had a relationship with the leadership team there for some time.
Ctrip was the most interesting deal for a couple of reasons:
One was they didn’t want to risk destroying value by doing a department-by-department merge. I think more and more internet companies are realizing that’s quite a good approach – keep what interests you about the company in the first place.
And two, there was the dramatic success they achieved in China. It’s almost of a different magnitude than the really large Western online travel companies. And so I was pretty confident we’d have a lot to learn and we’d be able to use some of their resources in the rest of the world as well.
What are some ways the deal benefited Skyscanner?
The deal strengthens our marketplace, but we’re pretty careful to make sure it remains fair and unbiased.
Through visits I’ve learned a lot about the dynamics of Chinese travelers and I think it’s reinforced my take that they are the leading indicator for the rest of the world.
What kind of behavior have you identified in Chinese travelers?
I think in some ways they have higher expectations. They’re more likely to be using us on a mobile device and they’re not keen on the redirect model, what we call metasearch. It demonstrates we’re going the right way in terms of improving the experience within the app.
Payments is another area. Getting to experience how awful payments are in much of the rest of the world gives added resolve to support and encourage modern payment methods.
The final one I’ve had some direct experience with is customer service. The expectation of the Chinese traveler is that someone, a live person, is at the other end of a chat interface. I think that will become an expectation in the rest of the world – there will be agent or bot technology that then hands over to human agents.
In terms of the Skyscanner day-to-day, how much time is devoted to building and improving new technology versus developing the business? Do you see the company still innovating in the technology space?
Yeah, absolutely. The whole team spends a huge amount of time focused on what we are improving or what we are starting afresh.
To get to the point where you’ve got a predicting personal agent that knows when you need to check in, knows which information to give you, suggests that you book a taxi now – all these different things are way more work than we’ve put in so far. I think we’re still a company that seeks to find its ultimate product-market fit, as it were.
So what do you think is the most exciting tech for the travel industry now? Is it automation, AI?
Yeah, I think that’s huge. But I also think that a lot of travel products are relatively complex compared to other products. Being able to serve the right choice on a phone is a non-trivial problem. For instance, showing a thousand results on a phone is not really authentically mobile. Much better would be for the app to offer one suggestion, which you can change if you don’t like it.
A lot of companies including Amazon and Google have virtual assistants that offer a wide range of services. How much of a challenge is it to build your own platform while also integrating with these larger platforms? Does that clash against what you ultimately have in mind for your product?
Potentially, yes. What it basically means is, the field of competition consists of the horizontal large internet players as well as everyone who’s in online travel. Which is fine – I think the internet is way bigger than any one of those companies and the opportunity to partner with others is there. We’re integrated into Yahoo Japan, we have flight results integrated into Alexa, and so on. You’ve got to be available where the user, the traveler is.
I actually think that in today’s context, which is an app-oriented one, there is room on most people’s phone for a single app that does everything related to travel outside of your home city. It may prove not to be the case, but I suspect it will be. That single app doesn’t exist right now, but that’s what I’d love us to achieve.
What would it take to achieve that?
You’re going to need to be able to transact all travel products. You need a deeply intuitive workflow around a trip and its elements, and the status of all these things. You need the ability to share and communicate with other travelers or people you’re traveling to. All of those things need to come together, which is a more than significant task.
What are the immediate goals for Skyscanner now? What does the near future look like?
Building traveler tools, essentially. We’ve got a huge backlog and we’re building products in all parts of the world. We’ve got software engineers, designers, product people, growth marketers. And they’re building things that are deployed worldwide. We’re now over 50 different nationalities, I think, and my ideal goal, the end result I’d love to see, would be we end up without an identifiable headquarters.
What’s the benefit of an unidentifiable headquarters?
The benefit is: “highly aligned, loosely coupled” – a Netflix phrase. It’s having autonomy and being able to respond to what you see in your local market and yet build it via internal open source and other techniques so that it can be useful for people worldwide. Because as travelers we have way more in common than not.
At your scale, how do you keep the teams coordinated, to make sure no one steps on each other’s toes?
I think the most important thing is alignment on what we’re trying to achieve. That’s followed by recruitment, internal development, and having a fulfilling, productive environment in which to work. And all of those are maddeningly soft factors to an ex-software engineer, you know!
How challenging is it to shift your thinking from an engineering mindset to these soft factors?
The first lesson I had to learn was, a well-crafted email is not the way to change someone’s opinion. Face-to-face and even video conference works better to influence people. It doesn’t matter what your seniority is, it’s the only way that someone telling you about an idea can convince you it’s got legs.
It’s always this problem of how you make a large group of people be effective together. It’s the problem the human race has been working on the longest and it’s still unsolved!
Brand recognition is a big part of Skyscanner’s success. Did that happen organically or was it achieved through targeted efforts?
We haven’t deployed large amounts of advertising spend or brand spend to do so. We’ve deployed lots of marketing and growth techniques and activities but at the core, particularly earlier on, we were mainly focused on repeat visitors.
Even though it’s not a daily use case, nevertheless they had a knock-on, word-of-mouth, referral effect. I always keep an eye on Google Trends to see if people choose to type “Skyscanner” into a browser as opposed to seeing an ad, or whether we’ve managed to come first in results for a generic search term.
And that’s been really healthy – for instance, more people each day around the world type “Skyscanner” than they do “Expedia.” We’re really proud of that because I remember the early years, where in Google Trends there was about 10 acres of white space between the two charts!
What’s your biggest frustration in your day to day?
Maybe the canonical to-do list. I still use paper and I still take notes on paper during meetings on paper, and it’s a hard problem. It’s interesting to think about how that will be solved. I think it’s going to have to be something that has enough semantic analysis to automatically extract information from your notes and create to-do lists. There’s an interesting startup in there, I think!
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