Yeoh Siew Hoon catches up with Hugo Burge, CEO of London-based Momondo Group, to discuss, among other things, the impact of Brexit, the need for emotion and purpose in today’s world of travcl, the evolution of meta and the investments he’s making through HOWZAT Partners, and why it’s a great time to do the right travel startup. Burge is one of the judges for the WIT Startup Pitch and will be speaking at the WIT Conference Oct 17-19.
Q: It’s been three months since Brexit – time for the dust to settle somewhat. Any short term impact on business so far and any long term concerns you have especially with the Euro IT Alliance which you head?
Yes, three months seems a long time. The dust has settled. Everyone has calmed down a bit, even though many questions and tricky conundrums remain to be solved. Actually, it’s been positive for us – 90% of our revenues are outside the UK, so the weaker Sterling has immediate benefits in boosting revenues. We should be open minded about the short term outcomes of the vote – while I’m confident about the future, there is a lot of wrangling ahead.
We’re a member of a few organisations – including both the London Travel Tech Alliance and the European Tech Alliance – that are watching this issue carefully, and its impact on our industry. Although we are a global business, Europe is very important for us and we have substantial interests across the whole region. I continue to support a successful Europe, with which the UK has a positive and transparent relationship, and where prosperity is something everyone can aspire to.
Q: Four years ago, Cheapflights bought the Danish metasearch site momondo and in 2014, your group received US$130m funding. What’s the grand plan for the group as a whole?
Momondo Group’s vision is to open our world, encouraging people to travel by shaping, inspiring and simplifying travel search. Our priorities are to build products users love, high performing teams and to grow as fast as possible. The details of how we’ll do that? Well, those are confidential, but we’re thinking big and growing fast now.
Q: There’s a reimagined momondo in the world right now – I can see that from your website as well as the DNA Journey video. What are you trying to do with momondo?
momondo always had a magic that stood out, that is why I feel so privileged to join forces and acquire them in 2014. All we have really done is to encourage them to focus on what that magic is and think bigger, as part of Momondo Group.
By bottling what it was that drove us and the values that make us, us, we’ve concentrated our thinking and are on the journey to achieve something bigger and more powerful than before. I’m proud of what the momondo team has done with The DNA Journey (watch below) – now 175 million views and a global viral phenomenon. I don’t see any other travel or search company doing something like that, which is exactly what we wanted to achieve – something that spoke to who we were, gave us pleasure and purpose, and differentiation.
Q: Have you taken the DNA test? What were the results?
Yes! For a project that is predicated on challenging stereotypes, embracing difference and questioning who we are, it was perhaps appropriate that I’ve been uncovered as someone who is only 5% British. It was eyeopening.
“Travel search needs to stand for things”
Q: Online travel is an industry built around clicks, conversions, commoditisation and price. Why do you think building a brand around emotion is so important right now?
Great question. Travel search is so easily corrupted by adverts, bias or is just outright boring or difficult to use. We had a long hard think and just believe that travel search – to be really good and stand out – needs to stand for things. Stand for values. Stand for better. Stand for an emotional connection – a purpose.
Over time – there is technology convergence across the leaders in meta-search, but we also see convergence of brands not really standing for anything different. momondo has always been different and we really wanted to embrace that difference, across the group and live and breath those values in a bold way. We know we have a great model in meta-search – it is precious and builds rare trust. The model needs protecting. The model needs a strong identity to reach out and connect with users.
Q: How are you differentiating your two brands – Cheapflights and momondo?
Quite straightforward really:
• momondo is about inspiring travel search, focused increasingly on hotels (in some newer markets revenue is 50% hotels) and mainly non- Engish speaking markets around the world.
• Cheapflights is about making flight search simpler, in global speaking English speaking markets.
Q: Meta search is now evolving into assisted or facilitated booking – everyone seems to be doing it. Are you too?
Meta-search seems to be converging with OTAs. There are great opportunities to make mobile booking more seamless but also great opportunities to mightily confuse the user. We are exploring it.
Q: You’re a strong player in Europe. What are your plans for Asia? What experiences have you had? You bought Momondo to expand after all – any plans for acquisitions in Asia?
Europe is our focus, it is true. And momondo is great for continental Europe. But we’re also very excited about Cheapflights growth in APAC, where it is already getting great organic traction and growth at a scale that we cannot ignore.
Q: Generally it is said European-based brands have a better chance of making it in Asia compared to American brands because we are used to diversity and complexities of different languages, cultures – Booking.com seems to have done better than Expedia, Trivago over Kayak, Skyscanner seeing good traction too. Your take on this?
This makes great sense to me. Growing a pan-European business is very challenging, and more nuanced and delicate than rolling out across the USA. It’s such a disadvantage vs US start-ups, so I like to think that those learnings give us a headstart when it comes to tackling a region as diverse and multi-faceted as Asia.
“Get ready for hard work, startups are gruelling”
Q: You consider yourself an Internet entrepreneur, growing momondo “out of profitable cashflow from a Cheapflights attic operation of 3 people to what it is today” – says your LinkedIn. What did you learn from those early days?
It’s darned hard work and takes longer than you think. I don’t know about being a genuine entrepreneur – I have not actually founded my own business yet – but either way, my lessons would be:
• Get ready for hard work, startups are grueling.
• Focus – less is more. Get loved for one thing only.
• Focus on the financials – not glamorous but essential.
• Focus on traction in baby steps, not the billion dollar story – that happens later (.000001% of the time).
• A strong purpose and culture is your starting point for great things.
• Creating a healthy, not just a smart team, is everything.
Q: You’re also an investor – so what would you invest in right now? Where are the opportunities now? In-destination seems to be pretty hot – Eg Booking.com just launched its pilot for Booking Experiences.
I’m not too keen on things that are pretty hot. I think in-destination is a strategic ‘thing’ for huge hotel focused businesses that are looking for a new vertical, but a super hard area to make work and stand on its own two feet.
HOWZAT Partners has invested in Travel Circus, which is about bundling attractions with hotels, which is kind of reversing in attractions to hotel deals. I like that! Hotels are the gift that keeps giving.
Look, this is an amazing time for building businesses. Digital entrepreneurs have the globe at their feet. Technology, data, storage, global ways of working are cheaper than ever. I love things that are super focused and different. There are no rules about what I would invest in: great teams who have created some magic on a shoe string, with some traction in something big.
HOWZAT Partners (which I co-founded but don’t run day to day) has been making some great investments in travel and beyond. For example, Customer Alliance – hotel services, SpotAHome – medium term consumer lodgings, Lodgify – vacation rental B2B services, Ampido – online car parking availability, CheckmyBus – meta for buses, SeatFrog – making upgrades simple, DonkeyRepublic – bike rentals, to Nuviz – an unfeasibly cool visual interface for motorbike helmets. The opportunities out there are mind boggling and exciting. It is a privilege to be on the journey with some of them – I know how hard it is, but it’s worth it for those that defy the odds, defy gravity and do something truly meaningful.
