Terrie's Take 980 (Tourism Edition) - The Full-stack Travel Company

Terrie's Take terrie at mailman.japaninc.com
Tue Feb 19 03:54:09 JST 2019

* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie Lloyd, a
long-term technology and media entrepreneur living in Japan. (

Tourism Sector Edition Sunday, Feb 19, 2019, Issue No. 980

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+++ The Full-stack Travel Company

Over the last 3 years I have spoken with many potential investors about
what Japan Travel (www.japantravel.com) is and why they might want to
invest. All the books, such as Venture Capital for Dummies - my favorite in
that particular genre - say that to be attractive to Venture Capital firms
(VCs) and other professional investors, you need have a single compelling
focus and be solving a problem in a large market, that you are well placed
to fix. You need to be ready to bet the farm (actually, usually someone
else's farm) on your project, you should be willing to fail big in the
process, you must have a global story, you should have a management team in
their 30's with a lot of insider knowledge, and either a couple of PhDs or
a couple of previous tech company wins under your collective belts.

So does that describe anyone in a start-up business that you know of?
Certainly it doesn't for me - well, not in Japan anyway.

Rather, most of my business start-up friends prefer to start out small and
learn the ropes first. Then they develop multiple sources of revenue which
allow them to build reliable prototypes to help mine that proverbial pot of
gold in their business sector, all while making enough to pay the bills
with. Once they have developed something and tested it to a good response
in the market, they might go out and start talking to potential investors.
Usually they will start with friends and family, perhaps some larger
companies in the sector, and if they've taken more than a year to start up,
then probably they will also be talking to the Japan Finance Corporation
(JFC). If you have never heard of the JFC you should check them out. They
help start-ups when no one else will. They have a massive JPY24.65trn in
assets invested (latest data is 2014) and I've sent more than one penniless
start-up founder to go see them.

http://bit.ly/2GPjMLJ [Japan Finance Corporation website]

With such a scrappy, pragmatic start, I've found that most people likely to
invest in a company like our's are not VCs obsessed with billion dollar
valuations, but rather, other business people who have been around the
track a couple of times and who recognize a good idea and competent
execution when they see it. As such, the pragmatic start-up, and certainly
my own business, are a kind of "anti-VC" start-up - meaning we have been
battle-tested and molded by real market experiences prior to raising
capital. In other words, we're a bit slower to get to first base.

[Continued below...]

------ Inbound Travel Business Matching - Last Call -------

In 2018, 31 million visitors came to Japan, over 3,000 international
conferences were held here, and the Rugby World Cup and the Olympic and
Paralympic Games are just around the corner.

Holding an event in Japan is not difficult any more, as many new meeting
facilities and hotels open one after the other. Working with the right
partners is now the key to success in organizing a MICE in Japan. IME 2019
will be held on Thursday Feb 28 at Tokyo Int’l Forum and will help you find
your right partner.

Come and join as a buyer at IME 2019. (http://bit.ly/2GOewrQ)

[...Article continues]

In fact, truth be told I have not done so well with VCs in developing Japan
Travel at all. Instead, I have probably made all the fundraising mistakes
that an entrepreneur could possibly make!

For example, my first significant mistake was naming a travel business as
Japan Tourist. I thought it was (and still is) a great name - very to the
point on what we wanted to do - which was to revitalize Japan inbound
travel, starting with foreigners. Instead, I was told that I needed to have
a shorter, punchier name, perhaps with *.ly or a sly misspelling somewhere
in the title. I did seriously think about registering "Wasabi Travel" after
the owners of Japantourist.com wanted the cost of a small house for that
name. But somehow, "Wasabily" didn't really sound right! Then, as often
happens in business, Lady Luck (aka Dumb Luck) suddenly appeared in the
form of a community member who knew the owner of Japan Travel and who
wanted to sell the domain.

My second significant mistake was not seeing myself as a Unicorn - you
know, one of those mythical companies with a market capitalization of
US$1bn or more. Instead, as I visited VCs I made a pitch that said we would
go public in Japan or regionally and that our target was a listing that
would value the company at US$100m - a big enough number that I thought was
respectable. But perhaps because of the corrupting influence of Mr. Son and
his US$100bn Vision Fund, it turns out that these days if you're not a
unicorn you're a pig.

My third and biggest mistake was sharing with VCs that I planned to make
something that I would refer to as, "A systems integration company for
travel." By this I meant multiple sources of tech-leveraged business
revenue that might offer us some safety from predatory competitors with
much bigger pockets. That idea went over really badly. As one VC guy told
me, "If you're spending all your time creating separate revenue flows, you
won't have enough time to spend on the main business that will make all the

Furthermore, the systems integration label sounded too complicated, so I
shortened it to a "full-stack travel business" instead. This means I opted
for a survival configuration with revenue being earned from three very
specific layers.
* Layer One: our media and advertising/marketing business.
* Layer Two: our full-service travel agency which allows us to produce our
own tours.
* Layer Three: Our systems development business that connects to many
sources of travel-related data in Japan.

What does Full Stack" mean? Well it refers to a new generation of software
developers who not only handle databases and servers, but also systems
engineering and client-facing interfaces (UX). In travel, I intend the term
to mean pretty much the same thing: strong back-end processes and
connectivity and easy-to-use front-end applications and customer service.
The only real difference between the two is that I now also throw in a
healthy amount of humans instead of trying to do everything by software
alone. As Expedia and other high-tech start-ups of 10 years ago have
started to realize, AI bots are interesting, but for now they are not yet
up to the task.

I believe that full-stack, diversified travel companies will prevail over
single-focus ones, if for no other reason than because supplying services
across the entire travel spectrum de-risks the business, as well as
spreading out income sources so as to flatten traditionally peaky revenue
flows that normally occur in spring and fall. This seems to be the same
reason that Expedia and other travel sites are starting to build out more
and more lines to sell visitors. It's not just about hotels or activities
any more.

As an example of the need for de-risking, I think that after the Tokyo
Olympics the travel sector media business will probably take a hit as the
national and local governments ease up on their sports diplomacy
investments. On the other hand, we are expecting the Rugby World Cup and
the Olympics to awaken massive subsequent interest (in 2021) by well-heeled
western tourists. As a result of that conviction, we are gearing up
investment into the French, British, and German markets.

...The information janitors/

--------- Japan Travel Corporate Travel Services ----------

Japan Travel's Type-2 licensed travel agency business is one Japan's few
independent foreign-owned inbound DMCs. One of our specialties is looking
after corporate groups of 10-300 people. To date we have assisted in the
successful holding of training events, incentive travel, conferences,
off-sites, and team bonding programs. We have looked after the full gamut
of services, such as: international air travel, hotels, local travel, event
logistics and venues, entertainment, micro-management of dietary needs, and
special needs customers.

We are highly motivated and are happy to work in a variety of roles
tailored to suit your needs: as a full-fledged corporate travel agency
partner, as a logistics partner for a particular issue, or as a source of
innovative experiences and venues. Looking after hard-to-please high-tech
groups is our specialty!

For corporate travel assistance, contact us at: tours at japantravel.com.
Or visit our pages at:


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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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