With the continued growth of incubators/accelerators and the major value proposition of acceptance being “the network”, it’s highly likely a clear winner will emerge in every major vertical. Many accelerators are already verticalizing as a point of differentiation - TechStars, a clear leader, has realized this as a growth strategy and now runs accelerators for Qualcomm (robotics), Disney, Nike, Barclays (finance), R/GA (connected devices), Sprint (mobile health), and Kaplan (EdTech). The YCombinator’s of the world won’t have to go down this path because they have a massive headstart (aka brand & reputation) – but everyone else will be required to specialize, or risk a slow demise into obscurity.
In terms of accelerators with a specific focus on travel (which is what we care about), there is VaultPad Ventures in Manchester, RunUpLabs in Indiana, London TravelTech Lab, VentureHive in Miami, 33Entrepreneurs in Bordeaux (late addition), Telluride Venture Accelerator in Colorado (late addition), Travelport Labs in Denver (late addition), and Travel Startups Incubator (virtual, disclosure: I’m a guest contributor to the TravelStartups.co blog). None of them have any significant wins under their belt, or any significant brand with travel founders (likely because it’s still early days in their history).
The accelerator most known among travel founders? Without a doubt, it’s Start-Up Chile. Founders working on travel companies are of course interested, and willing, to pack up their life and fly across the entire world to a city/country they’ve never been to. Unfortunately, just being “known” doesn’t mean being the best.
It’s my belief Start-Up Chile has the opportunity to be the best accelerator in the world for travel startups, despite the fact that they are funded by the government and operated very differently than traditional accelerators who are equity partners.
Community of global travelers. Start-Up Chile prides themselves on being the largest and most diverse startup community in the world. It’s true, you simply cannot ask for a more international community of entrepreneurs (over 1,500 entrepreneurs from over 75 countries) - which of course is ideal for companies focusing on travel that need content and connections from all across the globe.
Past Successes to Build On. Two of Start-Up Chile’s largest successes in terms of acquisitions and fundraising events are in the travel vertical. WeHostels (exited to Student Universe) & Glamping Hub ($1M Series A).
$35k + No Equity. Capital to live for 6 months and focus on your startup is great for incubation of travel ideas and concepts, and achieving product market fit. That said, there is a downside to taking no equity. It means there is no financial incentive for Start-Up Chile to help their portfolio companies succeed. While their staff helps as much as they can, the help available out of kindness and help from those vested in the long term outcome of the company are significantly different. That said, $35k in capital without having to give up equity is certain a great deal for founders.
What does Start-Up Chile need to do to capitilize on the opportunity in front of them? From my perspective, a few things…
Alliances with Angels and Venture Capitalists for Follow on Funding. The fact of the matter is there isn’t a ton of tech money in Chile, and companies need capital to grow, scale, and ultimately suceed. Early stage companies need access to trusted investors with domain expertise in the travel industry. It’s well known the best way to reach investors is via a trusted introduction. Start-Up Chile could act as a filter for their network of travel investors, facilitate introductions for their best travel startups, and get founders a seat at the table with the right investor.
Strategic Industry Relationships. Startups need to speak with gobal hospitality brands, OTAs, and industry veterans in an effort to gain distribution. Start-Ups need distribution to succeed, and the right relationships generally take months or years to cultivate. If there was a dedicated staff member of Start-Up Chile dedicated to building and owning those crucial industry relationships, that would go a long way to helping portfolio companies reach the right contacts quickly.
Strengthen the Travel Founder Alumni Community. Founders in the network are the best people to facilitate connections to existing industry & investor contacts – which of course are crucial to success. The travel industry is a massive place, and I have no doubt a tigher community would lead to more collaboration among portfolio companies. Since not every company succeeds, portfolio companies could benefit from grabbing talent obsessed with travel who worked at start-ups in the network. Note: there is a private Facebook group for existing Start-Up Chile travel founder alumni: https://www.facebook.com/groups/754869504571612/
A Travel Developer Ecosystem. Every start-up needs developer talent. It’s my belief the best thing Start-Up Chile can do to grow a ecosystem of developers in Chile is support an open source travel platform. One every single travel startup can utilize to speed up their development cycle. The most promising open source concept? Travatar - Gravatar for the travel industry (entire concept detailed here). Startup Chile would be listed as a supporter along with the other companies that contribute heavily to the codebase. They wouldn’t need to provide actual development manpower, but marketing support to ensure every travel startup knows about the platform and encouraged to help move it forward during their 6 months in Chile. Travatar could grow into a broader content delivery platform. Think Wordpress, for the travel industry.
If an open source initiative gained support, the result would be a community of developers here in Santiago better able to help future travel startups integrate/build great products without a massive industry learning curve. On top of that, developers from around the world would utilize it and Start-Up Chile would benefit from a branding perspective by supporting the project. An open source project is most certainly not a short term strategy – but it doesn’t need to be since this is a government initiative that is likely to be around for years to come. This would be a low cost strategy to do something innovative with the community, given there is no marketing budget from the government.
Especially to those travel founders who have already gone through the program or applying in the future, would this strategy make Start-Up Chile more attractive? What do you think they need to do to be a “must” program for every travel startup founder?
Disclosure: Yes, of course I am biased since Horizon is a travel startup going through the program (Generation 10) & our first target communities for hospitality exchange. A stronger Start-Up Chile community of travel industry founders, investors, and partners as well as access to more travelers to tap into would certainly help Horizon succeed in organizing every community on earth by location.
Do you believe unlocking travel opportunities matters?