Locality, take two!
Well, looks like its time to eat my words from last night about “international” startups… and so soon!
Within the space of a couple of hours, Om Malik has posted about Kleiner Perkins investing in Cleartrip.com, an Indian travel portal, and Mike Arrington at TechCrunch posts (by way of Scobleizer) a Swiss startup, cocomment.com.
Actually, on second thoughts, this does go some way to underscoring my point. From what I can gather, Cleartrip.com’s raison de etre is to provide an Indian version of Orbitz or Expedia.
Orbitz is still clearly US centric (and the flight recommendations bizarre, it just suggested to fly from Melbourne to Launceston, I could fly Melbourne, AU -> Auckland, NZ -> Syndey, AU -> Launceston, AU. This is amusing as there are at least 8 flights a day here from Melbourne, usually a 50 minute flight.)
Expedia on the other hand appears to have lauched an Australian version of their site recently. I say appears and recently because the first I knew of it was when I loaded the main site.
Anyway, my point is that if Orbitz was to clean up its act, get some people on the ground locally to sanity check their system, there is no reason that they shouldn’t be able to hit the market that cleartrip.com is aiming at.
After all, it makes sense to have a network of interlinked travel sites that would allow you to seamlessly book your international trip, so the next time you visit Launceston from Melbourne, you don’t get sent via New Zealand!
It will happen sooner or later, but until it does, I think VCs should get used to hearing the elevator pitch that starts with “It’s an Indian version of…” or “It’s an Australian take on…” or “Imagine Google News, but in Swahili!”
Recycling existing sites and services for your locality is not innovation. It makes business sense in the short term (maybe, I really don’t want to see pets.com.au though 
), but you aren’t innovating, unless you’re doing it better 
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February 6th, 2006 at 12:13 am
yeah unfortunately alot of VC’s think alot of Web 2.0 companies are too small (ie under $100m-$200m rev in 5 years, IPO’able etc “$1b Dollar Home Run”) even when focused on the US and global market. Basically verticalising an opportunity is considered too small in potential. High net worth individuals and large players in the space being attacked though (eg travel, telecommunications, search etc) will be interested – however then they often lack the early insight, technical competence and arent “professional investors” investing in an “Australian version of….” So what Im doing is small angel funding from a party I know well, combined with classic bootstrapping techniques : Get the product to launch, also build enterprise revenue by licensing the technology to players in your field.
The one real benefit this time is its alot cheaper to get a website up and live (ie $50k-$100k) which wasnt the case last time in 90s. Heck, someone with mortage equity gains could seed invest a business.
Just dont expect anyone to simply fund a local idea, however proven. Once you launch and have success watch them follow. So the key is to fund and exploit and create economic value from that window.
February 6th, 2006 at 3:38 pm
Warren,
I happen to be one of Cleartrip’s founders, and all I can say at the moment is:
1. Don’t believe everything you read in blogs or newspapers (especially not newspapers associated with the Times Group in India)
2. What you’ve pointed out about Orbitz is phenomenally true.
3. Given #2, don’t you think travel needs a better search?
February 6th, 2006 at 4:08 pm
Hi Hrush, thanks for your response.
First off, congrats on getting funded
This post is very much about how startups outside of the US can capitalise on the failure by US companies to see that they can expand their services beyond their borders. As I said in a previous post :
“If (US startups are) not willing to do that, then don’t be surprised to see competitors with better support for multiple locations overtaking (US startups) in the near future.”
I thought Cleartrip provided a perfect example of how Orbitz and others have missed the boat. Bad news for them, good news for you