At WIT Middle East in Dubai earlier this month, Tao Tao, COO & co-founder of GetYourGuide, the tour and activities marketplace, sat down for a conversation with Yeoh Siew Hoon, founder of WIT, to talk about mistakes made, lessons learnt and how “the fine line between resolute persistence and unbending stubbornness is difficult to tread”.
Q: So you were born in Beijing, but grew up in Germany. Tell us how you got together with your co-founders to start GetYourGuide. What problem were you trying to solve?
We all studied at ETH Zurich and knew each other’s strengths and weaknesses well. Initially we wanted to create a peer-to-peer platform for tour guides. The idea was born when Johannes (Reck) and I attended a student conference in Beijing. Being from Beijing, I became the designated tour guide. Based on that experience we launched a platform where anyone could become a tour guide or book a tour from a local. The sharing economy didn’t really exist back then, so we were quite early with that idea.
Q: I recall you telling me that when you launched the platform to the public in June 2010, you had 2 visitors a day. How scary was that? What was wrong with the original idea?
The early peer-to-peer tour guide idea was flawed for two reasons. Firstly, from a demand perspective most customers travelling to, say, New York aren’t interested in going on a tour with a non-professional guide who may or may not provide a good service. Travelers want to visit the Empire State Building, take a helicopter ride or watch a Broadway show.
Amateur tour guides are limited to walking tours or classes, which are great, but don’t capture the entire activities market. Even for walking tours, you have a quality issue: professional walking tour guides provide a better experience because they are trained to do so, can provide access to sites that amateurs may not get access to, and so on.
Local friends make the best tour guides, which is what inspired us initially, but going on a tour with an amateur friend and going on a tour with an amateur stranger are two very different things. Secondly, from a supply perspective with peer-to-peer service marketplaces, you always have the issue that the opportunity cost of leisure time is high. Would you really want to sacrifice your Saturday afternoon to guide strangers through your city for a few dollars?
When we only had 2 visitors a day, we weren’t scared. We didn’t think it was going to be an overnight success like viral games. We understood that building a marketplace from scratch takes time. Activities is an exciting market because it is one of the last greenfields in travel but being a greenfield means there is a lot of groundwork to do. Even 5 years into the business we are still building some of the basic building blocks of this industry.
Q: But you didn’t give up. What kept you going?
We believed in the market and, honestly, we had too much fun building the business to quit early on. Coming right out of university, we also didn’t have high living standards or obligations of any sort. Without much to lose, we just kept marching on. 
Q: I also recall you telling me that the biggest lesson you learnt was to ask, is that what customers want? If we had done that, after a week, we would have realized no one wants amateur tours.
Absolutely. In the early stages many start-ups, especially in travel, build products nobody wants or that nobody wants hard enough (features instead of products). Entrepreneurs are good at making others believe in their idea. The downside is that they make themselves believe in their idea, too, and sometimes too much.
The fine line between resolute persistence and unbending stubbornness is difficult to tread. Even mature companies with product market fit often fail to truly give customers what they want by not collecting or not looking hard enough at the data. Most surveys say that hotel guests value free hotel wifi, yet there are still hotels that charge for wifi.
Q: So you “pivoted” to a two-sided marketplace and that seems to have done the trick – who gave you that advice?
Nobody advised us but there were plenty of roles models from Amazon to booking.com. A company’s underlying business model serves to deliver what customers want in the cheapest, fastest, most consistent fashion. It just turned out that a two-sided B2C marketplace was the best way to serve great activity experiences to our customers. If that hadn’t worked out, we would have continued to iterate on the business model. I say this because many start-ups fall too much love with their business models – be it peer-to-peer or the “Uber for X” – that they forget that the true objective is to give customers what they want regardless of the underlying business model.
Q: You’ve raised a total of $45.5m – there are some that says funding is evil because it comes at a price and it’s best to bootstrap. What’s been your experience with the money you’ve raised?
Not all companies should raise funds. You should only raise a lot of money if there is a clear opportunity and path to become the leader in a very big market. Funding simply helps to accelerate becoming the market leader. By taking on funds we can take bigger risks to grow the business and absorb cost from mistakes. Funding also allows you to afford and attract world class talent, which is needed for accelerated growth.
Q: Most start-ups can get desperate enough to do something stupid. What was the stupidest thing you think you did?
We had countless head-slapping episodes. The most stupid things usually involved people so I can’t talk too much about those. Speaking for myself, putting a table soccer in the middle of the room ranks among the top 5 most stupid things. Total productivity killer.
Q: Money and business can come between friends, look at Facebook. Are you still friends with your co-founders?
After fighting so many battles together, in most cases our friendships have grown even stronger. The trick lies in separating work from personal issues when it’s required. Self-reflection is essential.
Q: What was the tipping point? When you knew you had a solid business.
Honestly, I’m still not so sure today. As a founder you’re always paranoid and fixated on reaching the next level, but I think that’s healthy.
Q: What’s your plan? To scale, grow and then to exit? As Viator did with TripAdvisor.
To scale, grow and exit is the general game plan for VC-funded companies. What separates VC-funded companies from one another is the size of the vision and execution capabilities. Our investors have backed billion dollar companies like Twitter, Tumblr, Wayfair or Oculus, so we’re all in this to build a big company. Nobody is thinking about an exit right now.
Among the activities offered by GetYourGuide in Dubai is a Desert Safari with a private dinner to round off the experience.
Q: How do you get customers to your site? And booking with you? We’ve heard margins on tours & activities are really low and it’s one of the hardest areas to aggregate cos it’s so fragmented, made up of lots of tiny, tiny businesses …
Margins and baskets are higher than what most people think. Consider a family of 3 booking a bike tour for average price of 30 to 40 dollars. Then consider that customers don’t just book one activity when they visit Paris or Singapore, which is a huge advantage compared to the hotel or flights space. We use many channels to attract customers. Search is big for us but so is partnerships with other travel companies because we are complementary to their hotel & air offerings. Fragmentation is a challenge but if it’s not difficult, it’s not valuable.
Q: Yet the in-destination piece is what’s really hot right now – lots of people eyeing that space. What would you say to those thinking of entering? Stay away?
We always welcome competition, because it makes the space stronger as a whole. However, only enter the space if you are a ready for a long journey, lots of groundwork, heavy investments in both technology and operations, have the ability to raise a lot of money, and don’t mind competing with us despite our head start.
Q: Plans for expansion?
Last month we launched eight new languages to capture the Scandinavian, Brazilian, Turkish, Polish and Chinese market. We are already active in more than 2,000 destinations. Much more to come.
Q: Quick word answers
Mobile: future
Airbnb: ballsy
Uber: execution
China: money
Q: A lot of Chinese are returning to China to be part of the amazing story – you?
China is an interesting market but so is Europe with a combined population of 750 million people. Berlin, where we are based, is writing a pretty amazing story of its own. We’re very happy here but who knows what the future brings?
