With all eyes on the tours and activities space this year, one company has certainly gathered a lot of attention and that’s the Europe-basedGetYourGuide which started life as a student project back in 2008.

“The basic idea we had was to create a P2P platform for tours and activities – we were a bit early and there were many issues related to P2P that we weren’t aware of at the time,” said Tao Tao, one of the five co-founders of the business which since its founding has raised a total of US$16 million.

Tao Tao, born in Beijing, raised in Germany, schooled in Switzerland, originally met one of his fellow student founders while on a high school exchange in the US. At ETH Zurich, those two and three other, all engineering and science students – Tao Tao studied physics at that time –got together on a university project that developed to be GetYourGuide.

“We took a trip to Beijing to attend a university conference and I acted as a tour guide and thought it’d be a good idea to create a P2P platform for tours and guides. We did it for about a year and for many reasons it didn’t work.”

“We had no business experience, we were naive and starry-eyed, there were underlying problems of P2P platforms – the opportunity costs of my time as a tour guide are higher than say, a fixed asset, a couch on Airbnb, and amateurs could only do walking tours and the professional inventory – horse back riding, canoeing, kayaking – was hard to aggregate and scale.”

And so in mid-2009, they decided to change the model to the two-sided marketplace connecting professional vendors and travellers like traditional OTAs. 

The five then quit their jobs and PHDs and in January 2010, launched GetYourGuide. “In the beginning, we got only two visitors a day,” said Tao Tao who is now VP sales for the company. But they persevered and scaled the inventory. Today, it has more than 23,000 activities, “more than Expedia and Viator”.

“It was hard work, we called everyone, e.g. companies like Tour East in Singapore. We went to trade fairs and we built technology that made it easy to upload content.”

The advantage was they had the old P2P platform which they could still use and today, they offer vendors the ability not only to upload content but to offer different commission modules, giving them control of their inventory and yields.

“We stumbled upon a massive industry with zero technology sophistication, low aggregation and unsatisfactory customer experiences,” said Tao Tao.

How massive? Tao Tao estimates there are about half a million tours and activities out there to be aggregated.

GetYourGuide’s main focus remains in Europe for now – its main customers are from the continent and its inventory Europe-centric. “We offer thousands of tours in the US, America and Asia but our current hot spots are in Europe. It’s a well-travelled continent.”

Its first seed round was in 2012 when it raised US$2 million. This was followed by a Series A in early 2013 when it raised US$14 million.

“Funding went mostly into technology and product – it’s a huge market, we are in front position in technology and inventory, and we want to stay ahead.”

Which is why even though he is originally from China, GetYourGuide is not yet in China. “The Chinese source market is huge, we have Fritz (Demopoulos, co-founder of Qunar) on board as one of our investors, regulations are becoming more relaxed, there is more FIT travel – you can see Chinese travellers all over Paris – but the danger is losing focus.

“If we want to enter China, we would do it in style – it’s in our sights but even with US$16 million in funding, we have to pick and choose our battles.”

As for brand building, it won 4m Euros worth of TV media money last year in a competition and will use that to build profile.

Working on a commission model, Tao Tao says the business is not profitable yet but the opportunity is huge. “In Europe, the tours and activity market is worth several billion– you can build a great company by ‘only’ capturing Europe.”

At the WIT Conference last year, Rezgo’s Stephen Joyce, speaking about the challenges of operating in this sector, said the average value per transaction was US$50 and so it was hard to be profitable unless you had scale.

Tao Tao said, “Our data shows it can be very profitable.”

The other opportunity is in mobile and tours and activities are the ideal mobile use case, he said. GetYourGuide is seeing more last minute bookings and same-day bookings are also growing – currently a significant portion of overall bookings come through mobile. “The percentage of same-day bookers will increase as we make it easier – not all bookings are available same-day.”

And he believes a “ToursToday” model would be a very hard value proposition “because with tours, pricing doesn’t change so much and tours don’t sell out like hotels.”

As for what advice he’d offer other start-ups now venturing into tours and activities – Asia is also seeing a lot of activity with names like Voyagin about to raise Series A funding and BeMyGuest recently raising US$500,000 through a partnership with South Korea’s TideSquare and acquiring competitor Indiescapes, Tao Tao said, “Think about what customers want and follow the customer trail.”

“It sounds trivial but it’s a lesson we learnt for ourselves. We were so in love with our business model, technology, Swiss-German engineering and all that – but you have to give customers what they want.

“If we had asked that, after a week, we would have realized no one wants amateur tours.”