“Startup spotlight” features companies on the rise in travel and innovation.
Headquarters: Lake Wales, FL
Founders: Matt & Nicole Zito
Our partnership background
When our journey to create Amadeus for Startups began two years ago, we knew we would never be able to “be all things to all entrepreneurs.” We also knew that to be successful, we would need to align with a carefully selected partner. Matt and Nicole Zito happened to be on a similar journey at that time, and Travel Startups Incubator (TSI) became Amadeus’ first alignment.
To mark the second year of our partnership, I sat down with Matt and Nicole to discuss their journey as a hybrid incubator and accelerator. Here are insights about how their company is influencing the travel startup ecosystem.
Why did you start Travel Startups Incubator?
In 2014, we were advising seven to eight startups per month from around the world, through an affordable monthly advisory service. We realized that the best startups we wanted to work with could not pay us because they didn’t have enough money. So the problem to solve became, how do we work with them? The solution was an incubator where we funded the startup and received an ownership stake for our advisory work. It was a win-win. At the time we launched, there was no dedicated travel technology incubator investing in travel startups.
What separates TSI from other incubators and accelerators?
We are 100 percent focused on investing in travel, tourism and hospitality technology startups. Currently, we are a virtual and global incubator, which separates us even more from other incubators and accelerators. Our niche in travel gives us a competitive advantage over other more broad-based incubators and accelerators. Our large network of 300+ travel executives and investors is a great resource for our portfolio companies and advisory clients. Additionally, our startups receive a long-term commitment from us – not just a three-month boot camp.
Since launching TSI, how has the investment landscape changed?
When we launched in August 2014, we were the only incubator investing exclusively in travel technology. Since then, the market has grown due to the entry of more than 20 corporate incubators, accelerators and venture arms. We believe that conditions are ideal right now for a travel startup to acquire $25K to $100K for a breakthrough travel technology idea.
Moving forward, what challenges do you see for TSI to stay competitive?
Most incubators and accelerators fail due to a lack of revenue generation. On average, it takes seven to 10 years for an incubator/accelerator to see a return on investment, so we are presently working on several revenue-generating products. We launched an advisory service and the Deal Flow Platform, two services that leverage the massive network we’ve built over the years with corporate travel companies and investors. The larger our network grows, the more value we create for the startups we invest in and advise.
As part of our larger plan, we’re looking to co-locate TSI on a college or university campus, or partner with a larger organization to create a physical presence. Our vision includes the TSI incubator, a travel technology lab, co-working space, and an investment fund.
How does TSI’s strategic alliance with Amadeus help your investments and advisory program?
When we met the Amadeus for Startups team, they immediately saw the vision we were building at TSI, and how our joint vision could propel the travel startup community. Amadeus was one of the first larger travel companies in the industry to get ahead of the curve; they quickly understood the impact that incubating startups could have on the larger travel industry.
Through Amadeus for Startups, our strategic alliance has provided TSI startups with access to industry-leading IT technology and expertise. Amadeus has conducted pilot programs with our startups, and is licensing technology. Amadeus executives also serve as advisors and mentors for our startups, and routinely help us answer questions about new travel technology we’re reviewing for investment and advisement.
In one word, how would you explain your company’s philosophy?
Transparency. We share information about our business with the startup ecosystem, which has never been done before. For example, we recently published our estimated ROI on our first portfolio of 19 investments. Some venture capitalists called to ask why we did this. Our answer was simple: We wanted to be transparent with our investors and the startup community. In the investment ecosphere, we’ve experienced and seen “smoke and mirrors.” At TSI, we are committed to being as transparent and authentic as possible. The result? We’ve been able to invest in some great companies at an early stage.
What methods does TSI use to raise awareness about its projects and services?
Our monthly blog posts provide insights into new travel technologies entering the market. We also interview startup founders who offer real stories about what it’s like to build a travel technology startup. Nearly each quarter we attend travel tech conferences around the world, actively participating as moderators and panelists for conference organizers.
What is on the horizon for TSI in the next six to 12 months?
Using one of the largest networks in the travel industry, we are focusing on building our Deal Flow Platform, which helps match new travel technologies with corporate travel companies and investors. We will also incubate a few startups through our Traction Program, and continue to survey the landscape to determine where our next “investment frontier” will be.
In closing, what nugget of wisdom can you share?
Confucius said, “To know what you know and what you do not know, that is true knowledge.” Fledgling startups can never know everything there is to know about launching a business or entering a new industry – and that’s where we come in. Our greatest reward is in guiding startups to success through the knowledge they receive from hundreds of advisors, peers, partners, customers and investors in the TSI network. You can’t put a price tag on that kind of wisdom!