A Q&A with TrekkSoft co-founder and CEO Jon Fauver. The Interlaken, Switzerland-based startup completed an $800,000 Seed funding round in mid-August. Investors include Redalpine Venture Partners, Adrian Locher and Innovationsstiftung der Schwyzer Kantonalbank. It was founded in 2010 by Fauver, Philippe Willi and Valentin Binnendijk.
SUB: Please describe TrekkSoft and your primary innovation.
Fauver: TrekkSoft is an all-inclusive Software-as-a-Service (SaaS) solution that enables tour and activity providers to manage and market their real-time, live inventory. It includes a booking system, an online payment solution, a website and mobile platform, and a channel manager. In short, TrekkSoft rolls up all the tools a business needs to manage, market and sell their tours or activities in one web-based solution.
SUB: Who are your target markets and users?
Fauver: TrekkSoft is primarily for companies offering tours and activities. It is simple enough to use that small owner and operator companies can be up and selling tours in a very short time, yet contains enough powerful features for larger multi-day tour operators to run their entire business. By meeting the needs of both sides, TrekkSoft facilitates easy cross-selling of in-destination activities by the larger companies.
The ‘tours and activities’ segment of the travel industry is worth $90 billion, yet the majority of the industry remains offline. TrekkSoft helps build these businesses by offering all the tools they need to effectively sell online, offline and mobile. In addition to the tour and activity suppliers themselves, we also have tourism offices and accommodation providers using TrekkSoft to roll up all their partner companies into one ‘micro-marketplace’ that allows them to offer all of a region’s excursions to their guests in one place.
SUB: Who do you consider to be your competition, and what differentiates TrekkSoft from the competition?
Fauver: Our biggest competitors are Excel, telephone, and pencil-and-paper reservation systems; closely followed by homemade sign-up forms developed by the suppliers themselves. The space remains low tech because the suppliers are resistant to change only for change’s sake. The majority operate low-margin businesses and the shift to online does not necessarily bring them more customers, it brings the customers through a different channel. To get the suppliers to bring their inventory online, solutions like TrekkSoft need to meet their needs and solve their problems first.
The space has been heating up and seeing much more publicity over the past two years. Other SaaS solutions competing for the same market as TrekkSoft include Rezgo.com, TourCMS, Bookeo.com and Xola.com. To date, the competitive field remains healthy and respectful, the space is wide open, and we are all working towards the same goal from different angles.
TrekkSoft is the only solution to offer an integrated payment gateway that allows suppliers to accept direct bookings after a quick-and-easy signup process. We offer the most comprehensive solution—combining the integrated payment gateway, robust tour management software, a booking engine, and a CMS with a powerful suite of promotional tools including social media integration and agent tracking. We also package in a free mobile-optimized website and/or white-labeled app. The TrekkSoft Partner network allows all suppliers in the TrekkSoft eco-system to seamlessly cross-sell each other’s products either directly or via API.
TrekkSoft gives suppliers the tools to ensure their live inventory is online, bookable and accessible to their agents and resellers. By addressing the needs of the supplier, we make it easy, affordable, and attractive for them to sell online.
SUB: When was the company founded, and what were the first steps you took in establishing it?
Fauver: We founded TrekkSoft in 2010. TrekkSoft as a company grew out of our own development of an online booking system that we built to solve our own needs selling tours and activities for two other companies that we are involved in. We were able to draw from our first-hand experience of the needs of an in-destination day trip company, multi-day tour operator, and a destination whose number one industry stems from a profitable relationship between those two types of companies. The first step was meeting the needs of these two types of companies by facilitating both their online and offline transactions, their relationship with each other, and with local points of sale and agents.
SUB: What was the inspiration behind the idea for TrekkSoft? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Fauver: TrekkSoft grew from our need to sell our own tours and activities online. Even today this is challenging for small- to mid-sized companies; in the mid-2000s it was a big hurdle. Managing all inventory from one place and being able to offer live inventory online gives the suppliers power and control over their own marketing and sales relationships. Our ‘aha’ moment came from Ray Nolan and Hostelworld in the early 2000s. Watching and experiencing how they changed and revolutionized the hostel industry with Backpack Online gave us a lot of inspiration to do the same thing for tours and activities.
SUB: How did you come up with the name? What is the story or meaning behind it?
Fauver: I can’t remember if it was around a campfire, beachside on the Tamur River, or hiking off the backside of the Schilthorn—actually, it came down to lots of scribbling on whiteboards, a few beers, and some single malt during multiple brainstorming sessions. Final credit for the name ‘TrekkSoft’ goes to our CTO, Valentin Binnendijk, and his wife over a home cooked meal and a 2008 Brunello. We think it did a good job rolling up travel, adventure, software and responsibility in an easy-to-remember name. Soon, it will be synonymous in the industry with ‘the best solution to sell my trips and run my company.’
SUB: You recently closed an $800,000 Seed funding round. Why was this a particularly good time to raise outside funding?
Fauver: Both TrekkSoft as a company and the tours and activities space were at the right point. We stayed low-profile and under-the-radar during our early stage. At the end of 2012, we felt that as a company we were ready to start scaling aggressively and the increased attention the space was getting made it the right time to get outside funding.
SUB: How do you plan to use the funds?
Fauver: A large part of the funds will go towards market development and building our inventory of suppliers. We have been successful with our first efforts scaling in Europe and North America, now we need to intensify our efforts and achieve greater market saturation. The remainder of the funds will be used to make sure we stay ahead in this rapidly changing online market. We are planning further development in mobile, the API and channel management.
SUB: Do you have plans to seek additional outside funding in the near future?
Fauver: Yes, to be successful in this space and to reach our goals within the industry, we will need to continue growing, both in the market and in development. We will need additional funding to do this within our planned timeline.
SUB: What have the most significant challenges been so far to building the company?
Fauver: We are facing two significant challenges at the moment. The largest is educating the suppliers about selling online and the advantages they will reap if they grant others access to their inventory. Second is convincing the industry that if they want to crack the tour and activity space and get access to the live inventory, we need to bring an upside to the suppliers—not just ourselves and the consumers.
SUB: How do you generate revenue or plan to generate revenue?
Fauver: TrekkSoft is already generating revenue. Our pricing model ensures that the suppliers can afford to use us and makes it attractive for them to get their inventory online. TrekkSoft is free to sign-up and use, no fixed fees, no setup costs, unlimited user accounts, unlimited bookings. We charge six percent plus a .50 transaction fee on any online booking. This fee includes the credit card and PSP fees. All offline reservations and bookings are free of charge. Offline bookings are any reservation or booking in which the payment is not processed through TrekkSoft—example: POS bookings, telephone reservations, direct payment on arrival, etc. In 2012, we processed $5 million in online bookings and we will grow that number to $8 million in 2013.
SUB: What are your goals for TrekkSoft over the next year or so?
Fauver: Continue signing up new suppliers and building the inventory that we have available; by the end of 2014 we will have over 1,300 active suppliers providing an inventory of more than 14,000 tours and activities. We will continue to help these suppliers grow their businesses by improving their own direct sales, facilitating cross selling through other companies using TrekkSoft, and offering optional extended distribution through connections with key strategic partners.
Trekksoft – www.trekksoft.com