GoEuro’s chief operating officer on APIs, organic growth and Berlin’s startups

This is the latest in a series of articles spun out of tnoozLIVE@ITB, recorded live over three days at ITB Berlin this March. More clips and interviews to come here, as well as on our YouTube channel.

A fragmented supply base with an inconsistent level of in-house tech,  growing demand from smartphone-enabled consumers, an often complicated product set and interest from A-list investment firms and industry buyers.

Multimodal search and booking has been overshadowed recently by tours and activities when it comes to a travel segment where technology is facilitating the move from offline-to-online, giving suppliers access to B2B tools and B2C distribution options. However, multimodal transport provision is arguably more complicated than tours and activities, more fragmented and has a higher consumer demand.

GoEuro is one of the leaders in the multimodal search and booking space. At the back-end of 2016 it picked up $70 million in funding, bringing the total raised so far to $145 million.

Malte Cherdron, its chief operating officer, talked to tnooz at ITB Berlin recently. In a short (12 minute) interview he discussed, among other things: working with partners to access and distribute inventory,  the importance of the end-user experience on a smartphone (while not  forgetting that desktop still has a role to play), what GoEuro is learning from its tie-up with Ctrip’s Qunar and why Berlin rocks as a hub for B2C startups.

Here’s the video interview, followed by an edited transcript of the interview.

 

Martin Cowen: Next up, we’ve got Malte Cherdron, who’s chief operating officer for GoEuro which is a multi-model search engine.

Malte Cherdron: Search and booking engine, yes.

Search and booking engine, of course. I must not forgot the booking side of what you do!

Could let us know what you’ve been able to do since the last fundraising round, with the additional investment that you received?

So the last funding round in 2016 was quite substantial for the company. We raised about $70 million from investors like Silver Lake and Kleiner Perkins. But the growth has continued unabated. The growth does not depend on any particular funding round. So we’re constantly adding new partners into the mix. We are integrating more of our travel partners, rail and bus companies into a fully integrated onsite booking, growing the team, improving the product.

That is not really dependent on any individual funding event. That is a continuous growth of the company.

Okay, so the focus is on getting the inventory into the GoEuro system?

Getting it into the system, improving the way it is in the system and just making it more and more usable over time.

Once you’ve got the inventory into the system, what are you then doing to attract customers. One of the things that we inevitably ask any B2C player is about “customer acquisition cost”.  You’ve got the inventory, you’ve got a great user experience but how do you get those users to experience it?

Initially you have to tell everybody about it which means you need to do a lot of marketing. Thankfully, with the inventory we’ve got and the product we’re offering, online marketing is very efficient as an acquisition channel in the beginning. And then over time, you build to repeat customers. You build direct traffic from people who’ve used the product before, likely to come back and of course, that increases over time.

So this is the traditional approach of buying the traffic initially, but then converting that bought traffic to direct traffic because of the products that you offer-

And keep reminding people of the offers and then keep bringing them back, yes absolutely.

In terms of the inventory, rail and bus, are you dependent on the technology of your partners in order to be able to integrate them into the system or can you work with rail and bus companies get that tech suitably integratable with your platform?

Yes, that’s a great question. So it’s actually rail, bus and air on GoEuro. But rail and bus is, let’s say, the big unsolved issue in travel. Of course, air travel has been solved in various ways already. And the thing about rail and bus is there are, there’s very little standardization out there. There is no IATA that standardizes systems and ways of things are booked.

Basically, every single operator runs their own internal systems – from the really good IT systems with great APIs we can just plug into and get all the inventory in real time, to the smaller bus partners in Southern Europe for example with very little IT, basically selling paper tickets. So you’ve got to adapt your solution to fit the needs of every single partner in a different way. There’s no single one size fits all solution that will help us build this thing.

Some of your partners have got an API that you can feed into, and then you’ve got your own API. One deal you have is with Qunar,  which is a Ctrip brand. So I’ve a few questions on the back of that – the take up of your API and what else you’re doing outside of your core European market?

That’s actually the opposite kind of integration. The first step is always to bring rail, bus and air content into our system. With Qunar it’s the opposite. It’s making our content available to a third party, Qunar in this case, in China. It’s a very interesting co-operation, we’re super happy about how this is evolving and it’s a great learning for us also to see how users in a very different geography are interested in and are using our product and our content.

Are you using that data and insights from that partnership to adapt to your core product? 

An API is an API, it doesn’t come in a specific language. It’s not specific to China or anything but you learn a lot about demand and how Chinese travelers in China plan their trip while they’re in China, how they differ in what they’re looking for,  from let’s say people in Germany looking for a train trip in Germany.

Let’s move from China  back to Germany. You’re Berlin based, and you’re quite active in this the German startup community. I think every major city would claim to have its own travel startup community. What do you think is the USP of the Berlin travel startup community? What are they doing maybe differently from other startup communities out there?

So for starters, Berlin is just a great place to live. It’s a fantastic city to be in. It’s a very attractive place to bring people to, and from all over the world. So GoEuro at the moment is 250 people give or take. And out of those, more than 200 come from countries outside of Germany, 45 different countries in total. So we’re recruiting all over the world and being in an attractive place just helps tremendously. People like to be in Berlin. It’s a great place not just to work but just to live.

What’s the support for  startups in Berlin? Does it come from the state or the city or private sector?

Well there’s is a great ecosystem now that’s evolved over the last I’d say 10-15 years in Berlin. Not just in travel but all kinds of mostly B2C startups. And that’s great network that that’s been evolving and you can help each other, like you can exchange information. It’s just great to be in a place where you’re not the only player.

It helps in recruiting because it makes Berlin even more attractive as a place for people to come to and work. It certainly helps solve the usual issue as you have a startup into you know, just compare notes and grow together.

What is on Go Euro’s development road map? Is it just pulling in more inventory or getting more consumers or is there anything else sort of left field that you’re also looking at?

First of all, it’s actually recruiting and attracting more really good people to you – product, tech, marketing, all over the company. And that really is the key to our growth. If you think about a company like GoEuro, there aren’t any physical assets, right? There are partnerships, there are users but at the core, it’s the people who build it every day and who grow it. So finding more talent, recruiting more talent into Berlin into GoEuro, that’s probably our biggest task at the moment.

Okay – expect an influx of CVs from the tnoozLIVE@ ITB audience!

[laughs] Happy to!

But then, of course, there is the output side. It is getting ever more inventory into the product you know, in an ever more usable way.  Getting data into a system like ours is just the first step. You then have to make it usable and you know how complex travel booking can be. If you go beyond a single point to point standard second class trip, you need to deal with people you’re traveling with a family who want to reserve seats, one of you has a discount card, somebody has something else. If you want to make all of that easily usable, and on a smartphone ideally, there’s a lot of work going into that. From making sure the inventory is there, it’s correct, it’s timely to making that easily accessible in a product that doesn’t overwhelm the user yet still gives them all the options and all the information.

Point A to Point B is relatively simple but this other stuff that you’re doing is complicated pulling it out  and then you’ve got to present that on a five inch by three inch screen.

Well that’s when it gets interesting. 70% plus of our users are on mobile devices these days. That’s shifted within five years from an 80/20 for desktop to now 70/30 in favor of mobile. That’s a much bigger challenge. It makes a lot of sense of course for travelers using smaller devices —

So it’s 70/30 now, where it’s going to get. Is it going to get to 80/20?

Somewhere around there. There’s always a use case for you know, people to use the desktop, even though the desktop is no longer that clunky thing that sits on your table, it’s typically a laptop and that’s actually some convergence

Yes. At what point does a small laptop become a large smartphone, but that’s another conversation.

You will still see differences in how people use these devices.

Okay, well that was great. Thank you!

Thanks for having me.

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