After making as much noise as could be made (including telling competitors that they will ‘shit their pants’), Costa Rican startup TripFab finds itself staring at a less than stellar exit after it put its assets up for sale on website marketplace Flippa at a starting bid of $50,000 earlier this week. It’s a humble exit for a startup that once promised to turn the travel industry on its head, as it invites bids for its IP, domains, traffic and users on Flippa.
TripFab was started by entrepreneur Michael La Rosa after selling his first startup, CodeMyConcept. TripFab was loud and inhibited in its ambition of disrupting the travel industry, and even raised $1.1M from various investors to this end. The basic concept was simple: Expedia and Priceline charge 20 to 40% commission on each hotel booking. TripFab basically wanted to eliminate this middle-man and let travel agents deal directly with concerned hotels.
The travel industry is a tough beast to tackle and the entrenched players have an iron grip on the market. TripFab possibly bit off far more than it could chew. The sales pitch on Flippa notes:
I personally had no experience in travel before this startup, and I made many execution mistakes. But we have a solid product, and in the right hands – you can make this rock.
Our loss is your gain, and we are looking to recoup back some of the investment put in.
The sale has attracted quite a lot of attention on Flippa. At a starting bid of $50,000, however, I doubt it will get much attention, especially since Michael himself admits that the travel sector is difficult to crack.
Michael’s last tweet was sent out on 24 August, and he notes in the tweet that the company has made a small pivot (which he reiterates in the sales pitch on Flippa as well). I’ve reached out to Michael to learn more about this ‘pivot’ and the reasons why TripFab had to shut shop despite all the feverish early activity.
TNooz has a nice article where Michael shares some lessons from the TripFab failure:
Pricing is everything, especially online. There didn’t seem to be any travel loyalty to a product, rather a price for consumers.
The fact that almost a decade of new products have failed to dethrone Expedia, Travelocity and Priceline from their perch should be good indication that the travel industry will open up only to an attack from the broadside – something like AirBnb. To take the industry head-on on price alone would require a very hefty war chest.
Image Credit: Kevin Dooley
