SM: How big is the market? How do you calculate TAM? MS: In 2007 the groups and meetings market is forecasted to be $170 B. The travel portion, $92B. (Source: Phocus Wright)
SM: What are your top target segments? MS: Small to Medium size companies (we also get business from Fortune 500 companies), Sports Teams, Student Groups, Friends Getaways, Family Reunions, Family Trips.
SM: And these are the options that you offer on your Groople site as Event Category. How did you penetrate the market and get early traction? MS: When Groople was first founded, online group travel was a completely new concept. Early market penetration was achieved through four primary avenues:
1) Creating a proprietary group hotel booking engine, which opened up partnership opportunities.
2) Forged an early test with Travelocity to power their group hotel bookings, which matured into an ongoing partnership. [This was a great biz dev deal structured by our founder.]
3) Search engine marketing played a key role in establishing Groople’s leadership position in the online group travel market.
4) Early PR efforts to generate awareness around online group travel and how we have taken a once laborious process and made it much simpler for the group leader. PR efforts were trade focused, B2B focused, and B2C focused.
SM: What stage are you at now? Revenue? Profitability? Traffic? MS: We are generating revenue and have been for sometime now. Last year, when I took over as CEO, was a real building year for us. We had to hire a new management team, completely overhaul our back-end technology, re-launch our website, and re-engineer how we delivered software.
We have a lot more work to do but the projects we tackled last year have led to substantial year-over-year improvements in traffic, bookings and revenue. We have seen 133% growth in traffic, with 180k unique visitors, up from 65k. Revenue has grown 113%. Transaction have grown 80%.
Not only that, we have managed to enhance our profitability function considerably, by dropping from 30 sales agents to 10. 90% of our transactions that were 25 rooms or above earlier went through call-center agents. Now they are direct, automated, self-service. Only 20% goes through agents.
SM: And how do you make money? What’s the business model? MS: We get paid anywhere between 12-25% of every transaction.