“Destroying Value”: the Pivot Away from Google, Facebook, et al.
An article has been making rounds in our office titled “Common mistakes of startups entering travel.” As a startup working in travel, naturally, we were interested.
It’s a summary of things we largely know as folks who’ve worked in this space for a few years, that you have to know your position and contribution to maximize your value for customers. But it ends with a bang of a quote: “Google is destroying value on the industry,” Bobby Healy, chief technology officer of online car hiring service CarTrawler, said.
Aside from being one of the only times a senior industry official has publically cited Google as a burden to the tech-cum-travel space where Triip and others like it including Agoda are building the future, it’s notable for a couple other reasons.
First, it tracks with a few things we’re watching, like Internet founder Tim Berners-Lee’s creation of a web alternative. His project, an open-source, privacy-focused web codenamed Solid, is still a few years away from making a to public debut. But today, right now, it’s easy to find digital desire lines where people are creating their own platforms and spaces outside of the main thoroughfares. The New York Times this week reported that Republican campaigns are creating their own social media platforms that mimic what you’d see on Facebook or Instagram but are much more cohesive and segregarted ideologically.
Healy was specifically talking about the outsized effect Google has on anything it touches because of its mammoth size and power, elements that have helped drive it to become market leaders in web searches and most importantly advertising. But looking closely at these specific elements certain problems are beginning to become evident. Namely, that Google’s parent company Alphabet seems to be living primarily off of advertising, which is an area where the California company’s size and scale are curiously doing little to remediate market inefficiencies.
Or consider this: the average cost to acquire a customer (which is inevitably driven by Facebook and Google, given their market share) is creeping up to $6 per client in some industries, a seemingly inevitable rise. For our industry, travel and hospitality, the cost-per-click in Google’s primary advertising product AdWords is holding at around $1.55, but our average conversion rate in AdWords is still around 2 percent (that is, 2 percent of people who see an AdWords ad are going to click on the ad itself).
Last, consider this: 46 percent of people who click on an ad don’t know it’s a sponsored search result, according to Wordstream.
Healy used some strong language, but we’re in agreement: a system founded on inefficiencies and, in areas, dishonest does destroy our value.
What is the solution? Inevitably, some part of it will be blockchain.
Right now, there isn’t a digital innovation that gives customers back control of their data and user experience in the same way that blockchain is doing. Rather than trusting everything to opaque corporations with the power of unelected state heads or gods, blockchain allows communities to run their digital operations and define the rules of play on their own terms.
It shouldn’t surprise anyone that both Google and Facebook are looking into their own blockchain ventures. Whatever the future holds, they’re likely to be part of what we’re doing for a long time still. But today we’re living in the time of both Facebook’s dominance and news that it’s searching for a web security firm apparently because they’ve built a product that has engendered privacy problems they’re both responsible for and don’t understand. We at Triip understand it’s time to move on and start building something new.
