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Travel and pre-startup anxiety

Oh, hi there. Every time I send one of these newsletters which still does not include “so, here’s the
Travel and pre-startup anxiety
By Matt Hackett • Issue #14 • View online
Oh, hi there.
Every time I send one of these newsletters which still does not include “so, here’s the new company I’m working on!!!” I feel irrationally apologetic.
For me, writing in public without a company is as if I’ve nicked myself badly shaving, am bleeding profusely, and just totally ignore that while I proceed to tell you at length about how good the space-travel novel I just read is. (The Wanderers was really good.)
This is in part why I’ve been shy about sharing a major thing I’m working on right now, a beautiful sound- and indie-music-related project and company that I love, and you might just too. More on that down the line.
I put myself under an inordinate amount of pressure to “find my next thing.” In truth, next things always come when we least expect them. They distill in an instant from all the messy, gee-that-seems-interesting, oh-you-have-to-talk-to-her-about-this of the incidents in between.
In that spirit, I present a peek at the current messiness: some explorations I’ve been doing around travel. Without an apology, even! (Though with a thanks to Luck and Privilege, understandably least venerated of all the gods, who’ve made it possible for me to do this exploring sans day job.)

Why travel?
I’ve been going deep on travel the past several months. Not traveling, per se, though I have been doing a bit of. That’s a recent shot from Guanajuato, Mexico.
Much like my explorations around real estate last year (which are not forgotten, just running in a background thread), I center my research with a purposefully naive question:
How might you make enriching travel possible for more people more often?
I believe more travel is good for humanity. The increasing availability of travel to people of every class all over the world creates far more than economic activity. Travel dramatically increases cultural liquidity. Like financial liquidity, it is a necessity for peace, prosperity, and common human purpose.
I don’t think my own horizons would be terribly wide had I not fallen in love with going elsewhere. At 19, I convinced my parents to lend me $800 (not small change to them or me!) to spend the summer in Thailand as a volunteer English teacher. That launched a passion that’s taken me to 40-some-odd countries, from Canada to the DPRK (aka North Korea).
Travel has made me me, and given me a lot of strong opinions about how it best functions as a product. I’m very familiar with the consumer end of travel, so I wanted to push myself beyond that comfort and look more closely at the “supply” side of the existing equation. That’s taken me from dry 10-K annual financials to more colorful conversations with seasoned executives.
A peek at how hotels work
A major hotel chain can make $500-600 annual average revenue per user (ARPU). Facebook, by comparison, makes around $140 annual ARPU in the US. Of course, one of those companies has a much less flexible cost structure, what with the buildings and the service workers. 
Hotels at scale are thus desperately trying to become a kind of software company, a thin client on top of the messy hardware of physical rooms to sleep in and caretakers thereof. 
Mega-merged companies like SPG-Marriott are divesting themselves from owning actual hotels and fast. They sell the hotel itself and simply license the name and services back to the new owner. Marriott, for example, owns less than 30% of its physical properties. From the tenor of their annual reports, they wish they owned 0%.
AirBnB was built in exactly the opposite way: They made a powerful software tool, which is a uniquely cheap method to create a brand in the modern era. The tool attracted the hard assets (short-term rentals closer to the places travelers wanted to be than any hotel could ever get). AirBnB has dabbled in hotels, but even with the HotelTonight acquisition, they are blissfully avoiding owning physical things, like any good millennial.
Hotels must sell a huge amount of inventory: at just one property, hundreds of rooms, every single night, every day of the year. The room sales problem appears to be a classic software one. If the specificity of a hotel room were a bit lower, it would be an ideal fit the real-time auction marketplaces that have given Google and Facebook FANGs.
But it a problem currently only marginally solved by software, with an inefficient and fractured set of systems. Hotels pay Expedia commission to book you in a room, or they pay you directly (and far less) in the form of loyalty points to book with them, or they hunt down locked-in corporate sales one large company at a time with human direct sales.
All of these intermediaries–including such seemingly customer-friendly sites as TripAdvisor–work for the hotels themselves, not you, the consumer. In fact, no one in the travel booking equation works for you, unless you’re paying the highest end of travel agents. Even if your company pays for corporate travel management, they are the customer. Corporate travel is all about cost management for the company, not a better experience for you, fellow worker-traveler. 
Opportunity is written all over a messy marketplace with no one working for the consumer. So next I’m back to the product side of imagining just what a solution might feel like.
Question for you
What keeps you from traveling more and more meaningfully?
(I know cost is often number one–and all these creaky middlemen aren’t helping there!)
A book you should read
The Wanderers by Meg Howrey
The Wanderers by Meg Howrey
I loved this novel about the first astronauts destined for Mars. A sort of antidote to The Martian, Meg Howrey takes you inside the heads of three imperfect humans doing their job, which just happens to be to bring humanity to Mars. She shows you how the most extreme kind of travel would feel. To me, that’s just as exciting as the speculative engineering of it all.
A music video you should watch
Aldous Harding - The Barrel
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Matt Hackett

I'm an entrepreneur and engineer, currently in exploration mode. Subscribe to follow along.



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