How We Started A Digital Tour Guide Platform With Over 500K Users [Czech Republic]
Hello! Who are you and what business did you start?
My name is Jan Doležal and I founded SmartGuide with the mission to turn tourists into explorers. The SmartGuide app turns every phone into a personal tour guide. It guides travelers using audio, geolocation, and Augmented Reality like a live guide, outside of the crowds, safe from Covid-19.
We provide this ready-made technology to tourist attractions, as well as destinations that use our content platform to digitize tour guides easily without the need to develop an app.
3 years since its founding, SmartGuide has exceeded 500 destinations and is approaching half-million users. Top travel brands including the city of Prague, many UNESCO sites, Singapore Heritage Board, and Switzerland Tourism already use SmartGuide as their official guide.
What's your backstory and how did you come up with the idea?
We are a team of passionate travelers. Just to illustrate, I have visited almost 70 countries and did not stop exploring even with kids. My son visited 30 countries by age 3.
During our travels, we realized we got the most out of each place with a good local guide. But we were frustrated by the lack of quality digital guides that we would expect in the 21st century. We saw that quality content for interesting places exists, just in outdated forms (paper, web, brains of some locals).
We also saw over and over how tourist attractions and destinations develop their guide apps to solve this problem. It takes forever, costs lots of money, and fails. We wanted to give storytellers an easy tool to share their stories with travelers and make visiting less popular places enriching. If more people travel independently also outside of main tourist hotspots, tourism will be more rewarding, sustainable, and enjoyable for all.
Take us through the process of designing, prototyping, and manufacturing your first product.
We started selling the product before we created the first line of code. Once we validated that the proposition was appealing we asked an outsourced development company in Vietnam to build a Minimum Viable Product. The app was quite ugly, only worked on Android and all data was hard-coded, but we could validate it in action with minimum investment.
I had a great career as a management consultant with McKinsey and my technical co-founder had a cozy corporate job. When we saw the traction, we decided to take the plunge and quit our jobs. We figured out it was easier to throw away the MVP and build proper technology from scratch on solid foundations.
The average age of a successful startup founder is 45 years and the success rates are highest for people in their 50s. So you are never too old to be an entrepreneur.
We first built the app with data decoupled in JSON files to get up and running. Then we built a proper backend for the data. Once the backend was ready, we built an internal content management system to replace wild scripts for managing content directly on the backend. Then we turned an internal Content Management System into a public tool that anyone can use to publish amazing digital guides.
Describe the process of launching the platform.
We are building a platform with a strong positive feedback loop. The more travelers on the platform, the more attractive it is for destinations to join, create more content, and attract more travelers.
The most difficult part of building a platform is getting it started. Nobody wants to be the first one to download an app with no content. And nobody wants to create content for no audience. To crack this chicken and egg problem, we have first aggregated content for 300 destinations from available sources.
The good thing about travel is that about every interesting place there is, someone has already written something interesting and much of that is available for free. When you plan a trip to Rome, you can find lots of information online. We have done the tedious work for you, looked through many sources, purchased some content, wrote some, took some free, and built basic content coverage. We attracted first-end users directly.
Once we had the technology ready, we started offering it to the first destinations to publish their official guide. These destinations promote it to their visitors which creates traffic that encourages more partners to join.
So for example in the city of Plzen, we first published a guide for the ZOO. This served as a great reference case for the biggest local attraction - the Pilsner Urquell brewery which decided to introduce SmartGuide for their foreign visitors. Soon the city itself noticed and jumped on the platform to guide visitors from two major attractions around the rest of the city. Soon we added the main cathedral and the Jewish synagogues did not want to stay behind. The snowball started rolling.
We also found a small marketing hack. On Google Play, we published anchor apps with guides for individual cities that could have their store listing, relevant images, and optimized SEO. These apps did nothing but redirect the user to the “main app” which includes all guides. This worked quite well to get initial users on the main app and compensated for the lack of options to promote location-specific content effectively on the app store.
Since launch, what has worked to attract and retain customers?
We were not the first ones who thought that a travel guide should be in an app, not on paper or in an outdated audioguide. Everyone agrees with that. And many startups tried to do it. They saw that travelers were buying guides and they thought they could replicate this model with an app. But the same person that is willing to pay $40 for a thick Lonely Planet book is often not willing to pay $4 for the same content in an app.
And even if they are, they don't travel every day.
So the lifetime value of an end-user is relatively low, especially compared to the high acquisition costs. These are driven by companies like booking.com trying to capture travelers and it is an uphill battle competing with their performance marketing. They have higher valued products so can invest more in acquisition. All these B2C startups failed to extract higher lifetime value than acquisition costs from the end-users.
Other companies offer white label apps B2B. This business model can work but lacks explosive growth and it ignores the fact that travelers don't want to install a different app for every place they visit.
Entrepreneurship is a mindset. Some people are simply born to be entrepreneurs, but many have not discovered it yet. Others see problems as opportunities to solve and have the drive and persistence to make them happen. Those are entrepreneurs.
We do the same B2B sales to let tourist businesses know about our technology through email campaigns, LinkedIn marketing, and some content marketing. But the difference is that we let them bring their visitors on a platform instead of a Whitelabel app. Travelers prefer to use an app that shows them around hundreds of destinations globally rather than a single-purpose app. So we get free acquisition of end-users as a byproduct of our B2B deals.
Our partners additionally benefit from the exposure to these travelers brought by other partners. And for us, it is easier to maintain one app instead of 500 apps. Everyone benefits from the platform. I don't like zero-sum games. But SmartGuide is a win-win-win model which captivates me.
How are you doing today and what does the future look like?
While most other businesses in travel struggled due to Covid, SmartGuide grew 700% last year. While other travel companies let go, we have doubled our team to about 15 FTEs. We have positive unit economics, but we are not profitable yet as we invest heavily in further development. We have validated the product-market fit so now we focus on scaling across Europe and globally.
In terms of technology, we are now focused on making the Content Management System just as user-friendly as the SmartGuide app. We also work on a web version guide for users who don't initially want to install an app.
We are excited about the technologies we are about to build next. We have already collected amazing data about travelers. We plan to build an AI-based recommendation engine that will learn your travel preferences and will build custom travel itineraries for you just like Netflix gives you recommendations on movies to watch. Giving everyone personalized recommendations will allow us to engage travelers more and at the same time disperse crowds of tourists at top sights which is the main goal of popular attractions and destinations.
We also believe that the future will be augmented. We have built prototypes of the Augmented Reality guide and as soon as the technology matures a bit, we will introduce new immersive Augmented Reality guide experiences. This is something paper guides or old-fashioned audio guides can’t even dream of.
Through starting the business, have you learned anything particularly helpful or advantageous?
Before starting the business I looked at the travel industry and thought that it is the safest industry to be in. It has been growing rapidly and consistently and has never gone through a real crisis since World War 2. Even in 2008 it declined just 5% and recovered a year later. Shortly after we started the company, Covid-19 hit.
Our initial runway was ending and I just planned to fundraise as Covid swept the world and everyone panicked. Investors who normally invest in travel put a stop to new investments because they realized that they need extra cash to keep their current portfolio alive throughout the storm. Investors who never invested in travel before felt insecure placing their first bet on travel when they did not even know whether they would be able to travel for their summer vacations.
We had to minimize cash burn and show results despite the uncertainty on the market to give investors confidence that we will be amongst the digital winners coming stronger out of the pandemic. These times were not easy and tested my resilience. If I had the slightest doubt that what we are doing is the right thing to do, I would have given up. Following my passion helped me persevere.
What platform/tools do you use for your business?
We are using a wide range of productivity tools from GSuite for storage, Notion for documentation, Slack for team communication, JIRA for development, Figma for prototyping, Trello for task management, Toggl for timesheets, HubSpot as a CRM, Investory for reporting, Signi for electronic signatures, and a lot more.
To be honest I think we use too many tools and I always challenge the benefits of introducing a new specialized tool as opposed to mastering several tools. My team laughs at me that we run the company on Google Sheets. We have some advanced sheets set up for budgeting linked to our bank statements etc. But at this point, I think 10 sheets is better than yet 10 more different tools.
What have been the most influential books, podcasts, or other resources?
If there was only one book I could read in my life, it would be Sapiens from professor Harari. His 21 lessons for the 21st century would likely follow.
To keep up with current affairs I like the BBC News Podcast and The Economist.
Advice for other entrepreneurs who want to get started or are just starting out?
Entrepreneurship is a mindset. Some people are simply born to be entrepreneurs, but many have not discovered it yet. Some see problems and just fuzz about them. Others see problems as opportunities to solve and have the drive and persistence to make them happen. Those are entrepreneurs.
There is a stereotype of an entrepreneur being a college dropout. The problem is that you don't see all those drop-outs who failed. Looking backward, I would have failed if I dropped out of college to start a business. I would have failed if I started a business right out of university. While there is no guarantee that I won't fail now, I feel that 10 years of diverse work experiences prepared me well for the tough job of starting a global company.
A recent Harvard research revealed that the average age of a successful startup founder is 45 years and the success rates are highest for people in their 50s. So you are never too old to be an entrepreneur.
Are you looking to hire for certain positions right now?
To expand our business globally, we seek to build long-term business relationships with Local Sales Reps who are well connected in the travel industry. They become the face of SmartGuide in their market, source local leads and close them together with our internal sales team.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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