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  • Writer's pictureTingbin Tang

Challenges for sharing experiences platform

Updated: Apr 30, 2018

Since Airbnb and Uber, sharing economy has become a hot topic, and many startups have been starting to work on this field in order to reshape different industries.

By best utilizing the idle resources, creating a peer-to-peer based sharing of goods/ services has become a trend since then. When I started to full time working on my start up, Gopackup, I thought over very hard on what are other idle resources that can be shared? Then I came up with this idea, which is allowing locals to use their free time to work as a local guide, and offer a unique, localized experience to travelers.

By doing this, I hope to disrupt travel industry. On one side, creating more job opportunities for locals; on another side, bringing special and customized local experiences to travelers. The travel industry has more middleman than any other sectors, this P2P sharing economy model will also make great impact to the industry.

During the past three years working hard on this project, raise and fall, suffer and joy, I gain a lot of understanding about this field, and have also learnt a lot from this journey of startup.

1. To educate the market is a big challenging

Even though ideally, with this business model, an architect may give travelers an architecture tour of the city; an artist may take travelers to every artistic corners; a gourmet enthusiast may share his/her collection of local tastes. But how do we make them realize that they can turn their own local knowledge into a new source of income besides making friends from around the world? For them, that is just their daily life, which they have been used to it and do not think that is a big deal, thus they do not think it can be a special service and offer to travelers.

On another site, we also need to educate the travelers to accept such service, and knowing that this service is trustable, and many things have been done to make sure it is safe and service quality is also guaranteed.

Once I met an Eskimos in the city, he told me that his parents and relatives are still living in a small village by the sea, and they still living in igloos and fishing seals. I told him maybe he can make that kind of life style as a service and listing on our site. For his family, that is their normal life; but for many travelers from other parts of the world, that is a really “cool!” experience.

2. Service provider’s commitment is challenging the engagement

Just like Airbnb is not for hotel owners and Uber is not for Taxi drivers, at the beginning Gopackup was also mainly for amateur people, instead of professional tour guides. But soon I realize the commitment is really a big challenge. When a host provides his/her spared room or house on Airbnb, when a commute worker picks up a passenger on his/her way to work via Uber, those do not need that much extra efforts; although a host on Airbnb may also need to do cleaning and prepare breakfast.

To work as a local guide need to put a lot more time to spend and engage with the customers, it requires a lot of effort before and during the service. Besides, those amateur people may have their own life and work to handle, he/she would not have that much commitment like a professional guide; his/her availability may also be question-able. Even though he/she may list their free time on weekends, but when a book request comes, he/she may have own family plan.

Even Uber rely more on its full time driver, those who treated that as its major job and put more time and effort on it. Service provider’s commitment is a key for the success of such business.

3. Vendor’s professionalism is challenging the credibility

Even though some people may think to be an Airbnb host just simply need to has a spared room, and anyone with a driver’s license may be able to be an Uber driver, still, Airbnb and Uber have put a lot of effort on training the vendors to be more professional to achieve users’ greatest satisfaction.

To be a local guide requires much more than that, for the guide may spend a lot more time and interaction with the traveler. Local guide’s services may also range from sight seeing to outdoor sports to adventure and exploration. As a local resident in San Jose for so many years, passing by those statues so many times, even today if you ask me who are the general on the horse and what is his story, I may still be embarrassed and shrug my shoulders.

A Nepal local guide who takes travelers for Everest Base camp trekking will need to have special license to guarantee the service quality and safety; a scuba diving local guide will also need to have special license and training to make sure the safety of the customers. So building up a sharing economy for local experiences will require much more professionalism than hosting a hostel or offering a ride.

4. The chicken-and-egg issue challenges the growth especially at the beginning

To build a P2P marketplace is relying on developing both the vendors and the customers, and the dilemma is that without enough vendors, the customers would not come to spend; without enough customers, the vendors won’t be interested in join such a platform. It is true and Gopackup makes no exemption.

What is more challenging is that, every trip may in different cities, people tent to travel to different places each time. Although I know many sharing economy players may start from one or several cities, then expand to more cities. But if so, then how do we find such customers that only want to travel to these several destinations? Even though we find such customers, how do we keep them if their next trip’s destination is beyond our coverage?

As a result, we were working hard to have vendors from around the world; so no matter where customers want to go, they most likely can find local guide through our site.

Meanwhile, we still need to put a lot of effort to bring in customers, which is also difficult for a startup with no name in public yet, and with limited budget for ads and PR.

5. Frequency is another challenge for user activity

User acquisition has been a challenge already, after the users are acquired, how to keep them coming back and use our product more frequent is also an issue. Most people does not travel that often. If an app they only use once or twice a year, it may be removed from the phone quickly. So does a site, it might be forgotten.

6. Is disintermediation a challenge for the platform?

Disintermediation is a challenge for some sharing economy site, but not all of them. For those sites which helps connects customers with local cleaner, handyman, dog sitter, or mechanic, after they met and build up interpersonal trust and relationship, they may just directly call the vendor instead of continue to book via the system.

Homejoy, an Uber for house cleaning startup, failed after raised a lot of venture investment as a YC star company, though they claim the reason was the worker classification lawsuits, but seems the main reason for its fail is its poor retention rates, many vendors start to directly work with clients after connected via Homejoy for the first time.

7. Is worker classification dispute a challenge?

Since we just mentioned the case of Homejoy, and we know some other companies like Uber also had such lawsuits, so is this also a challenge? As for the employment status of the vendor, are they independent contractors, or are the company’s employees, entitled to benefits, overtime pay, and so on?

With all these challenges, so what is the strategy we should take? Below are my understandings and what we have done, succeed, or not.

a. Start with professional guide, slowly educate more amateurs to join

This field is a little different. The line between professionals and amateurs is a little blurry. Though we have some professional guide who work in a museum or something, or a few places even required to have a license to be a local guide; but in most places, most guides are part time instead of a fulltime employee under a fixed employer; also, in many developing area, small local service providers are family owned business with just father and son or husband and wife or just individuals. These people who have already been in the travel industry, but they just lack of a way to directly reach out to the customers.

This market already exists for so many years, with many big players, with a large number of people working in this field; and there is large customer base as well. So no need much extra effort to educate the market. But how we bring major disruptive impact to such an existing market? I believe wherever there is a problem, there is an opportunity. The travel industry may have more middlemen than any other sector, the local guides who actually providing the services are not making good income but the middlemen, so such a P2P sharing economy platform definitely will bring great changes to this industry.

With this strategy, we started from recruiting professional guides and then influenced more normal people to join. So now in Gopackup, people can find services like helicopter tours, charters tours, safari tours, etc. from professional local vendor, they can also enjoy local cooking classes from individuals in different cities of different countires. They can take a Ljubljana music walk with a local violinist; they can participate a music residencies & study tour by a local musician; or catch the most dangerous fish in the world- Mbenga tiger fish with a local fishman; learn unique desert art forms - dotpainting from a Maruku’s local Anangu artists…

b. Interactions, diversity and rewards encouraging commitment

Since we started from professional guides, they are such group of people that have already tasted the sweetness by serving people from the developed countries. But they lack of a way to directly reach out to the customers, the middlemen have taken a big cut. Most of them are not tech savvy, they do not know how to build a website. Even some of them do build up with some templates, they do not how to accept payments online, how to promote their services. So Gopackup provide them with such solutions. They can register and publish their services, they can use the tools we provided to do marketing, to do customer management, to generate coupon, to directly communicate with travelers or even other vendors to build up partnership. Gopackup provides communication tools and customer/partner management tools for them to stay connected and interact, Gopackup also builds up a social network marketing tools as well as our own vertical travel community, such interactions are encouraging vendor’s commitment.

Chairman Mao has a famous strategy, “encircling the cities from the rural areas”, which was used during World War II and China Civil War, though I am not a fan of him, I’d like to quote this.

My understanding is that, the consumers are mostly from the city, from developed countries; and what they like to experience, is a different life style. I know some competitors normally like to develop from the cities, e.g. San Francisco, Paris, etc. I do not agree with them. Why would I need a local guide take me to a bar or local restaurant in such cities? Yelp may have already been helping me a lot. Why would I need a local guide taking me to the famous scenic spots? A google map may have already been helping me with that.

What travelers like, is the taste of different culture and different life style, an experience such white collar people normally cannot enjoy in the big cities. A local guide in Vietnam take traveler for agriculture tour, and let them try farming activities; a local paper-cut artist in Xi’an invite travelers to his home for tea and dumpling making; a Mexican amigo may take you to Guadalajara and experience how Tequila is made…

That is why Gopackup have been started from many small towns/villages in developing areas, and we focus more on SME small and media entrepreneurs. Not like those spoiled proud residents in the city, these vendors are eager to grow their business, and they cherish such platform and such opportunity, and willing to learn and use all the marketing tools we provided to grow their business, which, benefit the platform as well. At the end, the platform grows together with vendors. So such strategy also helps a lot with the commitment.

Of course, most importantly, is that, vendors can make money through this platform, so they will be mostly encouraged. To achieve that, as a small startup, without big budget on advertisement, we have to put more efforts in enhancing SEO, viral marketing and content marketing. Most importantly, by providing all kinds of tools to the vendors, the vendors also become part of our marketing efforts, sells force besides customer service force.

When blockchain enter into our attention, I also think maybe can issue a token to encourage people travelling. The more people travel, the more economy activity it can contribute to, so the more token can be issued to travelers as well as vendors. But that is a different story, which I may talk about it in some other articles.

c. Guidance, training, and reviewing to make sure professionalism and credibility

Since we started from professional guide, these people can become a role model for the normally individuals who just started to provide local guide services. With their guidance, the overall professionalism can be improved a lot.

Meanwhile, we also provide training, provide sample products, help the vendors provide better quality services.

Besides all sorts of verifications, I still believe that review plays an important role in regulating a trustable marketplace. Because for credit, it has two levels: how good is the review, and how long (how many) is the review history. Those who cares about his/her reputation, will not only have good reviews, but also manage a long history of reviews from different customers as well as returned customers.

d. Long-tailed products to attract more customers

As for the chicken-and-egg challenge, for this particular circumstance, I believe that we need to develop vendors/products first, to attract more customers.

Just think about at the beginning of a flea market, no much vendors show up there, not many interesting products are selling there, so the customers would not be very much interested in this flea market. But when more and more vendors come to this place, more and more special merchandise are displaying there, some merchandise may even be very weird, unique, or strange. Then the content itself will generate viral effects, and more customers will come to this place.

For global travel experiences, it is the same story. The more interesting and unique experience we can provide; the more viral effect it can generate. Even though most people who come to this place may still purchase a popular activity, but those unique ones have really caught their attention.

For example, at Gopackup, those who love magic can join Harry Potter studio tour in London plus its film location. For those who like to experience the Soviet period of the history in Russia, they can take the Communist Moscow tour. For the ladies who like to personalize their own smell they can attend Perfume Workshop in Singapore. And so on and so forth.

Most other platforms want to take advantage of the information gap. So they only provide selected but limited local activities products, and they do not allow vendors to directly communicate with consumers, which, in return, they have to have their own heavy customer support team, and they would not like to carry niche products.

For Gopackup, I believe the long tail strategy helps to conquer the chicken-and-egg challenge, since these niche products make the platform easier to be searched and become a word-of-mouth topic.

e. A friendly community instead of a cold e-commerce for travel to increase user activity

The problem with most current travel platforms is that, customers will only visit them once or twice a year. Other than that, the platforms are mostly ignored, but it should not be like that. Most current travel platform treated themselves just like an e-commerce for travel, the relationship between travelers and service providers are just strictly business. Besides, the platform also won’t allow travelers to directly communicate with the local guide.

The beauty of the internet is connecting people at any corner of the world; we want to let our users fully enjoy the beauty of the internet, and we allow consumers/travelers to directly communicate with vendors/locals. Hence they can enjoy personalized travel experience, and they can become friends. By doing this, our vendors are also our customer support, and we do not have to hire a big customer support team, which reduces operation costs.

Besides allowing the parties to directly in touch and communicate, we have also built a travel vertical sharing forum. What people like to share on social networks mostly are travel, food and outdoor activities. Travelers and vendors can share their travel photos and words via Gopackup Moments, which can be synced to many other social networking sites at the same time. By doing this, this Moments feature also become vendor’s social network marketing tool, with which, they can share their charming local moments to many other social networks at the same time.

With these community features, even if a person does not have a plan for travel yet, they can also browser interesting and beautiful photos at other corner of the world; they can follow their favorite guide or destination’s stream; and they can make friends with local people first, long before their journey. And travelers and locals can keep in touch even after the trip as well. As a result, user activities will be increased, and users has a reason to come here even everyday or every hour (hopefully).

f. Not all P2P platform has disintermediation problem especially when extra value is provided

My understanding is that, for those who is connecting service provider with consumer from the same place, especially when trustable skill or service quality is a concern, e.g. house cleaning, auto repair, most likely, such customers and vendors may stay in touch and directly deal with each other after first time introduced via a platform. A commute person in San Francisco may call Uber driver in the same city everyday, but not necessary always the same driver, because skill/technique requirements is not that high.

For Gopackup, which is a platform for sharing of experience and connecting locals with travelers, the disintermediation is not a big issue, since the travelers normally do not repeatedly go to the same destination to book the same activity; besides, having Gopackup as an intermedium, who serves as a payment escrow and providing service quality guarantee, will make the travelers feel much more comfortable to book a service from a stranger far away in another side of the world. Which means, the extra value provided by the platform may also keep the disintermediation problem away.

g. Let users have control and provide values

Even though Uber carefully uses legal language in its contract with drivers to define them as “partners,” not employees. And refers to itself as a “technology company” or a “platform”, still, Uber got several lawsuits, which claimed that Uber in fact behaves like an employer, for Uber “control and direct” its drivers how to work.

In such case, it also won’t apply to platform like Gopackup, since our vendor, fully in control of themselves, they decide how to design their local experiences to serve the travelers; furthermore, they name their own price, and it is totally up to the market to judge if their price is fair or not.

Of course, when a company grow bigger, it is hard to avoid all kinds of conflicts, but there should always be a way to solve such problem and regulate the relationships between the platform, vendors and customers. And I believe as well as the platform do provide a value to its users, all the stones on the road will always be finally removed!


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