Start-up digital ‘Davids’ in travel will be sustained and nurtured by digital ‘Goliaths’ because there is mutual benefit in such partnerships, the ITT conference in Sorrento was told last week.
Julie Meyer, chairwoman and chief executive of Ariadne Capital, told the annual UK travel trade membership organisation’s event said “ecosystem economics” is the new “digital playbook”.
This will see large established companies work with in partnership with disruptive start-ups and entrepreneurs who are willing to take risks to make their vision of the future into a reality.
She said digital Goliaths understand that their customers are willing to engage with the applications coming out of start-ups.
“The large traditional established companies who have brands and infrastructure will actually benefit from and contribute to the success of the digital Davids.
“Every start-up has a customer acquisition challenge. No venture capitalist which plugs into our platform if going to say we will give you huge amounts of money to do marketing.
“That’s not what’s happening today. The boards of directors of these start-ups will say go and do a deal with a Goliath.
“The large Goliaths in the travel industry realise that they are a highway for the digital cars to go down.”
Meyer said Silicon Valley in the US benefits from the network effect of being a technology and start-up hub and people would be forgiven for thinking that the game is up for everyone else.
But she said their vision of the future is not the only one and claimed the opportunity in Europe was far greater.
Citing the scholar Carlota Peres, she said: “Every 60-80 years a big bang happens of disruptive technology. There is a clear cycle to it.
“The cycle is 60 years if society and industry is having the right conversations about the benefits of getting to the future more quickly.
“If society and industry is living with its head in the sand and saying it can keep the future away actually that cycle is 80 years.
“Prosperity rips through society when we are in that 60 year cycle. The faster we educate everyone in society that it’s good for everybody, the faster that prosperity comes.
“All of society benefits from the work that entrepreneurs do pull that vision of the future into the present, to create jobs, business and wealth from which all of society benefits.”
Meyer said she is amazed how many big firms think they can build new products internally and they should at least put their internal teams on competitive notice with smaller firms.
“Big firms underestimate digital Davids,” she said. “As an investor we learn to never underestimate people.”
Meyer pointed to Accor’s acquisition of alternative accommodation provider OneFineStay as an example a David and Goliath working together story in travel.
“Most start-up Davids will be bought for their strategic value. Platforms are making all the money. The platforms are vehicles whereby you can create a position in your ecosystem.”