Lee Hayhurst reports from the Travo@10 Start-up summit in London, sponsored by Travelport and Cheapflights and hosted at at News UK’s new offices.
Running a start-up can be “torture” and founders were warned not to be seduced by fairy tale dreams of becoming overnight successes.
Hugo Burge, chief executive of Momondo Group and co-founder of investor Howzat, said that to impress investors, firms must prove they can operate on a shoestring and commit to the cause.
Howzat’s most successful travel investment was Trivago, the German hotel metasearch site, now part of the Expedia Group. Howzat invested when it was turning over just €30,000 a year.
“What they did really well was focus on hotels,” said Burge. “For start-ups to succeed they have to focus on one thing and do it extremely well. It’s very difficult to spot that magic in an early-stage business. There is no golden rule.
“Generally we have three guidelines. The first is an incredible team with a strong passion and staying power. Second is whether it is in a market where it can create enormous value.
“And third, which is always the hardest one, is their traction, their magic. Do you believe in what they are doing? Trivago ticked all of these boxes.”
Burge added: “The hardest thing as an entrepreneur is balancing dreams of changing the world with getting things done.
“The people who impress me most are those who are able to create things with tiny teams on their own.
“It’s incredibly hard. The early days of a start-up are torture. They are the hardest days of a company’s life.
“You are forced to do things that don’t play to your strengths, to be a jack of all trades. It’s really easy to get seduced by these dreamy Silicon Valley stories or fairy tales.
“These businesses are often raising enormous amounts of money over a long period and losing money.
“It’s not really very British or European.”