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Journera’s $36M Crash

When the Travel industry misses its own connection...

Author

Nicolás Cerdeira
February 15, 2024

Hey — It’s Nico.

I’m beginning to be more active on X (Twitter) and LinkedIn, posting extra startup-related content and build-in-public updates.

I’d love to connect with you over there.

Let’s get into this week’s content.

Here’s what I got today:

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This Week In Startups

🔗 Resources

A guide on how to develop a pricing strategy for your SaaS (Failory).

How to find your next big idea using ChatGPT.

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📰 News

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Israeli radar tech startup Wisense shuts down after securing $37M.

Grammarly lays off 25% of its employees as a part of a business restructuring. 

Crowdsourced security startup Bugcrowd secures $102M.

😮 Cool Stuff

The history of an entrepreneur, with plenty of failures in the journey.

Fail(St)ory

Journera’s $36M Crash

Last week, Journera, a startup aiming to revolutionize travel by connecting all journey components, shut down its operation.

Despite raising $36 million over 8 years, the company wasn’t able to find enough market for their innovative product.

What Was Journera:

Picture this scenario: You're at the airport and your flight just got delayed.

Instead of stressing about your hotel reservation, Journera dreamed that American Airlines would shoot a message over to Hilton saying, "Hey, our buddy here is gonna be super late." Next thing you know, you're landing, and Hilton has already prepared to streamline your check-in process, ensuring a smooth transition upon your arrival.

Nowadays, when you travel, all the different parts of the trip are disconnected from each other. The airline has all your flight information, your hotel knows about your accommodations, and Uber knows about your transportation.

There is no communication between all of these companies. 

Journera wanted to change this. They dreamed that Uber would preschedule your ride based on your boarding time, that your hotel would prioritize room preparations based on your arrival time, and that your airline would offer earlier flights based on your airport arrival time.

Jeff Katz, founder and CEO, was a seasoned veteran in the travel industry. He had held executive positions at American Airlines, Sabre, and Orbitz, so he had the necessary connections to make his idea work.

Still, Journera's dream proved to be an idea for which the industry was not yet prepared.

Milestones:

  • Journera raised $36 million in 8 years.

  • The most recent funding was a $10 million Series B-1 round in July 2022.

  • They partnered with some big brands such as Marriot International, Hilton, American Airlines, and United Airlines.

Shutdown: Now, cue the sad music. Despite all the excitement, Journera hit a roadblock. Last week, Jeff Katz had to pull the plug and admit defeat.

“We were not able to get Journera to a scale where profitability was within reach, and so we have to accept the reality that for us this mission is complete.”

Reasons for Failure: On Monday, Katz published an article in which he mentions some obstacles Journera had to face through its journey:

  • Everything related to people’s data is heavily regulated nowadays. Journera had to comply with regulations from the European Union's GDPR and the California Consumer Privacy Act.

  • A bunch of big data breaches at well-known travel brands stopped many companies from uploading data to Journera.

  • The travel industry was one of the most affected by the pandemic.

But in my opinion, there are two main reasons why Journera failed:

  • Lack of Product-Market-Fit: This is the big one. It is also the most common cause of startup failure. Katz actually identifies this problem in an article when he states that Journera’s use cases “couldn't bubble up to be the highest priority." Journera’s concept sounded really interesting to everyone, but clearly, the companies in the travel industry had other priorities other than implementing their solution.

  • Poor timing: I think Journera was ahead of its time. When it launched, the travel industry was not interested in using Big Data to improve customer experience. Moreover, because of the pandemic, many businesses in this industry had to focus on surviving rather than innovating. However, over the past two years, AI/ML models have become significantly more accessible and affordable. There is now a great deal of excitement surrounding data and AI products. So maybe there is still a chance for Journera’s idea of a “connected trip” to thrive.

Lessons Learned:

  • If your clients don’t have a strong need and willingness to pay for your product, you have no Product-Market Fit. Clients should stop everything they’re doing to implement the solution you’ve built. Lack of PMF is the #1 reason why startups fail, so achieving PMF should be your focus during the first years of your startup.

  • Timing can make or kill your startup. You can’t predict or change timing, but you can pay attention to market trends and understand where you and your company stand to take advantage of new opportunities.

Go Deeper:

Your Next Startup

Stripe’s Gifts As a Service

Last week, I wrote about a pretty unique brand marketing strategy from Stripe: they send extremely customized gifts to their customers when they reach certain milestones.

When I tweeted about it, Samuel Ekpe suggested an interesting business idea around this strategy: a service that companies can use to imitate what Stripe is doing.

How it Works: Suppose your company hires this agency.

  • A group of creatives will keep an eye on your customer’s social media profiles and your internal business dashboard to identify key moments for sending these gifts.

  • They will learn all about your main customers, including their hobbies, interests, industries they work at, etc.

  • Periodically, they will come up with custom-made present ideas for these customers.

  • Finally, they’ll take care of delivering these presents and interact with the recipients on social media.

Pricing: Price would depend on the amount and complexity of gifts every month. It doesn’t require the same amount of resources to create a 3D render as to create a book with a customer’s business story.

To Consider:

  • Target companies will be mid-to-big-size businesses looking to build brand loyalty and give back to their communities.

  • This is brand marketing, not performance marketing. It’s not necessary to report to clients things like the amount of engagement that social posts showing these gifts got. Clients looking for an ROI aren’t a good fit.

  • This service should, by no means, be automated. This can not be done by software. It has to be people thinking of ways to make the recipients feel great.

Validate: You can build this business in a really lean way by delegating the creation of the gifts to artists and freelancers.

You keep doing the part of interacting with customers and coming up with gift ideas — other artists take care of creating these.

This service is probably not something businesses are actively looking for, so you’ll have to do cold outreach and educate potential customers about the strategy.

Find brands who care about building loyalty and community and reach out to their Head of Marketing (or similar position) through LinkedIn.

Go Deeper:

Trend Radar

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A lot of VC-backed startups shut down despite having good products and customers.

It frequently happens that a startup isn’t following the exponential growth trajectory that VCs like to see or that it no longer has the potential to become a unicorn, so it can’t keep raising funds and has to close.

According to Dev Shah, many of these failing VC-backed startups are being sold in marketplaces for scraps.

He has written about some of these startups being sold:

Opportunity: Acquire a startup that has raised VC and is struggling to raise the next round of funding. You can have a business that has required millions of dollars to be built, for a fraction of the funds invested.

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That's all of this edition.

Cheers,

Nico