Product Discovery for Innovating in City Tourism: Product Management Case Study
Picture of Gdańsk, Poland. Photo by freestocks on Unsplash
Executive Summary/TL;DR
By doing product discovery work on a tourism and travel client’s business and product strategy, we were able to uncover necessary structural changes to their offering and develop a plan for implementation.
Introduction
Disclaimer: For the sake of confidentiality and anonymity, all details contained in this case study (especially PII such as names, addresses etc.) are fictitious and don’t contain any details about the respective client. If you’d like to learn more, reach out to me directly.
In this case, I’ll describe how I did product discovery for a new business idea for a client in the tourism sector with an established local brand.
In a nutshell, the aim was to create a more modern, flexible, platform-based business model in which it would be easier to offer and transact touristic services.
Problem Statement
Initial Assessment
After the first client conversations, I had a relatively clear picture of the overarching challenge they were facing:
They had an existing brand, revenue and business model in the tourism industry, which was largely based on “travel bundles” (e.g. a combination of train, transit, hotel and attraction/sightseeing services) and traditional affiliate business (i.e. affiliate links to tour operators for portfolio-conform offerings) with a few wholesale-size partners & contracts.
They acknowledged that their ‘traditional’ way of doing business — despite still being in its cash cow-era —wasn’t future-proof and potentially not appealing to the younger, nascent target market in tourism — the ‘insta-travelers’ (millennials and younger which head to social media rather than established agencies for travel curation)
Moreover, they were already seeing this market decentralization driven by platforms such as GetYourGuide and Airbnb Experiences, where small vendors can easily plug into a branded storefront and a robust process, which also provided value to customers. As it stood, they could offer neither of those things.
The solution to this seemed fairly straightforward, maybe — but I knew I had to dig deeper.
Underlying Challenges
As the trivial phrase
“If it was easy then someone else would have already done it”
suggests, this issue had to be less of a challenge in concept, but in execution.
Delving further into this, I uncovered more details:
Technical Feasibility
Photo by UK Black Tech on Unsplash
The client’s main challenge is that they had no software development resources of their own.
They were contracting all of their software from an industry-specialized vendor offering a whitelabel solution, as well as other adjacent services (website development, app development & maintenance etc.).
In short:
Find out whether the vendor offers the prospectively needed functionality
If yes, investigate crucial details
If not…maybe try to find another supplemental vendor? Try to have another existing vendor build a custom solution? Put the plan on ice altogether?
Compliance & Regulation
Photo by Ryan Brooklyn on Unsplash
In some countries (such as in this case, Germany), tourism & travel services are rather heavily regulated:
Obviously, liability for accidents, injuries etc. is a topic on its own.
Selected types of offerings may be illegal to provide without proper licensing — like giving someone a ride (e.g. Uber, Bolt etc. were strong-armed into a subcontractor model in Germany), operating a boat trip (often requires a license) and offering food (also requires a license). Aside of that, there’s obviously also the potential of bad actors trying to offer things that are straight up illegal, period — which would fall under direct scam/crime/fraud prevention rather than being able to ensure proper licensing, but deserves a mention in this context.
As a special case, there’s a liability difference of whether an operator offers a single or bundled experience, where there’s much more liability to be assumed for offering bundles. This one also runs deep, but as a quick example — if you only offer a city tour and guests don’t show up on time as instructed, then…it’s basically their problem, but if you offer a train ride & city tour bundle, and your guests don’t make it on time because the train’s delayed, you either have to wait for them to arrive, or provide them with a viable alternative, or refund them.
Speaking of refunds and cancellation policies — that also can get tricky.
So yeah — a lot of fun stuff to consider.
Administration
Even if the entire compliance part would be covered automatically by software solutions (which of course it wouldn’t), there would be a necessity to administer the platform and its activity.
The client did not have the resources to properly scale such a platform operation—mainly because they all they previously needed were key account managers.
Brand Strategy
Finally, I decided to dig all the way back up again —
Sorting out all of the previously mentioned challenges would be great, but…
…for what?
It seemed like they wanted to go up against the likes of GetYourGuide and Airbnb, by trying to copy their product, without an army (staff), without the weaponry (tech) and without the head start.
The only aspect in which they weren’t set up with a vast disadvantage was their brand.
Solution
Because of all the unknowns mentioned above, the only approach that I could sensibly offer was to do iterative and incremental market & product discovery.
Photo by Brian McGowan on Unsplash
At the heart of that would be to set up a working prototype as quickly as possible to start getting user feedback and answer questions regarding our riskiest assumptions.
Concurrently, we would build knowledge in compliance, a profile for necessary staff, and consult with the technology vendors on when what could be expected (and whether expediting or re-prioritizing would be feasible).
Where to start?
As I couldn’t (and shouldn’t) do all of these things at once, I considered what would be our riskiest assumption. I came up with two contestants:
“People are going to want to use this.” (Market fit)
“We are able to build this.” (Technical feasibility)
Now — I know that you might think the textbook answer is “Market fit first”. And that wouldn’t be a terrible recommendation.
However, I considered these aspects:
Market fit already existed, partially — the client had a similar running legacy business, and competitors like GetYourGuide were proving a fit for the other half of it.
The technical challenges presented would be crucial — if the main vendor were to not provide an essential component to launch, the opportunity cost of getting a different vendor or building a custom solution would blow out of proportion, tipping any cost-benefit-ratio to the unreasonable end.
Therefore, I chose to use technical feasibility as the guardrail for all other planning, especially a possible launch and scaling.
While doing due diligence on the technology vendor’s plans, I did:
in-depth competitor analysis on GetYourGuide and Airbnb Experience (from user experience for both vendors and customers, down to built-in compliance solutions),
low-fidelity prototyping with a no-code website builder,
and putting together a plan with Key Account Management on how to procure leads (or use existing ones) to test the prototype.
Results
Despite having put together a comprehensive plan and positive first discovery results from vendor and customer testees, we ended up closing on discovery and had to shelve the results as the technology vendor would not be ready for quite some time, as well as other subsequent circumstances (COVID).
As of this writing, these plans seem to not have been pursued at large.
However, if the client would choose to pick this project back up again, they would have something between a plan and a playbook to re-initiate it.
Conclusion
Despite not being pursued further for reasons beyond our (as well as everyone’s) control, committing discovery work was valuable for laying bare strategic vulnerabilities and allowing to consider a course-correct.
This exercise bore a certain resemblance to the cybersecurity practice of conducting penetration tests: you get someone external to do an analysis of weaknesses you might have, and the subsequent report contains details to help you fix it.
Overall, further conclusions to be drawn include:
as an industry that’s a very dynamic mix of globalized and localized, tourism being disrupted by technology is an ongoing back-and-forth
the competitive advantages of global and local tourism business are respectively distinct; competing on one’s own edge, not on the other’s, seems to be key.
Not the platform I meant, but a nice view. Photo by Lee Easton on Unsplash
Recommendations
The most obvious general recommendation here is:
Always keep discovering.
Having a money printing machine is good, but those don’t work forever (as history has proven time and time again).
The next more specific one is: put in the extra work to understand your specific case over using a one-size-fits-all mentality. We could’ve sunk quite a lot more money into discovering PMF at length only to still be hindered by technical feasibility (or lack thereof), but wouldn’t have learned much more valuable information at that stage.
Lastly, not using discovery results doesn’t defeat its core purpose; a valuable outcome of a discovery can also be a clear indication to not do something, or even if the outcome suggests doing something and it subsequently being halted or discarded for other reasons.
Discovery is primarily about generating insights, not revenue.
Insights. Photo by Georgia de Lotz on Unsplash
Thank you very much for reading!
If you’d like me to help you with a similar challenge you’re facing, I’m a Freelance Product Manager & Consultant for hire — feel free to reach out to me at hi[@]bertrandrothen.com