We have written in our previous articles that a problem is an opportunity for a new business. The bigger the problem, and the more people have the same problem, the bigger the opportunity. We will go into detail on executing on a big problem that you have identified. We will specifically focus on importance of the right execution team and board of advisers.
Many of us have hiked up to the beautiful Himalayan regions in Nepal. Ujwal has written about his experiences of hiking to Annapurna Base Camp. One problem that he identified is the difficulty of getting a hotel room in villages along the Annapurna trail. Prasanna experienced the same problem when he hiked up to Everest Base Camp. There are a limited number of hotels on the trials. To get a hotel room, you have to get there early. If you walk slow (which is highly recommended in high altitude), you may not get a room at all during peak tourist season. You may have to sleep on the sheds or sometimes in the cold outside. If you are a Nepali, the lodge owner may give a non-Nepali a room over you although you maybe able to pay a lot more. The concept of booking is almost non-existent here and this can make the trekking experience unpleasant.
This problem could be solved by a simple online booking system. Imagine the following – You select the dates that you will be hiking. The online system maps where you should stay each night and offers you hotel availability information and prices. You select the hotels you want to stay, pre-pay online and when you arrive at the hotel on the date, you get your room and can sleep well without worrying about not getting a room like now.
We think that this is a big opportunity for a big new business. However, you may ask-
> Should I enter into this business?
> If I do enter, how should I execute so that I will be successful?
An entrepreneur will be successful if she/he can do three things well -
- Has a team that can build the product that solves the problem
- Has a team that can sell the product
- Has excellent industry connections to ask for advice on executing on the business
First, you need people who can build the online booking system. a good set of IT engineers can set this up. These IT engineers can build something on their own, or use an existing product and add features on top of it to suit your needs (there maybe open source booking products you can use).
Second, you need people who understand the business nuances of the trekking industry and make sure your business offerings, price and services cater to your customers’ needs. Your team members must understand how to sell your product to the two types of your customers -
a. Lodge Owners along the trails
b. Trekkers like us
You convince the lodge owners on the merits of a travel booking system. You teach them how to use it and help them include their availability and pricing information online. To inform trekkers about this online booking service, you advertise in travel related materials (online, TV, travel newspapers etc). Team members who understand the tourism business will help you best do this.
Third, you need access to advisers who can help you understand the tourism business, get access to capital and connect with other business executives and bureaucrats whose help you may need to grow your business. For example, a CEO of a major Nepali trekking agency as your advisor can guide you on how you should convince the lodge owners, how to charge them, how to explain that this system will increase their profits and occupancy etc. He may make key introductions to you. Similarly, a banker advisor can help you get access to debt and equity financing to grow your business. A bureaucrat advisor can help you navigate Nepal’s legal/government regulations.
To summarize, having the right team to build your product, sell your product and guide you will be key to your success.
Once you have the right team, having the right execution strategy is key . The right team will play an instrumental role in defining an execution strategy.
First, focus on one trail – perhaps the Ghandruk, Ghorepani, Naya Pul triangle. Convince a few key lodge owners on this trail to share with you their availability and price information. If they don’t have Internet, you can call them on their mobile every day, ask them for availability and price and share with them who will be coming in that day. You could upload this information to the Internet so that a tourist anywhere in Nepal / World can use your service.
You make revenue by advertisements on your site and possibly others like a service fee per transaction. Another revenue model is taking the risk of occupying the hotel room. You do a bulk-buying deal with a hotel owner. Get 5 rooms at a certain price for a set period. You add a premium on top of this and charge this to the guests online. You make money from the premium. The hotel owner doesn’t have to worry about his rooms not being occupied. He has already been paid in bulk.
After you become successful in Ghandruk, Ghorepani and Annapurna Base Camp triangle, extend it to the Annapurna circuit and then to the Everest trek and then nationally. Become the trusted brand for doing hotel bookings on the Himalayan trails. Help trekkers and lodge owners alike.
Offering such a system will do wonders to our tourism industry. You will increase number of tourists who visit and consequently more hotels may get built and more will gain employment. This is a huge business opportunity that will do wonders !
by Prasanna Dhungel & Ujwal Thapa