1. ACC1Ó Esmorzars de Finançament
Corporate Venturing y Intrapreneurship
Charles Ehredt (Chuck)
Group Director, New Ventures & Innovation
charles.ehredt @ odigeo.com
@ChuckEhredt
March 19, 2013

2. ODIGEO Operates 4 Leading Online Travel Agency Brands
New Ventures Team
NEW
TECHNOLOGIES
NEW
BUSINESS
MODELS
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3. ODIGEO is the largest ecommerce business in Europe with only about 7% of the
Online Travel market
Competitive environment is
constantly changing
Consumer preferences are
constantly changing
Technologies are constantly
changing
Start-ups bring constant
innovation through
business models and/or
technology
Barriers to entry are very
low, but barriers to success
are very high
SOURCES: Nielsen, June 2012 (Italy, France, Spain); Omniture, June 2012 (UK, Germany); Google Adplanner,
June 2012 (Nordics, Portugal)
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4. ODIGEO offers early-stage companies marketing support and capital
investment, but the bigger opportunities are through internal innovation
 The New Ventures & Innovation Team is dedicated to:
 Study and anticipate shifts in the competitive landscape
 Study and anticipate shifts in consumer preferences
 Study new business models and technologies
 Work across internal departments to drive innovation/coordination
 Work with 3rd parties to access skills, products, and services not available internally
 Key Observations:
 Cost of Customer Acquisition has gone up dramatically in Europe in recent years
 The Smartphone is driving structural changes in many industries
 The Travel Market is maturing – leading to greater price transparency
 Massive industry fragmentation implies a need to work with the eco-system
 Deep expertise is required in a few operational areas for sustainable differentiation
 Market demands have led to several shifts in the focus of the New Ventures team
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5. Global travel is large, growing, and customer habits are changing
Global Travel-related spend is $3,463B
Flights Lodging Auto In-destination Spend
$425B $581B $351B $2,106B
Food Local Transit Local Activities Travel Retail
$803B $598B $351B $346B
< 1% of destination travel spending is booked by OTAs (because it is not “planned“)
Even when bookable, less than 5% of local activity is booked online in advance
Local service providers are extremely fragmented, little publication of offers online, little
use of international standards for ease of distribution, and few global players
Source: USTravel.org, WTTC 2010, IATA 2010
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6. Technical and Cultural changes will likely affect the 6 traditional
phases of travel
Travel Spending Today – by Phase of Travel
Excell in online flight sales Leverage into new fields
$ $ $ $$$$$ $$$$$$$ $
 20 years ago, these phases of travel were integrated – as a human travel
agent in a brick & mortar Travel Agency provided ideas and services.
 During the past 15 years, the phases have not changed, but simply
migrated online with technical advances.
 Unfortunately, the degree of fragmentation enabled by technology does not
serve the traveler´s primary objectives of simplifying the process and
having access to someone for help when there is a problem.
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7. Changes in Consumer Behavior create opportunities for suppliers who can present
compelling offers during Inspiration/Planning and engage travelers during their trip
Travel Spending Today – by Phase of Travel
Excell in online flight sales Leverage into new fields
$ $ $ $$$$$ $$$$$$$ $
Travel Spending in 2-5 years based on new Aggregators & Smartphones
Planning/Shopping/Booking
will blur together in Social
Travel (standalone Meta and
Excell in online flight sales
Booking sites will still exist) Leverage into new fields
$ $$$$$$$$ $$$ $$$$$$$$$$$$ $
Google, Apple, Facebook, and others will Mobile booking on the smartphone will
fiercely compete for the attention of customers be the transaction vehicle of choice
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8. ODIGEO is only involved in a few of the major areas of expenditure in the
Travel Eco-system
ODIGEO OTAs are not involved in some of the biggest areas of travel spending
Local Activities
Local Transit
ODIGEO
Restaurants/Bars
Flights
Accommodation
Rental Cars
Darker blue circles indicate services that would be Mobile-friendly. Offering such services makes Mobile solutions
much more sticky/useful, i.e., the smartphone will be the in-destination device of choice for discovery and booking.
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9. We are clearly in an age where the customer is highly empowered. Brands
must engage the customer with great services if we want their business
The consumer was
Time Magazine´s
“Person of the
The
Year” in 2006.
By 2012, Customer
is in
the Smartphone
has exponentially
added to the
Consumer´s
influence over Control !!
whom they choose
to do business
with, and how they
want to be served.
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10. Who is this customer and what do they want / need ?
 Customers only care about reduced hassle and richer experiences
 Customers vary, but generally align with 8 primary profiles
 The ¨Sharing¨ economy has taught customers that a lot of
information is free, but quality still has a cost
 To ¨win¨ in the marketplace, ODIGEO must allow the customer to
do business with us the way they choose
 In response to market shifts, ODIGEO is increasingly focused on:
 Enhancing Customer Relationship Management (CRM)
 Engaging customers during their trips
 Aggregating Long Tail products and services
 Building a collaborative eco-system to rapidly adapt to changing
customer requirements
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11. Customer Engagement with a brand evolves through fairly predictable stages
that ODIGEO - through valuable products or services - can strongly influence
Striving for a “relationship” Loyalty and
Advocacy Drive Advocacy
with the customer Down the Cost
increases Lifetime Of Customer
value Acquisition Loyalty
Eventually Satisfaction
there is a
First Purchase
Selection
Pre-purchase
Consideration
Assessment
of Alternatives
Knowledge The only way to proactively
manage this process is with an
integrated, enterprise-wide
Awareness
CRM System
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12. Engaging and useful services are required to remain engaged with
customers
 Nearly all employees are involved in Mobile Travel Companion
innovation, raising problems and Access to useful information
opportunities that get evaluated (Before & During Trips)
 ODIGEO is interested in collaborating
with 3rd parties who can help deliver
customer value in-destination
(ByHours, ReallyLateBooking, TEPWireless, etc.) Flights
 Internal projects include: Hotels
 Passenger Rights for cancelled or Rental Car
delayed flights Tours
 Delivering passenger itineraries on Guides
mobile devices Insurance
 Proactively alerting customers of
delays or cancellations
 CRM enhancements
 Improving information quality
(booking confirmation emails, etc.)
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13. Gaining consensus across ODIGEO requires a lot of communication and
“data” to substantiate hypotheses
 Adjusting business models is very difficult when
you have been so successful for many years
 ODIGEO is remarkably innovative around its core
¨flights¨ product, but can be so focused on
optimizing the core business, that other
opportunities are missed
 Measuring everything enables improves agreement
What we don´t know
concerning priorities that we don´t know
 But sometimes, you must rely on instinct
What we know
that we don´t
know
What we
know
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14. Typical weekly activities for the ODIGEO New Ventures and Innovation Team
 Respond to inquiries from Start-ups & Early Stage companies 4-6 hours
 Conduct interviews with interesting candidates 4-6 hours
3 Major
 Follow-up with companies on ODIGEO´s “Watch List” Internal 6-8 hours
Projects
 Manage portfolio companies & commercial relations 12-16 hours
 Conduct Due Diligence on Investment Prospects 0-20 hours
Almost Zero
 Participate in Industry Conferences Time in 0-20 hours
Operations
 Internal Meetings 8-16 hours
60-80 New
 Design New Solutions Companies/ 8-20 hours
Ideas
Reviewed 14
 Manage Internal Projects Companies 8-12 hours
per Quarter
in Portfolio
 Prepare Company Presentations or on 4-12 hours
Watch List
 Industry Research & Analysis 6-10 hours
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15. Innovation is often a matter of perspective
Be sure that “perspective” is objective
 Companies compete based on:
 Price
 Innovation VS
 Customer Relationships
 Innovation is not only customer-facing, but can include internal processes and
supply-side improvements
 For leaders in Operational roles, there is never time left over at the end of the day
for innovation
 Innovation initiatives have a profound, positive impact on employee morale (hope)
 Innovation should be led by people with credibility across the entire organization
(not a young MBA)
 Innovation efforts can fail, but risk management can reduce the negative impact
 Innovation is part of the long-term survival of a company; it cannot be started and
stopped frequently
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16. Thank You !
“In most organizations, change only comes
in two flavors: trivial and traumatic.”
- Gary Hamel, Wall Street Journal, Sept. 29, 2009
* Gary Hamel is considered the world s leading strategist by the Wall Street Journal and Financial Times
Charles Ehredt (Chuck)
Group Director, New Ventures & Innovation
charles.ehredt @ odigeo.com
@ChuckEhredt
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