STARTUP STAGE: Tango targets “mass affluent” travelers with AI-based booking platform

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Tango

Tango combines artificial intelligence, machine learning and human curation to provide design, booking and servicing of hyper-personalized
trips. 

The
founders were formerly executives with Carnival Cruise line as well as several
other large brands including WeWork, Old Navy/Gap, Nike and Audi.

What is
your 30-second pitch to investors?

Tango is
the OTA killer for the mass affluent traveler. We’ve re-imagined the
travel marketplace and built a generative AI-native platform that designs,
books and services hyper-personalized trips at scale, combining a beautiful
digital UI with light human touch. Our successful beta has proven that
travelers want to buy this way. Turns out, buying trips can be as inspiring as
taking them. 

Describe
both the business and technology aspects of your startup.

Tango’s
journey-based commerce platform adapts to traveler’s different trip stages –
from dream to book to anticipate to travel – and offers contextual,
hyper-personalized options and destination-specific information, powered by a
hybrid ensemble of generative artificial intelligence, machine learning and human
experts. 

Initially,
travelers answer our Trip Intent Quiz, based on the “OCEAN personality model.”
After paying a fee, they receive a beautiful, personal Tango web app with a
bespoke trip menu of curated stay and experience options and an asynchronous
video from their advisor. Travelers can edit or book a complete trip in
seconds. Prior to and during the trip, their Tango custom menu is continually
updated with relevant, tailored add-ons, resulting in multiple booking cycles
per trip.  

The generative
AI hype cycle has produced its first wave of UI skins on noisy foundation
models with little meaningful success. Tango’s generative AI / ML ensemble
approach is the new frontier. Our proprietary hyperlocal models are built with
a corpus of trusted sources and trained by reinforcement learning from human
feedback (RLHF). We’re generating not only high accuracy results, but also
repeat & referral customers, in a way that allows us to rapidly
scale. 

Give us
your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the
company.

  • Strength: We
    understand mass affluent travelers exceptionally well. We completely
    re-imagined their ideal trip purchasing experience – something that advances in
    AI / ML has allowed us to do. It’s not about incremental changes to a
    marketplace model – it’s about creating an entirely new paradigm in how we buy
    travel, one that prioritizes traveler delight. Having integrated
    generative AI / ML from day one, we’ve outpaced the hype cycle and created real
    business value by strategically applying automation that creates highly
    resonant, trusted outputs. 
  • Weakness: We’re
    creating a new category, hyper-personalized commerce, that is neither an OTA
    nor a traditional agency. That makes us hard to describe at times! 
  • Opportunities: While our
    product is B2C, we’re getting a lot of attractive interest in B2B applications
    from consortiums, DMOs, agencies, hotels and cruise lines. 
  • Threats: We’re in “fast
    moving water” and firmly believe the traditional OTA buying experience will be
    relegated to MapQuest status in less than 24 months. As such, we’re moving fast
    to reinforce our leadership in this space!

What are
the travel pain points you are trying to alleviate from both the customer and
the industry perspective?

  • Traveler: People
    don’t want more choices. They want confidence in the choices they make.

    That’s
    where Tango comes in. Travelers see trips as a horizontal experience that
    starts at the moment of ideation and lasts through execution (about one year to
    one month). OTAs meanwhile have verticalized the journey by narrowly focusing
    on the moment of individual bookings to capture the highest transaction value.
    In this model, they focus on increasing supply at low prices while relying on
    the travel attention economy to pump volume through their channels. In doing
    so, OTAs (and Google Search) have created “The Valley of Despair.” 

    We rescue
    the traveler from the travel attention economy’s “Valley of Despair,” where
    they are besieged by noisy, low-quality affiliate content, bot user-generated content, intrusive
    ads and limitless options. Instead, we take them on a journey that only
    surfaces personalized, curated, actionable, cohesive option sets that showcase
    a sense of place. We match these to their trip’s “why” and “how,” not just “what.”
    Importantly, we allow them to book multiple items, from stays to experiences to
    transfers, in seconds and are with them along the entire journey, providing
    support & services when needed.

  • Industry: As part of
    our curation process, we bring visibility to high quality experiences from
    local small business owners who have a hard time standing out in the
    competitive marketplaces. We’re motivated to help keep the money in the
    destinations we’re privileged to service. 

    Time and
    time again, our local partners inform us that Tango travelers arrive informed,
    confident and willing to spend money on high quality experiences. We also
    love partnering with luxury travel agencies and DMOs to help direct the right
    traveler to the right stay & experiences for them.   

So you’ve
got the product, now how will you get lots of customers?

We already
know that when travelers use Tango, they come back, tell their friends and
share their Tango web apps widely, activating product-led growth. We segment
our customers into flywheel target groups and tailor acquisition channels and
messages accordingly.

Currently,
we have a growing relationship with luxury travel advisors who turn away
travelers who do not meet minimum spend thresholds. Not only do we help travel
agencies monetize those leads, we also provide them with a valuable answer to
the travelers who often qualify for their more white-glove services down the
line. 

In terms
of paid media, we focus on highly targeted look-a-likes of our core customer
segments and their rich CRM profiles using a cost-efficient mar-tech stack.
However, at this early stage of the business, we haven’t needed to lean heavily
on paid search and social.

Tell us
what process you’ve gone through to establish a genuine need for your company
and the size of the addressable market.

We’ve been
blown away by the interest in and results of our beta. There’s a tremendous
appetite for buying travel this way. Not only from within the US, but also from
Europe and Asia.  We’ve also serviced a much broader age range – from
early 30s to 70s – than originally anticipated. We estimate our TAM to be
around 17% of U.S. and 12% of European households.  

How and
when will you make money?

We
launched with profitability and a clear business model in mind. We charge an
upfront trip fee ($95, $125 & $600 tiers) and also earn commission from
some of the hotels and experiences we book. 

Of note,
not all our offerings are commissionable as we look to offer the best options
for the traveler, period. We view trips as portfolios and our main goal is to
have satisfied travelers who will not only return for their next trip, but
refer us to their friends and family. We’re already seeing that flywheel take
effect. Make sure travelers are thrilled and growth
follows.     

What are
the backgrounds and previous achievements of the founding team?

Most
recently, Gaby Gonzalez Bux was vice president of member experience
transformation for  WeWork, establishing
the global NPS System and directing the C-level strategic retention
initiatives. Prior to that role, Gaby was the vice president of digital and
guest experience for Carnival Cruise Line for over 5 years, managing $500
million P&L across multiple platforms, from the site where cruises are
booked, to the pre-trip site where experiences are sold, to all the digital
interfaces onboard (including the award winning app). Her experience building
Carnival’s journey-based data driven digital platforms, with a relentless focus
on traveler satisfaction, is what inspired building Tango. She’s originally
from Puerto Rico, spent part of her childhood in Thailand and has lived and
worked across the U.S. and Europe, Middle East and Latin America.

Taylor
Bux’s background is in brand, product and growth marketing, digital and
operations in Europe, Asia and the Americas. He’s done this on the brand side:
Carnival Cruise Line (vice president of brand and growth marketing) and Old
Navy / Gap, Inc (director of digital, social and mobile marketing). In
addition, his marketing agency portfolio includes industry leaders such as
Nike, Converse, Audi, Cartier, J&J, FedEx and L’Oreal among many others. He
sold his previous startup to a marketing conglomerate in Asia. Taylor is from
Philadelphia and has lived and worked across the U.S., London and China. 

How have
you addressed diversity and inclusion within your business?

As a
remote first company, we have assembled a cross-functional team with members in
the Philippines, Brazil, South Africa, Slovenia, Japan and Germany.  

From day
one, we’ve looked for individuals with global and growth mindsets, who are
open, kind and intentional and are (or seek to be) at the top in their
respective fields. Across the board, these curious individuals are fiercely
committed to helping our travelers have inspired and easy trips while building
strong, sustainable relationships with local partners. Regardless of their
roles, everyone has a seat at the table and actively impacts how our experience
is built. 

What’s
been the most difficult part of founding the business so far?

Not the
most difficult, but perhaps the most initially surprising for us… There’s a lot
of pessimism around travel startups! 

In the
very early days, we had many conversations with senior veteran operators and
investors who graciously cautioned us about the space given the “dead bodies”.
But here’s the thing: when ideas keep coming back, it’s because the problems
have not been solved!

Those
early conversations inspired us to think critically about how we might solve
traveler pain points within the physics of the industry. We sought to
more deeply understand the traveler’s problems, studied adjacent industries
such as fashion and home design, and found a solution that was 100x better than
the status quo and succeeded financially from day one.

Generally,
travel startups face a fairly tough time making an impact – so why are you
going to be one of lucky ones?

Luck is
always a factor and timing is on our side. Expedia launched 30 years ago – when
the Macarena was on the airways – and while whatwe buy has been
disrupted (hello, Airbnb) how we buy travel hasn’t changed. Right now,
with the advances in generative AI and the soaring demand for travel propelled
by shifting work patterns, it’s hard to bet against a big disruption in the
buying experience.  

So why us?
Our backgrounds are in customer experience, marketing, business strategy, tech,
data and operations and thus we come at the opportunity from multiple, holistic
angles. We know
our customer.  We understand the problem both as expats and travelers
ourselves, and have also learned from the amazing travelers we
support.  

We also
understand the business physics necessary for Tango to succeed: low CAC, high
baskets sizes and efficient operations. And we
execute quickly. We know how to attract travelers efficiently, build world
class digital products, use data ethically to personalize the experience, and
run profitable operations with high performing, cross-functional teams on a
limited budget. 

Finally,
we feel very privileged to be able to pioneer AI in this space and build our
platform natively versus integrate it into what was already built; we are
incredibly inspired by the results to date. 

A year
from now, what state do you think your startup will be in?

The theme
for 2024 is to use our beta architecture and insights to expand our geographic
footprint widely, servicing over 25 geographies, in order to support many
thousands more travelers.  

What is
your end-game? (Going public, acquisition, growing and staying private, etc.)

Our goal is to build a travel experience
company millions of people love (not just like), and do so profitably and
sustainably. We’re focused on that North Star and will evaluate opportunities
with that lens in mind.

PhocusWire’s Startup Stage

PhocusWire profiles startups in the travel, tourism and hospitality industry.

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