Crisis? what crisis?

The other day I was listening to the radio while I was jogging. I strongly recommend working hard and then stopping to do some exercise. As Thales said, a long time ago “Mens sana in corpore sano”.
This kind of combination (the order is also important, first intellectual work then the physical one) is good to memorize what you are learning, for instance if you are preparing for one exam or in order to get a boost of creativity if you are thinking in a new entrepreneurial adventure, preparing a study case or as in this case, thinking about a post for your blog!
Anyway, I was listening to an interview of a famous Economist talking about possible solutions to the economical crisis.
We don’t have too many alternatives - the Economist was saying…
1) Devaluation of our currency. BUT, this is difficult if you don’t have your own currency. Apart from that, if you are importation dependent and your debts are in other currencies this will be a good way to increase your inflation - I thought to myself…
2) Salary devaluation. This is also a problem because in order to grow, you need to increase exportations (remember tourism is an exportation but instead of sending products abroad, we bring people!) or increase internal consumption. If you decrease salaries, usually, the last one will decrease.
3) Increase taxes.
What? - I stopped jogging and began a strong argument with someone that was not listening to me! So, we have different options one is impossible (or it will be a disaster) and the two others are the economical metaphor of killing ourselves!
Luckily, there are other ways, Schumpeter’s way! As you know, I am a Touristologist but my cultural background is Economy (I have a PhD in this science). I have always enjoyed going over the theories of Adam Smith, Keynes, Karl March and Friedman.... But the first time I listened to the theories of Schumpeter I said to myself “ I have found and intellectual friend” I talked about Schumpeter and his important ideas in this post. To summarize:
A) Crisis and bubbles are not something you can eliminate. It’s the way capitalism works!
B) In times of crisis you need entrepreneurial activities. Creative destruction. Destroy the old, the corrupt, the inefficient and build something new!
So, currency devaluation, salary devaluation, raising taxes… BUT the best solution, the fairest, the most interesting is Schumpeter’s solution.
We together have to create new international enterprises that make direct competition with big ones. It’s naive to trust big enterprises. They are NOT bad, it’s just that they are enterprises and it is written in their DNA to get maximum profit through monopoly.  They will try to use all their power /influence to get political actions and laws which favor their profits and interests.
Of course, we need big enterprises if we want to play a role in this world, BUT we can create it following bottom-up ideas versus top-down ones. We can create a network of small and medium size enterprises working together as chains of value able to compete and be as efficient as big enterprises.

This is the bottom-up approach, the one that will take us out of this crisis. Everybody is important here, the ones which create these enterprises, the ones which choose to buy their products and services, the ones which ask for real reforms to facilitate this kind of enterprises, good politicians listening to their people and implementing laws that really favor them …

And of course, this movement has to be INTERNATIONAL!

As Thomas Friedman said we are in Globalization 3.0

"Globalization 1.0  1492-1800 when Columbus opened trade between the old world and the new world. It was about countries and muscles.

Globalization 2.0 1800-2000 (interrupted by the Great Depression and World Wars I and II). It was about Multinational companies and industrial revolution (falling transportation and telecommunication cost).

Globalization 3.0 INDIVIDUALS globalizing THROUGH the flat-world platform."

YES! And these individuals must work together, creating, using and managing chain of values.

Are you ready to take your destiny into your own hands, Touristologists?

“The best way to predict the future is to invent it” - Alan Kay, 1971.

Touristology’s mantra: Specialized, International AND Groups!

Last time I gave a seminar for entrepreneurs willing to open tourism companies (basically, hotels and restaurants), I repeated my two favorite mantra-words to be successful as a Touristologist:

1) Specialized: You already know my bias for specialization, don’t you?

2) International: To me, it is hard to understand how it is possible that young people that grow up in a flat world still believe in local tourism as the most important one. “Jordi, what if I have enough customers with local tourism?” Proudly they claim “What if you DON’T” Touristologistly, I reply!  If the world is not your office, if you are unable to go to any place in the world detect segments and motivate them to go any place in the world, if you believe that getting the trust of the tourists and manage all things important to them before, during and after a trip is not your calling… then, you are not a Touristologist.

Luckily, for the future of our beloved sector (and for my mental health!!!) these kinds of arguments are less and less normal… Almost everybody agrees that international tourism is the way to go. So, I have my Touristologists internationally oriented AND with a clear vision that they must combine generic with specialized tourism (Do I have to mention, AGAIN, that it is better to begin with specialized?)

OK! The big ideas are unleashed! Let’s talk details (The devil is in the details. Remember?).

Wait a moment, Jordi! -I clearly heard a voice from my guts claiming to be Touristology’s voice - Have you already explain to your Touristologists the importance of GROUPS? No? You’d better do it!

“GROUPS” is another word carved into my mind. There is nothing wrong with individual tourism BUT, If you want to run a profitable business… it will be easier, powerful, endurable… if we work with groups!

I like the way that this idea is represented in this video from tripku a new start-up in our field:

Ready for another example? What about some Women Traveling Together.

Of course, you always can rely on the “classics”. Do you remember Hotels with Me that we talked about here? “For the first time, groups can collaboratively choose a hotel without having to sit in front of the same computer together”, they proudly claim!

Or Literary traveler cited here.

Managing groups gives you more bargaining power, economies of scale, more leadership and control over you chain of value… so, what are you waiting for?

Do you want to become a Touristologist? Meditate, see yourself becoming a Touristologist, act, think and feel as a Touristologist… And don’t forget the mantra-words… Specialized…. International….Groups!!!!!

Psssst … and chain of value working as a single organization? Shut up, Touristology’s voice! They already know that!

Make (Freedom) OR Buy (Simplicity)

 The other day I, Touristologistly, tweeted this post:

Jordi, exactly what do you mean with this sentence “Make (freedom) OR Buy (Simplicity)” Well, I try to summarize in a framework (you know how much I love frameworks!) one of the tough decisions you face in any project related to the Internet. You can make a solution from scratch and get exactly (or almost exactly) what you want OR you can use a standard solution to get something similar to the solution you had in your mind faster and cheaper. 

What are the cons of Make? Without any doubt, the cost and time of getting the solution done. Furthermore, you also have to add uncertainty. When the solution is already created you know, for sure, the cost and the time. If you have to develop it… well, it is not so clear. Only people that never code will say that they know exactly the time it takes to finish all the features! 

What are the cons of Buy? As any solution for a lot of people/companies you have limits in the customization you are able to ask for. For instance, here in this video, you can get an idea about the solution WordPress  is proposing for restaurants. It’s easy to implement what is already developed. Adding more functionalities, though it is possible, enters us into a new league!

So, this is the framework. You can Make or Buy a solution. This solution will have functionalities (the things that the program will help do: Reservations, getting recommendations, sharing opinions… you name it!) which you have to specify with a technological scheme. An associated cost and the time in order to do the following concepts:

A) Design and development of the solution: Here the key characteristic will be if we want a database or not. Having a database is essential for any complete solution, but to design the scheme of it (Yes! Even if you are using a schemeless database as MongoDB or CouchDB). Define the CRUD (Create, read, update and delete)... is one of the most gratifying and difficult things to do! 

B)Implementation: Once the solution is created you have to implement it and test the functionality in a real environment. 

C) Training: Somebody has to use this solution! So, you have to train the “homus organizativus” members of your chain of value . As a matter of fact, one of the main problems of software is the lack of use for bad training causes! 

D) Production: ISP / CLOUD: You have to decide if you want this solution in-house: Install the hardware at your office or with an ISP (Internet Service Provider) OR install it in the cloud using the IaaS, PaaS and SaaS features we talked about here. 

As I always said to my Touristologists, Clients and Associates… Functionalities, Cost and Time - you can choose two! A lot of functionalities and very fast? The cost will rise. I will have to outsource and work at night! Low cost and very fast? You will get few functionalities! 

Jordi, what is the meaning of the word integration that appears in the picture? Ah! You noticed it, right? It is a very important word! If you remember, an important characteristic of successful enterprises in web 3.0 is to achieve a chain of value working as a single organization and the integration of all departments, employees and software involved in any servuction process! So, once you get your solution you have to integrate it with other software servicing other departments inside your company and other software in your chain of value. And no, this is not automatic, Touristologists! It is very important BUT complicated… unless you are … A TOURISTOLOGIST!!!

Bye-Bye Gidsy!

The other day I, Touristologistly, tweeted this post

Jordi, exactly what do you mean with “DEU N’HI DORET” is this English? No, it is Catalan my beautiful mother tongue! It has a lot of translations but on this occasion it can be something similar to… what a surprise!!!I also attached a video about one ad of the buyer, Get Your Guide

I find this add interesting because it is an example of “how to increase the relationship with your customers” that we talked about here. At the end of the day, to introduce the members/workers of the company is a way to convey the idea that we are more a family than a company and, usually, you get more attached to people than companies!

I love the idea of Gidsy as I said here, it was an excellent example of, at least three really important concepts for any Touristologist: Servuction , Pro-Am and Super3.

Furthermore, Gidsy was more focused on providing experiences for specialized segments than products for anyone… and you know my bias for specialized tourism!

I checked out the new website and it seems very similar. I will keep an eye on it. It still seems like a very good example for my classes and seminars!

Anyway, this acquisition (more information here) is a wake-up call for all startups. If your business is very original BUT generic, sooner or later a bigger competitor or a member of the chain of value will try to buy you. It’s the next logical step. Generic tourism is based on economy of scales. So, the bigger fish eats the smaller one. There’s nothing wrong with that, but you have to be aware. I talked about this here remembering the cases of room 77 and worldmate and foreseeing something similar to WeHostels.

On the other hand, if you aim at specialized tourism with an international scope, the possibilities to start and endure is multiplied by 1000. Of course, you will have a small number of potential customers, BUT you have a greater potential of growth and chain of value control, as we explained here. In specialized Tourism the winner is the one which gets the trust of the customer by adding value NOT by lowering the price. This value can come from

1) Synergies between people that like the activity, pro-am and professionals. Touristologists represent this fact with the following matrix.

2) International routes. You will have customers from around the world and you must offer products with the same scope

3) The possibility of becoming a Super 3. Take the case in point of Wyndham for instance. They developed a customized service for Business Women (a good example of My Own 1,2,3). Then, they create a central reservation system for any hotel desiring to serve this segment. This is the power from getting the trust of the segment!

I repeat, you can choose generic or specialized. It’s up to you! Just remember, they are a different kind of business with both pros and cons that you have to be aware of …. Of course, only if you want to become… A TOURISTOLOGIST!!!