What: Steadyfare is an online service that allows customers to “reserve” airfare for certain routes in advance, for a fee, to make travel plans without an expensive commitment.
Where: The Steadyfare team is currently in the Techstars SeedStartup Accelerator in Dubai.
Who: We talked to Ryan Houk, co-founder of Steadyfare.
What was the hunch that got you started?
Jack [one of the co-founders] and I have been longtime friends from UCLA. Our third founder, Brandon, and I went to middle school together. We always talked about starting a business together and we began throwing out some ideas. All of us had traveled quite a bit and had our own frustrations. Ryan had experience with financial derivatives and felt he could apply that type of thinking to the travel industry in a way people hadn’t done before. We bounced around how this would work for consumers, and it snowballed from there.
The problem we saw, that we thought we could fix with SteadyFare, was with the airline industry pricing system. It fluctuates constantly and by unknown quantities to the consumer. This is instrumental in pressuring ticket purchasers to buy early so that they get a good price even when they may not have set any travel plans. Later on, they may may face cancellations or changes which can cost a whole lot of money. Basically, the current pricing system forces consumers into a corner where they buy now and risk paying more in the long run.
And the amount of risk is pretty substantial, considering you just want to buy an airline ticket. So, we thought that this could be improved. We also found we could use this product to create flexible travel dates, so the consumer wouldn’t have decide what day they fly while an airfare is locked in, they could decide this later.
What have you learned? Did you pivot at any point?
We are in an accelerator program in Dubai, which presents its own challenges and benefits. Being a US-based company, the distance can make it difficult to perform some of the business tasks related to partnerships and customer acquisition, since we have to do it all remotely. The time difference has led to quite a few nights working until 3am to stay in contact with people back in the US. However, it has also provided us the opportunity to isolate ourselves and really focus on our business in a way that wouldn’t have been possible if we had been somewhere like New York or San Francisco. It’s been easy to work distraction free, and that has allowed us to build a lot in a short period of time.
What is your team like and how has it influenced the business?
Right now it’s just the three of us, so we have to do everything, and it’s a great learning experience. As for company culture, we’ve been friends for a long time, years before SteadyFare, so it’s a great work environment. Which is good, because right now we are in a business accelerator program in Dubai, so we are living together, working together; we haven’t been out of each other’s sight in three months.
The accelerator program provides a whole array of benefits and challenges for us. The mentors have been an incredible help to jump some of the hurdles that a startup can face, as we can avoid some common mistakes from their advice and experience. It’s also great working with the other teams in the accelerator program since we’re all kind of at the same point and we can bounce ideas off each other and learn from each other.
What can brands learn from you?
I don’t know if we’re proven enough to actually teach anything quite yet, but I can tell you what we’ve learned from our experience. Fundamentally, we think that businesses should listen to their customers, and then innovate ways to solve these customer needs even if the solutions are somewhat unorthodox. The customer pain we’re addressing is not a new or hidden one. Lots of people think that the threat of rising prices [in the airline industry] is the most stressful part of buying airline tickets. This is nothing new to the airlines or online travel agents, and they’ve told us as much. However, there has been almost nothing done to address this problem in a way that was satisfactory to the consumers. Part of the reason is that this system works very well for the airlines. They make a lot of money from it and see no reason to change.
If there’s a fundamental conflict of interest between you and your customers, eventually things will go bad. I genuinely feel that 9 times out of 10 that kind of situation is unsustainable. If your companies don’t solve their customers’ pain points then eventually someone else will. I don’t know if it is revolutionary advice to say “listen to your consumers,” but I feel it’s advice that should be taken more often.