WIT Speakers Corner: Specialist travel fund, Travel Capitalist Ventures, is setting its sights on 'the next big thing' in Asia; Abrar Ahmad tells Yeoh Siew Hoon what he's on the lookout for.

1. Let's talk about travel investments in general – has the market come back after last year? What's the current mood?

On the whole, the travel market is returning. To what degree is a factor of where you are in the world. For example, growth travel markets like China and India were relatively unaffected compared to the United States or United Kingdom. Investor interest in companies like Hipmunk and MakeMyTrip's IPO are certainly encouraging. It also depends on where you are positioned within the travel industry. For example, the cruise, tour and river cruise travel products have demonstrated year over year growth in some of the worst market conditions we've seen in a long time. One really needs to be astute in mapping their current offering versus the overall trends to successfully participate in today's market.

Overall, I would characterize the mood as cautiously optimistic.

2. A little bit about Travel Capitalist Ventures – why the focus on travel?

We see tremendous opportunity in travel.

Growing travel markets like China and India allow Travel Capitalist Ventures access to multiple growth areas through investments in travel startups, joint ventures with established companies and by helping our portfolio companies extend to an entirely new customer base.

Travel startups in the United States (and elsewhere) are pushing ahead with deeply integrated Facebook travel applications, mobile travel, location-based travel and mashups of existing travel services in ways the market has yet to experience. Corporate travel companies are continually looking for ways to differentiate their offerings to successfully secure travel contracts. Tourism Bureaus are looking to leverage social travel and inspiration travel to attract a larger audience.

These are just a few examples of where we look to participate and add value.

3. What drives your investments? Usually, what's the ROI period you give?

Innovation drives our investments. What truly inspires us is finding that one special company with an innovative offering nobody has ever seen. When that happens, you can feel the energy in the air. Then it's a matter of mobilizing our respective strengths and resources to scale the investment to a national or international level in the best manner possible. We also have the great fortune of collaborating with leaders within travel to take an existing offering in an entirely different direction.

Our exclusive focus on travel coupled with our global reach allows us to identify, and in some cases, create opportunities that weren't there before. Our ROI period ranges from 1-3 years depending on the amount and type of investment.

4. What's your most successful investment so far?

Our investments in Tavisca (an end to end travel technology company) and Offbeat Guides (on demand travel guides) are our two most successful investments.

5. What's been the most difficult?

Thankfully, none of our investments has been extremely difficult. We try to screen the company, team and market as best we can before we get involved and that helps to mitigate any post-investment difficulties. I can name a few companies that I'm glad we didn't invest in but thankfully none of our portfolio companies fall anywhere near that description.

6. What are the most common problems affecting startups? Are there differences across the world? Say between the US and markets in Asia - what differences confront investors?

I've noticed a few common patterns among travel startups.

Foremost, they grossly overestimate the time and energy it takes to establish relationships within the travel industry. To begin with, the travel startup must truly be innovative and be able to communicate this in a way a prospective supplier will understand. Does the startup have the wherewithal to close and execute on a deal once it's been signed? All this takes travel domain expertise, a track record of success and existing relationships within the industry which startups often do not have.

Secondly, I see startups overestimate their ability to differentiate themselves. They make assumptions without any customer or market validation or have no reliable explanation for the customers they already have. I often ask startups why somebody would actually buy their product or service and what they base their conclusions as an early indicator of their thought process and approach.

Thirdly, I see startups underestimate the costs involved. The problems I've mentioned earlier all require people, time and money to overcome; three key areas that are in short supply at startups. Without professional help, it can be difficult for a travel startup to become a sustainable enterprise.

In addition to these universal issues, there are a host of regional barriers travel startups face including lack of investors, government over-regulation or bureaucracy, lack of broadband Internet services and prohibitive transaction & payment systems.

7. What's your view on travel investments in Asia? Do you have any? Is it a higher risk zone?

I am very keen on travel investments in Asia. Most of our Partners have done business for years in Asia prior to joining Travel Capitalist and have maintained strong relationships with various stakeholders in Japan, Thailand, Hong Kong, Singapore, India and Korea. That gives us a strong advantage as we expand our investment footprint here.

We are actively pursuing investments in Asia and you'll see our portfolio reflect this. We have two investments in India and two more in the final investment stage, along with one investment we are finalizing in China. We are always looking to forge new alliances and welcome the opportunity to collaborate with successful travel companies.

Asia has a different risk profile for us and we address this by having an investment framework for each country we invest in in addition to a regional framework. That has worked quite well in balancing our risk and reward.

8. What's the next big thing you're looking for? And do you think you will find it in Asia at WIT?

As of August 2010, we see a few areas that interest us.

The true intersection of social network and travel has yet to be seen. Despite Facebook having over 400 million users, it wasn't till a few weeks ago that an airline offered a Facebook application and even that didn't have the deep Facebook integration I would have liked to see. Social travel, inherently viral, is an area we see potential in that is just getting started.

Mobile applications within the travel industry are just beginning to catch up to their web counterparts but we're looking beyond that with real time 3D overlays, location-based services and virtualization.

How can mobile devices – be it mobile phones, the iPad and others – be fully utilized to provide a leap forward in enhancing the travel experience?

Inspiration travel -- which helps a traveller decide where they should go based on their known and predicted preferences – is far from being fully implemented.

It's an exciting time to be a travel investor and where else but WIT Asia would I find these opportunities?

Abrar Ahmad will be featured in "Face-Off: Content, Customisation & The Next Big Thing" at the WIT Conference, with Dave Sifry, founder of Technorati and now Offbeat Guides. Abrar will also be attending the WITovation Entrepreneur Bootcamp where he hopes to hear some winning ideas.

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