Plan for 18-Month Runway
If I ran a travel startup or company, I would actively plan for 18 months of challenging capital raising times. You need to survive at least the next 12 months and, preferably, the next 18 months without raising any additional capital.
Act now if your travel startup expects to run out of money in the next six months. Make the tough decisions now to lower your burn rate and extend the financial viability of your travel startup. Prevention is better than a cure, as they say.
Areas to Focus On
With the capital you have left, this isn’t the time to swing for the fences or embark on capital-intensive risky initiatives. I’m cognizant every travel startup needs to take at one point or another, but I am hoping you’re past the point where you must for the survival of your travel startup).
Focus on growing the wallet rather than spending time and resources building potentially new revenue streams.
Take measures, while you still can, to extend the runway for your travel startup, whether securing short-term notes, differing large budgeted upcoming initiatives, closing out the current funding round, or seeking convertible notes/SAFE (comparatively speaking).
Focus on low-hanging fruit initiatives and ‘no brainers’ (a term I use to describe decisions that are heavily favored towards success that you can execute in the short term in lieu of funding risky new product or service offerings).
For example, spend capital on raising your booking engine conversion rate because the benefits will go immediately to the bottom line once you’re successful. I consider this a ‘low-hanging fruit’ to take advantage of, given there’s a definitive start and end date, you can see the benefits very soon after deploying the capital, and it will take you a few weeks to complete. Contrast this to a long, drawn-out, capital and resource-intensive risky initiative that may or may not add to your bottom line and won’t extend your runway.
You will not be able to raise capital at all or certainly as quickly in the coming months.
Please don’t say I didn’t warn you 😊
General Caveat
There are too many travel startups in too many countries, selling too many travel products at wildly divergent growth arcs, to give universal one size fits all advice. My advice applies to 8 out of 10 travel startups rather than universally applying to every travel startup. For example, when I say funding has dried up, I am referring to most travel startups (of course, there are always select companies that will successfully raise capital in the next 12-18 months).