Melbourne travel site Rome2rio has no intentions of securing unicorn status anytime soon, but this slowly-does-it startup has ambitions of being the go-to tech company Australians want to work for.
It’s seen 100% growth year-on-year and now has more than 60 staff on board, with co-founder Bernie Tschirren putting Rome2rio’s success so far down to sustainable startup practices, strong SEO, and not being sexy enough for social media.
Founded eight years ago by Tschirren and Michael Cameron, Rome2rio is designed to help travellers find and compare routes with ease.
For travellers looking for the best route to any destination, there’s often a trade-off, Tschirren tells StartupSmart. Do you pay more to get there faster, or do you take the long way and save some cash?
“It’s different for everybody what that trade-off is.”
The founders met when they were both working for Microsoft in California — although not together. Both later travelled Europe — also not together — before returning to Australia and pairing up to build Rome2rio.
They had the computer science expertise, Tschirren explains, adding “all we needed was the data”.
The pair spent four or five months buying and sourcing data, and by May 2011 “we had a prototype up and running,” Tschirren says, although he admits “it was really ugly”.
Traffic has grown steadily over the past six years, and the site now gets between 600,000 and 650,000 users every day. Revenue has doubled year-on-year since 2015, although Tschirren doesn’t disclose the exact figures.
The founders have also recently received the 2018 Victorian Pearcey Entrepreneur Award, joining previous recipients Envato founders Cyan and Collis Ta’eed and Redbubble co-founder Martin Hosking.
The award “recognises the risks entrepreneurs take in creating and growing companies,” Tschirren says.
“Lots of great people have been recognised previously and it is a real honour to join them,” he adds.
Initially, a lot of the growth happened organically, Tschirren says, either via word of mouth or people sharing emails.
Oddly, the founders realised people were forwarding email chains that almost read like ads for Rome2rio — and although they had nothing to do with them, they saw “waves of traffic whenever people would forward those email chains,” Tschirren says.
Later, however, they put a lot of effort into getting their search engine optimisation (SEO) up to scratch.
At Microsoft, Cameron had worked on the Bing search engine, and so had an understanding of how the algorithms can work, but getting Rome2rio to index well on Google was still a challenge, because of the very nature of the site.
“There are millions of places in the world,” Tschirren says, and when you’re mapping how to get from any one to another “there are trillions of combinations”.
“We can answer all those questions, but Google can’t index every one of them,” he adds.
The founders came up with a subset of the most common search terms and set to work getting them to rank in the top three Google results.
All of this was done in-house with no spending at all, Tschirren says. The trick, he explains, is to remember that while Google changes its algorithms all the time, it’s “going to optimise the end-user experience”.
“Show a good answer, and Google will show it near the top,” he says.
If the user is looking for a route, and you can show an accurate route with the added benefit of options, you’re going to be one of the top results. If they’re looking for a ticket and you can’t sell a ticket, that’s reflected in your ranking.
“In the end, if you have a product that works well for the user, then you’re probably on the right path,” he says.
The startup makes revenue primarily through affiliate links with accommodation providers such as Booking.com and Skyscanner, as well as through advertising and, to a lesser extent, ticket sales.
Until recently, this revenue has been tied closely to user numbers, increasing along the same trajectory, Tschirren says.
However, last year, Rome2rio didn’t see the same increase in users as it has in previous years, although revenue continued to increase steadily.
Tschirren puts this partly down to Google “getting more sophisticated”, and only showing the site to users who actually plan to travel.
“It means the total amount of traffic we get has decreased, but the amount of conversions we get has increased,” he says.
“That’s something we’re grappling with right now,” he adds.
Perhaps surprisingly for a travel site, not much of Rome2rio’s growth has come from success on social media.
While the startup has followers on Facebook and Pinterest, and receives some interest through these platforms, when compared to the amount of traffic the site gets from Google, “the difference is orders of magnitude”, Tschirren says.
He puts this down to the audience, calling Rome2rio a “useful utility” rather than something that’s entertaining.
“If you want to travel, we’re useful for you to plan your trip. If you’re not travelling then Rome2rio isn’t useful to you,” he says.
A Facebook feed is often “not the right time or place” for showcasing this kind of application, he adds. On social media “things that are interesting and fun to read get traction”, he says.
“Rome2rio is just not very sexy.”
Rome2rio is “more of a slow self-funded type startup, rather than raising lots and lots of money and going really big”, Tschirren says.
The startup has received angel and seed investment to the tune of just over $2 million, plus a Commercialisation Australia grant of $1.2 million, which “really helped us grow”, Tschirren says.
However, he adds that taking on too much in funding is “quite risky”.
Co-founder Cameron often describes the company as “a cockroach, not a unicorn”, as it is intent on growing organically, in a way that’s going to be sustainable in the long-term.
“When we have money we hire people, when we don’t, we don’t,” Tschirren says.
The founders started the company in Melbourne partly because they just like living there, but also because “we wanted there to be a good ecosystem here”.
When they came back to Australia from Silicon Valley, they were looking for tech companies that were “big and cool and doing interesting things”.
At that time in Australia, there were not many options, Tschirren says.
“We figured, why don’t we create that?”
There are a lot of Australian expats working in California, and at some point, they’re going to want to come back here, he adds.
“We can have a company here, pay competitively, and have cool interesting problems for people to solve,” he says.
“But, we still have some way to go with our dream yet,” he adds.
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