Startup Profile: Adioso

- January 7, 2013 3 MIN READ


We’ve all been there.  You come up with a seemingly awesome idea but after going through the motions in your head you refuse to pursue it further. You call dealbreaker. For some reason or another, you felt that the idea would not be worth the time, effort or money involved and would probably not scale.

Complex engineering? Lack of industry knowledge? Red tape a minefield? Whatever the case, the story of Adioso is one that will resonate with many and may cause you to reconsider that idea you shelved a few months back.

Adioso is the brainchild of Melbourne lads Tom Howard and Fenn Bailey, the latter responsible with building the world’s first mp3 encoding app in 1996.

Presenting at Startup Grind Melbourne’s Christmas party, Tom recounted the Adioso tale and it is at first a familiar one when it comes to dot com business – university buddies, computer programmers, bored and unchallenged by the school’s curriculum, told not to bother by their lecturers and (almost) forever pondering how to apply their talents for good instead of evil.

It wasn’t until Fenn came up with the idea for Adioso – a travel website designed to map out the best vacation possible based on your interests and specs – that the duo developed a sense of direction.

Having no knowledge of the travel industry and lacking the necessary relationships or data within the business, Tom was at first not convinced. Add to this the unique search model, radically different to modern travel search engines like Webjet and Expedia, and the enormously complex coding required to build it, it is no wonder why he felt the idea would be unlikely to grow wings.

However, it was that or nothing at the time so Tom decided to team up with Fenn and give it a crack, if nothing else than for the experience.

A minimum viable product (MVP) was developed to test the market and it was this MVP as well as numerous customer testimonials which scored the pair a place at the now prestigious Y-Combinator in Silicon Valley. This gave Adioso access to valuable networks, seed funding, travel route data, media exposure on websites such as TechCrunch and the additional investment required to make a run at things. A testament to the power of being invited to what is essentially the Harvard of incubators. Adioso graduated in the winter class of ’09 along with online travel startup poster-child AirBNB.

However, just as the jet engines were beginning to make some noise, Adioso would instead taxi for a good three years or so.

Confronted with the inability to scale, the pair went through some dark times and almost threw in the towel. Tom refers to this period as the “trough of despair”. Some key staff changes a last ditch decision to hire outside employees gave the company the pivot it needed to emerge from the trough.

While they could not then pay employees, instead opting for a future benefit realisation model, the reinvigoration of Adioso was built on a shared vision of passionate coders and a spirit of entrepreneurship. It wasn’t about the money – it was about belief in the product.

The company is now starting to make good as a profitable business, but is not yet out of the woods in what is a highly competitive and ever evolving online travel landscape.

When questioned about the decision to run the business out of Melbourne, Tom insists that as far as online travel goes, Australia’s startup scene is amongst the best in the world, home to Lonely Planet and StaTravel. Therefore, there was no reason to look overseas – score one for the ongoing Australia v Silicon Valley debate.

He also stresses that when faced with the adversity that Adioso was confronted with, one must ask the question of execution and concept. Is your idea failing because the concept is simply not scalable or is it a matter of execution? Does the problem lie in the marketing, the coding, the pitch? It is a difficult question, particularly when it comes to a product you are emotionally invested in, but at some point or another, it is a question that needs asking.

What we learn from the story is that those inhibitions of yours about why you shouldn’t give that idea a go are probably true – this shit ain’t easy. It’s been almost five years since Tom and Fenn started Adioso and Startup Grind Melbourne founder and event host Chris Joannou made a point of reminding everybody that as little as 18 months ago he was concerned for Tom’s health and whereabouts.

The fact is that you will need to work hard and you will need to make personal sacrifices – whether they are worth it is up to you to find out.