Toni Raurich, investor and former Director at Booking.com: “Product is king”
During the Q&A session held in IMPACT Growth community, the mentor spoke about marketing, growth, investment, product, pitching and teams.
“Product is king, VCs is for highly scalable non-niche markets and teams are the reason a product is king and VCs will invest, so careful with your co-investors”. With these tips, Toni Raurich, investor, former Director at Booking.com and IMPACT Growth mentor, closed the Q&A session held in IMPACT Growth community last week.
Toni Raurich joined IMPACT Accelerator as mentor of different startups where he ended up co-leading investments by Mundi Ventures or Lanta Capital.
Reason one to invest: People
We spoke with Toni about several topics, such as marketing, growth, investment, product, pitching and teams. When we asked him what makes him be interested in a pitch and invest in a company, he highlighted that “the team is the driver, and all the rest is just a PowerPoint. People is the reason number one to invest“. It goes over the product, the market and the strategy of the company.
“The team is the driver, and all the rest is just a PowerPoint. People is the reason number one to invest”.
“If the team is bad, even if they are addressing the right market, they will fail, and if they are too good, they will understand if they are in the wrong market, product, or strategy”. It is also important to keep in mind that investors are looking for highly scalable products.
Growth hacking tip: Start by asking yourself “Is it a niche or a mass market?”
Toni is aware that startups need to show some growth metrics to investors and that need to grow fast. He advises to ask the ones who used your service what they think about it. “The ones that score from 0 to 2, attend it; 3 to 8, support it, and the ones that scored you 9 or 10, give them vouchers to invite friends. If they scored you that high, they are fans”.
The investor also recommends to be careful with the marketing budget to spend it in a smart way. “If I had a budget of €100, I would set up an AdWords campaign because you are able to measure it soon. For €10.000, again AdWords, but for €100.000, I would start with TV advertising. But you have to be careful when using social media or AdWords, it depends on the support you need”. It is upper funnel versus low funnel.
The upper versus low funnel approach also depends on the size of the niche. Mass markets require a high funnel approach and a investment; meanwhile for the small niche, less investment is needed, but by definition it is more complicated to scale up. He made this very clear: “Start by asking yourself ‘Is it a niche or mass market’? If it is a niche, forget about VCs and marketing, because it is not scalable; but if it is a mass market, it requires VC funding and marketing budget for TV advertising, PPC and other marketing channels”.
“Start by asking yourself ‘Is it a niche or mass market’? If it is a niche, forget about VCs and marketing, because it is not scalable; but if it is a mass market, it requires VC funding and marketing budget for TV advertising, PPC and other marketing channels”.
In the case you are small startup, you cannot compete with big corporations working in the same market as you do, that is why Toni recommends to disrupt Google on search: “What you do is to go before the search, and you make people transaction there. You can call it App Store or Facebook, because they both avoid Google, but if you are facing Google, you will get hurt”.
Product, the key to approach partnerships with big corporations
Big companies are scouting for great products and technologies all the time because they need them. That is the reason why Toni remarks the importance of focusing the efforts on the product and its added value, specially for the company you are approaching. “If you have a great product, it won’t be difficult for you to do an agreement”.
Also, having the best product and the right price means that marketing will be cheap, and if your product is great, at the beginning, even when you have a low marketing budget, the the ROI (Return of Investment) should be positive and growth massive, explains Toni.
Love your suppliers
“You need that love, that wow effect”, Toni says when being asked about how to build a moat on the suppliers’ side. You need to serve and fulfill the need of your suppliers. “Think about loving them, money comes after. Make sure they love you, specially because you have the right product and all the rest will follow”, remarks.
If you are working in the tourism industry and are interested in closing partnerships with airlines and airports, conferences are the key to meet top level executives. CEO Airline Summit and Low Cost Airlines Conference are good examples. Also, Raurich recommends LinkedIn, but always keeping in mind the importance of developing and presenting an excellent product.
Speaking about the future, Toni suggests to keep an eye on chatbots, since it is a trend expanding nowadays in the online tourism industry.
More about Toni Raurich
Toni Raurich is an Internet professional since 2003, focused on B2C transactional sites, specialized in hyper-growth marketing, operations, product and financing advice. He studied Business Administration and Economics and is pursuing a degree in Statistics at the moment, and he has investigated academically the problems generated on employees with artificial intelligence, low labor and high capital intensive technologies and what we as society will do to mitigate its effects on the labor market.
His background is in VC, where he started, but then he moved to product for five years at Grupo Intercom; meanwhile at Booking.com he moved from operations to marketing, sales, and product, but he left his Global position to focus on other projects.