Katrin Buckenmaier, Co-Founder & СЕО, Travelmenu: an Emerging Russian Online Startup

Katrin Buckenmaier is Co-Founder and СЕО of Travelmenu, an emerging Russian online travel startup. Travelmenu addresses the travel agency (B2B), direct-to-consumer (B2C) as well as traditional corporate travel market segments.

Founded in 2006, Travelmenu received $2m in seed funding that same year. As we reported at the time, the company also raised $1.6m in growth capital in May 2011.

Katrin started her career working for lasminute.com and subsequently gained investment banking, private equity and M&A experience in a variety of roles at Nectar Capital, a London-headquartered growth capital fund, Warner Music Group, and Lehman Brothers. 

Katrin holds an MBA in General Management from Harvard Business School (2003-2005), and a BSc in Philosophy and Economics from the London School of Economics (1996-1999). 

We spoke to Katrin about the rewards and challenges of working in Russia; the fundraising lesson she learned the hard way; and which aspects of her business keep her awake at night.

TNW: How did you come up with the idea for Travelmenu and then arrive at the decision to turn your idea into a reality? 

KB: Nina Pogossova and her brother founded Travelmenu in 2006 following Nina’s project work for Expedia. Nina recognised that the e-travel landscape in Russia represented a vast green field opportunity. However, the timing was not yet quite right. Therefore Travelmenu was originally set-up to be providing Russian-language aggregated individual hotel supply to offline travel agencies in Russia and Ukraine. In 2010, I joined Travelmenu and together with Nina wrote a business plan for a direct-to-consumer model. The B2C website was launched in May 2011 following a financing round by two Russian venture capital firms, Almaz Capital Partners and Runa Capital. 

TNW: What makes your company different from your competitors? 

KB: Travelmenu focuses on developing the infrastructure for the sale of package tours online in Russia. Unlike in Western markets, in Russia package tours still represent more than 80% of all outbound trips. Due to vertical integration of the tour operators, package tours continue to be much cheaper than individualized travel to the most popular holiday destinations for the Russian traveler.

It’s Travelmenu’s stated mission to bring price and product transparency to this market segment using the tools of online search. In close cooperation with tour operators such as TUI, Tez Tour, Natalie Tours and Pegas, Travelmenu is developing an aggregated and easily searchable database of package tours available to the Russian traveler today.  

TNW: What is your business model? 

KB: We are an online travel agency and hence our primary source of income is sales commission from hotels, airlines and tour operators. In addition, Travelmenu is experimenting with providing its package tour booking engine to online and offline affiliates partners for a licensing fee. Overtime advertising by tourist boards and other tourist suppliers will be a further source of income.

TNW: When you built your team, what are the key qualities you looked for to ensure the success of your business? 

KB: As always, execution is 80%+ of the success of the business and if the idea is good then it is likely that there will be significant competition. Therefore speed of execution can be a defining success factor. 

To accomplish speed, Travelmenu has recruited a team of pro-active self-starters, who not only bring complimentary skills to the table but can also execute and develop their specific areas of focus without being told what to do. As such personality traits, such as being comfortable with a high-pressure high-responsibility environment are just as important as hard knowledge and specific skills. Start-ups thrive on testing and pivoting in their model, on being able to move nimbly and experiment.

For that I have taken particular care in choosing people who embrace this experimental approach to building a business and are able to take decisions quickly, analyse the results and then learn and adapt if necessary their thinking and their approach. 

TNW: What is your marketing strategy and what has been the most effective source of new customers so far? 

KB: Finding customers is not hard in the online world – Google and the other search engines and portals provide a never-ending stream of them. The challenge lies in attracting customers profitably. In the emerging Russian travel market it is not possible to achieve customer break-even on the first transaction when attracting them via paid search.

The competition for keywords is so tough that none but the best-financed players can actually attract customers in that way, hoping that their repeat purchases will make them profitable. 

This has resulted in Travelmenu pursuing a slightly different strategy and focusing evermore on product and creating truly unique selling points. As such Travelmenu’s investment in IT infrastructure facilitating the fully-online booking of package tours is reaping early rewards. Travelmenu discontinued all paid search / CPC advertising and is now attracting customers purely on a profit-share basis. 

TNW: Do you lie awake at night sometimes thinking about the company? What aspects of it specifically keep you awake? 

KB: I worry about our ability to achieve our goals and fulfil our vision.

Specifically I worry about whether or not I am taking the right steps and am prioritising correctly our limited resources (both people and money) to create the most value for our investors as well as for our customers. 

Secondly I worry about our ability to attract the best possible team to execute our vision. Given that we are located in an emerging market, a lot of the skills required are still scarce and extremely highly priced. 

TNW: What has been your biggest challenge throughout the history of your company, from planning to funding and execution, and how could others learn from it? 

KB: The biggest challenge is to build the right team. 

TNW: Do you have plans to expand internationally? Which countries and when?

KB: Clearly Russia alone is a huge market to tackle. Having said that all Russian-speaking markets are a natural expansion opportunity, which we might want to take a look at in 2013. 

TNW: Do you envision an exit, how and when?

KB: It is too early to think of an exit. For now I am working towards building a company, which offers a unique selling point to the consumer.

If we achieve our goal of bringing price and product transparency to the Russian e-travel market, there will be multiple exit opportunities. 

TNW: Briefly describe your history in raising investment for your company 

KB: In May 2011, Travelmenu raised financing from Runa Capital and Almaz Capital Partners, 2 of the most respected early stage venture funds in Russia. Both funds have continued to support us since providing further staged capital infusions, the latest in September 2012. 

TNW: Do you believe it is better to find customers then funding or vice versa? 

KB: This really depends on the ambition of the company and the market environment. Facebook, Twitter, Amazon, etc. could never have turned into the behemoths they are today without venture financing. Not all business models can be immediately profitable and there are VC investors, who understand this and are prepared to finance the company’s vision through the product development stage. However, certainly having early clients is extremely helpful. They will inform the product development process and lead to an improved customer experience upon full launch. 

TNW: What do you believe are the key pros and cons of venture capital vs angel investment? 

KB: Venture capital has to be smart money and really bring additional network, operational support and strategic perspective. Also there are so many VCs out there, that one really has to find the ‘right’ one for one’s specific strategy, which will take time and patience. In the meantime angel money can be helpful to bridge super-seed financing requirements prior to the more institutional investors becoming interested. 

TNW: How have you found angel investors’/venture capitalists’ attitudes towards you as a female entrepreneur?

KB: In general, I have not encountered any open questions relating to the ‘gender’ issue. Having said that, probably investors who were not comfortable with a female entrepreneur just didn’t invest and might have given different reasons as to why not. What I can say, however, is that both Runa Capital and Almaz Capital Partners have more than 1 portfolio company with a female CEO. 

TNW: What have you learned the hard way through the fund raising process that you wish someone had told you at the beginning? 


That fundraising never stops… It’s almost like the 100 days in office one says the US president has before he goes back on the campaign trail.

One really has to keep constant momentum and it’s a sprint marathon. 

TNW: Do you think that attitudes towards female entrepreneurs are changing? 

KB: Yes, I think so.

As there are more and more female entrepreneurial success stories, this will be a necessary consequence. The money will go where there is the highest success potential. Hence well-publicised success stories will change the perception and that is all that is needed.

TNW: What qualities do you think women entrepreneurs need for sourcing angel investment/raising venture capital?  

Persistence – but frankly both male and female entrepreneurs need that. Just never taking “no” for an answer.

TNW: How does it feel to be an entrepreneur in a BRIC country? 

KB: It’s great being an entrepreneur, whether in a BRIC country or elsewhere. 

TNW: What are the particular rewards and challenges of working in Russia? 

KB: What stands out in an emerging market is that there is so much latent demand for products & services, which are already commonplace in the US and Europe. It is hugely gratifying to work in an area such as travel, where one can truly open up the world to many Russians, who have in the past not travelled abroad.  

I have found it to be a particular challenge to install a culture, which is risk-taking and thrives on trial and error, favouring quick execution over lengthy analysis.

Many employees are uncomfortable with openly sharing their opinions and think extremely hierarchical. However, on the upside the workforce is on average extremely highly-educated, intelligent and hard-working and I have found everyone to be open and embracing of a more Western style of doing business.

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