Entrepreneur Corner

What is the perfect city for you? How would you learn?

After 12 happy years in Silicon Valley, I have felt wanderlust and looked at living in places with the following:

• A temperate climate within five minutes of a warm-water beach
• English-speaking, since the only other language I know more than 10 words in is dead
• Relatively low cost of living
• Modern amenities
• Safe with a stable government.

The question is, what are all the cities in the world that match this? The answer is surprisingly hard to find.

Travel booking sites like Expedia and travel guides like LonelyPlanet assume you know your destination. Travel networks like Tripwolf have people to ask, but that’s manual and hit-or-miss. You can Google terms and guess like I did — New Zealand and Australia fit — but that’s inefficient. It took my roommate to suggest Costa Rica.

What’s needed is a data-driven matching system that shows which cities match your needs. eHarmony does this for dating: tell it who you are and you get targeted matches. Travel sites do the equivalent of asking you the names of people you’d like to date. When a search engine asks you for more information than you have, it’s not doing its job.

Travel is a $100 billion market, and it’s not going away even in a recession. Former SideStep employee Mark Johnson says about 70% of travel is for business with no flexibility on location. Of the 30% consumer market, about 70% goes to top 20 cities. Assuming this search engine wouldn’t change top 20 behavior, the long tail of consumer travel is about 9% of the total travel market, or $9 billion. That’s still pretty big.

A city-matching system would be even more valuable for the $14 billion moving services market. Finding the perfect new hometown is a critical decision and moving a two-bedroom house cross-country can cost over $10,000. Realtors, truck renters, packing services, and storage sites would all be interested in advertising to impending movers.

An eHarmony for travel – let’s call it CityMatch — could collect as much information as travelers want to give about their ideal location:

• Environment: temperature, humidity, rainfall, landscape types
• Culture: languages, religions, ethnic diversity, openness to foreigners
• Government: type, tax rates, economic and social freedoms
• Safety: crime rates, natural disaster patterns
• Things to do: popular sports, activities, night life, cuisine, tourist spots
• Price: cost of airfare, hotel, car, food, rent, activities, schooling, housing prices, health care.

Some travelers will want only one or two filters; some will have highly detailed needs. CityMatch could offer wizards to guide choices, wikis for user reviews and content, and forums to connect with other searchers.

Anything that gets people to travel is lucrative. A typical one-person, three-day trip costs over $1,000 in airfare, lodging, car rental, food, and activities. Longer or family trips cost several thousand dollars. Each booking an affiliate generates can earn a commission of $20-$200+. Travel lead-generation is big business.

The site’s search and data APIs could be exported to create demand and convert buyers for several types of partners:

• Travel booking sites that want to increase purchases by showing travelers their best matches. Expedia users visit an average of 10-15 times before buying. Reduce that just a few visits and Expedia will be thrilled.
• Travel guide sites that want to suggest your best destinations to sell guides and ads.
• Travel vendors such as airlines, hotels, and car rentals that want to spark demand.
• Travel agents that want better tools to serve clients.
• Even weather and content sites that want to monetize their information better. “It’s 72 degrees and sunny in Hawaii today. See if Hawaii is right for you!”

Partnerships are essential for this idea to gain scale. Travel is too crowded a market to compete in without a lot of partners or a ton of funding. Fortunately, CityMatch is likely unique and valuable enough to gain partner interest. When I interviewed an Expedia VP, he was ecstatic at the prospect, offered access to Expedia data, and began selling me on why I needed to start this.

Because travel is big business, it’s very crowded. Travel keywords cost tens of dollars per click, and hundreds of sites focus on SEO to get a sliver of Google juice. Still, there are few true travel matchers; any site with a “From” and “To” field is not a CityMatch competitor.

City-data.com has a lot of detailed data on cities and a surprising 6 million monthly visits, but no matching system and an awful interface.

MyIdealBeach is a nice matching pilot from Orbitz, but only shows beach destinations from a limited set. Says Orbitz’s press release: “Our research has shown us travelers want a different, better way to search for complex trips than by dates and destinations.”

Travelmuse and GeckoGo have some interesting matching features but only on basic variables like time of year, budget, and activity. There is much more to learn about the interests and preferences of travelers to find their best city

FindYourSpot poses over 50 questions and returns a list of cities that match your answers, but like eHarmony’s 45-minute marathon quiz, you are forced through all questions whether you want to answer them or not. It also pushes spammy requests and links, has a poor interface, and only tells you about U.S. cities. The data is quite useful but the site would need a lot of iteration to gain wide adoption.

Starting CityMatch would take just a few steps:

1. Find reliable sources for city data. Start with a few main traits, then expand as users tell you their needs. The Weather Channel, Expedia, Fodor’s, the CIA factbook, and many other sites have this data and some have APIs.
2. Build a basic search engine to query the data.
3. Build an intuitive interface. Kayak’s is nice and could be easily copied.

That would yield a useable beta. You could then add social networking and wikis, offer APIs, integrate commission programs, develop partnerships, and watch the dollars fly in.

I do see three troubling risks:

Infrequent use: most people don’t vacation or move often. CityMatch would be lucky to have repeat users every three months. High user churn means constantly having to find new ones or targeting the small portion of frequent, high-end travelers.

Search engines are a pain to market: Unlike most search engines, CityMatch is actually a little word-of-mouth viral. People often travel together and may share search results and itineraries. Yet, gaining search share is a bitch when Google looms.

Barriers are low. Any of the major travel sites could copy CityMatch in a few months if they woke up. They might be more likely to buy CityMatch than build it, but that sets a ceiling on acquisition prices. CityMatch would need to cultivate sticky content like reviews or a social network to increase barriers.

Still, I believe these risks are addressable and that CityMatch has the potential to find many people find their happy place.

What do you think?

Mark Goldenson would love to find a couch he can surf in Australia. He is starting an innovative venture in health care. To submit an idea for the What’s Next series, email Mark at mjgold3@gmail.com. Selected ideas will receive attribution.

Next Story: Attack of the Palm Pre VoIP apps
Previous Story: Apple fixes security hole in iPhone