Successfully Navigating Through the Pandemic as a Travel Tech Company | Local Adventures

Our trade mission in Mexico continues on. And we've got another founder journey for you. This one's a special one because it's Local Adventures, one of our own launch academy companies in Guadalajara, Mexico. They are a travel tech company that had to navigate Covid just like every other travel company around the world. But these guys had a very different twist to how they approached it, and they've been doing well.

Three, two, one.

Welcome to another episode of Founder journeys by Launch Ventures. Really great episode today because we're here in Guadalajara, Mexico. We're continuing our road trip, our trade mission in Mexico, but the guests are actual launch academy companies. This is a company that we've been working with since 2019, Local Adventures. They're part of our startup visa program, part of our Maple program, transitioning to expanding into Canada through the startup visa program. But you guys have been on fire. Like, the travel industry prior to 2019 was on fire. You guys are doing amazing. Then everything turned into a dumpster fire with COVID So we're going to start go around, introduce yourselves, but tell us about local adventures, the journey prior to 2019, and then how you addressed the issues that we saw coming about for not just travel, but the all tech companies with COVID hitting. Right?

Yeah, sure. So first, welcome.

Thank you.

So glad to have you guys here. Guadalajara, we call it the land of tequila, since we produce tequila. So, yeah, it's nice to have you here. I'm Daniel. I'm CEO and co founder of Local Adventures. I'll give you a quick intro about us and then they can continue presenting themselves. What we do basically, is we want to make the trip of your life. We want to do it the easiest way you can. So basically, we're the platform to book the trip of your life. How we do that, we select local operators around the world, we make them go through a vetting process, and then we add certain facilities for you to book with them. So basically, that's what we do where the bridge between Latin America, mostly Latin American consumers, travelers, and local operators around the world.

And when you talk about local operators, Moses, you can answer this as well. But, like, you're talking about people with experience in that market that are actually, like, chaperoning you on these adventures. So it's not just, hey, here I sell kayaks, go for a sail or down the river. They're part of the experience, and they're helping cultivate this experience. So it's not just driving, travel, booking. These are real experiences. Correct.

I'm gonna pass it to Sebastian because that's the right guy to do it.

Well, thanks to come here to Guadalajara, Ray. Well, the local operator is not a matter of maybe the size. It can be like a local guide or it can be like a small company all over the world. It's a matter of the quality that the experience they can give to the final customer.

Right.

So we validate like with the whole process certain specs and features that they must have as a certification of the activities, culture, experience of the site, like all the things that you mentioned. So as soon as we check all that checklist that we have as mandatory, they are able to start like creating new experiences with us. Well, we work with them like very deeply to prepare a real experience of the final customer. Right.

So in the years that you were doing this, what's probably the coolest adventure that you've seen?

Well, I'm a real active, active guy, so. Well, we have one trek in Peru. Everybody knows Peru because Machu Picchu.

Machu Picchu, yeah.

But in that trek you can sleep under the stars, putting a tent and you can sleep into a crystal dome. And it's a mix of certain unknown activities with the final sweet spot that is Machu Picchu. So I like to walk a lot and make hiking and trekking. So this is for me one of the.

That's really cool because 99% of people will go to whatever travel site, see the package solution and that's just basic. Trek up Machu Picchu, have some food, go back down. This is something that is amazing experience but not many people know about. And yeah, that's cool.

And every country in the world have some, some, some special experiences like that, I think.

Cool. And Moses, introduce us about yourself, what you're doing.

I'm the city of Local Adventures and essentially what I want to tell about Local Adventures is that we are creating like really serious technology about prediction of for example, prices in flights. So we are introducing to our customers BMPL solutions where in Latin America we have like great problems about buying like really expensive goods. And I mean the Latin American people, they really don't have the cash just to pay it. So we are offering great trips around great cities, great destinations where they just give us like a real small deposit and they are just paying us small amounts of deposits just to accomplish their trips. This is not just for the trips where they can take tracks, etc, etc, they can purchase with us something like flights, insurances, etc, etc. So local adventures is about solutions for those Latin American guys that really want to take unforgettable trips.

And on the surface it looks like a typical travel tech company. But I know because I've been working with you guys behind the surface. There's a lot of data, a lot of algorithms and machine learning that you're putting together to really build a future proof business. We'll get into that in a bit, but I just want the audience to know that it's not just, hey, nice little travel company, this is a robust tech company. This is like a big tech stack behind what you're building.

Yeah, it's not easy to see it. It's obviously like the main product that the customer is seeing is just like the experience.

Right. Because they just, that's all they care about. They don't give a shit about what's happening behind the scenes.

They're not going to buy an algorithm. No, they are not going to buy an algorithm or something like that. But yes, behind the scenes it's happening. Everything about like data, Right? Like we are collecting lots of data about flights, our trips, etc, etc, so we are improving our selection of destinations, we are improving our prices in flights, etc. Etc. But yeah, as you were saying, we have robust technology about it to give personal, personal trips to our customers.

Yeah. And obviously the everybody around the world knows 2020 Covid hit first thing to die is the travel industry. And so you guys are travel business. What was that feeling? How did you persevere and what's been the outcome?

Right, Well, I think the first feeling that everyone had when the pandemic started, it was fear, of course, like fear because we didn't know for how long this was going to last. I mean, travel basically shut down for a couple of months, totally in terms of zero bookings, everyone canceling their flights, their packages, their experiences. So it was a lot of fear and uncertainty at the same time because, yes, we have as a startup certain limited resources that we need to stretch for a certain time frame. But if we don't really know for a new pandemic, a new virus, how long that's gonna last. The decisions we have to take in that moment are very difficult to take. Right. So the first decision we took, and.

It was a very difficult one, which month is this? Like it was April, May.

It was March.

March 2020.

Yeah, the beginning for us was in March, in March.

Still seems like 10 years, 10 years ago now after everything we've been through.

March. Yeah, 2020. Yeah, it feels like 10 years ago. But the first decision, it was very hard to take because it was kind of a decision against what Our investors were thinking, and it was like to keep the team and to try to basically not got headcount and continue trying to sell and to do some marketing about travel. And it was like, contrary to what everything was happening in the travel industry. But we took that decision based on a lot of research and because we had to talk to a lot of customers. And it wasn't just because we thought it wasn't just a hunch.

Yeah. It's not a gut reaction and a little bit of context. So at March 2020, you gu are venture backed. What was the headcount at that point before COVID Right.

It was around 30 people, I think.

30 people. Okay. And so continue. So you made the decision.

What next? So the first thing we made is, okay, we're gonna keep our people and we have to let them know we're keeping them. But if we're keeping them, everyone has to work very, very hard to try to continue growing the business. Because we knew that with the cash we had in the bank, it wasn't enough to keep all of the team without generating any more revenue. Right. So what we did is basically we did a very deep analysis in terms of travel is not going to stop in the following years. Right. Everyone's scared now, but we know that sometimes people are going to start to travel again. So what we have to do now in order to make them feel comfortable about booking, even if they travel in two years. Right. So after this deep analysis, we saw things as complete flexibility, better deals this year than the ones they're gonna have maybe next year or so.

You're taking pre bookings, right?

Right. So how many pre bookings we have to take? And the result was basically that we were able to grow 80% during the first year of the pandemic versus 2019. And that was because of that flexibility and that other BNPL solutions and a mix of everything. But basically it was just talking to our customer and talking to that traveler that was able and was eager to book, even if he was planning to go two years from the date they booked.

The date they booked.

Yeah. So it was really tough. I'm telling you this because it resulted. All right, we are here, you're still.

Here, and you guys are thriving. But making those decisions at that point in time, it's like your hair will probably be as gray as mine if.

Everyone around you is telling you it's like the wrong way to go. It was just a decision we took, and we were eager to go down with that decision. If that didn't work out and it worked. Right. Because a lot of the other travel companies, they stopped marketing. They could headcount. So basically they did the other type of strategies we were not doing. And what happened is that there were a lot of people well that was not getting any kind of offers, any kind of marketing, any kind of attention from any travel company. Right. So it wasn't like a big percentage of the industry. But that little percentage that was willing.

To book came to you because there was nobody else offering it. So because everybody else contracted and you guys are still marketing stuff. Yeah. So even if 80% of the population said I'm not going to travel, there's still 20% that I want to travel. I'm not willing to do it now. But I'll pre book and. Or I'll do a staycation and I'll stay in Mexico and I'll go to a location and also five hours from my house.

Yeah. The local operators, since they are kind of small, they're not like the very big size local operators. They also want some like pre bookings. They need to leave. They have small businesses. Right. So they were able to give very good deals in order to receive some cash for them to keep the business. So we just translated that benefits to the customer and that resulted in bookings.

Yeah, that's another area that I didn't really wrap my head around until just said that like you also were a lifeline for all those small operators. Like they, their business dried up and they probably didn't have enough as it is to really survive through a year and now to have that contraction. But to have local adventures still there to do pre bookings, probably save people's lives.

Right, right. And they are operators from Canada, from Turkey, from Egypt and some of them had borders closed for a long time. So for, for 18 months, for 12 months. So it was very important for them at least to have money to feed their families.

Yeah, yeah. No, that's amazing. And so what's the state of local adventures now? Like we're now in February 2022, almost two years later. How are you guys doing?

Yeah, I'll give just a couple of metrics and then you guys can continue. Right now we're over 50 people in headcount. I mean you're in our headquarters. We have people in Mexico City, in Colombia, in Peru, we have open door company in Canada. We're looking to expand our team to make some really serious R and D projects in terms of price prediction and BNPL solutions for B2C and B2B verticals so that's some of the metrics here.

Okay, well, yeah, essentially from my side, we really wanna do it really well in terms of algorithms and AI because I within that the company and the startup has that real power in terms of competitive business against every single other competitor. So it's like just doing it well and really well in terms of having a great team here or Canada or in Peru or in Colombia. Because now it's we are like in engineering, we are really open to home offices, that kind of thing. So we are looking for engineers that engineers data scientists, et cetera, et cetera, and really do it well in terms of algorithms and AI.

Cool. Sebastian, maybe you can touch on what is this sentiment within the staff here because you guys kept headcount, you grew headcount. A decision that was probably very tough, but now you've got 50 people working with you. But also what's the sentiment with the channel partners that you work with the operators?

Okay, well first, right now I'm 100% sure that it was like the better decision to keep the team. Because you said now we have the original team plus we grow it.

Right?

Yeah.

So that put us on the best position. Like we are ready for the reborn of the travel. So right now everybody's like, okay, all the population is getting vaccines, all the border are.

They're calling it and all that stuff. They're calling it revenge travel. Right. So much pent up demand and interest to go and do something.

We have the team and not just the team. We have like a very commitment team because all the past and I think that decision just put us in the best position.

And you guys have revenue, you've got strong partners. What's the sentiment with the partners?

Even with the partners, they are total confident with us, they trust with us because we weren't saying okay, see you in two years.

You guys were there when they needed you.

So I think we built a really strong community, tribal community. And well we are here. We are ready and let's see.

Rock and roll.

Right?

Open up the borders, open up the airports. Let's get going. Moses, I want to jump to you. So you guys are part of our Maple program, expansion into Canada. I really want to emphasize it's not relocation, it's expansion. You guys are now a global business. You need international headquarters and operations. Why Canada? What is it that appeals to you about Canada and what's your vision for the Canadian division of.

Checking the details about, for example launch academy? We were seeing that Vancouver was a great hub of AI and Engineering and that kind of thing. So from our perspective was a great opportunity to apply and see that that could be an opportunity to grow and as you were saying, expansion. Right. So right now we are looking to do some R and D things in Canada. So it looks like the government is really supporting those kind of companies that really want to grow in terms of R and D, in terms of AI, in terms of blockchain and that kind of things, because those are really new technologies. But the environment in Vancouver looks like they are ready and they have the capacity to teach us and we have the capacity to learn from those, from that people. So we can make it in Canada because looks like the people is just ready there.

Yeah, the network, the peer group.

Exactly.

I'm really happy that you said blockchain because we talked earlier and everybody else is really excited about blockchain. You're on the fence, you're trying to see what's the actual practical applications in your business for the blockchain type of technology. But I'm happy to see that you're willing to explore it.

Yeah, exactly. Because they are new technologies and we have to learn what's happening there.

Right.

Like if we really don't know anything about it, those things are just growing, right? Like NFTs, Web3, etc. Just distribution, the distributed things, et cetera, et cetera, they just are growing. And if a startup and company is just not learning about it, they are just going to get it in the past.

Yeah. Awesome. So part of Founder Journeys is the journey of the founders and getting to where you are today. We've already talked about the big issue of COVID and having to address that. But you guys are all first time founders and there are ups and downs to every founder journey. Is there something, a story or something that you want to share with our audience just to help people realize like this is. It's a hard journey and there's things that are realities that maybe a lot of people don't talk about.

Right. I think every founder has a lot of struggles. But one story that it's pretty interesting that I like to mention is that when we started, yes, we were working in companies here in Mexico, just like an usual employee. Then we decided to quit. But we knew that we needed support from someone because we were first time entrepreneurs, right. So we decided to go to the US to an incubator. Like our first time living in the US going through a program. I'm talking five years ago. So it was kind of new. And in Mexico there weren't a Lot of things happening. Right. In terms of startups. So we went to the US we got into this incubation program. We got 30k for the incubation program that was meant to be used in housing or like.

Yeah, cover the cost of living for six months.

Right.

But instead of using that for housing, we decided to spend all of the money in marketing. So we kind of. We were able to grow the business, but then we were homeless. Right. So what we did basically because.

In a couch.

Because we. Yeah, we're not like from.

So we're not on the street. You guys crashed somewhere, you couch surfed.

So we couch surfed with one guy for six months in his living room. This is not like, I'm not exaggerating things or anything. He's a very good friend now. But we basically searched in couch surfing for this guy. He was. He was eager to let us live in his living room for 15 days. And then we just keep like, he kept extending. Yeah. And we were there like for six months, the three of us. Not even just one. And also something really funny is that. So we got some office space in the incubator and we were trying to stay as long as we can every day, like 15 hours a day. Just. We don't.

So you don't want to arrive to a culture.

Right.

And also because there were happenings, these kind of networking events and happy hours and that was free food and free drinks. Right?

Yeah.

So it was just basically very hard six months. But also something that we learned from that, it's to bootstrap and also like to be willing to take that kind of struggles with the founding team, as a founders. Right. And to share that kind of pain. So it was really.

That definitely, like gels you guys even more. It could have gone either way. Either you guys hate each other living on a couch together and you don't want to work together anymore, or it brings you even closer together because you have that experience.

Well, we hated each other enough times, but we kept them together. So yeah, it was. It was one of very good stories.

We bought bikes. We were riding 10 km daily, for example, in the morning, at night, etc. Etc. So it was really fun. Fun?

Where in the US Was it in Dallas? Dallas. Dallas, Texas. Yeah.

Great beer, great beer, good barbecue. Yeah, totally.

That's awesome. Yeah. Like, again, there's lots of stories. Like we actually had somebody at Launch Academy. We actually had a shower there. And so he didn't have to le I come in. It's like, wow, he's really dedicated so early. He's always here. He works so late. Turns out that he was sleeping there and now he's a venture fund and he's investing in companies. He's done really well. But yeah, these are the things. Like, if you're really committed to your business and your startup, there's things that you have to sacrifice and do. It's easier when you're young because wives and kids, that's not going to happen. But when you're young, you can dedicate yourself to that degree.

Right? Right. Yes. Now what I think it's also very important, it's like, to acknowledge because a lot of the founders and ourselves, you can kind of feel very lonely during a bad situation. Like, there were days when we had like one week of cash left. Right. So we were thinking of, are we closing this or what's going to be the next decision? Because there's like, the music is stopping. So it's very easy to feel that you're the only ones, like, going through that kind of path. But basically every founder does. So it's just also a matter of trying to open yourself and maybe talk to a fellow founder or a mentor. That helped us a lot too. It was hard, but when you tell a mentor what's happening, they just give you like. Like, oh, my. Come on, friend. Yeah, that's going to happen.

Just the beginning. Yeah. I always say misery loves company. So no entrepreneur knows the pain of another entrepreneur better than the entrepreneur. Right? So. So these things happen and you just have to kind of roll with the punches. That's a good, great story. I want to end this off with Tell me about Guadalajara. What's the magic here? Like, I'm seeing so many different entrepreneurs, so startups, there's some really happening here. It's like the start of something really special. So why are you still passionate about Guadalajara? What should our audience know about the tech scene here? The type of startups here?

They are from Guadalajara. I'm not from Guadalajara. I'm from Puebla, for example.

Okay.

And I saw six years ago now, eight years ago, that something was happening here because many companies, many tech companies were being created here. I was like, something's happening there, something's happening there. And I was like, really bored in Pueblo because we don't have that capacity in Pueblo. It's not really good and I hate it to say it, but Guadalajara has that, like, they really are growing in terms of community. Before COVID for example, we were having lots of meetings about networking with tech companies, with big companies like hp, IBM, Oracle, Etc, etc and small ones like Quest Key Pocket, Local Adventures, etc, etc. It was really great because the community is just telling stories like this one and it's just like, okay, I'm with the founder that just raised this capital fund and it's like crazy because I want to reach that goal and right now I'm here, but I want to get that because that guy is like me. It's not like pretty different. I can do it so well. Has a really great community and we are having more and more founders because those whole companies, startup companies now they are they, they were having those employees that now they are creating new companies though. It's really nice what is happening here.

That's awesome. They have a very aspirational environment around you. But from what I'm hearing, very accessible. A lot of the, the entrepreneurs know each other. There's a lot of camaraderie, a lot of peer support. Especially during COVID everybody needed that mental support and help. It sounds like it's a very, very solid, committed community here.

Yeah, you always have a friend here to listen to.

Right? I mean it's also becoming more relevant. Like even you're here, Launch academy is here. So for me it's what has happened in other regions of the world, in Canada, in the U.S. mostly where you have these first time entrepreneurs are becoming bigger and bigger or some of them having exits that are reaching to smaller ones and they're just creating this circle of value creation. I don't want to say like just company creation, value creation. And the employees of that entrepreneurs, they learn how to grow a company and they also became entrepreneurs and you have like these company mafias where the first 10 employees then become 10 founders and.

It'S just a domino effect.

Right. So it's basically what has happened already in more developed markets. But we can replicate it here. So that's pretty interesting. And you can see it.

Yeah. From my opinion, I see Guadalajara where Vancouver was what, 10, 15 years ago. Like we see where Vancouver is now in 2021, we had 14 unicorns in that one year alone in just Vancouver. And so this is the trajectory, this is what I saw in Vancouver 15 years ago. The camaraderie, the ecosystem starting to come together. A lot of first time founders finding some success. But then as you get into that second, third, fourth startup, that's when really starts to elevate and you're on that path. So awesome.

That's the idea.

Right. And Local Adventures is gonna be that anchor that everybody looks at. As you said about aspirational Everybody's gonna want to be like local adventures now. I've already heard that multiple times. It's, oh, yeah, local adventures. They're doing really well.

No, I mean, we're very committed to get to that point, but also at the same time, I think if we want to get to that point, we're in a very connected world. So that's why we have to think beyond Guadalajara, beyond Mexico. We have to think of the US we have to think of Canada, Colombia. Peru is like, if we just try to replicate what has happened, but just in Guadalajara, we're not getting there. Right. So that's why we want to be very global, very different in terms of regions, not just stay in one. Right.

Yeah. And that's the mentality of experienced entrepreneurs. It's really refreshing and impressive to see it coming out of you guys at such a young age that you're thinking global right from the beginning.

Right, Right.

Awesome. This has been a great conversation. So excited to have connected with you guys in person in Guadalajara. Next time is going to be back in Vancouver because you guys are getting your work permits. You're going to be there soon. Thanks, guys. It's been a great conversation.

No, thank you. Everyone's welcome here in Guadalajara, in Mexico City. You should come here at least one time to see what's happening. And yeah, we're eager to be in Vancouver and get to know the startup community and everyone there.

Yeah. I highly recommend if people are looking at Latin America as a market that they want to enter. Mexico as a stepping stone is the path. And if it's a startup space, Guadalajara, you got to come to Guadalajara to be able to catapult yourself into Latin America.

Yeah. Almost nobody is in Latin America, so it's a real opportunity. Opportunity as a market. So just think about it and you're welcome anytime.

Yeah. Discretionary income is growing. The desire to absorb tech is growing, and so it's a huge untapped market.

Yep.

Awesome.

Thank you.

Thanks, guys.