4 Reasons Why We Are Investing In Capitaine Train (Again)
For those of you who don’t speak French, the tweet above reads something like: “Ok, I believe @capitainetrain has got THE BEST F**** USER EXPERIENCE IN THE WORLD (such a kick-ass customer support)”.
While no doubt on the extreme in its expression of enthusiasm, a quick peek at Capitaine Train’s Twitter feed shows that this declaration of love is by no mean unique, and echoes a feeling shared by many users of the service. Here is a pretty good rule of thumb: as a company, if you can get your users to swear in capital letters how much they love you on Twitter, you’re probably onto something, and you’re likely to have hit a raw nerve.
In Capitaine Train’s case, the raw nerve looks a lot like this:
Yes, train ticket distribution in continental Europe is still owned by the national incumbent train companies, with the level of user experience and customer support typical of such organisations. Their customers are frustrated, and wherever there is customer frustration, there is a business opportunity, which Capitaine Train set to exploit in 2009, 2 weeks after the French competition council stated that the SNCF had to open up its inventory to 3rd parties, in order to comply with European regulations.
Of course, the reality of the European railway market’s liberalisation turned out to be less rosy than its promises and when I first talked to Jean-Daniel, Martin and Valentin in December 2011 they had been battling with the SNCF for almost 2 years to get access to usable data, and were still limited to closed beta, and were crippled by such expensive fees that they were losing money on every ticket sold, and were set to do so unless they sold over €100m of tickets a year. Not a small order for any bootstrapped startup.
In spite of these difficulties, we decided to back them with €500k of seed capital last year, and to keep supporting them today with a €1.1m contribution to their Series A. Here are the four main reasons why:
1. A team on a mission
These guys never had it easy. This is to be expected when you set to attack one of the most powerful monopoly left in France, the SNCF. It took them many months to get access to all the data they needed, and many more to make sense of it and present it in a usable format. The reward for their hard work? A negative contribution margin on every ticket sold…
But it didn’t put them off and they kept ploughing on, constantly trying to negotiate better deals and find alternative providers to limit their reliance on one supplier. They could have failed many times over but they’ve made it this far and when you spend time with them, you realise how much this journey has toughened them up. Today, they’re not simply aiming at building a good business and make money, they are on a mission. A mission to make European train travellers’ lives better. And they have a very clear vision of how to achieve it.
2. Two obsessions: product + customer support
Building a great train ticketing engine is not as easy as it sounds: it needs to be fast, to offer an exhaustive combination of itineraries with the cheapest prices, support a variety of loyalty cards, and make payments easy and secure. It is both a complex engineering and design problem. Which they are solving by combining the most powerful itinerary engine in Europe (so powerful that it now offers cheaper prices than Voyages SNCF on more than 10% of all journeys, as explained here) with the most simple (some would say minimalistic) User Interface. You can watch Jean-Daniel speak about their UX here (you know a UX designer is French when he uses “boulangerie” as his case study for great customer experience…).
No advertising, no car rental, no hotels, no flights, no unnecessary option. The result: 50 seconds to book a ticket vs. 3+ minutes on Voyages SNCF. And potentially cheaper too.
And while many highly technical teams make the mistake to think their job is done once the customer has transacted and is off their website, the Capitaine Train team has always understood that even the best products require top-notch customer support by real humans. They recently wrote a long blog about their vision for customer support: https://blog.capitainetrain.com/1923-lobsession-du-service-client, and if you check their twitter feed, you will find them replying to customer tweets on Sundays at 10.30pm. Their goal is clear: eliciting #WOW moments from their customers.
3. Insane customer loyalty
The Capitaine Train equation can be summarised as follows: Existing Customer Frustration + Great Product + WOW Customer Support = Outstanding Customer Loyalty. Indeed 70% of the customers who bought a ticket in April 2011 bought one last month. That kind of retention is, by any standard, exceptional. Simply put, once you go Capitaine Train, you don’t come back. And, more often than not, you tell all your friends about it. Which is how they’ve reached €10m of annual run rate without any marketing.
4. Very very mass market
Of course, all this wouldn’t be as exciting if Capitaine Train were disrupting the reclining bicycle market. But rail transportation is a truly mass market, with about 8 billion passengers in Europe every year (10x more than air travel). Voyages SNCF is the largest travel ecommerce website in France with 11 million monthly uniques and €3.6bn in annual turnover. With 75% of all French Internet users visiting it at least once a year, it is probably the most mainstream one too.
And Capitaine Train is not limiting itself to France either: it has already integrated with Deutsche Bahn, Thalys and Eurostar and there are more integrations to come in many more European countries. Once again, their goal is simple: become the #1 destination for booking train tickets anywhere in Europe.
Working with them hasn’t always been easy. The flip side of having such a strong mission/vision is that there is no room for compromises. They are religious on many topics: they develop everything in-house, using only open-source technology, won’t do any aggressive marketing or develop any “viral” feature that’s not core to the booking experience, will not allow any ad on their platform, and refuse to ship a product until it is absolutely pixel-perfect. Their product and service will succeed or fail on its merits only.
More critically, they are still a far cry from having won their most difficult battle: the fight against the inertia monster. Indeed, they are still being used by only a small group of super early adopters, as most customers are not even aware that an alternative to Voyages SNCF exists (and even less aware that they would actually be better off using it). Moving the cursor from a pure tech and product focused startup to a marketing-driven company is their biggest challenge yet.
But these guys are survivors, and as such, will always be able to evolve and thrive. And this is why we are so excited and feeling so lucky to be part of it.
The team celebrating their Travel d’Or in their shiny new office rue Ambroise Thomas (click on it for the animation!)