Interview: The reasons why innovation must be meaningful for tech startups

George Hadjigeorgiou is CEO of UK startup success story HouseTrip. Since joining the firm in early 2012 he has played a defining role in developing and executing the company's strategy to address accelerating demand for unique, easy-to-book holiday rental accommodation. We spoke to George on the topic of how he defines innovation, and how he views tech startups and investment risks in general.

TechRadar Pro: What's your definition of innovation?

George Hadjigeorgiou: Innovation is often thought of as embracing the latest, coolest, most disruptive technologies. Almost by definition, hungry new startups – particularly in the tech space – are businesses that are making use of technology in some way, shape or form.

But our definition of innovation is a bit different. Imagine a Venn diagram with technology on one side and a customer problem on the other. Innovation lies in the sweet spot in between, where players are harnessing existing solutions to improve or resolve real-world issues. I define genuine innovation as a better way of solving an existing problem with proven technology. Our raison d'etre is to make the whole experience of booking and staying in a holiday home fast, easy and memorable.

TRP: So you're advocating innovation, but not for the sake of it?

GH: Correct. I believe that trying to be 'too innovative' and focusing on disruptive technologies will hinder rather than help a startup. In popular perception, startups are typically synonymous with innovation. Getting the balance right between familiar technology and wanting to labelled as innovative is a big challenge for any startup.

One of the most important things that entrepreneurs should focus on is deploying trusted platforms and services which your customers recognise, which won't crash. At the end of the day, the key lies in creating a brilliant user experience that customers want to return too.

And that's it – concentrating on creating a simpler, easier experience for users to enjoy is a more important (and more successful) strategy than blindly applying the latest tech just to prove your company is 'innovative'.

TRP: In this tech-fuelled age, is it naïve not to put tech investments first?

GH: The internet has disrupted and transformed almost every consumer experience and business model, from grocery shopping to takeaway ordering; from finding gig tickets to choosing a new winter wardrobe.

Holidays are no exception. The first wave of change came in over 10 years ago, making it easier to find and book holidays online, all but killing the high street holiday shop. The next wave of change is now upon us. Consumers don't just want to turn to the internet to search for their next holiday destination – they want web-based companies to work for them. However they don't necessarily want to be forced to use new tools or techniques to find relevant information – they want companies to do this for them at the back-end.

Investments should be made wherever this will result in the biggest benefits for customers. If customers would benefit from investment in another area, such as expanding your customer service team, this should be prioritised.

TRP: Do you think wasted technology investment is one of the reasons for high failure rates in startups?

GH: There's no denying that starting a business is hard and keeping it growing is tough. According to Bis.gov, of the 400,000 companies that were set up in 2012, 80,000 failed within 12 months. Defining the technology requirements for a startup is often one of the trickiest steps a new company has to take. This is often due to the fact that so much of the technology products and suites available are designed for large organisations.

A startup's technology goal is to adopt the services that will help you get things done and support your most immediate business needs. There's no need to plan technology for the next two to three years before this point. The best tools are those that you can grow out of rather than grow into. Pinpointing the right, proven technology is crucial for a startup as it helps keep costs down (critical for a new business), improves efficiency and prevents investment in a service that won't be required or is outdated 12 to 18 months down the line.

TRP: Startups are always being encouraged to take risks – failures are seen as a badge of honour. Are you really saying: play it safe?

GH: Startups tend to share a common vision; we want to create something that addresses a genuine need and becomes part of people's lives. Successful entrepreneurs hold that vision at the centre of everything they do, make sure it's achievable through market research, and then pursue it relentlessly.

Unusually for a web startup, neither of our company's founders (husband and wife team Arnaud Bertrand and Junjun Chen) came from a tech background. On paper, to start an internet-based firm with no developer experience sounds like a huge risk. However they had a clear vision of what they wanted to create and channelled their industry expertise, from working in the hospitality sector, to produce the brilliant alternative to holidaying in a hotel.

Knowing and understanding the travel and hospitality industry and audience is part of our DNA which sets us apart. When HouseTrip was originally founded, it had all sorts of additional functionality – an eBay-esque marketplace function, a Yelp-like local guide function.

We quickly stripped it all away and as we always say, "If you fail, fail quickly so you don't waste time." Focus on your vision, really believe in your business and deal with any risk that comes along. By losing faith, giving in to fear and backing away, that is a sure-fire way to fail.

TRP: What tech startups have got it right?

GH: Today, startup space in London, the UK and even across Europe is growing faster than it has done in the last five years. However, the space is also becoming increasingly complex and convoluted. Many entrepreneurs appear to be innovating for innovation's sake and this is becoming reminiscent of the previous dot com bubble.

However, there does appear to be one resounding secret to success for those startups who have made it: keep things simple. If we look at recent success stories like Yo, and even the recently resurrected Flappy Bird, we can see why they've secured users and gained popularity.

Yo has gained fans because of the fast and simple way in which you can use it to capture someone's attention. Flappy Bird is addictive precisely because all gamers need to do is furiously tap the screen to keep a bird in motion. Both these developers stuck with their vision, used proven platforms, and got the formula right.

TRP: Apart from keeping things simple, what else do you see as key to successfully growing a business?

GH: It's back to school when growing a business. Do your homework when it comes to funding. When it comes to your pitch, do your sums. What do you need to advance your business? How much equity are you prepared to relinquish? Then proactively identify how to find that cash, because it doesn't grow on trees. What seed or series funding is available? What angel investors or venture capitalists do you need to know? Perfect your pitch, and then start networking.

However, always keep focused on your core business proposition and your customers. Once you start networking and learning from your peers, it's easy to lose sight of your vision and be wowed by shiny new techniques and technologies others are investing in.

The UK has a great reputation across the globe and is very positive about entrepreneurship. A recent parliamentary survey found that 77% of people believe we have a positive atmosphere to build and encourage entrepreneurship. Being part of this encouraging growing startup and technology network within the UK is so important when you're first venturing out there.

Establishing a strong network of contacts is not only vital to doing business, it can help you to build up your social circle too. Do get involved in Tech City and government-backed initiatives focused on growing the UK startup community. Take advantage of the fantastic advice, resources and events that they have to offer. The knowledge that others are going through similar experiences will help you get over the fear hurdle. Don't be shy, get out there!

TRP: What's next for London's startup scene?

GH: Growth. It's a great city to start a business, run a business and turn a business into a global brand. We love being based in London. We are committed to it and we'd encourage other entrepreneurs to dive in and start their businesses here. There's a great hub for entrepreneurs and the startup community, especially around Silicon Roundabout which is the hub for tech companies. However, there are communities of startup businesses all over London.

One of the biggest advantages of the London startup scene is being close to VC funding. We're backed by Europe's three biggest Venture Capitalists (Index Ventures, Balderton Capital and Accel Partners) and our proximity to those VCs certainly helped us to forge a relationship with them. In addition, the UK – specifically London – has one of the biggest technology talent pools in Europe. At a time when IT skills are in short supply, it helps to be closer to the growing talents.

London's startup scene is big, dynamic, and has a lot of people – all potential employees and customers. It has a strong economy and is one of only two or three genuinely global cities. It has strong leadership and great infrastructure and, I believe, will only keep going from strength to strength.

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