Founder & CEO
For the newly initiated, what is blockchain,
Blockchain is a groundbreaking new technology that is definitely going to change the world.
It’s not very easy to understand. People hear
blockchain and they immediately think about
some sort of virtual currency, but it goes much
deeper. The underlying technology behind bitcoin, blockchain allows us to build networks
without third parties that would sit in the
middle of all the transactions and control the
network. The blockchain technology allows us
to transact on a network without intermediaries. Bitcoin is a financial system where we
don’t need a bank in order for me to send you
a certain amount of money. Similar logic can
be applied to all kinds of different areas in
our lives. In the case of Winding Tree, we are
seeking to disintermediate an industry that is
dominated by a few large corporations.
What solutions does the technology offer to
In the travel industry, one of the hardest problems
is access to data. The implications of that fact are
tremendous. Without open data, we cannot have
innovation. As someone who has been in the travel
industry, working with startups, for at least three
years, I see that problem very clearly. What we’re
doing by removing intermediaries is allowing suppliers in travel to connect easily and quickly without a long sign-up process and without paying
exorbitant transaction fees. By doing that, we’re
bringing a lot of value to the table. The blockchain
technology, because of its implications, allows for
many, many other things to be built on top of the
platform. That’s the core of our platform. It’s bundling. It should be easy to combine different travel
segments, such as air, rail, hotels and B&Bs.
Blockchain fundamentally as a technology allows [there to be] no downtime. [In traditional
transactions], there is a central party out there
whose servers go down every once in a while.
The bitcoin blockchain, as an example, is up all
the time. In a few years, we’re going to see a lot
less fraud because of the blockchain technology.
Third parties bring a lot of security problems to
the table. Look at Equifax. If you store a lot of
user information, payment information and information that should not be disclosed to the public
in one place, of course you are going to be hacked;
it’s a gigantic target for hackers. Blockchain as a
distributive technology removes that problem on a
very fundamental level.
How will your product work?
For suppliers and sellers to travelers, they’ll just
What level of interest have you attracted from
plug their systems into our network and out
of the box, they can sell inventory very easily,
receive a payment in cryptocurrency and at the
same time immediately transfer that cryptocur-
rency and convert it into a fiat currency, such as
U.S. dollars or euros, and send it to their bank
account. Cryptocurrency is just an enabler. For
suppliers, it will be easy to sort inventory from all
kinds of different suppliers—airlines, hotels, car
rentals, tour and activity providers—and com-
bine them in interesting ways and sell them with
no exorbitant transaction fees. We’ve designed
a whole new economy around blockchain tech-
nology. Our goal is not just to make money as a
company but to bring innovation back into the
travel industry. Our goal is not just to remove the
bad guys. It’s to make travel cheaper for travelers
[and] more profitable for suppliers and sellers,
and that technology fundamentally gives us the
ability to do so.
We have a lot of natural interest. We have big
players like [German travel and tourism company] TUI. We’re talking to big and small airlines, a
few hotel chains and a few smaller providers. Our
goal would be to work with companies that can
move very fast in terms of technology integration.
We wouldn’t sit and wait for the big airlines [that
need] two years [to integrate. We want] to be
able to experiment very fast and start from there.
We do have conversations with very big corporations out there that are willing to move fast.
What about current travel distribution suppliers?
We have talked to the big GDSs and OTAs
several times. Our message to them is that fundamentally, blockchain technology does remove
intermediaries but those companies do not have
to go away. Those players that sit in the middle
of all the transactions are able to charge those
fees not because they deliver a lot of value but
because they can; there is no marketplace that
would determine the right margin, the right price
point for the value that they deliver.
What is your time line for launch?
In the software world, nothing is ever done and
fully operational. The minimum viable version
of the product we are hoping to launch this
fall, around … November. We are going to start
with testing the smart contracts for hotels and
vacation rentals. It’s something that we have
developed over the past few months, and so far,
it’s up and running. We’re testing it with a few
of our suppliers. Airline smart contracts will be
much, much harder. The search will be much
harder, so we will try to deliver by the end of
next year. We need a lot of feedback and to learn
about how those big companies operate. All of
those airlines have different systems, so it’s going to be a lot of work.
Amid travel industry chatter about how blockchain will transform travel distribution, Winding Tree
is among the few startups applying the technology directly to the travel space. It is developing a
“new economy” for hotel, airline, rental car and other travel suppliers—from distribution through
payment. With its first launch only a few months away, CEO Maksim Izmaylov spoke with BTN’s
Michael B. Baker.