Most inter-city travel in France and Europe is done by train, so a train travel search engine sounds like a good idea for a startup, right?Valentin Surrel thought so, and that’s why he cofounded Capitaine Train – a Kayak for train travel.
There was only one problem with Surrel’s plan: French train travel is controlled by a government monopoly, SNCF, who don’t like upstarts muscling in on their turf.
SNCF’s online booking site, voyages-sncf.com, co-owned by SNCF and Expedia, had revenues of 2.4 billion euros, or 3.4 billion dollars, in 2009.
That’s not something you want to let people compete with if you can get away with it.
But Surrel and his friends did, and they seem to be thriving. Here’s the story of how.
We spoke with Capitaine Train co-founder Valentin Surrel who told us the story. It’s edifying.
In February of 2009, French regulators fined SNCF for allowing Expedia and Expedia alone access to their database and API to allow them to sell train travel online, mandating that it allow other sites to build booking services.
Capitaine Train’s three co-founders saw this and started coding. But then, when Capitaine Train asked SNCF to let them access the API, SNCF gave them the silent treatment.
SNCF objected that Capitaine Train wasn’t registered as a travel agency – a requirement to sell train tickets in France.
That kind of registration requires locking up the weirdly specific sum of 92,000 euros in a bank account as a financial guarantee and buying a specific kind of insurance – a kind insurers are loath to provide.
(Welcome to France!)
Capitaine Train managed to find an insurer. They raised money from angel investors.
All that done, SNCF grudgingly gave Capitaine Train limited access to the SNCF API in December of 2009.
But then negotiations on a formal contract that would allow them to go live dragged on. The Capitaine Train guys went to the press and made a fuss. Oddly enough, the negotiations suddenly sped up! They signed a contract in the summer of 2010 and finally got full API access in September.
Today, the relationship with SNCF is good, Surrel tells us.
Nevertheless, the company’s agreement with SNCF is still hobbling. The site is currently in invite-only beta. Capitaine Train’s contract requires a low ratio between searches and bookings, which prevents a big “blow out” launch where tons of people would check out the site without booking, so Capitaine Train is forced to grow by slowly expanding their beta invites.
It’s a shame, because the site is great, and quite superior to SNCF’s garish, ad-filled, crash-prone service.