After Winding Tree gave up in July 2024, I was approached by Maksim Izmaylov, who founded the company together with Pedro Anderson and Jakub Vysoky, to document the case. They gave me full access to the available material and connected me with 19 interview partners, all of whom provided their own viewpoint on why the business model did not work out.

Winding Tree was a bold blockchain initiative that set out in 2017 to disrupt the travel and tourism industry. Their ambition was to build a decentralized, open-source marketplace allowing direct transactions between travel service providers (e.g., airlines, hotels) and customers that bypass traditional intermediaries such as global distribution systems (GDSs) and online travel agencies (OTAs). By eliminating middlemen, the platform strived to enhance transparency, reduce costs, and empower smaller players. The project attracted substantial interest and conducted a successful token sale, but was finally shut down in 2024. Rather than label it a failure, I argue that Winding Tree offers critical insights for future ventures in digital transformation and blockchain implementation in the tourism and travel industry.

Study Design and Methods

I applied a rigorous case study methodology to uncover why Winding Tree failed to achieve its mission, consisting of:

• A quantitative survey of 86 industry stakeholders to assess blockchain sentiment and Web3 readiness,
• 19 in-depth interviews with founders, partners, investors, and industry experts, and
• an analysis of secondary data, including white papers, source code, blog posts, and public documentation.

The study explores two research questions:

1. Which key factors prevented Winding Tree from achieving success?

2. How can the failure of Winding Tree be explained from a theoretical perspective?

What I found: A Web of Challenges

The study results revealed a complex interplay of internal, technological, organizational, and environmental barriers that ultimately led to Winding Tree's demise.

1. Philosophical Commitment to Decentralization
   Winding Tree’s refusal to accept venture capital, which can be explained by the commitment to maintain decentralization and public ownership, left it vulnerable to financial constraints.
2. Immature Technology Stack
   Building on Ethereum during its early development phase exposed Winding Tree to the limitations of blockchain at that time. These hindered integration with industry players’ legacy systems and complicated user experiences.
3. Misaligned Market Fit
   The initial focus on B2B solutions and corporate travel proved ill-suited to blockchain’s strengths. Despite potential cost savings, businesses lacked motivation to adopt a system that required significant change and offered unclear advantages. A typical "chicken-and-egg" problem emerged such that widespread benefits depended on a critical mass, yet adoption stalled without existing users.
4. Resistance from Incumbents
   Efforts to bypass powerful intermediaries met with substantial resistance. Established players discouraged adoption, and the lack of regulatory clarity around crypto payments and smart contracts deterred risk-averse partners.
5. Usability and Organizational Readiness
   Both corporate users and travelers were reluctant to manage crypto wallets, private keys, and new platforms. Corporate IT teams lacked the capacity or incentive to replace familiar systems with an unproven alternative.
6. Financial Fragility
   The initial ICO funding proved insufficient over time. Without a robust revenue model, Winding Tree was unable to sustain its operations. Its token-based model also attracted speculators rather than long-term stakeholders.
7. External Shocks
   COVID-19 drastically curtailed global travel, eroding momentum and capital. Although some partnerships were formed during the pandemic, they were insufficient to ensure survival.

Theoretical Implications

I assessed Winding Tree’s story through several established frameworks:

• Diffusion of Innovation: Winding Tree struggled to move from early adopters to the early majority due to a lack of perceived advantage and high implementation complexity.
• Resource-Based View and TOE Framework: Internal capabilities, technological constraints, and environmental pressures turned out to be major hurdles.
• Disruptive Innovation Theory: Though Winding Tree targeted market inefficiencies, it failed to gain traction in underserved niches.
• Behavioral Economics: Rational cost-benefit arguments alone did not motivate companies to change entrenched processes.

No single theory can fully explain the project’s failure. Instead, the case highlights the need to refine and contextualize existing models for emerging technologies, such as blockchain.

Practical Lessons for Practitioners

The authors provide three critical recommendations:

1. Know the Market and Its Power Structures: Successful disruption requires a deep understanding of industry dynamics and stakeholder incentives. Blockchain alone is not enough, but the value propositions must be concrete, measurable, and easily communicable.
2. Secure Sustainable Funding: Decentralized ideals must be matched with viable business models. Hybrid structures such as consortium chains may offer a middle path between public blockchains and investor-driven platforms.
3. Leverage Existing Knowledge: Future projects can build upon Winding Tree’s open-source work and avoid repeating its history.

Conclusion

Winding Tree's collapse is not only a story of a failed business model —it is a case rich in lessons for practitioners who actively seek to transform traditional industries using disruptive technologies. Its experience reveals the complex, often underestimated interplay between ideology, technology, industry inertia, and human behavior. Blockchain remains a powerful enabler, but its promise can only be realized through pragmatic execution, ecosystem alignment, and sustained organizational effort.

The paper can be found here:

Lessons learned from an abandoned tourism and travel blockchain project: the case of winding tree