We also spend a lot of time in this interview talking about Mobile Stop, the mobile phone reseller Ben co-founded in the late 90s.
Previously, he co-founded Mobile Stop, a mobile phone provider.
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Next, who’s the lawyer that tech startups trust? Scott Edward Walker of Walker Corporate Law. Here’s what Neil Patel, founder of KISSmetrics, says about Scott: “Scott is a great lawyer, responds fast, doesn’t charge you for five-minute phone calls, and always gives great advice.” Walker Corporate Law.
Finally, did you know that in addition to being the virtual phone system that entrepreneurs love, Grasshopper.com has one of the most popular blogs on entrepreneurship? Even if you’re not ready to get a new phone number from Grasshopper.com, even if you’re not ready to add extensions to your current phone, even if you’re not ready to get text-based voicemail and stop listening and start reading your voicemail, even if you’re not ready for all that and everything that Grasshopper offers, check out Grasshopper.com’s blog to learn about entrepreneurship. Here’s the program.
Andrew: Hey everyone. I’m Andrew Warner, the founder of Mixergy.com, home of the ambitious upstart, the place you come to listen to entrepreneurs tell you how they built their businesses.
So how does a guy who doesn’t know a thing about the airline industry build an industry-leading travel site? Joining me today is Ben Chong, co-founder of Jetabroad, the Australian online travel service that allows people to fly from anywhere to anywhere. Ben, you’ve come a long way from the days when you didn’t know a thing about the airline industry. Welcome to Mixergy, and I’m looking forward to hearing your story of how you learned it.
Ben: Hi Andrew, g’day. Good to see you.
Andrew: G’day – you’re in Australia right now.
Ben: Absolutely, it’s a sunny morning in Sydney, and I just have a beautiful view of Sydney Harbor right in front of me, so it’s fantastic to be able to be talking to you and to be talking about Jetabroad.
Andrew: Thanks for starting your morning with me. So how many customers did you have? How many customers did you have last year?
Ben: Last year we probably had over 75,000 customers spend time on the Jetabroad website, and actually purchase some tickets from us.
Andrew: 75,000 customers?
Andrew: Okay. Now I’m on your website right now, and it looks very similar to Travelocity or Expedia and some of the other sites. I see the radio boxes that ask me if I’m doing a return trip, a one-way, etc. Where are you leaving from, where are you going to, the dates and so on. We’re all used to it. How is Jetabroad different from all those sites that I mentioned and all the other ones we’re used to?
Ben: That’s a very good question. I think what sets Jetabroad aside from a lot of online travel agencies is that we provide the ability for people to fly from anywhere to anywhere. That’s the first thing. I think the second thing that we do is we offer a much wider range of airline carriers than other people. And then the third thing that we do is that we make it easy for people to purchase their travel.
So the first one: we offer the ability for people to purchase their flights from anywhere to anywhere. If you go to a lot of other sites, they will only allow you to purchase a ticket from the originating country from the home site or the website, whereas we have people who are purchasing tickets for relatives who might be in Scotland, in South Africa, even for relatives who might be in Nigeria of all places! So we have the ability to fly people from anywhere to anywhere I always say.
Andrew: Are you profitable doing this?
Ben: Absolutely, and we’ve been doing this since 2005. Although we’re a private company we have been able to grow the business rapidly since that time.
Andrew: Can you give me a sense of what the revenues are in the business?
Ben: I don’t really disclose our revenues because we’re an unlisted private company, but what I can tell you is that we are one of the largest online travel agents in Australia.
Andrew: Okay. Let’s see, actually we can probably do the math pretty easily and figure out that roughly – well, I won’t even do it. What’s the average ticket size?
Ben: I think that’s the other interesting thing. Because we do anywhere-to-anywhere, we focus on international airfares. Our average ticket price is larger than our competitors, so when you’ve got folks out there who are focusing very much on a domestic type offering, where you might be flying from, who knows, from Boston to Los Angeles, or even what I would call domestic within Europe, which may be from London across to Paris, your ticket prices tend to be a lot smaller, a few hundred dollars. When you’re talking an international airfare, where you might be going from Sydney to Los Angeles, or from New York across to London, your ticket prices are a lot larger, and I would suggest that our ticket prices tend to have four digits instead of three.
Andrew: I’ve noticed that actually. In preparation for this interview I went into different message boards to see what people had to say about you. Specifically, I wanted to see did people hate the company, did the love the company, what’s the feedback? What I was that a lot of people would put the rates that they found, and we’re not talking about $200 flights. No, they had numbers like $1,500 and more expensive than that. They just wanted to check if Jetabroad was a good company. Is this a reputable place? And from what I saw, all the feedback I read as I went through the message boards to check up on you guys was positive.
All right, so we have profitable business, very big, servicing tens of thousands of customers a year. I want to find out how we got here. Let’s do that by going back in time and talking about the previous company that you had, Mobile Stop. What was Mobile Stop?
Ben: That was back in 1997. I had a very good business partner at the time, and he remains my business partner today – Ari Klinger. We started a business selling mobile phones, cell phones, online in Australia. We were the first fellows who thought that the Internet is going to be a big thing, and mobile phones are going to be a big thing.
At the time, you might remember a lot of us were carrying around these large mobile phones (those of us who had mobile phones), and we could see the future. We could see the future when more people, not just business people, would be having mobile phones: mums, kids, all sorts of folks would be having these mobile phones as they grew smaller in size. And we also saw that there was this thing called the Internet that was making a phenomenal growth and experienced a huge uptake, not only in Australia but in many countries around the world.
So we thought, ‘What could be a better thing than combining the two and having mobile phones being sold online?’ And we started this business called Mobile Stop. And I’ll tell you, it was a hard slog at the time. It was a hard slog because we had to convince a lot of the distributors, the wholesalers of the mobile phones, as well as the mobile phone networks about what we were doing, why it was a good idea, and why they needed to back us.
After a lot of convincing and showing them beautiful charts and slide shows and meeting with them, they saw the future as well, and they realized that the vision that we had come up with was something that they wanted to back. It was one of those things where we had to knock on many doors in the beginning, but over time people came to see the benefit of the vision and they bought in, so we started this little business.
Andrew: So the first step was getting the mobile phone carriers to allow you to sell their product?
Andrew: Were you required to buy and inventory the products ahead of time, or could you buy and service them as you were getting orders?
Ben: Yes. This is the thing. I think the traditional model at the time was that the mobile phone dealers had to purchase a lot of stock. And what we had to work out was given our original capitalization, how could we change the model slightly so that we could invest what we would otherwise spend on inventory into sales and marketing and building a great website – a great experience for our users, and put in place a just-in-time system so that we were able to drop ship? And that’s exactly what happened. We found folks who were able to help facilitate that drop-shipping so that we didn’t have cash tied up in costly inventories, but rather we could deploy that cash for marketing purposes.
Andrew: Why do you need drop shippers if you already have the carriers on board with you? Can’t you work with the carriers? Why do you need permission from the carriers if you have the drop-shippers?
Ben: In the early days we found that there were the carriers who would be providing you with the service. They’d provide you with the SIM card and the service. And then there would be the folks who actually distributed the mobile phones?
Andrew: I see, so you need both of them on board here?
Ben: Yes, exactly.
Andrew: Okay. So you’ve got both on board. I see how it doesn’t take any cash to get them on board. It takes a lot of time with the carriers and it takes a little bit of time with the drop-shippers and you’ve got supply handled. Now the website, who does that? Is that you, is that Ari, or are you guys hiring other people?
Ben: As much as a I like spending time on websites, I have no idea how to code, and the same goes for Ari. We were very fortunate at that time being able to find folks that we knew. We were still at university, so we found folks that we knew at university who were able to help get this website together.
One of the early things we learned was the importance of trying different website designs as the impact on conversion rates was huge. So even back then we realized that having different colored buttons or having different text, or different size of text would make a huge difference to the conversion rates, the number of people who came to the website versus the number of people who actually purchased from us.
Andrew: Do you have an example of some strange change that you made to the site that increased conversions dramatically?
Ben: Oh, yeah. One of the things that we did early on is that we had a button, and the button was to add things to the shopping cart. One of the original buttons was colored red. We thought red was a nice color. It was one of the colors of our logo. We thought it fitted in well with the rest of the color palette. And then one of the designers suggested that we change the color to green. Needless to say, conversions went up by a significant amount tremendous amount and we kept it at green, even though it didn’t fit in with the rest of the color scheme.
Andrew: Unreal that such a little thing would have such a dramatic impact on the site.
Ben: That’s right, and so early on we realized the importance of making small changes to websites. Because consumers, people visiting our websites – once you have a significant number of them – you could realize that some of these small changes could make a big difference.
Andrew: Okay. So how expensive was developing the website?
Ben: We were fortunate in finding uni students to help us with that, so we struck a deal where we got to pay them on some sort of fixed basis. It was a really, really low-cost site to start with.
Andrew: Okay. So inventory: product doesn’t cost much money. Web development doesn’t cost much money. Now we need to talk about marketing. It seems like that’s where a lot of your money went.
Andrew: Where did you market?
Ben: These were the days before Google, so we started off trying to sign portal deals with a lot of the online portals. You might remember folks like Excite or MSN or whatnot. We became friendly with those folks, either large ISP’s or portals, and we signed deals to appear on their shopping verticals. So we would be the featured mobile phone retailer on Excite or MSN.
Andrew: How much money did you raise?
Ben: We raised money from family and friends, so it was a couple of hundred thousand dollars, and we didn’t take it beyond that round. We used a lot of that on marketing.
Andrew: Unbelievable, for a couple of hundred thousand you can buy ads from those portals and launch a business? I know those portals were very expensive. They were really ripping off companies like yours at the time, I felt.
Ben: Yeah, yeah. I remember being on one of them and the first month we paid them $25,000, and we had to sign I think a minimum of three or four months. So for a very early stage business that was a lot, a big commitment.
Andrew: That’s a significant portion of your revenue. So did you convert enough from that to make a profit?
Ben: Yep, yep.
Andrew: You did?
Ben: We certainly did.
Andrew: So you might be the only company I know back then that bought one of those placements and actually made a profit off it.
Andrew: Why? Why did you make a profit? Is it because the margins on mobile are just so high and the bounties for signing customers are so large?
Ben: At the time, the mobile phone companies at least in Australia were really wanting to grow their market share. They knew that there was this gold rush, this land rush happening, and what they needed to do was to lock people in. So there was a huge amount of competition between the mobile carriers, and they therefore had budget to pay for acquisition. What we were able to do, and it’s similar today, but a lot more competitive back then – you were able to get a mobile phone for $1 so long as you committed to spend money to 12 months. And it’s interesting, as the time went by the mobile phone carriers went from a commitment of 12 months, to 18 months, to 24 months. I remember some carriers wanted to get a commitment of 28 months, which is obviously longer than two years. I’m thinking, ‘Man, am I going to be able to keep my phone alive for two years, let alone 28 months?!’
Andrew: Will the hardware survive?
Ben: Yeah. So it was great selling some of those 28-month plans because the bounty was higher, certainly mush higher than an 18-month plan, but obviously that affected what happened in month 28, or month 24, to be precise, because we would have to push out the time that we would have to renew that customer.
Andrew: So you were profitable year one?
Andrew: How long did it take you to generate the first million dollars in revenue?
Ben: The first million took awhile. I think we probably did that in year two.
Andrew: Year two?
Andrew: That’s impressive. When you hit it after launching this business with very little capital, how did it feel? Do you remember the day?
Ben: Oh yeah, it was fantastic. It was champagne glasses all around, we’ve made the first milestone. But we also knew that the market was growing quickly and that we needed to reinvest a lot of our funds and resources back into the business to grow and get that to the next stage.
So I think even back then we realized yes, great milestone, but we needed to go and reinvest and ensure that the future was laid on a good foundation.
Andrew: So it seems like the carriers were locking in customers for many months if not many years, but you guys were signing somebody up and then losing them to the carriers. Was there any repeat business, or did you have to get up every day and rebuild your business by finding new customers?
Ben: Well we struck a deal with these carriers where we had the first dibs on the renewal of these customers.
Andrew: I see.
Ben: So if someone’s signed up for an 18-month contract, we would contact them around month 14 or 15, warming them up. We actually negotiated with some of the carriers the ability to give people a bit of a holiday from their 18-month contract, maybe one or two months early, so long as they re-signed for another 18 months.
Andrew: I see. I saw an article with a quote from Ari from I think the year 2000?
Andrew: He said, “If you order a mobile phone from us at 11:00 a.m., we’ll get it to you at 5:00 p.m.” That quick turnaround was a goal for you guys.
Andrew: Did it end up being a big part of the business? You’re saying it was . . . tell me about that rapid turn-around. That’s very fast.
Ben: Yeah. Australia’s a big country, it is pretty much the land mass of the United States, and yet we have a population these days of around 22 million, so back then it was maybe 20 million. We wanted to be able to offer the ability for customers to get service and delivery really quickly, and that was a challenge. That was a challenge because outside of the capital cities, trying to find a good courier companies who had a reputation, who could offer tracking, who could offer us the online proof of delivery with signatures and whatnot was a difficult thing. In the early days trying to service customers who were out of town, while they took up a large proportion, in fact a disproportionate number of our customer base compared with the population, it probably cost us a lot of money. Margins on that sort of business weren’t as high.
Andrew: So why did you do that? Why offer such a quick turnaround? Why not say, ‘It will be there next day, or two days we’ll have it in your hands?’
Ben: We wanted to give customers a real reason to purchase from us instead of going down to the store at their local mall or shopping center. We wanted to really provide something that was different and that would set us apart.
Andrew: Okay. So I see was looking at your LinkedIn profile in preparation for this interview. I see Right Click Capital, the investment firm that you have now. I see Jetabroad, I see Online Marketing Group, OMG, but I don’t see Mobile Stop. Why not?
Ben: Mobile Stop is there, I think it is there. It’s a company that we had a fantastic time with, but the sad tale, if you like, to the story is that we grew the business rapidly in 2000, and we were going through a process of raising raise a bunch of cash. We were trying to raise a bunch of cash, and it was at a time where we I guess caught the tail-end of the dotcom bust, and/or boom, depending on which side of the timeline. And unfortunately we did not make that second raise that I was talking about before. We obviously made our first family and friends round, but we were trying to go for a much larger raise, because we saw an opportunity to really dominate Australia and then to grow the business within Asia-Pacific.
Andrew: So what happened after you couldn’t close the round?
Ben: After we couldn’t close the round we had to lay off a lot of folks because we had expanded the business in preparation for market expansion. We laid off the business, and then we put the business in more of a holding pattern mode, and after some time, while the business was still turning over money and it was still marketing profitable, we saw opportunities in other things and we decided to exit the business.
Andrew: How did you go from having it be a profitable business to one where you needed investment or else you couldn’t keep it going?
Ben: We expanded the business and we spent more money on marketing, on growing the business. Also at that time there were additional competitors who entered the market, and what we found was that there was degradation in our margins.
Andrew: I see. Can you give me an example of where you spent money on marketing that maybe in retrospect you shouldn’t have?
Ben: That’s a good question. I’d say that we started doing a little bit of marketing where we found partners, we found affiliate partners where they might have a large database, and we thought there were opportunities to leverage that database. But even though those guys were going to be paid substantially on a contingency basis, we found the cost of actually setting up those relationships and getting the marketing collateral and the offers to be really competitive for those guys, we found it to be costly.
Andrew: Okay. So what year did you close it down?
Ben: It would have been 2002.
Andrew: Okay. So in 2002 you close it down. Right Click Capital launches 2003, Imega [SP] Group also launches 2003. Those are the next projects, right?
Andrew: So how did you feel in 2002 when you went from being on top of the world to having to shut down a company? How did it feel personally?
Ben: It was really sad. That was our little baby! It’s like a child and you don’t want to have to say goodbye to a child.
Andrew: Were you able to give your friends and family their money back, their investment money?
Andrew: You were? Did you and your partner Ari pocket any money personally from it?
Ben: We weren’t able to pocket any money from the sale of the business as such, but we had taken money out over time, so we were happy with that decision.
Andrew: Okay, all right. So you weren’t at the end of it scrambling for work. You made enough money that you could feel confident in your entrepreneurship skills and go launch another business?
Ben: Absolutely, but all the same when you have a business that ends in such a way, it’s a time for reflection. Obviously, I wish it had gone on to be one of the dominant players today, but hey, there have been lots of other exciting things to get on with.
Andrew: And I want to get to those exciting things. That’s the focus of this interview. But what’s one thing that you learned from that first big entrepreneurial endeavor that you took with you for everything you did afterwards?
Ben: I think two things, and they sort of go together. I think the first thing is that you have got to have absolute confidence. You’ve got to have absolute confidence and passion in the product or service that you offer, and you’ve got to be able to evangelize the people around you.
Andrew: Were you able to do that at Mobile Stop?
Ben: Absolutely. The carriers, the mobile phone distributors, the folks who were doing our deliveries, and the early customers that we got on the phone and spoke with. You really need to be passionate. You have to believe it, and it has to be a good offer.
Andrew: So if I’m understanding you right Ben, in that period of evaluation around 2002 you said to yourself, “All right, this didn’t work out, but the one thing I learned from this is that if I can be confident and evangelize properly, the world will come behind me in whatever mission I have, just like they did with Mobile Stop, and they’re going to do that in the future with anything else that I can project that kind of confidence.”
Ben: Yes, but I would also balance it with something else. The thing that I would balance it with, Andrew, is that you also need to develop the ability to be self-critical and to work out when it’s time to stop. I think that’s taken me a long time.
Andrew: How would that have played out at Mobile Stop if you had that ability?
Ben: Maybe we might have stopped the business a little bit earlier. We might have stopped the business a year or 18 months earlier, and used that time and the effort and energy still expended in that time to get onto other projects.
Andrew: How would you have known back then that that was the height?
Ben: Oh, it’s hard to tell. It’s a really, really difficult thing to tell. I think when the capital markets crumbled that probably was a good sign not to plug on or at least take a holiday.
Andrew: You know, Ben, I had a business back then, too, that was doing really well, and I saw the capital markets go into all kinds of panics and frenzies. And I said to myself, “That doesn’t apply to me. That applies to those guys that are heavily involved with the capital markets.” These are the guys that are either invested in Wall Street, or the people who have taken money from investors – I’m not any one of these people. I don’t have tens of millions of dollars of investors money, and I don’t need another round. I’m immune. I’m an entrepreneur. I got here because I could do anything, I could survive this because it doesn’t touch me, and if it did, I could handle it. Is that the way that you felt back than?
Ben: Yeah. I felt that I was invincible and that while there was a massive storm around I’d be able to ride out the storm. I thought the storm would go for a lot shorter than it did, and that despite those externalities, that people would see us for what we were and would value that highly.
I think the thing I’ve learned is that yes, there are businesses that have made a lot of hay while there hasn’t been sun shining in the capital markets, or whatnot. But at the same time I think people need to be realistic about the environment where their business exists, and they need to adjust their behavior accordingly.
I think it’s really, really important to have that confidence, to have that passion, to gather a team of people around you and to bring them with you. But at the same time I think it’s also important to be self-critical and to look at the events and the environment around you.
Andrew: Let me pause the narrative right here to ask about confidence. There are a lot of people who are listening to us talk about how we felt invincible in that moment. Even when the markets were crumbling, we felt like we were on top of the world, and bring the bullets on, because they’ll bounce right off of us. A lot of people who hear that say, “I’d like to feel like that. I’d like to have that kind of confidence.” So let me ask you this, Ben. How did you get to be that kind of confident? I want to understand how you got there, so maybe they could figure out how they could call or draw on that kind of confidence in their own lives. How did you do it?
Ben: I was very lucky, and am still lucky to have a great partner. We spent a lot of time going through our plans, going through the vision of the business and work-shopping that. I think a lot of this passion is contagious. When you’re in a room with happy people, even though you might have been unhappy when you first walked in, I think it’s difficult to remain unhappy.
Andrew: Do you have an example of a time when maybe you felt a bit insecure and being with Ari as a business partner in the same room you felt, “You know what? No! What was I being insecure about? We could take on the world!” Do you have of how he turned it around?
Ben: Absolutely. There was a time early-on in the business where we were subject to some credit card fraud, and that cost us a decent chunk of cash. I remember very clearly being in a meeting room with Ari, and he said to me, “The good news is this: we’re alive. The business is still alive, we still have happy customers. The bad news is that we’re probably going to be on the hook for a fair chunk of this money but, but if this is the only, if this is the biggest issue that we need to go through, then the future’s bright. The future’s rosy!”
And I thought about that, because I was looking after the finances of the business at the time, and I was going, ‘Uh, gee, we have a bit of a hole here!’ But I thought about his comment and it resonated with me.
I said to him, “You’re absolutely right! Sure it’s a speed hump, it’s a little bit of a hole, but we’re going to get through this.” I think we sort of stood up, we hugged each other, we high-fived each other. We said, ‘Let’s not have that get in the way of the success of the future.’ And we got ourselves into a very excitable state and moved right on!
Of course, the next day I had to negotiate with the banks for the repayment but I felt I was doing that from a position of power instead of weakness.
Andrew: Perfect example. I put you on the spot there and I said can you call up a specific example from way back when and you did it, and I appreciate it.
Let’s continue with the narrative. In fact, what I’m going to do is skip over a couple of the businesses that you launched because I want to get to the one that we introduced here at the beginning of the interview, which is Jetabroad.
Andrew: You told me before the interview started how the idea, how the business first came to you. Tell my audience, how did you first get introduced to this business?
Ben: It was in 2005 and a very good friend of mine, Paul Chapansky [SP], gave me a call. He said, “Ben, what do you know about travel?”
I said, “Paul, I love travel! I know usually in a large 747 there’s first class, there’s business class, and there’s economy class, and quite often I’m in economy class.”
He laughed at me and he said, “Yes, yes, I understand. I want to know whether you’re interested in being part of an online travel business.”
I said, “That sounds fantastic! Why online, why travel? Tell me the story.” As it happened, Paul had previously been a partner with a Boston consulting group, and he was the head of e-commerce at Quantas, Australia’s largest airline. He had gotten a call from an old colleague of his who had been working with him at Quantas, and they had subsequently started an online travel agency business called [??], which is now part of the Travelocity empire.
Paul said that Alex, his former colleague who is now one of my business partners, has got this idea, and the idea is that we can offer something online to consumers that’s a little bit different from everyone else. It’s got a lot of similarities but it’s got a few differences, and it’s these few differences that we think are going to make it very, very attractive – not only to Australians, not only to New Zealanders, our Kiwi cousins, but also to other people around the world, and that’s how in 2005 Jetabroad was born.
We met at a couple of cafes. We had lots of pieces of paper with sketches. We put together a little business plan on the back of a napkin, and the business was born. I think we sold our first ticket in October of 2005.
Andrew: After you planned out the whole business, what’s the first step that you took?
Ben: After we planned out the business?
Andrew: Yes, you created this whole business plan and now it was time to take action. Was it to build the website so you have a mock-up to show people? Was it calling up the airlines and saying, “We’re building this great new site, we want you -to be a part of it?” as it something else?
Ben: Yeah, it would have been a couple of things. One of the first things we did is we needed to come up with a name! We were scouring the website for all these different sorts of names. Should we have a number in our name? Should it be an international-sounding name because we focused on international flights? And low and behold, after trying a couple of different names, Jetabroad was born. Previously it was called, well the code name was ‘Online Travel Site.’ Until we got that name we were scurrying around, but once we did get it we were able to find a designer to come up with a beautiful logo, we found a web designer to help do some mock-ups for us, and then began the process of us talking to airlines and suppliers and other folks.
Andrew: Beyond airlines, who are your suppliers?
Ben: I think we spoke with some travel insurance people. We spoke with some hotel people.
Andrew: I’m on the site right now and I see Flights and Insurance as the two tabs. I don’t see Hotels, I don’t see Rent-a-Car, I don’t see any of that. I think when you and I first talked you mentioned insurance as one of the prominent pieced of the business. Why insurance and flights? What is it about insurance specifically?
Ben: I think because we decided to go after an international market, those who were traveling abroad, insurance is a big thing. When you’re traveling overseas, if something were to happen to you, the need and the ability for you to get high-quality medical or whatever assistance is of prime importance. And that’s why we saw a great linkage between travel insurance and flights.
Andrew: I see. You just thought there would be high demand for it. It wasn’t about the size of the margins, or it wasn’t about some intuition about how this would affect the rest of the business?
Ben: No, it was more to do with the fit of those products. As you foreshadowed, we don’t focus on cars or hotels, like a lot of our competitors. We focus at the moment on international airfares.
Andrew: Okay. Now I get a sense of who the suppliers are. Can you tell me about the first partner that you brought on, the first supplier whether it’s an airline or an insurance company? What was that like?
Ben: Well the great thing is that one of my business partners, Alex Sneed, had a lot of relationships with airlines, with the global computer reservation systems companies, because has been in the industry for I think some 30 years now. He had a very big Rolodex and he twirled the Rolodex and was able to make calls. So clearly the first thing for us was to get a computer reservations system, which is how a lot of airlines are connected to travel agencies, so we got one of them on board. We also had to get a payment system on board, so at the time we spoke with Verisign – and their payment platform is now a part of PayPal’s payment platform. So we had to get them on board, and we had to get banks on board. It was just setting up the whole infrastructure so that we were able to transact and to provide tickets to our customers.
Andrew: You know, by the way, something happened in that answer and our video finally cleared up. The audience hopefully will not know that the video on your side for me was just pretty much frozen during this whole conversation. I was talking to a shadow that occasionally moved. Somehow in that answer whatever process was running on either of our backgrounds is gone and now I’m actually getting to talk to you. And the reason the audience will not know it is because we put a lot of work into this. Ben, you put a lot of work into this. You were recording this conversation from your computer. I’m recording it from my computer. Joe, the editor, will piece them both together and hopefully the audience won’t know a bit except what I just revealed to them.
So it seems like that that was fairly easy for you – not a snap, but not a tough challenge. Building the website, not a snap but not a big, major challenge. What about finding customers, how was that?
Ben: In the early days we started advertising in a few of the newspapers, a few of the [??] newspapers, and also a couple of the regional newspapers in Australia, because we thought the flights that we were offering, especially to those in regional areas were extremely good value. What we later found out is that we had much higher returns on focusing our efforts on the online sphere.
Andrew: What was the biggest source of customers for you online?
Ben: We moved to spend money on places like Google AdWords and Yahoo Search Marketing and we still spend a good chunk of money on Google AdWords and Yahoo Search Marketing. We’ve also found opportunities in search engine optimization, ensuring that our website appears high in the search engine results pages for certain keywords. We’ve also found that appearing on say, affiliate-related websites has also been very helpful for our business.
Andrew: I noticed your SEO efforts, and in fact, to be honest with you, they made my job very difficult because when I was looking up Jetabroad online, all I saw were pages that you intentionally wanted me to see. I mean, it’s really well done search engine optimization. I saw pages like Cheap Flights to New York, United States, with a lot of cheap flights in there. I saw a lot of, I think it was PR/newswire, a lot of press releases from you guys. It was that kind of stuff. At what point did you pick up on search engine optimization and get that good at it?
Ben: Early on we realized that search engine optimization would become an important part of the business.
Andrew: How? A lot of your competitors didn’t realize that. A lot of us in the space, it took us a long time to realize that search engine optimization was as important as it was. What made you guys aware of the power of SEO?
Ben: I think it would have been my earlier background, having spent time even with Mobile Stop trying to get Mobile Stop to appear highly when people were searching for mobile phones, or mobile phones online. And as you probably know, with search engine optimization it’s one of those things where you need to invest, and you tend to need to invest a lot of time and effort, and the payback can sometimes be delayed. In fact it’s often delayed but it also has legacy benefits in that . . .
Andrew: What you sow today you can reap for a long time afterwards.
Andrew: I see. I get that. I get the SEO. Did you guys do it internally or did you bring in some consultants?
Ben: A combination.
Andrew: It’s clearly built into your site. It’s not an afterthought. I’m looking here on the page. It’s not just New York City flights, it’s Jetabroad.com.au/cheap-flights/New_York etc. is the URL there, so it’s clearly a part of the infrastructure.
Affiliates – so what kind of affiliates do well for you?
Ben: We’ve found that there are a number of folks out there who attract a bunch of visitors who like or have an affinity with our product. Quite often they might be travel-related blogs, where people are talking about travel, they’re dreaming about travel. And it makes sense for us to have relationships with those sites so they can introduce our website to their visitors, or to folks who are on their site.
Andrew: You and I met through Rob Rosson. How do you know Rob Rosson?
Ben: I’ve known Rob for a very long time. We’ve skied together, we’ve partied together, we’ve even done a bit of business together. He’s a fantastic bloke and he is one who keeps me on my toes about marketing online.
Andrew: What has he taught you about marketing online? Where has he kept you on your toes?
Ben: He’s kept me on my toes when it comes to testing.
Ben: Yeah, testing. Testing different landing pages, testing different copy, testing different colors, all that kind of thing – Rob has been fantastic.
Andrew: You know, when I did an interview with Rob, his story was just so incredible, that a lot of people in the comments just criticized me for falling for it, basically. They said, “This can’t be true!”
Of course, since then I’ve met and interviewed a lot of his friends who didn’t even need to vouch for him but told great things about him. And in the comments someone recently e-mailed me and said, “Andrew, the comments under Rob’s interview are closed, but I want you to know my story with Rob,” and I opened up the comments just so he can go back in and say nice things about Rob Rosson.
Ben: I’ll tell you what, Rob’s a good guy, he’s a very good guy and he knows what he’s talking about.
Andrew: He does, and you know what? It’s kind of interesting that the world doesn’t understand that there are these great success stories out there that they never heard of. It almost feels like if TechCrunch doesn’t cover it, if the top tech blogs don’t talk about it, and it’s not on the cover of The Wall Street Journal or Business Week or whatever they read, it must not exist. What they don’t understand is that there are all these great stories that aren’t told of businesses that there’s a lot to learn from and are very inspiring.
Ben: That’s very true.
Andrew: Speaking of inspiration, you and I also know we have a friend in common now – Chris Jonkalovsky.
Ben: That’s right.
Andrew: I interviewed him here. It’s Jonkalovsky, right, not Jenkalovsky? He’s a new friend of mine. When I interviewed him here, he told me about a setback that he had that gave him inspiration to really live life, and he told me where this whole passion for business comes from. You and I now have talked for awhile, and I still don’t know why. Why are you launching the two companies we talked about in depth, and the others that we didn’t? What’s the motivation? Why are you here, Ben? why are you fighting?
Ben: I am completely inspired and fired up about starting new businesses, about working with great people, about employing folks, not only in Australia but abroad, and trying things out. I think it is part of the desire to want to innovate, to try, and to make things better, to really make things better.
So I’m not sure whether I have a seminal turning point like our friend Chris, but what I do know is that my passion and my desire runs deep, and I’m looking forward to talking to you in many years’ time still about adventures and wanting to try more things.
Andrew: Did you ever have a period where you saw other people achieve something big and say, ‘I want to be a part of that?” Did you have a period where maybe you started off in life – you know what? I’m putting all kinds of stereotypes in front of you and saying, “Do you fall into any of these stereotypes.” So let me pull away from the multiple choice question and ask you is there anything internal that makes you want to do this, or any experience at all that defines you and sends you on this path?
Ben: I would say that it’s the creativeness and the desire within me to want to create. I’m a musician, I love playing music, I love learning new music, I love learning instruments. And I see what happens in business as something which is not that different.
You sometimes play an instrument and you find that it’s like magic, it just works. The sound is great, your fingers are able to move through the strings or the keys or whatever instrument you’re playing, and it’s just like magic. At the same time, I realize that with a musical instruments it takes a lot of practice, but once you have practiced, and once you make that sound and you hear that sound, it’s a wonderful thing, it’s a beautiful thing.
Andrew: How is Jetabroad like a piece of music? What is it about Jetabroad that feels like an art project or an art creation?
Ben: I’d say you can look at our business from multiple levels. At one perspective, you can see that we provide a really easy-to-use website, a really easy way for people to book their flights, to get them from anywhere to anywhere. And then if you look at another perspective, perhaps a technical perspective, the technical folks have told me that we have been able to do things that other folks have found very, very difficult to do.
Andrew: Like what? Give me one example of something you did that you’re so proud of that you feel like that’s a work of art, and I’m so proud that I added that to the world.
Ben: I think that if people were to perhaps search an itinerary from, let’s say from Canberra to Omaha, people will try to search that on our website, and if you were to search that on other websites, you’ll find that the connection times on our website tends to be better. You will actually get results from our website, and the results that you do get from our website are much better value from anywhere else.
In one perspective that’s great for the customer, and that has been a lot of work in the background to make that happen, to make it easy for people to use. So that’s one side. Another side obviously is what we’re doing on the marketing. That’s getting the SEO right, getting the [??] quick right, and then behind all of this is a wonderful team, a wonderful team of people who are servicing our customers, people who are providing customer support, who are managing our relationships with airlines, managing our campaigns and people who are managing the business at large.
I see that a lot like an instrument, it’s got multiple layers and it’s something that requires practice, but as you get better the sound is better.
Andrew: Okay. By the way, speaking of music, the person who has the office next to me is actually playing music really loudly. It’s late in the evening here and I guess he thinks there’s nobody in the office. He doesn’t realize that there’s somebody on the phone, or on Skype, with Australia.
Okay. I’ve got to fill in the gaps here. There are a couple of things that I know my audience is going to say, “Andrew, you didn’t follow up!” I started out this conversation asking how a guy who doesn’t know anything about the airline industry build an industry-leading travel site? How does that happen?
And what I heard from that, now that I’ve summed up in my notes the answer, it’s basically affiliate program, SEO, SEM: search engine optimization, search engine marketing. But if I just leave my audience with those three things they’re going to say, “Ah, we hear that all the time!”
What is it about you and these three, or what is it about you, Ben, and Jetabroad that made you so successful? What is it about this business specifically?
Ben: I think it’s the way we do things.
Andrew: What do you mean? Give me an example of something that you do so well that my audience is going to go, ‘I’ve got to follow Ben’s lead and do that in my business. I just learned something earth-shattering or something that’s really going to open my eyes to a practice that I can employ right away.’
Ben: A simple example. We look at what our customers are searching for. So we look at what they’re searching for, we look at how they get to our website. We look at the itineraries that they are trying to get information from on our website, and we also work at what the conversion rates are. We actually go into the detail and we’ll say, “Oh, there are people on Google and Yahoo or whatever it is searching. This is the way they come to our website. These are the keywords or these are the entry paths by which they come to our website.”
Then we actually have a look at what itineraries they are searching for on the website. What are they buying? We track those numbers quite closely, so we know. We know for instance when there is a spike in demand for a particular itinerary, or not. And it’s actually getting into that detail and working out: Are we competitive perhaps, or are we not? What are the small things that we could change to improve our conversions that I think helps us and really makes a difference?
Andrew: So let’s suppose that you started watching your Google traffic and your own internal metrics, and you’re seeing a lot of people are searching for Sydney to New York, so you get that data point, then what do you do with it next?
Ben: We will look to see how competitive we are at Sydney to New York. So we’ll look at our benchmark rates to see for every X number of searches for Sydney to New York, how many conversions we will make. And we can tell historically whether what’s happening today is better or worse. If it’s better we try to find out how, why. If it’s worse we also try to find out how, why.
Andrew: And you compare yourselves to the competition.
Andrew: So you say, ‘How much does the competition charge for this [??] rate?’
Ben: Yeah. So it’s asking the questions and actually getting into the detail, because I think online there is so much data that is being produced. There is a plethora of data that is being produced every day, and it’s trying to work out from all of this data what are the nuggets? What are the bits of information that are worth digging for and then worth doing something with.
So absolutely – SEO, affiliate, PPC, all that stuff is things that online businesses do, but my advice and what I think is important is, are there meaningful metrics that can be used in the data that you’re already collecting that can inform your business activities?
So for example we talked about Sydney to New York. You’re checking to see how your conversions stack up to past conversions on Sydney to New York searches. Let’s suppose the conversions went down. Why would it be? How would you fix that?
Ben: It could be a number of things, but we would obviously have a look at how competitive are our efforts. Are our competitors doing something differently? Do they have promotions, might they be discounting, or could it also have something to do with the seasons? Is it the right season? Is it because it’s winter there, or summer there or whatnot? There’s a bunch of things that we’ll look around, and we’ll try to see whether if it’s a lever that we can shift.
Andrew: Okay. My audience loves when I get examples. Earlier when I asked you how Rob Rosson pushes you, you said to test, and test marketing. Do you have an example of something that he did, some push that he gave you that led to a better result than you would have gotten without his push?
Ben: Yeah. I think a couple of years ago we were running some campaigns for our business and we had a headline. I was a fan of a shorter headline, and Rob was a fan of a longer headline. And I said, “No, no, no – I think it’s a shorter headline, Rob!” I like to see a headline that’s relatively short, that you can see with one look of the eyes and then bang, it’s digestible. But Rob was saying no, no, no, for this part I think a longer headline would be better.
So what we did was to do an A/B test. We had 50% traffic going to one headline, and 50% of traffic going to another headline. And lo and behold, Rob’s headline did better, which was fantastic.
Andrew: I see.
Ben: So what we did was to try to refine that headline, and we had another A/B test with still using a long headline, but one type of long headline versus another type of long headline.
What tool do you guys use for A/B testing?
Ben: These days I use a tool called Unbalance.
Andrew: I love Unbalance. I use them also, they’re great.
Okay. Finally we should talk about the kind of investments that you’re making. In addition to running this business, in addition to being an entrepreneur yourself, you’re also making investments. What kind of companies are you looking for?
Ben: These days I spend a little bit of time with Jetabroad but we have a fantastic managing director who looks after that business, and a good team. I spend my time helping Jetabroad, helping OMG, helping the other businesses that we’re involved in, but I’m also looking for new opportunities, for new businesses to get involved in where I, along with Ari, are able to add our experience, financial capital, and the ability to help them grow.
We’re specifically after businesses that have been around about a year or more, businesses that are online and so have an Internet presence in either a product or service that they’re transacting online, and who have over $1M worth of revenue over the last year.
What we do is to provide, if you like, some of the entrepreneurial experience. We’ve spent quite a bit of time online, and we provide capital, and we help those businesses form a really clear and big vision – then we’ll roll up our sleeves, give them a hand, and help them to take it to the next level.
Andrew: And these are companies that are not just a year old, but have a million dollars in revenue. Do they at that point need that kind of guidance?
Ben: We find that there are a huge bunch of really early stage or start-up businesses, and I’ve invested in a bunch of them, but we like focusing on businesses that have had some revenue. It proves that the concept has legs and in terms of whether they need investment – absolutely! Because proof of concept is one thing, but being able to take it to production, being able to scale to one country or multiple countries I think requires additional capital. But more than that, it requires folks who have done it before.
Andrew: Okay. How do they find out more? How do they connect with you on this?
Ben: Visit the website: RightClickCapital.com.
Andrew: RightClickCapital.com. Ben, thanks for doing this interview.
Ben: Thank you.
Andrew: Let me talk to my audience real quick before you go.
Guys, I want you to know that Ben and I have now been on the phone for an hour and a half. It might even be more than that. He set up a recorder on his computer – downloaded the software, set up the recorder, recorded his part of the conversation, got into the office early to do this interview, and spent an hour and a half with me. We did research, we talked to Rob Rosson to check each other out. All this is to say we really care about you. We’re not here just to hang out. We can hang out over the phone. We’re doing all this for you.
What I’m hoping is that if you invest an hour of your time to listen to this whole interview, that you’ll take one thing at least that Ben just said in this interview and use it in your business. Let it percolate in your head and let it come out as you build up your business. And if you invested this much time and there isn’t even one great thing that you can use in your business, I want you to come back and be angry with me. Complain to me and say, “Andrew, here’s what you could’ve done. Here’s what you should have done differently. Ben offered to come back, next time, here’s where I want you to go.”
So be active! Actively use it, or actively complain, but don’t be passive and at the end of it just say, ‘Hmm, all right. I’ll continue.’ You could listen to Britney Spears if that’s all you’re looking to do. Britney Spears is a lot more mellifluous than either of us is. So if you’re going to actually listen to both of us and deal with some of the tech issues, and put yourself through that kind of investment, do something with it. What do you think of that, Ben?
Ben: Sounds good to me!
Andrew: Sounds good to Ben, sounds good to me! Go do it and come back and shoot us both back an e-mail and let us know what you think. Bye everyone.
Ben: Catch ya!