NB: This is a guest post by Pete Meyers, co-owner of EuroCheapo, a New York City-based digital media company specializing in budget travel.
There are many different approaches to financing a new online travel company. A startup can raise venture funding, tap into a wide – and rapidly expanding – network of angel investors, or go it alone and try growing organically.
Whatever the method, each of these models has one thing in comment: it’s always helpful to know how to conserve cash.
During the 9 years since EuroCheapo published its first budget hotel guide, we’ve learned a lot about the importance of bootstrapping. Many of these “lessons” came in hindsight and followed periods of uncertainty amid dramatic shifts in the industry, while others are common sense tips that we wish we would’ve known and put into practice earlier.
If you’re just getting started, we hope you find them practical and useful. If you’re already an established player, feel free to share your own tips in the comments below.
1. Do your own research and always ask for feedback.
Build an obsessive awareness and understanding of who’s doing what within the industry. Build a team of unpaid “insiders” to view and comment upon pre-launch features.
2. Excel at customer service. It’s free.
Make it simple for customers to get in touch and respond to their comments, questions and inevitable criticism immediately. They won’t forget it.
3. Handle your own PR.
Build relationships directly and focus your budget on your team and product, not an agency’s retainer. Be helpful and become a resource.
4. Execute your social media strategy, don’t let it execute you.
Prioritize your Twitter and Facebook objectives, but don’t spend disproportionate hours on social media channels at the expense of product development or other higher impact projects.
5. Network offline. Meetup.
Go to travel trade shows when you can do it on the cheap. Attend as many travel and technology happy hours as you can. If there aren’t any existing networking events or meetups then take the lead and coordinate them yourself. You never know when you’ll have that one “gotcha” conversation, but you have to get out there to have it.
6. Know your revenue source and focus on cash flow.
Clearly understand supplier payment terms, whether your model is referral, advertising, transactional or a combo of each. Know what combination of volume, value and payment date makes the most sense for your business.
7. Be a good partner and think long term.
Travel is a massive vertical. Don’t be excessively heavy handed in negotiations at the expense of a more meaningful long term relationship. Everyone wants to win.
8. Know when not to be a tightwad.
Don’t skimp on your server costs. Hire the most talented employees you can afford. Pay yourself.
9. Celebrate your victories.
Whether it’s a new product launch, site usage milestone, or your company’s 1st birthday, celebrate with your co-workers. Embrace even small achievements.
10. Cut corners and understaff.
Use Skype and Open Office. Learn Photoshop. Become a QuickBooks guru.
11. Don’t forget to travel.
Hit the road and use your product while traveling. Talk to other travelers and learn from them. Understand what value you’re providing and what you’re missing.
NB: This is a guest post by Pete Meyers, co-owner of EuroCheapo.com, a New York City-based digital media company specializing in budget travel.