TLabs Showcase - UsingMilesNewsBy Kevin May | November 16, 2010Share This article was originally published on TLabs Showcase on travel startups featuring US-based loyalty scheme service UsingMiles. Who and what are you (including personnel and backgrounds)?1) Business Development Austin Veith, Founder, CEOKrista Paul, founderJon Nordmark, founder 2) Technology Shawn DavisonDave JohnsonKaveh Arapfakhry 3) Design / Management Keith BristolJennifer DingesHeather Morgan 4) Advisors Vince Chirico, Sales Director Google / Orbitz Lead at Delta AirlinesJim Donohoe, CTO Grouple, VP Engineering TravelPost 5) Investors Brad FeldDavid CohenLibby CookPaul BerbarianWhat financial support did you have to launch the business?We are self-funded, but being a TechStars 2008 company, we received a tremendous amount of support from the local investment community.What problem are you trying to solve?There are 180 million frequent flyers worldwide and 120 million in the United States alone. Likewise, there are 10 TRILLION outstanding frequent flyer miles that aren’t being put to use by travellers.Managing and using frequent flyer miles and points is an onerous process. Award seats are released intermittingly with no rhyme or reason and travellers have to manually check for availability time and time again with every supplier until a seat is found.The complexity of redeeming miles and points has resulted in some frequent flyers losing value in their programs. This is a tremendous problem for airlines and hoteliers, because frequent flyer programs are the most lucrative part of their business. They are looking for ways to keep their members active and engaged so they continue to remain loyal to their program.UsingMiles removes the frustrating barriers associated with searching for and booking award travel, and provides suppliers with a way to increase the value of their programs and make loyal customers out of their program members.Describe the business, core products and services?UsingMiles.com is the world’s first search engine for award travel. Its core products help frequent flyers successfully manage and utilize their miles and points.The initial service makes it easy for users to aggregate and track hundreds of reward programs from one place, including airline, hotel, rental car, credit card and retail programs.In addition, UsingMiles.com is built on a meta search platform that allows users to search for and book airline fares and hotel rooms using cash, miles, or a combination therein. The UsingMiles.com recommendation engine uses advanced algorithms to pinpoint the value of a mile in each individual program at any given time, and recommends when it is better to use cash vs. miles/points on a specific search query.UsingMiles.com is the first site that facilitates online booking for regular fares and award redemptions through deep linking directly into the supplier sites. Users can also monitor fares for price drops or award availability and UsingMiles.com will alert the traveler when a desirable fare or award seat is found.Who are your key customers and users at launch?We are announcing several large partnerships in the upcoming weeks, including a retail partner (with the largest retail loyalty program in the world and an email subscription base of 22 million subscribers).We are also about to announce a strategic partnership with one of the most well-known frequent flyer service companies in the world. They operate 9-12 different frequent flyer properties, including the largest frequent flyer online community in the world and a well-known frequent flyer magazine.These partnerships will allow us to drive massive traffic to our site and get access to some of the most active frequent flyers in the world to become users of our service.Did you have customers validate your idea before investors?It was the customer's response to our first company that actually inspired our idea. We had launched an online travel site that was more of a "social" concept.It allowed users to share their travel experiences and earn frequent flyer points in exchange for their interactions. Those customers shared their frustrations with frequent flyer programs and identified the need for what has become UsingMiles.comWhat is the business AND revenue model, strategy for profitability?While we focus on solving the needs of the frequent traveler, we have also been very proactive with our supplier relationships.Suppliers and Advertisers are the source of our primary revenue streams. We provide suppliers with access to the most coveted community of online travel customers in the world and can demonstrate a higher ROI then most other companies in our spaceSWOT analysis – strengths, weaknesses, opportunities and threats?Strengths: Patent pending time saving consumer tool for searching, redeeming and optimizing travel awardsPatent pending recommendation engine which evaluates cash vs. awards and recommends whichever is optimalSupplier friendly model which increases the overall size of the travel award space for travel suppliers by removing marketplace inefficiencies Weaknesses: Too many opportunities resulting in scope creepLimited resources inhibiting ability to scale quickly Opportunities: Additional time saving tools to further optimize travel awards for consumers and increase revenues for travel suppliersTravel awards technology platform supplier for the entire travel industryExtend model into adjacent ecommerce categories with loyalty awards Threats: Competition entering space (even though we are first mover, there is always the threat of competitors) Who advised you your idea isn't going to be successful and why didn't you listen to them?Early in our existence, we had many investors tell us we weren’t going to be able to make it work. It was hard hearing this since we were such an early-stage start up with so many obstacles before us.Fortunately, we had a large network of mentors that had ‘been there, done that,’ and they helped keep our spirits high through the low times and when nobody else seemed to get it. Without them, we wouldn’t be where we are today.We also learned that there will always be “haters,” or those who don’t believe or cannot see the vision. And if we listen to them, we will fail. We have learned to take constructive criticism seriously and to ignore destructive criticism. And if we don’t do this company, somebody else will. We won’t ever let that happen!What is your success metric 12 months from now?12 months from now we hope that we will have exposed the hidden value of award travel for both the consumer and the supplier. A key measurement for us would be managing at least 7 million frequent flyer accounts a year from now.NB: TLabs Showcase is part of the wider TLabs project from Tnooz.