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Building a Million Dollar Mailing List with Scott of Scott's Cheap Flights

Episode #020

Learn how Scott Keyes grew his mailing list from 300 to 600,000 subscribers and $4M in revenue in two years.

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    My Main Takeaways:

    • Scott never really wanted to start a business, and never had any entrepreneur desires. But he loved to travel. And he eventually ran short on money but wanted to keep traveling.

    • The idea of Scott's Cheap Flights came when he began getting a reputation as the guy who goes on cheap flights and others wanted Scott to let them know too. This started off all as word of mouth.

    • Scott described himself as very obssessed with scanning for cheap flights.

    • At first, scott would simply send emails with cheap flights he found in his spare time, to the emails of the people who asked him for cheap flights, he did this for free and as a hobby at first. Again, because he just enjoyed it.

    • Scott was working as a journalist during the early stages

    • Eventually Scott's friend from a big company decided to do an interview with Scott, and the interview went viral. So Scott's hobby email list of 300-400 people (of which 80% he knew personally) went to 5,000, over night.

    • After his email list grew massively (5,000+ in his email list), he then started thinking about how he could make it a business

    • Scott's cheap flights was essentially founded serendipitously.

    • One reason why subscription fees do not grow linearly is because of transaction fees. A 30 cent transaction fee is over 10% of a 2 dollar a MONTH subscription, which adds up every month. It's better off doing a 10 dollar per YEAR subscription with a 30 cent transaction fee ONCE, beause you save 3.30 dollars a year on transaction fees this way anyway.

    • Increasing prices actually has the psychological effect on "fence-sitters" who were unsure as to whether they should buy. They see the price is about to going up and realise that they will miss their window of a lower price, so they are forced to make a buying decision before the price goes up again.

    • Scott says that based on his analytics, you could tell how many people would upgrade to a premium version from the free version. And typically by 2 months, if someone has not upgraded to premium, then there is a low chance that they would get the premium version. So he decided to send this cohort of users (and only this one), a promotional email giving them 1 month of premium free, in exchange for their credit card details. And suddenly there were thousands of signups, and it was "almost like free money from people who were never going to sign up until the promotion". Lesson: use targeted promotions based on your customer analytics

    • Focusing on one single problem early on is ideal. Very narrow and targetted and tailored.

    • Scott preferred to not spend money on paid advertising, but instead on quality customer support

    • Scott turned away from the VCs because he didn't want to be burdened by external investors and stakeholder pressures. He wanted the freedom

  2. 1

    Amazing interview by: Scott "I'll give you an example" Keyes :)

  3. 1

    Awesome interview and business.

    I spoke to a friend afterwards who told me that he and 4 friends share their premium subscription to Scott's Cheap Flights.

    Made me think that a group subscription could be cool, just like what Netflix offers.

  4. 1

    I was dismayed to see Dollar Flight Club blatantly copied your UI and value proposition. The only difference is that they offer an affiliate program. I'd love to know how you are working to keep market share and also, it sounded like to get a free trial, you demand credit card details up front. I'd love to know how you came to this decision, and if you ever tried no-cred-card trials.

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    Just out of curiosity, what is the percentage breakdown of your free and premium subscribers by location? I assume majority of premium are US?

  6. 1

    Great stuff, thanks for that. Scott, do you find some of the newer services (Hopper, etc.), are a threat? Or is the nature very different given email as a medium? Your customers are more passive, and at a different stage of the buying cycle?