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Scott's Cheap Flights: From Small Side Project to Booming Business
By
briankidwell
June 13, 2017
Scott's Cheap Flights: From Small Side Project to Booming Business - Indie Hackers
Yesterday, I saw a reply you made in some reddit post and thought: 'this would be a great interview for Indiehackers. This morning was online
:D
I remember your post on /r/entrepreneur a while ago. I'd expect a business like that to do a couple grand a month. But $320,000?? Wow.
Yeah we thought the same thing at first! This business never stops surprising us. Scott will probably do another update on r/entrepreneur soon as well :-)
Great story and congrats on your success. I bet it was a real roller-coaster ride to get to this revenue so fast. What are your open/click - through rates and du you track any kpis (do you know how many people actually book through your service? Etc)?
Thanks! And yes it definitely has been a roller coaster. Since our business isn't a monthly subscription sometimes we'd see big months and then the next month we'd do less than half of that. Over time as the 3, 6, and 12 month renewals started coming in it started smoothing out, but we still have ups and downs.
We've seen open rates consistently hover around 30% since the beginning. Open rates for premium subscribers are higher on average than they are for free subscribers. Candidly, I've done a poor job of tracking KPIs up until this point. I figured if the business is growing then I could just keep hustling on other stuff and not worry about precise numbers. Now that we have a team in place that is starting to change and we'll be doing a better job of tracking everything moving forward.
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Hi,
Great answer and you shared very important information and I read it carefully and gain amazing knowledge. Thanks and keep it up.
Search cheap airlines with Google flights search & hotels and save till 40% OFF.
Read More: https://www.deltaairlinesreservations.flights/google-flights/
Just out of curiosity, what is the percentage breakdown of your free and premium subscribers by location? I assume majority of premium are US?
Hello Scott, congrats on your success, it is impressive how you managed to test your idea with minimal upfront cost!
Would you be kind enough as a seasoned traveler and business founder in travel, to give your opinion on the service I'm creating : http://flytour.io ,
which allows to find the cheapest set of flights if you want to visit to multiple cities in any given order?
Hey, this is Brian, but I sent over your question to Scott and here's what he said:
"(1) cool idea. could be useful if executed well.
(2) needs a design facelift.
(3) should be able to type in airport codes, rather than just the city name
(4) no way to remove cities once you've added them
(5) nothing happens when i click search haha
(6) the premise is a bit flawed. one-way flights tend to cost way more than half of a roundtrip. ideally you'd want the algorithm to price in the trans-oceanic flights as an open jaw (i.e. one itinerary of DEN-LHR and CDG-DEN) and then separately search for a budget flight one-way LHR-CDG"
Hope that helps and best of luck!
Hello Brian,
Thank you very much for your detailed answer. I'm sorry to reply quite late, but I hope I have addressed now the points that you made.
Essentially the fact that when you make a search nothing happens, so I added a loading bar and some messages to let know what happens behind the curtains.
I will try to enhance the algorithm with itinerary routes but I don't have access to open-jaw pricing for now :/ which is a great idea!
Thanks again,
Serge
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Hi guys - great interview.
As a Canadian, I know of a few large competitors (yycdeals.com and associated site... and nextdeparture.ca). Both of these are ad or affiliate link supported). The problem is that they seem to find the same deals. If the same would be true of SCFs, how do you convince someone to pay for your service when they can get the same alert from YYXDeals and NextDeparture?
Great question. Since the beginning we've wanted to provide the best service possible. If our income is based on affiliate commissions and ads then we would be rewarded by the quantity of deals we send out instead of the quality of the deals. A portion of our subscribers value this approach and decide it is worth the cost of the subscription for a better experience.
I'd say! $320,000 a month is incredible. Great work.
Thanks for sharing. Really, Important tips about how to present your product to a customer.
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Finding cheap flights to London can be a bit of a challenge, but there are a few strategies you can use to save money. Here are some tips to help you find affordable flights to London:
https://Alfaflights.com
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Hey guys! Great article. Question: When you first started offering premium and were offering curated flights based on airport , offering no ads/earlier emails, etc. were you doing this all manually, or was it automated? Would love more info on this. I'm starting a newsletter that I'd like to offer different versions of but it seems like a LOT of manual work. @scottkeyes @brianki
Have you considered partnerships to help you grow your audience? For example, do you have an affiliate program where we could promote your services to our audience?
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Hey Scott, you said your journalism background has been a big advantage. Any book recommendations?
Lots! Daily Rituals & Getting Things Done for improving productivity, anything by Michael Lewis or Malcolm Gladwell to learn how to write, maybe some Dale Carnegie for timeless life advice.
I just recently got my eye balls on one of the best hack to get cheap flight. This guy shared a tutorial on how he were able to save $800 while booking an air ticket https://goo.gl/XMFyNG
Thanks for interview. Do you feel competition from services like Skyscanner and Aviasales? If so, how do you stay ahead?
No it's a different business model. We send our subscribers to sites like those to book their flights (usually Google Flights and Momondo). Those sites are search engines and we take a more curated approach.
Hi Brian,
Incredible story!
A questions about the revenue. Hope you can answer.
In the headline it says 4 million annual revenue and in one of your replies you mention 3 million annual revenue. That's quite a difference, so was wondering which is correct?
I was wondering if someone was going to ask that :-)
The 4mil number comes from our current monthly revenue ~$320,000 * 12 and accounting for growth in the biz. It would land us around 4mil.
The 3mil number is what we said in the interview and is based on our estimates for 2017. Our numbers were lower at the beginning of the year.
Thanks Brian!
So if your estimates for 2107 were lower I'm assuming your growth rate has gone up. Can you share something about the growth rate? say, monthly in 2017? Is the growth consistent or do you see drops?
Yeah depending on the month we're looking at anywhere between 10-20% growth.
Great interview! As an aside, the white text on a dark background is hard for me to read. Greater contrast would be good for accessibility.
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Hey Scott, great interview (podcast and website). I recently started a similar service to yours (https://citybreakflights.com/) except mine focuses exclusively on short breaks within Europe. I started traveling last December and that got me into cheap flight hunting. I have a couple of questions for you:
P.S - it's good to see another journalist doing well in business ;-)
Hi, are the links to the flights affiliate links?
Hey Justin. No they're not. If they were we'd be rewarded for sending quality instead of quantity. Our model allows for higher quality curation of deals without trying to send an arbitrary number of deals out each day.
I am surprised that you've got so many people manually searching Google Flights for cheap flights - the Nerd in my thinks this is idea for some level of automation ('scraper' keeping track of averages for routes and flagging up when it comes well under) - is this something you've looked into or do us Humans still have an edge with your secret flight searching sauce?
Great question. We get this one a lot and have been approached by quite a few developers who say they could easily build us something like this.
Is it possible? Sure.
Would it be better? I doubt it.
Say we use Google's flight API. The cost per query is 3.5 cents. Departure airports X destination airports X available dates X 3.5 cents = a ridiculous amount of money.
Or we build a scraper. It would be cheaper than the API, but we'd still need the human element to make sure it's actually a good deal. We take into account number of stops, airlines, etc.
I see potential for a computer/human combo in the future, but right now our flight searchers are doing great and we don't feel that automating the process would make the business significantly better.
Hello Brian,
We already have the scraping business covered... and we could agree on a far better deal than Google flights :) (think flat-fee access to our search engine API). And maybe develop customized tools for you to work with our data. Are you interested ? If so, msg me on our twitter (@AZairBot).
Currently we maintain a fresh db of ~ 6 million lowcost flights updated in near-real time, focused on Europe, Middle East and Asia. Our search engine allows for massively large queries (ex: "from Germany to Mediterranean coast, any time in July-August, for 3-10 days") and so I believe it could be a huge help for your business... check out our search capabilities demo at www.azair.com if you like.
Thanks Tom. Just checked it out and it looks like you guys are missing some of the major US airports in the database. We search from as many airports as possible, so this won't be that useful for us.
What a great interview and super impressive work guys! Quick question - why did you switch from a monthly $2/mo to the quarterly/semi/annual model? And follow up question, with the new model, which plan do you see the majority of subscribers signing up on? Thank you and again, outstanding work!!
We switched from $2/month for a few reasons:
(1) Customers were asking us for an annual plan
(2) Stripe charges 30 cents per transaction + a percentage. So if we lower the number of transactions, we pay less in fees. 18% of our revenue was going to Stripe when we were charging $2/mo.
(3) Increase the LTV. By creating a 3-month minimum subscription the minimum amount of revenue per customer goes up.
I did a more in depth write up about this here: https://www.sitepoint.com/the-pricing-tweaks-that-turned-a-cheap-flights-side-project-into-a-real-business/
Most of our subscribers go for the annual plan, then quarterly, and then semi-annual.
Thanks! And super smart!
Hi Scott & Brain! Great interview!
so you guys now have 15 employee？
where do you find them? RemoteOK.io? upwork? where are they mostly? in US? are they full-time or part-time?
how many of them is developer? like… 2?
how many of them is constantly looking for cheap flight? & some other job?
how many hours per week you guys(Scott & Brian) is require spending on this? 3 day per week minimum?
so now Scott move all these finding cheap flight work to other people right? because it sound exhausting.( everyday look through same website to find cheap ticket)
Thanks! feel free to answer part of it if you don't wanna answer all of it.
Woo! Lots of questions :-)
(1) Where do we find new team members?
This depends on which type of person we're hiring. If we need flight searchers or customer support team members we'll post on travel-related facebook groups. When we were hiring developers and designers we used our own network and also used Angel List to find candidates.
(2) Where are they?
We're spread out around the world (so we can send flight deals from everywhere). Here's (most of) our team: https://scottscheapflights.com/about/
(3) Full-time or part-time?
Most are part-time. We start everyone as a part-time independent contractor. Some people we are starting to move to full-time as we grow.
(4) How many developers?
We have 5 developers right now because we have an exciting project in the works. A few of these are only on for the project though and are not included in the 15 employee total.
(5) About 8 of them are involved in flight searching. Some of these people also handle customer support. 5 are dedicated flight searchers.
(6) How many hours do Scott and I work?
It depends on what is going on. I'm not sure exactly about Scott, but once we went full-time on this I was working 60-80 hours per week. Now that we have a team I'd put that closer to 40-60 depending on what we're working on. We're pretty much on our computers every day unless we're traveling or with our families.
(7) Scott still finds most of the US flights, but we have some help now so he can work on other parts of the business as well.
Thanks for the great questions!
Wow, Awesome, Thank you very much!
Of course! :-)
Congrats on the success! Also found you from /r/entrepreneur and had no idea this had grown to a $4m/year business. That's awesome!
Love it! /r/entrepreneur has always been great to us. Lot of great feedback from there. I think Scott will be back on there soon :-)
This is a neat service, and I'm glad you're doing well! I had no idea you guys made that much or had that many employees.
My question is: How much do you make from selling subscribers' email addresses to spammers? I have a unique email address that I've only used for your service, and now I'm getting spam on it.
Our subscribers are too important to us to ever sell their information to someone else. We never have and never will sell users information like that. Our only source of income is subscriptions and occasional advertisements in the free emails. Ruining our reputation to make a few extra bucks would be an extremely stupid decision on our end.
With that said, we do run promotions with partners where we give away awesome vacation packages (Mexico and Tokyo recently). If anyone signs up for one of these promotions they are agreeing to the terms and conditions, which clearly state that by signing up for the giveaway the email address will be distributed to all of the partners involved in the giveaway (typically 4-5 other companies).
Thanks for the reply!
I looked through my emails and found that the emails started right after I entered a giveaway from you. So that explains it! You're right, it does say for the giveaway offer that you're signing up for emails.
Sorry that I jumped to conclusions. It's just that I get a lot of spam and it's very annoying. Also, your partner emails provided no value to me at all.
Scott / Brian great interview!
Do you think this idea of providing a concierge type service could extend well to other niches like finding hotels or finding food using your model of an premium email list?
Thanks! And yes, we've been asked about hotels many times, but I'm not convinced it would be the best model. Even if you save a bunch of money on hotels, you'd still have to spend a lot on flights (unless you score both a great hotel deal and a great flight deal). It just seems a bit backward to me to make plans because you got a great deal on a hotel.
With that said, I'm sure there are other applications for this type of service. SaaS products and subscription boxes seem to really have opened people up to the idea of subscription services.
On one of the IH podcasts, there was mentioned that the majority of clicks in a email newsletter happen on the very first link. Have you observed this?
Are there any other interesting things you have seen with emails at your scale?
Hmmm yeah definitely. It was way easier to send out emails to 50,000 people than it is to send them to 500,000 people, especially at the frequency we are sending. We're sending upwards of 20 million emails per month, sending emails at all hours of the day, to people in ~100 countries, etc. At a certain level you start running into email providers trying to limit your access to a user's inbox.
This is why we do everything possible to keep our sending reputation stellar. If you're on the subscription you'll notice it is very rare we send out anything other than a cheap flight deal. We've received many inquiries from advertisers that want to send dedicated emails to our subscribers but we always say no because our reputation is everything (both from a business perspective and an email perspective).
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Hey Francois, great question. We definitely see our fair share of rip-offs like that, but don't really let it get to us. We're focused on making our service better and worrying about people ripping us off just wastes our time.
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