PODCAST EP 70
Simon chats with Glen Richards, Former Co-Founder of Greencross Ltd, Shark and Investor on Shark Tank Australia and Veterinary Surgeon.Listen Now
It’s 2018 and we’re back! And for our first show of the New Year, we’ve got Mike Boyd, CEO of Vroom, Vroom, Vroom and it’s a fascinating story with his climb to the top from supplying frozen margarita machines! Bring out the tequila, people!
Simon Dell: So, welcome to the interview for this week. We have got a gentleman by the name of Mike Boyd, who is the CEO of VroomVroomVroom, who is currently based in Singapore. What I’m going to get you to do, Mike, is just give us the little two-minute pitch about what you do and what VroomVroomVroom does, so that everybody who doesn’t know who you are can get to know you really quickly.
Mike Boyd: Thanks, Simon. It’s great to be here. Thanks for having me as well. What do I do? As you said, I’m the CEO of VroomVroomVroom.com.au. We’re the largest car rental comparison website in the Southern Hemisphere. We’re a bit like an Expedia, or a Webjet, or an Agoda, but we specialize in ground transportation. So, we work with Hertz, and Avis, and Budget, Thrifty, Europcar, all of those major brands, and we compare prices and book vehicles directly through our site all over the world.
We tend to do that better than most people in the Southern Hemisphere, which is where we started a little over 16 years ago. It’s a fantastic little digital company. We’ve got staff in 12 countries around the world. 10 of those are represented remotely, and two other countries are staffed offices. We run a very lean, remote, digital enterprise and service customers all over the globe.
Simon Dell: Fantastic. There was a question that I didn’t write down that I’m going to launch straight into. It’s quite a tough one, especially the industry that you’re in. I’d normally save this till the end, but I’m going to ask it now in case I forget. I read a comment about three months ago, four months ago, and it was from one of the CEOs of one of those car rental companies that you mentioned.
It may well have been Hertz. It was a female CEO, not that it makes any difference, but it was one of the CEOs. And they confessed that the industry hadn’t spent as much as it should’ve done perhaps in brand and customer care over the past, let’s say, 5 to 10 years. I’m completely paraphrasing that quote, but that was the basis of the quote. Do you feel that that’s a fair comment about that industry?
Mike Boyd: Yeah. Look, I think so. I’m not familiar with the quote, but speaking to it generally, I think that it is a fair comment. A lot of these car rental companies are massive US-owned enterprises, publicly listed companies, that have tended to follow the US airline model where they’d get really, really big, really bureaucratic, and then try and eke out some level of operational efficiency.
But it’s pretty hard to do when they’re fragmented all over the world and local markets are different. So, brands have suffered. Customer care has been outsourced to low-cost Asian nations without a huge amount of quality control. A lot of the brands have started winding that back now to try and recover.
But I think if we’re talking marketing and how a company like VroomVroomVroom interacts with them, the comment about brand as well is that they’ve often lost a lot of direct business over the last decade, which, you see with any travel company at all with a lot more business going to online travel agencies like mine than there is to direct brand.
So, the proportion of direct sales has decreased. The proportion of travel agency referred business and online travel agents have increased, and therefore, they’ve lost control of their brand in some circumstances. So, that’s probably what that comment relates to.
Simon Dell: And I feel that perhaps that loss of control has turned them into a bit of a commodity as opposed to people having sort of an attraction to one particular brand. And I think that’s probably where, and again, jumping straight ahead here, far ahead of where I would normally go, but I feel that’s probably where the success of you guys have stepped in, is that you’ve had that great brand success with what you’ve done.
Mike Boyd: Yeah, that’s right. And I actually think it goes far beyond brand. I think what they’ve really lacked in the last few years, the suppliers themselves, is innovation in general. Because it is very much a commoditized industry. There’s only so many Toyota Camrys that you can rent, and most of them are white. You can flap a Hertz brand on it, or an Avis brand, or a Europcar.
But at the end of the day, their product differentiation really comes down to service. The service at the counter, when you’re arriving to collect your vehicle, or if you’re a loyalty member, all those sorts of things haven’t really had enough attention in those years. They’ve literally just focused on fleet size, turnover, utilization rates, rates per day, all those sorts of industry lingo terms that have nothing to do with human interaction. That’s where they’ve suffered.
Simon Dell: We’ll come back to this, because I now want to take you right back to the completely other end of the spectrum and talk about Coolybar Party Hire.
Mike Boyd: That is going back some time.
Simon Dell: And the reason I want to take you back there is because that was your first business, wasn’t it?
Mike Boyd: Well, not really the first, but the first one I acknowledged publicly, I guess.
Simon Dell: We won’t ask about those other ones, Mike, just in case. What on earth made you go into something like that?
Mike Boyd: It does make for a good story. I often introduce myself as an entrepreneur first and a CEO second. And so, my entrepreneurial journey started at the age of 11 selling lost golf balls. I started a few different ventures throughout high school. They were all tremendous failures, but the stepping stones towards earning some street smarts, I guess you could say, by making all the mistakes in the book.
Coolybar, I guess, was one of those, but ended up having a little bit of success and a whole lot of fun with it. So, Coolybar originated when I was 17 years old. I was actually just graduating high school, looking to head to uni, and I was one of the older kids in my grade. So, I was turning 18 first and I thought I want to have the best 18th birthday party possible because that’s going to set the standard for everybody else to follow, and I’m going to do a year’s long worth of these fantastic parties because I’m going to set the bar really high.
In my infinite wisdom at 17 years old, I thought it would be really cool to have a beer keg like in the American college movies, with the red cups, and all that fun. A beer keg in the backyard type of thing, and I thought that was a pretty simple idea. Rung around a few pubs, and bottle shops, and all of those sorts of things in the local area in Brisbane. Lo and behold, no one did it anymore. And even my parents said, “Oh, no. We used to rent kegs when we were kids, and we just called a pub, and blablabla.”
Long story short, the pubs themselves were happy to sell a keg, but they weren’t into the equipment. It’s too expensive because it was just too small of a business for them. They didn’t want to get called at midnight saying, “Oh, the pump’s not working” or “The beer’s frothy.” It was just not core to their business. And so, basically, no one was doing it anymore. I called around and called around, and note that I am saying call.
This was back in the day of literally Yellowpages and a little bit of Google. I eventually called a guy on the Gold Coast that rented dispensing equipment, but he wanted, on top of the rental fee, $100 delivery to bring it to Brisbane and another $100 to pick it up the next day to take it back to the Coast. That was $200 that I thought I could put towards the beers itself rather than the equipment.
Simon Dell: That’s a lot of beer.
Mike Boyd: It is, it is. And so, my 18th party came and went, and we had a whole lot of fun, but I never had a keg. That was a bit disappointing. And so, I just couldn’t get it out of my mind. And not long after that, I graduated. I had a few months off before starting uni and thought, “I just can’t get this out of my head. If I have demand for this, other people have to have demand.” We just learned how to build our own website in Grade 12 and all this sort of thing.
I started tinkering with the brand and trying to build this keg hire Brisbane branded site. Eventually, it was called Coolybar. I ended up going backpacking, went to Asia, landed in Vietnam with a mate. Within 24 hours of landing, we went to an internet cafe… Back then, of course, no 3G, and I had all of these random emails into a Gmail account that were inquiries about hiring a keg in Brisbane. It was the most bizarre thing. I just couldn’t understand what was going on. I just landed in Asia. I didn’t have a business. All I’ve done was muck around with this little HTML template.
What I soon discovered was there was, in fact, demand that was shared in the market. It was more than just me looking for this service, and my little half-built website now ranked #1 in Google for ‘keg hire Brisbane’ because there was literally no other content competing for it.
Simon Dell: Back in the days when you could just put a website and it ranked in Google the next day.
Mike Boyd: Exactly.
Simon Dell: Good times, they were.
Mike Boyd: It was probably three weeks or something. Not quite a day, because it came completely out of the blue. I never even finished the website. So, that sort of kicked off my holiday and got the brain going while I was backpacking. And I came back a month later, and scraped together the savings, and begged dad to borrow some money and all this sort of thing, and turned me down a few times, and then ultimately said, “As long as you stay in uni and keep your part-time job to pay me back when this fails, I’ll loan you a couple of grand.”
I promised all those things and imported some gear from the US. Long story short, we launched this little business, started renting out the gas cylinders and the dispensing equipment to chill the beer, partnered with a couple of local pubs to sell the kegs themselves, and we were profitable in under three months and went on to run this Coolybar party hire business for the next three years while I was at uni and diversified in the [INAUDIBLE 00:43:41] machines and all these other fun stuff.
But basically worked a day and a half a week delivering gear on a Friday afternoon or a Saturday afternoon and picking it up on a Sunday afternoon, cash on delivery. I was a cashed up uni student in the beer business, so it made me pretty popular. It was a great time to learn about business. I like telling that story.
Simon Dell: What key things did you learn from that? If there was one lesson that you took from that whole three year experience, what was probably the one thing that sticks with you today?
Mike Boyd: Well, it was really the start of my digital marketing journey. It was almost accidental. I was already IT and inclined, and hadn’t really started to play on the marketing side. While we had this early success with SEO and ranking, we ultimately scaled the business using the very early days of social media. We actually offered to send photographers, which were just mates of mine, to the parties that we were dropping kegs off to to photography their party for free.
And we would upload them on Facebook with our watermark and our logo on the bottom-right hand. And so, our target market was 18th and 21st. That was basically all that was on social media in those days. That was kind of first mover adventure, and the hosts were usually very willing to have us provide the photos.
Simon Dell: That’s sort of almost early days. You’re almost forcing yourself to go viral there, aren’t you, because by sharing 200 photos of someone’s party and everybody’s… You couldn’t even tag each other back then, but certainly, people were sharing them on and things like that. I could imagine the reach that you gained from that was incredible.
Mike Boyd: Oh, it was massive. It was early days social and content marketing, and we didn’t even really know what it was, but we knew it worked. And so, we just kept doing it. So, it taught us a lot about business, but gosh, we made every mistake as well because I didn’t know how to do any bookkeeping. I didn’t know how to even run the operational side of the business, where do you store equipment, and clean it, and turn it around. Now, we need delivery utes, and employees, and all those sorts of things where, really, that was what I reflect on as the great foundation to my business education.
I was at uni doing a business degree, but I’d sneak out of lectures because my phone was ringing, or I got an email on my laptop ordering a keg. So I’d sit up the back booking a keg in for Saturday afternoon while pretending to do a business degree. So, it was a pretty cool time.
Simon Dell: I can imagine how popular you were with the other students. God, that sounds great. So, I mean, I guess as you say, you took a lot out of that. I guess, obviously, the main thing you took out of that was the digital marketing. Was that something you sat there and went, back then, you kind of went, “This is the next thing.” That social media space, the Google space? Because back then, we’re talking 2009, aren’t we? So, I’m just still thinking where Facebook was in 2009 and things like that. It was still very early days, wasn’t it?
Mike Boyd: Very early, yeah, and it was even a couple years preceding that before it really scaled beyond a hobby. You’re talking like ’07, ’08, ’09, when we really started playing with it. Look, it did open my eyes and got me really excited about it. I also didn’t really realize the extent of what I was getting on. It just worked, and it was almost too easy. But you know, it slowly dawned on me because, at the same time, I started a not-for-profit organization called The Hive or The Hive Network in Brisbane.
I did that while I was at uni as well. I ran it for three years in Brisbane, and it was basically an event once a month for free, held in a bar, somewhere in town there and I’d find a prominent entrepreneur from the community to come along and tell their story. So, it was basically those that have already made it coming along and just sharing some wisdom with those that were keen and eager.
The most fascinating thing that came out of that was that I was the host of the event, and I’d introduce these speakers, and I’d spend a lot of time in-between events chasing the next speaker, and emailing them, and inviting them to come and volunteer their time. They’d turn up to speak, and interest themselves to me, and ultimately ask me what I did. And I’d say, “Oh, you know. I’m a uni student but I’ve got this business called Coolybar and this is what we do.”
Simon Dell: Anyone want a frozen daiquiri? Yeah.
Mike Boyd: Exactly, exactly. Here’s your mojito and can I offer you a beer” sort of thing. But you know, we kept talking, and they said, “Tell me about this Coolybar.” And I said, “Well, you know, we have photographers, and we do this Facebook thing, and we rank in Google.” I realized very quickly that these very successful entrepreneurs and CEOs I was talking to, that were sometimes running multi-hundred-million dollar businesses, had no idea what I was talking about.
It was just lingo that they kind of had heard of, had no idea, really, the detail, and they were fascinated. That actually led me into my next opportunity. So, you said, “What do they get out of Coolybar?” I say insight into digital marketing, because I then quickly transform to myself into a digital marketing consultant. My clients were Hive speakers. They literally said, “Can you come in and tell that story to my marketing manager? Can you come to my board?”
Simon Dell: You almost went and created your own funnel of clients there with The Hive?
Mike Boyd: Exactly, and again, by accident. So, I literally was flown interstate, I presented the boardroom, so I presented the marketing team. And I was just a 19-year-old kid going in there. The first time, someone said, “What do you charge for this?” And I went, “I don’t know.”
All I had done at that stage was to build my own business and work hospitality, so I thought I’d charge more than that, and I just said, “Uh, $50 an hour?” And the first person said, “That’s too little. I’ll pay you $100.” And I said, “Oh, okay.” And so, I went in and did three hours for them or something.
And then the next one came along and they said, “What do you charge for this?” And I said, “$200 an hour?” And they went, “Okay. Can you come in on Monday?” and I said, “Sure.” The next one came along, and you know, it went on and on. I ended up charging about $350 an hour for these consulting, and back then, it wasn’t even called digital, it was called social media marketing.
But it was amazing. I got some early results with some really big brands and opened my eyes to an even bigger business community. And I figured out, at the same time, that as an entrepreneur, I didn’t want to be a consultant my whole life. It’s a fantastic way to make money, but it was all hours for dollars, and I didn’t want to trade my hours for dollars. I loved building a business where I could employ people, or build a system, or something that ultimately bought me freedom rather than more work.
Simon Dell: Yeah. I think The Hive is where I first met you. It might’ve been The Hive or it might’ve been you were speaking at another… It was back then when entrepreneurship wasn’t really a word. I mean, people obviously knew what the word was, but it didn’t quite have the same ring that it has to it now. It’s not the same sort of… People looked at you a bit weird back then if you cast yourself as an entrepreneur.
Mike Boyd: You know, I started The Hive after going to this entrepreneurship camp. It was called a creative entrepreneurship camp for young people. It was the most bizarre-sounding thing. I had to check that it wasn’t a hippie commune first, because you’re right.
Back then, it was not a thing. It was not an existing community. But sure enough, it was run by a reputable group, and I met some amazing people that were all teens or early-20s. We went up to the Glass House Mountains there, and had a nice three or four days or something.
We did this process of creatively mapping out businesses and entrepreneurship, What a not for profit type work as well. I’ll never forget, one of the things it taught me there, was that their whole philosophy was validating weirdos. And I just went, “Now I know where I fit.” You know? I actually remember calling my mother who also never understood me. I remember calling my mother from this camp and I said, “I have found where I fit in the world. There’s a bunch of other weirdos here.”
Simon Dell: “Congratulations, mother. I’m a weirdo.”
Mike Boyd: Exactly. I now have a label that sticks. But no, it was. It was weird back then to say you wanted to be an entrepreneur. I was going to a prestigious university, studying a prestigious degree, doing all of the right things, and I hated it. I absolutely hated it. All I wanted to do was get out, and try stuff, and create stuff, and build stuff.
So, I came away from that camp with a promise that I was going to start The Hive, and I literally started a month later. That was sort of the inspiration. But I didn’t found the concept. Some friends of mine that I connected with in the very early days of Twitter, I think it was 2007, 2008. They were based in Melbourne. They were RMIT students, and they actually started The Hive as an RMIT project. It was a not-for-profit.
Same story: prominent entrepreneurs from Melbourne telling their story, baa, for free, and it was quite successful. They ran 10 or 11 events in their first year. I’ve seen it from afar from Twitter, thought, “This was amazing. I wish we had that in Brisbane.”
After I’ve been to this camp, I flew to Melbourne, took the guys out for a beer, and begged and pleaded to let me expand the concept to Brisbane. And they were pretty reluctant because they’d had some success and they didn’t want anyone to tarnish their brand, and all of those sorts of things. And I said, “Look, just give me a shot. Give me one event. You guys come up for it. Give me 60 days. I’ll put on an event. If it’s not successful, we’ll pull the pin.” They agreed.
It’s sort of a classic entrepreneur story. Three days before the event, the speaker pulled out. And 48 hours before, the venue cancelled because we didn’t have enough pre-booked numbers to cover their minimum spend, and all of this sort of shit. And again, I was 18, 19, promising everyone the world and then realizing we have a microphone, all this sort of stuff.
In the end, through friends, and a good amount of hustle, and a very good amount of luck, managed to pull off this event. We got about 60 people there and it was a resounding success. And you know, the most interesting part of all of that, looking back, is that the first ever speaker, the backup speaker after the first one pulled out three days prior, the backup speaker that we got in as an emergency was one of the very early employees of a company called VroomVroomVroom, which I now happen to own and run.
It’s funny how those things come together, right? We went on to run The Hive for three years, a monthly event. It was a tremendous success.
Simon Dell: When I met you, this was one of the things that you were doing, was Cupstart. When I look at what you were doing with Cupstart, it feels like it was a little bit before its time. Do you feel the same sort of thing as well?
Mike Boyd: Yeah. It was definitely early and also a little naive. Cupstart was an attempt by me to merge two passions, which was coffee — I loved espresso-based coffee, and finding great coffee shops, and that sort of thing, which also wasn’t as big a decade ago. There’s always been an underground coffee community but nowhere near as popular as it is in Australia today — and technology.
So, I wanted to mash those two things together and build a company around that. Because I thought everyone says ‘follow your passion’, so I thought I’ll build a coffee app. So, it was an online ordering system or a mobile ordering system so you could order your coffee in advance, order it 10 minutes ahead, and drop by the cafe, and collect it.
Great for the community cafe. If you’re ordering it on the way to work, you pull over, and pick up your coffee and keep going. You didn’t have to have cash on you because it was all prepaid credits, and all digital, and everything. It was also an attempt by me to build a company that was actually a product, not a service. It was an attempt to get away from that consulting world.
Long story short, I scraped together some savings, funded it all myself, literally got onto eBay and bought these really cheap Intel laptops out of Hong Kong which I’d give to the cafes to receive orders on them. They were like Windows XP, or 98, or something horrendous.
I’ve got a photo of me sitting on the floor of my living room with about eight of these laptops all lit up around me as I’m loading each of them with — setting up… Cupstart was successful in terms of proof of concept. We had four or five cafes in Brisbane running it every day and receiving orders for coffee through it every day. We had loyal customers.
The most successful one was in the CBD where it was a cafe actually based in the foyer of a building, and people would order from their office on the 14th floor, and come down the lift. And by the time they came down, it was ready to collect. They’d take a tray of coffees back up to the meeting sort of thing. They didn’t have to line up. They didn’t have to worry about cash and all of that.
It was successful in terms of product to market fit, but where it failed was the business model in the commercial side of it. It was something where we were making about 20 cents per cup. I think at the height, our record was like 30 cups in one day. You got to do a lot of cups at 20 cents to make money.
Particularly, when we’re buying these laptops that cost a couple of hundred dollars each, and giving them to the cafes just to receive the orders, and then marketing on top of that to get users, and all of that. So, persisted with it for about 12 months.
It was showing promising signs. It had that early validation, but then didn’t really know what to do next. I got connected to a guy who I sat down with for a coffee, ironically, and his name was Steve Baxter. Steve, everyone knows that name now, but nobody did back then.
Simon Dell: Nobody did back then, yeah. Absolutely.
Mike Boyd: And so, someone had referred Steve to me because I was running this great Hive community. It was the biggest entrepreneurial community in Queensland, and collectively, between Melbourne and the Sydney chapter that launched, we were the biggest in the country not-for-profit entrepreneurial community.
And Steve was starting to think about the idea of starting this thing called River City Labs, which he’s since gone on to do and it’s been fantastic. But he said, “Is there a way we can bring The Hive community in to River City Labs? Can we collaborate?” all that sort of thing. And I’d actually just reached the end, or just about to reach the end of my time with The Hive. I ran it for three years.
I was pretty exhausted by the end of it, needed the next challenge to sink my teeth into. And I said, “Mate, by all means. If you can pick up this batch on, and run with it, and genuinely do good for the community and not just flog stuff to them, that would be fantastic.” So, that’s what our conversation was about.
And then I said, “What else are you up to?” And he said, “Oh, well, you know, I’ve made my money in these things. And now, I’m investing.” And he said, “Actually, I’ve just invested in a great startup. It’s called TXT4Coffee. It’s a mobile coffee ordering app, and it does this, this, this, and that.” And I just said, “Oh, you’ve got to be kidding me.”
It was my only decent competitor at the time. And Steve, with unlimited financial resources and about to make a serious move in the Queensland startup space had just invested in my only competitor, and I just went… So, I came away from that meeting, and used all the swear words I could’ve thought, and just went, “Gosh, 12 months of my life” and all this sort of thing.
And in the end, I actually think my product was a bit better than theirs, but that means nothing unless you get the customer and the dollars. So, I decided to leave it there and sort of wounded up probably three or four weeks later. There was a bunch of disappointed customers because they loved using it, but it just wasn’t a sustainable model.
And so, I took that learning and went in search of an industry that could afford to pay more than 20 cents a cup in whatever that was.
Simon Dell: Before you step into that, I just want to get an understanding. When you had Cupstart and you went to look for these cafes, how did you do that? Was it just you on foot, knocking on doors?
Mike Boyd: Yeah. I was quite literally this young kid walking into the cafe, saying, “Hey, I really like coffee, and I built this coffee app. Would you be willing to try this? I’ll give you a laptop, and I’ll put a little A4 sign on your customer, and customers can order ahead.” It was pretty hard.
But again, it was cutting my teeth on sales. It was literally door-to-door sales and being rejected countless times, and ultimately, getting a sit down with the owner. Because you just walk in, obviously, and there’d just be another teenage barista behind the counter who can’t make a decision like that. So, even just getting access to the decision maker, and then coming back, and then ultimately getting them interested…
These are the things you learn as well. These are all small business people. They’re running small cafes, typically, because I didn’t go after like a Gloria Jean’s or anything. I was going after independent cafes who did great coffee, and a lot of them were even resistant to 20 cents a cup because their margins were skinny as it was.
So, originally, there was ideas around having a subscription model of a couple hundred dollars a month, plus a fee per cup, and all this sort of thing. At the end of the day, it just wasn’t appetizing in the market. They weren’t prepared to pay.
Simon Dell: I know this is asking you to think back a bit, but how many doors would’ve you knocked on to get your…? I think you said five or six clients.
Mike Boyd: I think it was four or five operational in the end. And so, I would say probably 30? It’s not a terrible conversion rate. I also went up to the ones…
Simon Dell: We did a masterclass with a friend of mine about conversion rates. I would say to anyone starting a business: If you were going to see 30 people and get 4 clients out of it, that’s a pretty good success rate, really.
Mike Boyd: Yeah. And look, the advantage I had was that there was my cost upfront. It was just, “Are you willing to stick this on your counter?” And then the problem I had was they wouldn’t train their staff, so an order would go through and no one would see it. So, I would turn up to a café that pre-ordered, and they’d stand around waiting, and then eventually ask, “Where’s my coffee?”
So, there was all those sorts of teething issues. But I also used some of that early technology success to pursue coffee shops that I could see had even a little bit of digital presence, and I thought that’d be more open to this tech play. So, any cafes that I could connect to on Twitter, or Facebook, or their founders or owners, that sort of thing. They’re the ones I went and asked, which probably improved my success as well.
Simon Dell: I think one of the things that I take out of that and that I say to a lot of businesses is that, certainly, in the early days, or certainly, if you want to grow your business, there’s an element where you have to be a salesperson. You have to not necessarily knock on doors, but you’ve got to be able to sell yourself.
And if you want that fast growth for you going out and seeing 30 cafes… I mean, if you think about exact numbers, you could probably get around to 10 or 12 cafes in a day. So, realistically, maybe let’s say that’s 60 cafes a week. Looking back on it now, you go, “Right, well, that’s 60 cafes a week, and in a month, that’s 240, and I’m converting 20% of them.”
That makes sense for a business model, but for a lot of business owners, the concept of saying to them, “You need to get off your ass and knock on some doors,” or “You need to pick up the phone and call some people,” or “You just need to just get in front of people,” they find that quite hard to do.
Mike Boyd: Exactly. And then to add on top of that the insecurity, the stress, the anxiety of having created the product, and then hear people tell you why it sucks, and then turn up to the next sales meeting. I would’ve loved to have done 60 a week, but often, it would take all my courage to take to three or four in a week, because I’d have to recover between them.
Because someone would say, “Oh, but I want it to have this feature,” or “I’m not paying 20 cents. I’ll pay 8 cents” or “What about this?” or “I will only list my coffees on your platform and increase the price on your platform to cover your fee.” And I said, “But these are your regular customers. These are people that come into your cafe every day. We’re trying to save them 5, 10 minutes, and make it more convenient, make it more sticky.”
And they said, “Yeah, that’s fine, but I’m going to charge an extra 20 cents on the coffee.” And I said, “Well, that’s not going to work, is it?” So, you’re just constantly handling rejections or curveballs. Again, all of these stories, you’ve really dug into my history, that’s fantastic with conversation. It all makes sense now in learning those early sales skills. These days, I’m not selling coffee, but I’m either selling myself or the services of my company.
Simon Dell: And I would say to you now that if somebody put Mike Boyd on the spot and said, “You’ve now got to go and see 10 clients and sell VroomVroomVroom to them,” I’d bet a week’s wages that you’d crack 9 out of 10 of them.
Mike Boyd: Oh, absolutely. That’s not blowing up my tyres. That’s actually a tremendous skill that we’ve developed, that I’ve developed over time, and it’s because of that early grind, and all of that early rejection, and not actually giving up. You can get rejected 100 times, so if you go 101 times and you makes a sale, it makes up for all of it, and that’s why it’s worth persisting.
Simon Dell: I’m going to jump forward to VroomVroomVroom now. Just so I can understand, or everyone else out there can understand how you got involved in the business… Because I believe you were consulting to them first and then ended up sort of transitioning into there?
Mike Boyd: Yeah, that’s right. It’s interesting, all these stories, trying to tie it together. I was at uni. I ran Coolybar for a couple of years. I started The Hive not long after. Richard from Vroom was the first Hive speaker for the first event, and the event period then went on for three years.
Nothing actually came out of that initial discussion. It was years later that Vroom hit a bit of a rough patch, and the CEO was living in London, a very long way away from where the bulk of the business was, and he was the CEO because he was the major shareholder. The company was being run by two very talented technologists, brothers in Brisbane, Richard and Dave. Richard was the one that spoke for us at The Hive.
It’s a bit of a complicated story, but basically, what happened was the guys were brilliant at building and scaling the technology side of the business, and the SEO, and the inbound marketing in particular, particularly in the age in which they built it in the early 2000s. But when it got into a larger business, they weren’t as skilled at actually building a business, and growing a business, and managing staff, and operations, and all those other constraints.
Simon Dell: Which frequently happens with tech-focused people, doesn’t it?
Mike Boyd: Completely. And so, the majority of the leadership was tech-focused. The company experienced growing pains because it had doubled and tripled every year as a startup. It had all of those great success stories, but then, all of a sudden, it suddenly got a bit big, bit bloated. There was contracts, and legals, and all these other things.
So, I needed a bit of a commercial head to come in and get them back on the straight nad narrow. They thought they just needed a little bit of advice for a couple of hours. So, Richard thought of me because we’d connected through The Hive. And after being the first speaker, he was, being the humble dude that he is, he would often just show up every month and listen to every other speaker as well.
He wasn’t too good for that. I always admire him for that. And so, we stayed connected, became friends, and then he reached out to me and said, “Mike, can you come in and give us a couple hours of your time, and see if you can help us with some of these commercials?”
Long story short, came in, had a bit of a look at what they needed some help with, and realized I needed a hell of a lot more than a couple of hours. Ultimately, I was trying to get away from consulting but wanted to help them out. It’s a great business and great people. They were just in a bit of a bind.
I was trying to build another startup on the side, but I carved it out because when you’re building startups, you’re not really making money. So, I welcomed the money and said, “Look, I’ll do a day a week for you.” I did that, ultimately took on the title of COO, because I had to liaise with a lot of external suppliers, and car rental companies, and all these sorts of things. They wanted to know who this guy was that was sort of improving all these systems and operations.
So, I did that as a consultant for a while and put some really early runs on the board. So, renegotiated contracts, got commission increases across the board ,saved a bunch of money in unnecessary expenses, HR, what I view as simple stuff now but it wasn’t simple back then. So, the CEO who was, like I said, based in London saw all this from afar. We’d never even met. We’d just spoken on Skype all the time.
And he said, “Look, Mike, love what you’re doing but it’s not enough. Can I encourage you to come on board full time?” And I said, “Thank you. I really appreciate it, generous offer, but I’m an entrepreneur at heart. I’m not looking for a high-paying gig or a fancy title. I could accept the role but I’d probably last two or three months before I hated myself because I wasn’t being true to what I want to do.”
So, I was not going to be successful for either of us. And he said, “Alright. Thanks, anyway” sort of thing. And that went on for 12 months. He ended up offering me the role. Initially, it was full-time, and then it was, “Will you take on the CEO role for me?” I turned him down three times.
The first three conversations were basically the same, and the fourth conversation was quite serendipitous. I was working on this other startup in cloud based software, again, investing sort of 12 months there, and it went pear-shaped in a big, big way. The people that were putting the money in ran out of money and it collapsed with debt.
So, now, I was this young guy that was all in for sweat equity. So, I hadn’t really put money in, but I was on the line for tens of thousands of my share of the debt, because we were one-third shareholder type of thing. So, I was in a lot of trouble all of a sudden.
Quite literally, the same week that we had to liquidate that company, and let go of the early employees, and literally, the most difficult time of my life… It was the biggest failure, biggest fuckup. Four days later, Pete called me from London and said, “Mike, I’ve figured it out. I want you to come on board with Vroom full time.
I know you don’t want to be an employee. That’s not what motivates you. You’re an entrepreneur. You like to build your own businesses, so I want you to be my business partner. Take a small equity stake in the company and come on full time and run it like your own.” And I went, “Oh, Pete, gee, I think you finally got me.”
Simon Dell: Yeah, you’re down the other end of the phone still trying to play it really cool, I think, at that point, aren’t you?
Mike Boyd: I was so trying but it was literally the worst time of my life, and then he called out of the blue with that, and I just went, “Yes, yes. That sounds great. Let’s figure that out.” And so, that started that chapter.
Simon Dell: I want to ask that question about the debt issue. It’s something I face myself, when you sit there and you go — something’s failed or something hasn’t succeeded how it’s supposed to succeed, and you suddenly realized that you owe a lot of money. How do you mentally deal with that? It keeps a lot of people awake a lot. They lose sleep, relationships fail because of it. How do you mentally deal with something like that?
Mike Boyd: That’s a terrific question and I don’t think I could do it justice. That’s seven or eight years ago for me now, and I think I’m still dealing with it. I don’t think I’ve fully recovered or processed from it. It still haunts me to a degree. Again, it has shaped me as a business person. But probably, what I’ve learned the most from there is… Forget about the personal situation I’ve put me in.
The thing that I just play over and over and over in my mind is sitting down in front of our three full-time developers that were trying to build cloud-based apps for the mining and engineering space — at the height of the mining boom, too. So, we thought here’s clients that can pay, this is a no brainer.
Sitting down in front of these three full-time devs, which were basically the early employees, with tears streaming down my face, letting them know that the company was… “We just discovered the company was trading things off and we had no choice but to wind it up, and I’m sorry, but there’s no jobs for you right now.”
And it was just heartbreaking. Obviously for them, but heartbreaking for me and just the most awful thing to do. Because I was there working for sweat equity, I’ve been there alongside them in the trenches every day, building these incredible products. And we had built incredible products, and so, it was also really sad to let the products go and not see them through to their full potential in the market.
So, going back to your question about the debt and the personal circumstances, I still say that the best deal I’ve ever done in my life was figuring out how to get out of that mess. A whole bunch of it is probably still confidential, but long story short, I’ll give the business with two other guys that were funding it and they let it drop in terms of — they couldn’t uphold their obligation, they ran out of money.
But everyone was still super passionate about what we’ve built. I think it was one of their cousins, or one of their uncles, or something, had always wanted to be in the business, and had some money, and I ended up orchestrating a deal to sell all of my equity to this cousin or uncle in exchange for clearing the entire debt of the company.
So, I basically fell on my sword and said, “Don’t let this go in the insolvency. Don’t let it have creditors. I don’t want a black mark on my nails.” I was like 20 years old, 21. I said, “I’m going to build too many businesses in my life that have this sort of a failure this early.” I was all about legacy, and preservation of reputation, and all of that.
So, I basically fell on my sword, and did that, and allowed them to settle the debt and rebirth the company at a later date to pursue those same products, which they did. And it was pretty heartbreaking, again, there not to be a part of that second act, but I was fortunate just to get away from the mess, to be honest. That’s very much the right decision.
Simon Dell: On a more positive note as we sort of move to the end of this, because as I say, there’s probably at least another 20 questions I could ask you now. What I want to touch on is what… From a digital marketing perspective, I really want to just talk about that for the last section and understand from you what your tips would be to a business owner, or a startup, or somebody that’s even well-established around digital marketing.
With all the knowledge that you’ve had from your early days of Cupstart, and Party Hire, and now with the entity that is VroomVroomVroom, what do you think people should be doing or focusing on from a digital marketing perspective?
Mike Boyd: That’s a really good question. I think if I was to talk at a high level, across all industries, into all stages of business, the high-level stuff that I would talk about in terms of digital marketing and certainly that’s worked for me across multiple ventures is never underestimate unique content. Never underestimate unique content that you create.
In VroomVroomVroom, we have been tremendously successful with SEO and organic rank, and it’s because, over a decade, we developed all in excess of 10,000 content pages with real, unique content for all of the major locations that we rent cars across the globe.
Simon Dell: Give me an example of what you define, because I wouldn’t know what you should define as content. Just for people listening, what’s your definition of creating a content page?
Mike Boyd: This specific example is considered oldschool in the industry, really. I mean, we have location pages for Sydney, Brisbane, Melbourne, or Brisbane Airport. More specifically, diving into the regions: Wollongong, Geelong, Downtown Boston, Los Angeles, Charles de Gaulle Airport in Paris.
That’s because we were playing the SEO game, matching long tail searches, ranking number 1, 2, and 3 in Google for different web properties that we owned just because we had the most relevant content. Now, what went on that content page? Well, not only did we have the URL stream that was highly relevant to that, it was VroomVroomVroom.com/US/massachusetts/boston/downtown, things to see and do type of thing.
But what we would do is, around those locations, there’s only so much you can say about renting a car. So, we really built it into travel guides, places to go, things to see, top restaurants, top cafes, where do you refuel a car, all those sorts of things. So, tips and tricks, very much location-specific content worked very, very well for us in the Vroom business. If I go back to Coolybar, the unique content was photographing the parties, highly-personalized content that was, and people would share it with their friends.
The other thing I’d say, too, is that from a digital marketing perspective, transactional-based marketing, so things like PPC, paying for Google Ads, paying for Facebook ads, paying for Twitter ads, Snapchat, whatever it is, that’s in vogue at the time, it will always be a limited opportunity. Something is priced cheap in the beginning, then it’s priced very expensive in the end, and then the attention shifts to another platform.
So, it’s not something that you can build a brand on. It’s not something that you can build long-term, sticky customers on it. If you have an overreliance on transaction-based marketing rather than it just being supplementary to what you do, it’s something that could be a very, very big risk.
So, in the last few years, we’ve eliminated a lot of competitors competing with our car rental business that relied purely on Google AdWords, and they’ve now been completely crushed out of the market. As you can imagine, car rental search terms are extremely expensive to bid on.
Simon Dell: Scare me as to what a car rental search term click is worth.
Mike Boyd: In the tens of dollars, easily 10, 15, 25 dollars. The commission’s aren’t outrageous in the industry, so in that territory, you’re loss leading because, of course, that’s just a click, not a conversion. There’s a whole bunch of other factors.
So, the people that are running those strategies really are running at a loss leading, hoping to get three or four rentals from someone in order to break even. Whereas we have a lot more direct to brand, a lot more organic, a lot more social and video. We’d much prefer to go after a profitable sale rather than loss leading.
Simon Dell: That makes a lot of sense. At the end of the day, depending on which channel, which industry you look at, Google AdWords really only accounts for… Normally, I say to people 15% of the traffic clicks and the organic rankings normally account for 60%, and then there’s lots of people who just don’t click on anything. But you know, so if you’re just relying on AdWords, you’re only ever going to get 50% of the traffic at the most.
Mike Boyd: That’s right, and Google has dominated this monopoly for so long, but that’s not to say that the entire platform or the entire way of searching and discovering content is changing. There’s a lot more mobile. There’s a lot more just stuck entirely in the Facebook ecosystem. There’s a really fast acceleration towards voice search at the moment with…
Simon Dell: I was going to actually jump in there and say to you: How do you think voice is going to affect your industry within the next five years, and what are you guys doing around that?
Mike Boyd: We’re starting to play with it. I’ve bought Google Home and Alexa’s for the dev team to literally play with and become familiar with so that we can eventually start playing with online apps and services for it. And really, just at that innovation level, pulling stuff apart and seeing what’s possible.
Where do I think it’s going in five years? Much like Amazon has their buttons to reorder commodity products, like washing detergent; you push the button and it just arrives the next day or the same day, and it’s a single button for a single product. I see car rental as a highly commoditized industry where there’s not much product differentiation.
And so, whoever wins voice wins the market. Because you’ll just ask Siri, or you’ll just ask Google, or you’ll just ask Alexa, “Hey, can you book me a car?” I think it’s going to be autonomous car, which is a whole other conversation, but can you book me a car for tomorrow in Sydney, look up when my flight lands, and I’ll get it then?” sort of thing.
And then AI will be able to match the flight number, really easily see when it’s due to land in Sydney airport, book your car at 4:00 p.m. And it won’t ask you: Do you want to search Vroom, or do you want to search Hertz, or do you want to search Avis? It’ll just be whoever’s got the best voice bot for car rental that determines that language query will serve as the result and get the booking.
Simon Dell: Autonomous cars is another hour-long conversation we can’t have today, but maybe we’ll postpone that one for another time. Last three questions before I let you go. The first one is: What are some of the other brands out there that you love, that you look at every day and go, “We should be more like them,” or brands that you buy yourself all the time that you get attracted to?
Mike Boyd: Great question. I try and figure things that are a little bit different. Just thinking about the experience I had this week, I moved to Singapore this year and it’s hot and humid here all the time. I went out to the yoga clothing brand Lululemon. I was shopping for some shorts. And I thought, nice and comfy, breathable, great for the climate, all that sort of thing.
But I’m looking at the tag on these shorts because there was a different range of them and they’re all talking about their vortex this, or their great material that, or whatever you know. And I’m just like, I just want shorts, shorts that kind of look dressy — because I’m not going to the gym, but I just want something that’s comfy. I turn over the tag and one of the first things that this Lululemon shorts professes to have is ABC.
And directly after the acronym is its explanation that says: Anti-Ball Crushers. It’s trademarked. They trademarked Anti-Ball Crushers, and that’s the way they described their men shorts range at Lululemon. I just thought, “Fuck, I’m going to buy them just because that’s brilliant marketing.” And I just thought, “What a way to stand out and really connect?”
Simon Dell: For years, Mike, I’ve wondered which men shop at Lululemon. I’m always like a seven dollar, five dollar Kmart pair of shorts because it’s just — I’m just going running in these things. It doesn’t matter what I look like. Now, I’ve met a man who shops there.
Mike Boyd: And a Real man . Come on, now.
Simon Dell: But you’ve also given me a good reason as to why you shop there, so I’ll accept that. That’s fine. Are there any others out there? What about in your industry? What are some of the other travel brands that you look at and you think do a really good job out there?
Mike Boyd: I travel a lot. That’s part of the reason I live in Asia because I travel a lot to the Northern Hemisphere a lot and it’s sort of like a halfway home for me. I like to be one flight to anywhere in the world, and Singapore’s a great spot for that. And so, I often… I’m often a bigger customer of airlines than I am car rental, myself.
I used to fly a lot of Qantas because I used to be based in Hong Kong and Manila. I used to fly a lot of Qantas, a lot of cafe in the last few years. I’ve flown Emirates, flown Singapore Air, and it’s amazing to compare another commodity product, like airlines, similar to car rental. And when you’re getting to not only the pointy end of the plane, but also the highest status frequent flyer and all this sort of… the friction points that only frequently travellers notice and overcome has been fascinating for me to see and understand.
And I think that, certainly, in the international markets, an airline like Qantas is easily being outcompeted. It’s very easy to claim because a lot of the other airlines are better-funded, but it just comes down to pure service and product fit. I’m trying to think of a great example for you.
Simon Dell: I guess my question would be: If you had a choice of flying, which airline would you choose?
Mike Boyd: I would choose Singapore Airlines these days. I’d recently had an amazing experience on Emirates because I used a bunch of frequent flying points flying Canada First Class. That was amazing. There’s a shower and all that sort of stuff onboard, but it was wow because it was designed to be well, and you’re in your own little closed off pond. But in terms of day to day travel, and consistent experience, and consistent service, after flying… To put it in perspective for you.
Last year, I flew over 100 flights, circumnavigated the globe eight times, and spent 16 physical days in the sky. So, I’ve had a fair bit of time in the cabin to assess planes, airports. And look, honestly, that’s the other thing, too. It’s the off-the-ground experience. It’s check-in through airport, through security, through lounges, how you’re treated, how that can be streamlined.
To answer your question, I actually think brands as a country have been really interesting. So, I used to be a Hong Kong resident. Now, I’m a Singapore resident, and they both have Smart ID cards. So, whenever I fly through Hong Kong airport which I do literally twice a month, I would turn up with my credit card sized ID card which had my photo on it and a chip, and I’d put it into this like an ATM machine at the airport, and it would say, “Yup, Michael Boyd. Thank you.” Spit out the card.
I’d walk through the first set of gates, scan my thumbprint, the next set of gates would open, and I’d be in the country. And not once did I even lift my passport out of my pocket. And it was literally 40 seconds to get through immigration, and Singapore is very, very similar.
Simon Dell: It’s taking that lesson from something like that that I think a lot of businesses… A lot of businesses need to take that lesson. And the less friction people have when they deal with your business, then the more pleasurable the experience is going to be, and the more often they’ll come back, and the more times they’ll recommend you, and remember you, and spend more, et cetera.
Mike Boyd: Exactly, exactly. And that’s the thing that I noticed, too, at the frequent flyer end. No one flies that often because they love it. It’s not actually glamorous. I quite enjoy flying, I quite enjoy travel, but it is exhausting. It’s tiring. It’s all of those things. And so, anybody that eliminates even the smallest friction point, when you’re going through an airport every single week of your life, you know this and you appreciate it.
And I will spend money on an airline or even the flight through a connecting city that does it better than going by a one that’s inferior. That’s where, as a brand and as a business, or even as a country, it really works. Because I’ll choose to fly from Australia to London through certain airports rather than others and pay another $1,000 because it’s not worth my time or the friction to do it the wrong way.
Simon Dell: Last couple of questions for you before I let you go. What is 2018 going to hold for VroomVroomVroom? What are your big objectives for this year?
Mike Boyd: Great question. On a simplistic level, the brand will turn 17. So, that’s a really long time.
Simon Dell: That’s an old online brand, isn’t it?
Mike Boyd: Really, right? 2001. That’s like the age of the modern internet. That’s the age of e-commerce, so an incredibly long stint consistently from the brand. For us, it’s about consolidation. It’s probably more getting to the stage of more branding and less sales, less transactional analytics, and PPC, and all that sort of stuff that I was touching on before, and more just pure, “This is who we are. This is what we stand for, and you know where to find us when we need it” sort of thing. We’re at a certain scale, too, where we can do that.
We’re also diversifying left and right. We also do a huge amount of campervan and motorhome bookings. We have an insurance business that I founded a couple of years ago that we didn’t talk about today, but it’s an ancillary upsell to the Vroom product so that you can insure in case you’re in an accident with the vehicle.
This year, we’re getting into airport transfers: limousine transfers, bus transfers, that sort of thing. Because some cities that you fly into aren’t really geared for car rental. So, even here in Singapore, it’s not the biggest self-drive market. You’re more likely to be picked up and chauffeured to your hotel, or catch the MRT or something like that.
The same with London Heathrow. I fly in there all the time but I catch the Heathrow Express train into town and then get a taxi across town, because parking and driving through London, I have no idea what I’m doing. But if I’m going further out in the UK, then I’d rent a car. So, trying to get that full ground transportation product mix is on the agenda for us.
And we’ve also launched a new business and a new brand last year called V2B Travel, play on the words B2B. It’s where we’re using all of our technology, whitelabels, APIs, booking engines, things like that, partnering with other major companies to provide them with car rental solutions under their brand. We launched our first airline partnership with Tiger Air last year. That was a big win for us. And so, now, every time you book a Tiger Air ticket, you’re offered car rental in the booking part, and that’s all powered by Vroom.
Simon Dell: Fantastic. Mate, that’s been really, really good. Thank you very much for your time. Last question: If people want to get a hold of you, if people got other questions, for god sake, don’t give out your phone number here, but where’s the best place for them to get in contact with you?
Mike Boyd: With the amount of time I spend on airplanes, the phone number’s the least likely to get me. All the usual digital stuff. I’ve got a website at MikeBoyd.com.au, and otherwise, I like to hang out on Twitter. I’m just @MikeBoyd there on Twitter as well. You can email me through my website, or send me a Tweet, or something. It’d be fantastic to connect with some of the audience.
Simon Dell: Thank you very much for your time today. We really, really appreciate it. I hope a lot of people have got some insights from this, because we could’ve done a part two for this and we could’ve gone on for another hour. But once again, mate, thank you very much for your time today.
Mike Boyd: My absolute pleasure. Thanks again for having me, and all the best with the future episodes, too.