What is WAYN?
WAYN is the fastest growing travel and lifestyle social networking community website. WAYN is present in 193 countries and membership has grown from 45,000 users in March 2005 to over 15 million today. WAYN is all about connecting like-minded people and helping them to find each other, to meet, to share dreams and aspirations and to help them enhance their social status. WAYN is not just about travel, it is about meeting people and having fun!
Who are WAYN’s main competitors and how do you differentiate?
It is an interesting one. If you look in travel there are few travel social networks of any significant scale. You have the niche utility sites such as Dopplr, TripIt and TravBuddy. Then you have mass market travel sites such as Expedia and TripAdvisor who recently bought Virtual Tourist (since it was bought it has really capitalised on Trip Advisor’s SEO and driven traffic).
In terms of other types of social networks, we also compete with Facebook (albeit not directly) as this does have the mindshare of people’s time on social networks.
Where we are different is in making new friends – 60% of users on WAYN say they use it to meet new friends and not just to connect with existing ones.
Tell us about your business model – is ‘freemium’ the way forward?
Freemium is definitely the way forward. It just depends on what that means. We came from a subscription background (following the advice of Steve Pankhurst from Friends Reunited) but when the market changed in 2005, we had to change in order to compete. We did not think that our offering was sufficiently differentiated enough to justify people paying subscriptions. At that time our revenues were 70% subscription and 30% advertising based. Jumping to today, advertising is now the bulk – over 70% of our revenue is now from advertising.
Shifting our business model is the best thing that we could have done. It allowed us to go from 1.8m uniques to 7.5m uniques. It was a great way to grow audience. It also forced us to learn about how to monetise using advertising – prior to the change we did not really understand what our clients wanted but now we truly know our client base and deliver real satisfaction. We have great case studies to show companies in the lifestyle, leisure, travel space about how we genuinely drive traffic, improve conversions etc.
Going forwards, it is an interesting one. We do believe that advertising allows scalability and it is a useful platform however we do not believe it is the ultimate answer. We have recently refocused our efforts to create a new type of subscription offering called VIP. This provides a premium extension to our existing service. It provides subscribers with a combination of offline and online benefits such as browsing in secret, sending gifts, reduced entry to nightclubs etc. So far the feedback has been really positive.
We’d love to know how you initially took the concept from a piece of paper to an actual website…
The idea came from Jerome whilst he was on the Pacific Highway 101 in the US with friends. He thought wouldn’t it be cool to be able to know where your mates are and connect with them etc.? I had been doing a summer entrepreneurship course at LBS and when Pete told me the idea I thought it was great and could immediately see the value (unlike others he had told who thought it was a rubbish idea!). Jerome and I had met previously at a social gathering for Accenture, our employer at the time. We immediately brought in our other friend, Mike Lions, who is the tech brain and we started spending weekends and evenings over the next few months working on it.
Our day jobs were definitely not 9-5 so we were desperately trying to scribble notes on the way to work and do support queries in the evenings etc. We used to meet at LBS and put ideas on whiteboards then send them to Mike who turned them into reality for the site.
It was a real grass roots and bootstrapping approach. At times we did question if it was worth it – we spent two years of our time not making any money from it. That was tough. However in year one, we managed to get £10,000 from Steve Pankhurst and in year two we secured another £15,000. It was not until year two that we discovered that Google ad words was the key to getting customers and we managed to get 45,000 customers. In early 2005, we re-launched the site with web 2.0 features and other novel things and it was amazing – the site went from 45,000 to 1m members in six months. Our next challenge was then about sustaining this growth.
What was the toughest thing you faced in the early days? What is the biggest challenge you now face years on?
Our first challenge was growth – how do you manage growth? We did not know about VCs or funding, we were just thinking about how do we keep this running? We thought that if we blocked every country except for the UK and US from using the site we could limit usage – we really stifled a lot of growth at that point. Also because we charged that limited a lot more usage and finally we also restricted the site to over 18s. If we had known about the VC industry then and how taking some money would have helped our growth we would have done it very differently. The VC industry is a good thing.
The other challenge we faced was when we saw the market changing and we saw the rise of Facebook. For us, the question was how do we respond? We raised money and de-risked the business by taking some money off the table. We then changed the business model – we essentially ripped the business model in half and had to start again!
Now, our biggest challenge is how we constantly differentiate ourselves and compete in a very competitive market space. Everyone is on Facebook and uses Twitter so we have to constantly redefine what people want. We have to provide people with a reason to use WAYN. We are just focused on helping people to connect, to have fun and to be able to share dreams, aspirations and experiences.
What are the pros and cons of the current market?
The positive is that there is a lot of innovation in the market – people are trying new things and mobile is exploding. Things such as Android have made it easier for developers to make applications etc. The climate is providing a host of opportunities to take advantage of and there is a real buzz in the industry thanks to people like The Up Group and the Drink Tank boys etc.
The downside for start-ups is the fact that it is difficult to raise money. It is only possible if you have a proven monetisation model or you have a business with a great idea that is getting great traction.
How did you find raise initial financing and why did you take the investment that you did?
One of my biggest recommendations is to bootstrap as much as you can in the early stages and don’t give away too much equity too soon. When you don’t have much cash like us in the early days it focuses your mind on what you can do - so you just buy the server, you get a friend to do the graphic design and not an agency etc. Don’t raise Series A too early.
We raised our Series A in November 2006 – it was lead by DFJ Esprit who have been fantastic. Nic Brisbourne is on our board and he is very supportive of the management team and works really collaboratively. Brent Hoberman was our initial Chairman and is also an investor. We now have the befit of Simon Guild at the helm, who has been fantastic since day one. Simon used to run MTV across Europe, Middle East and Africa and achieved great success for MTV. We are very happy to now have him on board. David Soskin and Hugo Burge from HOWZAT Media (also Cheapflights) are also investors as are the co-founders of Active Hotels, Adrian Critchlow and Andy Phillipps. Finally, we also have Constant Tedder on our board, the co-founder and managing director of Jagex Ltd, which runs RuneScape, the UK’s largest online multi-player game.
The board are fantastic and all very relevant to the online, travel, gaming and entertainment space.
Steve Pankhurst of Friends Reunited was an original investor however he had to relinquish his shares due to the sale of Friends Reunited to ITV.
Did the fact that you were both young first-time entrepreneurs mean it was even more difficult to get funding?
No I don’t think it did. I think it helped that we had work experience from a credible organisation like Accenture and it helped that we had grown our small investment to a £2m business already. I think people take the view that the proof is in the pudding.
Brent had had unique experiences himself so I think he related. As long as you show that you have the ability and that you are working on something novel and that there is a real opportunity then the VCs don’t care how old you are.
What is the biggest mistake you have made as a CEO?
On of our biggest mistakes was trying to keep up with the Jones’s. We naturally tried to emulate what players like Facebook were doing and apply it to WAYN. We were trying to compete with something much bigger than we were and we were never going to win. We tried to do too many things reasonably well. We are learning from that now. Focus is key.
What do you think are the main ingredients of building the best team?
Attitude. It is all about finding people who compliment your strengths. Get the right people on the bus early. Don’t be a lone ranger. You have to be smart about who you hire and you have to put people through the mill – we try and create near to reality scenarios and see what people would really do. When you find good people then look after them and incentivise them to do well. We now have teams aboard and managing remotely is tough but you have to get the balance right with autonomy and empowerment – communication is the key.
What is hot in the start-up world right now?
I don’t have the time to scour TechCrunch and Twitter to see what new online start-ups are launching as otherwise I would not get any work done! There are so many ideas but unfortunately many do not happen. In the UK and Europe we should try and get behind start-ups like they do in the US more.
Spotify has created great traction and I wish them the best in capitalising on that momentum and just hope they can before the money could run out!
TweetDeck is another great idea and run by a great guy – it was a smart move to get PROfounders on board.
I also very much rate the Huddle guys (Andy McLoughlin and Ali Mitchell) and there are some exceptional young entrepreneurs coming through the pack – too many to mention!
However, apart from that, nothing springs to mind that makes me really go “Wow – that’s going to be the next Google” at the moment in terms of new start-ups but I really do admire some of the more established start-ups that have managed to scale. Seatwave is a great example – Joe Cohen has created real scale there. Lovefilm also.
What is WAYN?
WAYN is the fastest growing travel and lifestyle social networking community website. WAYN is present in 193 countries and membership has grown from 45,000 users in March 2005 to over 15 million today. WAYN is all about connecting like-minded people and helping them to find each other, to meet, to share dreams and aspirations and to help them enhance their social status. WAYN is not just about travel, it is about meeting people and having fun!
Who are WAYN’s main competitors and how do you differentiate?
It is an interesting one. If you look in travel there are few travel social networks of any significant scale. You have the niche utility sites such as Dopplr, TripIt and TravBuddy. Then you have mass market travel sites such as Expedia and TripAdvisor who recently bought Virtual Tourist (since it was bought it has really capitalised on Trip Advisor’s SEO and driven traffic).
In terms of other types of social networks, we also compete with Facebook (albeit not directly) as this does have the mindshare of people’s time on social networks.
Where we are different is in making new friends – 60% of users on WAYN say they use it to meet new friends and not just to connect with existing ones.
Tell us about your business model – is ‘freemium’ the way forward?
Freemium is definitely the way forward. It just depends on what that means. We came from a subscription background (following the advice of Steve Pankhurst from Friends Reunited) but when the market changed in 2005, we had to change in order to compete. We did not think that our offering was sufficiently differentiated enough to justify people paying subscriptions. At that time our revenues were 70% subscription and 30% advertising based. Jumping to today, advertising is now the bulk – over 70% of our revenue is now from advertising.
Shifting our business model is the best thing that we could have done. It allowed us to go from 1.8m uniques to 7.5m uniques. It was a great way to grow audience. It also forced us to learn about how to monetise using advertising – prior to the change we did not really understand what our clients wanted but now we truly know our client base and deliver real satisfaction. We have great case studies to show companies in the lifestyle, leisure, travel space about how we genuinely drive traffic, improve conversions etc.
Going forwards, it is an interesting one. We do believe that advertising allows scalability and it is a useful platform however we do not believe it is the ultimate answer. We have recently refocused our efforts to create a new type of subscription offering called VIP. This provides a premium extension to our existing service. It provides subscribers with a combination of offline and online benefits such as browsing in secret, sending gifts, reduced entry to nightclubs etc. So far the feedback has been really positive.
We’d love to know how you initially took the concept from a piece of paper to an actual website…
The idea came from Jerome whilst he was on the Pacific Highway 101 in the US with friends. He thought wouldn’t it be cool to be able to know where your mates are and connect with them etc.? I had been doing a summer entrepreneurship course at LBS and when Pete told me the idea I thought it was great and could immediately see the value (unlike others he had told who thought it was a rubbish idea!). Jerome and I had met previously at a social gathering for Accenture, our employer at the time. We immediately brought in our other friend, Mike Lions, who is the tech brain and we started spending weekends and evenings over the next few months working on it.
Our day jobs were definitely not 9-5 so we were desperately trying to scribble notes on the way to work and do support queries in the evenings etc. We used to meet at LBS and put ideas on whiteboards then send them to Mike who turned them into reality for the site.
It was a real grass roots and bootstrapping approach. At times we did question if it was worth it – we spent two years of our time not making any money from it. That was tough. However in year one, we managed to get £10,000 from Steve Pankhurst and in year two we secured another £15,000. It was not until year two that we discovered that Google ad words was the key to getting customers and we managed to get 45,000 customers. In early 2005, we re-launched the site with web 2.0 features and other novel things and it was amazing – the site went from 45,000 to 1m members in six months. Our next challenge was then about sustaining this growth.
What was the toughest thing you faced in the early days? What is the biggest challenge you now face years on?
Our first challenge was growth – how do you manage growth? We did not know about VCs or funding, we were just thinking about how do we keep this running? We thought that if we blocked every country except for the UK and US from using the site we could limit usage – we really stifled a lot of growth at that point. Also because we charged that limited a lot more usage and finally we also restricted the site to over 18s. If we had known about the VC industry then and how taking some money would have helped our growth we would have done it very differently. The VC industry is a good thing.
The other challenge we faced was when we saw the market changing and we saw the rise of Facebook. For us, the question was how do we respond? We raised money and de-risked the business by taking some money off the table. We then changed the business model – we essentially ripped the business model in half and had to start again!
Now, our biggest challenge is how we constantly differentiate ourselves and compete in a very competitive market space. Everyone is on Facebook and uses Twitter so we have to constantly redefine what people want. We have to provide people with a reason to use WAYN. We are just focused on helping people to connect, to have fun and to be able to share dreams, aspirations and experiences.
What are the pros and cons of the current market?
The positive is that there is a lot of innovation in the market – people are trying new things and mobile is exploding. Things such as Android have made it easier for developers to make applications etc. The climate is providing a host of opportunities to take advantage of and there is a real buzz in the industry thanks to people like The Up Group and the Drink Tank boys etc.
The downside for start-ups is the fact that it is difficult to raise money. It is only possible if you have a proven monetisation model or you have a business with a great idea that is getting great traction.
How did you find raise initial financing and why did you take the investment that you did?
One of my biggest recommendations is to bootstrap as much as you can in the early stages and don’t give away too much equity too soon. When you don’t have much cash like us in the early days it focuses your mind on what you can do - so you just buy the server, you get a friend to do the graphic design and not an agency etc. Don’t raise Series A too early.
We raised our Series A in November 2006 – it was lead by DFJ Esprit who have been fantastic. Nic Brisbourne is on our board and he is very supportive of the management team and works really collaboratively. Brent Hoberman was our initial Chairman and is also an investor. We now have the befit of Simon Guild at the helm, who has been fantastic since day one. Simon used to run MTV across Europe, Middle East and Africa and achieved great success for MTV. We are very happy to now have him on board. David Soskin and Hugo Burge from HOWZAT Media (also Cheapflights) are also investors as are the co-founders of Active Hotels, Adrian Critchlow and Andy Phillipps. Finally, we also have Constant Tedder on our board, the co-founder and managing director of Jagex Ltd, which runs RuneScape, the UK’s largest online multi-player game.
The board are fantastic and all very relevant to the online, travel, gaming and entertainment space.
Steve Pankhurst of Friends Reunited was an original investor however he had to relinquish his shares due to the sale of Friends Reunited to ITV.
Did the fact that you were both young first-time entrepreneurs mean it was even more difficult to get funding?
No I don’t think it did. I think it helped that we had work experience from a credible organisation like Accenture and it helped that we had grown our small investment to a £2m business already. I think people take the view that the proof is in the pudding.
Brent had had unique experiences himself so I think he related. As long as you show that you have the ability and that you are working on something novel and that there is a real opportunity then the VCs don’t care how old you are.
What is the biggest mistake you have made as a CEO?
On of our biggest mistakes was trying to keep up with the Jones’s. We naturally tried to emulate what players like Facebook were doing and apply it to WAYN. We were trying to compete with something much bigger than we were and we were never going to win. We tried to do too many things reasonably well. We are learning from that now. Focus is key.
What do you think are the main ingredients of building the best team?
Attitude. It is all about finding people who compliment your strengths. Get the right people on the bus early. Don’t be a lone ranger. You have to be smart about who you hire and you have to put people through the mill – we try and create near to reality scenarios and see what people would really do. When you find good people then look after them and incentivise them to do well. We now have teams aboard and managing remotely is tough but you have to get the balance right with autonomy and empowerment – communication is the key.
What is hot in the start-up world right now?
I don’t have the time to scour TechCrunch and Twitter to see what new online start-ups are launching as otherwise I would not get any work done! There are so many ideas but unfortunately many do not happen. In the UK and Europe we should try and get behind start-ups like they do in the US more.
Spotify has created great traction and I wish them the best in capitalising on that momentum and just hope they can before the money could run out!
TweetDeck is another great idea and run by a great guy – it was a smart move to get PROfounders on board.
I also very much rate the Huddle guys (Andy McLoughlin and Ali Mitchell) and there are some exceptional young entrepreneurs coming through the pack – too many to mention!
However, apart from that, nothing springs to mind that makes me really go “Wow – that’s going to be the next Google” at the moment in terms of new start-ups but I really do admire some of the more established start-ups that have managed to scale. Seatwave is a great example – Joe Cohen has created real scale there. Lovefilm also.
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