|
RealTime People: SafariNow - On the waves to
riches
A little over a year ago SafariNow was a small travel website that Matthew Swart and Brad Shrimpton ran from Matthew's lounge. The site has now grown to an e-commerce venture to be reckoned with, and global rollout is on the horizon. Heidi Potgieter talked with Matt, Brad and Mark Derman at their offices in Kommetjie. Do you absolutely have to be a surfer before you can work for SafariNow? "Yeah!" comes the answer from Matthew Swart, Brad Shrimpton and Mark Derman simultaneously. "It's a kind of culture that runs thick in the blood," says Brad. "If the waves are up, productivity seems to go up." And they ditch the office in Kommetjie, near Cape Town, every now and again to hit the waves. They call it "flexitime" or "telecommuting". Jokes aside, these guys are serious about their business - an Internet holiday accommodation and reservation service. And the funding they recently would have received from a British venture capitalist has landed SafariNow a spot in the Internet limelight. Unfortunately, the deal fell through - not that these surfers allowed this "speedbump" to throw them off their boards. They already have another company lined up for funding. They've come a long way since their small beginnings in January '99 in Matthew's lounge. Initially, it was a one-man show. Says Brad, "Matthew had started a small travel site, taking bookings for guesthouses that he was advertising for free. And we were chatting about starting a business together. We went away on a surf trip, came back and decided okay, that's it, we're going to take it to the next level." Mark joined them in May last year. And they've all made radical career changes. Matt was a land surveyor. In fact, the day that he qualified was the day he started his travel site. Brad was doing marketing for Ericsson SA before he joined Matt, and Mark did a B.Sc. in mechanical engineering, but worked as a programmer in London for about five years. Continues Matt, "We realised the need for money if we wanted to come in as a proper player. And we did the VC rounds quite extensively... We saw a lot of VC's, but most of them hadn't converted to analysing how to value an Internet company. Things are changing rapidly now." These days, VC's are advertising in Internet magazines. Finally, a British VC promised them a R1 million when they combined their money-mission with a trip to the UK for the World Travel Faire. Back in South Africa, SafariNow suddenly found itself in the limelight. The phones started ringing. "It's quite nice, because money seems to attract money," says Matt. Adds Brad, "Suddenly it's all happening. People phone me, instead of my phoning them. It's all very exciting. We suddenly realise that what we've been working on for a year is becoming sustainable." Unfortunately, the deal didn't pull off. "We had a major hiccup with the investment," Matt later told media.toolbox. "What was considered a 'done deal' was derailed by the incredibly slow process of setting up legal vehicles for investment in South Africa. Some seemingly straightforward requests such as company name change and setting up a new PTY took an incredible six weeks! Our investor understandably said 'time out'". Matt says the hiccup was a clear demonstration of the problems you face if you have to build new-economy developments on old-economy infrastructures. The hiccup had an upside though. Kickstartventures.com, another British-based startup incubator, stepped in with funding and SafariNow can now go ahead with their plans and development. The money from Kickstartventures is, however, only an interim arrangement. SafariNow is on the lookout for a more permanent partner, and is already negotiating with interested parties. "We'd ideally like to proceed with a fairly strategic investor who is in for the long haul and not the quick buck," Matt replied in an email a while after the interview. In a little over a year, SafariNow has acquired an impressive database of guesthouses and B&B's - at the time of the interview, the site boasted about 490 places where you can make online accommodation bookings. Having a base of almost 500 guesthouses and B&B's on your site is one thing, but how do you get the travellers and tourists to book on your site? "The million dollar question. The billion dollar question," laughs Brad and passes the question over to Matt. The growth-curves have been quite radical, says Matt. Furthermore, they're not a stand-alone website. You can currently access SafariNow through about eight major websites, including World Online, Internet Africa, M-Web, 24.com, iafrica, Junkmail Online, and others. What they're moving towards, explains Matt, is not so much building their own unique brand, but allowing other websites to customise their functionality. They work as a sort of plug-in on other sites. Both sides win. The portals that host the SafariNow plug-in add value to their service and get a cut of the bookings made through their site, and SafariNow gets feet past their virtual door. You can call them a "back-end distribution element" says Matt. Portals are willing to plug SafariNow's functionality into their sites, but they want their own look and feel. Aren't they afraid of losing their brand value through this kind of strategy? Nope, says Brad. "You have to look one step further for the brand, but when you find it, it's kind of big, because it supplies functionality in so many places. Every time you replicate the interface, you replicate the entire business. It's like two competing business trying super-hard to sell your product. It's really quite nice." And SafariNow gets more than just more business from the deal. They get increased credibility. "The drive on the affiliate program has essentially been one for credibility since June last year," comments Mark. "24.com wanted us to do accommodation. We were starting in tours, and they said, no look, we want B&B's. So, we changed to do B&B's for them, because we developed a relationship and it was critical to our momentum to get them on board and get the credibility associated with that." But who are currently the people who book accommodation online? Is it mainly South Africans or overseas visitors? "We were expecting a lot more overseas buyers," comments Mark, "but I suppose mainly because our affiliates are 24.com, M-Web, all the local portals, we had a tremendous number of local folks." Once the global plan rolls out, this should change. At this stage they average between 2000 and 3000 page impressions per day, with their highest being around 3200. Another statistic that these three guys are very proud of is that between 18% and 20% of unique users who visit the site end up booking. And they've maintained this performance for the past five months now. Brad adds, "From a seller's perspective, that's phenomenal. I mean, it's costing him nothing to place his guesthouse on the Internet. He's got a one in five chance of somebody actually booking and paying him online. We take the risk." In exchange for hosting the guesthouses, SafariNow receives on payments made. Who makes sure that the guesthouses get back to the customers promptly with quotations and information? "The biggest problem with the guesthouse owner is that his average age is 57," explains Brad. "It's probably the first time he has ever switched on a computer." It's a massive education process, he continues. On the site they tell visitors to allow about a day's response time. In reality, the average response time is about a day and a half. It's not quite what SafariNow's team want it to be, but it's getting there. SafariNow is able to track each inquiry, so they check up on the guesthouse owners if they sit on a request or inquiry for too long. Matt says they're positioning themselves so that visitors to the site don't need to communicate through SafariNow, but can talk to the guesthouse directly. But every now and again, they have problems with guesthouses' ISPs collapsing, which means that SafariNow still has to be able to step in and get the quote to the buyer in time. The people working in the guesthouse and B&B industry are very relaxed too, comments Brad. "With an informal market like this," he says, "they take leave, they don't notify us, they just bugger off!" Their relationship with the guesthouses is a win-win situation, says Brad. SafariNow currently acts as a free marketing channel for the guesthouses. In fact, they promote their accommodation heavily. They've got a new "specials" page on World Online where you can get up to 40% off. This is an amazing opportunity for the guesthouses themselves. Individually, they don't have the bucks to advertise their specials on World Online and the other affiliate partners' sites, but collectively, they can afford to, explains Brad. And that's where SafariNow steps in to mediate and negotiate the deals between the guesthouses and the portals. As for their global strategy? In addition to their affiliate program with major local websites, SafariNow is introducing a new kind of development that will expand their network and market globally. During a second trip to London (after our interview with them) they struck a deal with a British based company who will become a partner to SafariNow. The partner (who's name they're not prepared to disclose) gets a license from SafariNow to use their software and provide their functionality and service in the UK. The company, that SafariNow calls a "Master Partner" will operate under its own name. In exchange for allowing the partner to use the surfer guys' software, SafariNow shares in the partners' profits. The idea is to set up similar Master Partners in viable countries - one Master Partner per country. These Master Partners will then operate as the central office in a specific country, and acquire people or companies to sell the booking service by awarding them a license for using the Master Partner software. Locally, SafariNow itself will become the Master Partner for South Africa. The surfer guys will then launch a much larger entity that will effectively be the parent company of all the Master Partners worldwide. The first UK Master Partner is set to open doors in June, and Germany and France are soon to follow. SafariNow is a testimony to how small beginnings and a simple, but effective idea, can lead to a prospering global business; even if it's not run from the economic hub of a city centre. Mark says he was initially somewhat sceptical about running a business from a small town such as Kommetjie. "I thought, hmmm...we're not gonna be able to attract the top people that we're gonna need to come and work for us out here. And it's been exactly the opposite. We've had guys looking at our job advert on our site, seeing where we are, applying and saying, 'We'll drop everything and come over right now.' Guys from New York, from London. The response has been amazing. People want to come and live the dotcom dream, and that's what we're trying to do here." |
|
.gif)
