This week’s Misfit Entrepreneur is Scott Keyes. Scott’s just your every day, run of the mill guy who turned a hobby of finding cheap plane tickets into a multi-million dollar business in less than 2 years. As he would say it, Scott’s Cheap Flights was more an accidental business and he started out as more of an accidental entrepreneur. A misfit if you will.
Over the last 5 years, the business has grown to service hundreds of thousands around the world, help save clients millions of dollars on their flight purchases, and has been featured everywhere from CNBC to Virgin, Conde Naste, and Time Magazine.
Scott has learned a lot about finding a niche and cultivating a great business from it and that is one of the things I’m most excited to explore with him in this episode.
As Scott says, he’s an accidental entrepreneur. He ended up where he is completely by accident. The way it came about happened after he graduated college and moved to DC. He had a degree in political science and loved to write. He became a political journalist. There wasn’t much money in it, but Scott wanted to travel and needed to find a way to fund it. So, he got into the world of travel hacking.
He got really good at it over the course of a couple of years. It all culminated when in 2013, he got the best deal he had ever gotten – a ticket from New York to Milan for just over $100.
When he got back from his trip, word had spread amongst some of his friends and co-workers and they started asking him to share deals with them when he found them.
He started an email list to send out deals he found to his friends and co-workers. Over the next year, he did as a hobby, but the subscribers started telling other subscribers and they told others and so on.
By 2015, it had grown to over 5000 subscribers. At this point, there started to be some costs involved. In August 2015, Scott relaunched as a “freemium service” in which there is still a free signup, but also a paid sign up with more content and perks.
Nowadays, Scott’s Cheap Flights has over 1.5 million subscribers.
When you look back on how you got to this point, what is your best advice on how to discover a profitable niche and uncover opportunities under your nose?
- Don’t quit your day job overnight. Whatever you start, do it part time and split time.
- Build things on a small budget – don’t spend a bunch of money up front.
- Test things out for a little while before going all in on a strategy or offering.
- You must find something that brings real value and that people will actually pay for (and not just support you)
- If people are willing to pay for something, they value it and others will too.
- The main thing is to use micro-thinking. Try different ideas over smaller periods to see what is getting traction. But, be ruthless in cutting out the things that don’t show promise.
At the 16 min mark, Scott tells us how SCF works…
- They are not a travel agency.
- What Scott and his teams do is spend every moment of the day searching for cheap flights.
- Really good deals pop up and don’t last long. Sometimes they are only available for 4-5 hours.
- They then alert subscribers, so they can get them before they disappear.
- Scott uses an example of roundtrip flights to New Zealand for under $400.
- As Scott says, what SCF is, is an early detection system to find the diamonds in the rough.
At the 19 min mark, Scott talks about how the business is setup and the model (this is a great model that you could follow in your niche).
- There is a free subscription in which subscribers get access to 1 out of every 3 deals by “region” that SCF finds.
- For a few dollars month, Premium subscribers get access to all deals and can select by “airport” so they can be more specific to their needs.
- Lastly, Premium subscribers get their emails first and free get them 30 mins later.
Scott loves the freemium model. In today’s age, people are skeptical. It is so much better to give them a way to show them the value you can create and how you generate results for them. It relieves pressure and creates more devoted clients.
What have you learned about building a business in going from 1 man with a hobby to having employees throughout the world and serving millions?
- Learning never ends!
- There is a point in the growth of a company, around 8-10 employees where what you do shifts from the core product of the company to leading people and working to get the best out of them.
- There is a transition that happens and has to happen as a leader and your skill set will have to change to a focus on people and strategy.
- Another challenge, especially with remote employees is finding ways to connect them and build a strong team culture. As a leader with remote employees, you must have a special focus there.
Are there any systems or specific strategies you’ve used for remote employees that work really well?
- SCF grew at a pace of “one employee at a time” and they didn’t take the time so much to build out the systems to communicate well across a larger group which caused some challenges.
- People in the company didn’t know what was happening in the company.
- Its’ more important to over-communicate….
- They found that putting in a system of having regular meetings, communicating through Slack, doing check-ins with team members throughout each quarter, getting feedback, and being genuinely interested in how they can make their team’s lives better.
What have you learned about building and cultivating a subscriber list and how did you transition from free to paid?
- Scott was terrified taking people from free to paid. He had seen the backlash that customers had when things like newspapers stared charging for online access, etc.
- The psychology of it is interesting. It seems to be much harder to get someone to pay $1 for something they used to get for free than it is to get someone to pay $2 for something they used to pay $1 for. Even though, it is still $1 more, people don’t see it the same. The shift seems monumental.
- Being conscious of this is really important and why the freemium model is a good way to go. It removes the barriers to entry.
- As he moved from free to paid, he gave all subscribers the premium subscription for the first month and gave them the choice of keeping it for free or getting a scaled down version with less features.
- This also helped created FOMO – fear of missing out
- He set an extremely low price point, a few dollars a month.
- It was not so much about profit in the beginning, but to see if people are willing to pull out their wallets.
At the 36 min mark, we have a great discussion on value and what that means to clients.
What are some tips on cultivating and taking care of subscribers on your list?
- Be very respectful of people’s inboxes.
- Invest in customer support and be very responsive – create a tribe of evangelists for you. Imagine what people will think if you are responded in minutes to clients, not days.
- Don’t buy lists to email to – this is huge mistake that can get you blacklisted
- Your subscribers are your best referral channel – more than paid search or advertising. Treat them well and they will treat you well.
- There are no short cuts, things have to happen organically
At the 43 min mark, Scott answers the question, “What are some tips on how to find deeply discounted flight deals?”
- There is a secret sauce which is searching for flights 20 hours a day.
- First, you want to cross the ocean as cheap as you can, then worry about getting to your final destination. For example, book Chicago to Athens when going to Santorini and then get a cheap flight from Athens to Santorini
- Change the way you look at flight shopping…invert it
- Most start by picking where they want to go, then what dates they want to go, and lastly, they look at the prices.
- Look at price first to see where there are cheap flights right now. You can do it on Google Alerts, Kayak Explore, and a number of places.
- It is much easier to find good deal this way. Find the price and build the trip around that.
- If you find a really good fare, it won’t last long. You have to be able to make a decision quickly.
- A little trick is the 24 hour rule. When you book a flight directly with an airline, you can cancel the flight within 24 hours without issue or penalty. So, you can lock in a price for 24 hours and give yourself time to decide.
Best Quote: We are terrible predictors of our own career path. Be open and humble about where your career path can and will go.
Scott's Misfit 3:
- We are terrible predictors of our own career path. Be open and humble about where your career path can and will go.
- Beware of golden handcuffs. You don’t have to stay in a job forever.
- Go to conveyer belt sushi places for the price, but order from the menu for the fresh stuff. It’s the same price.