London Innovation Society launched a new event series “Building Castles in the Sky”, aiming to enable entrepreneurs and investors in London. “By hosting academicians, entrepreneurs and professionals in the events, the objective is to bring investors and entrepreneurs together and enable them” stated the President of London Innovation Society, Dr. Suleyman S Demirsoy.
The event series is supported and hosted by Level39, the infamous co-working space where many startups are founded and located such as Revolut, and the future events will be held in the main lounge of Level39.
The second event was titled “Building Castles in the Sky: How to go from 0 to 50, and from 50 to a billion?” and the presenter was Elnur Seyidli, CEO of the HalalBooking.com, world’s leading online search & booking website for halal-conscious travelers.
Attendants had a chance to network during the event as each task required them to work in a different group of people and enjoyed the venue after the presentation.
You can follow the upcoming events from related landing page
How to go from 0 to 50, and from 50 to a billion?
It’s wonderful to be here. As I understand, all of the companies here are aiming to be a unicorn one day: a billion-dollar company. Our company is not a billion-dollar company yet, but I believe we are halfway there. My name is Elnur Seyidli. I am the CEO and co-founder of HalalBooking.com, a UK-based company. We are a company which we believe to be valued at 50 million dollars. That is why the presentation is called: “How to Go From 0 to 50 and From 50 to a Billion”. We are by far the number one website which specialises in what we call the ‘travel search for a halal-conscious customer’. There are Muslim families around the world, mostly middle-aged and with children, searching for travel and they have specific criteria which we call the halal-consciousness criteria. Our mission is to help them to make their search quicker. We have six languages and 75 countries which make up our customer base. So that is where we are now. We have doubled every year since we were founded seven years ago. This happened with almost no funding, so we just grew naturally. The challenge is now how to continue doubling, which is an entirely different challenge from the problem to get here. The good thing about our type of business is that it is a marketplace business model; it is where we connect suppliers and customers. What is terrible about the marketplace model is that it is tough to get initial traction, but once you get it, it is highly scalable, and your costs become a fraction of your profits.
We have a great team: each person is specialised and focuses on their own area. I think one of the critical ingredients for success is how this team works together. If they do their individual jobs really well and they have complementary skill sets; if they communicate well-, that’s it, that is very important for success. Coming back to what we mean by “halal search”, broadly speaking, you can divide this requirement into 5 different areas. One is about ‘food’, another is about a ‘family-friendly entertainment environment’, the third is about ‘dedicated ladies-only leisure facilities’. And there is also a ‘prayer place’ and ‘washing facilities’ requirement. So this is far too many problems to solve in one go, right? When we started, we said: “We are not going to solve all these problems, it is just too many.” What we did is, we chose to focus on just one requirement. We concentrate on ‘ladies-only leisure facilities’. A critical piece of advice that I give is to take hard decisions about focusing. If you are at an early stage, you cannot do it all, right? Focus on solving one problem at a time. If you try to solve too many problems, you may end up with nothing. And after 6 years and being $50million company – we are still not solving all of 5 above mentioned requirements, we are now focusing on just 2 out of 5 requirement – ‘leisure facilities’ and ‘food’.
What is great about this market is that it is a niche market. Niche markets have good and bad sides to them. The good side is that it is so specific that not everyone can understand it. If your team has the skills to understand it at a deep level, you have a competitive advantage over everyone else. The sad thing about being in a niche is that the market might be too small sometimes. So you need to decide: is the niche you want to focus on too small for you? And if the market is huge, it means that lots of people will be interested in it. And then you need to ask another question: can you execute this business model better than anyone? If the answer is “yes”, then go ahead and do not look back – sooner or later, you will succeed.
We are actually a latecomer to this halal-friend travel search market, but still, we are the only one who has managed to become a global player. We have bookings from 75 countries. The reason for that is that you need to think about what the critical success factors (CSFs) for your business model are. In our case, we have two significant essential factors of success: 1) you have to understand the real problem, which is in this case, on the one side a travel search problem related to halal-conscious family holidaymakers. 2) On the other hand, you need to be great at engineering and data management because this problem cannot be solved without it.
So, how can you structure the halal-friendliness travel data so that it is searchable, understandable, user-friendly? You have to manage these entirely opposing skills, right? The reason why, in spite of being a latecomer, we are still ahead of the companies that specialise in this, is because they all have skills for one critical success factor but not the other. Some of them are great engineering companies, but they are not good at understanding business processes and defining the actual customer problems. Others recognize the business problem very well, but they cannot scale it up because they do not have the engineering background. They make a website, it works, but the moment they try to scale it up, it just becomes high maintenance because fundamentally, it has not been built correctly from the start. That is an essential concept for a real business. Think hard about what the critical factors of success are for your business model. Not just any success factors, but the critical ones. There are dozens of success factors, but only think about the most important ones – 2-3 critical ones – and make sure that you have them covered by your founding team.
There are some marketing metrics which are very important in the early stages of a company. In the travel business, this is absolutely critical, but I believe in pretty much any business it is quite vital. It is effortless to get it wrong. A lot of travel companies and start-ups fail at some point in spite of substantial funding because they get these metrics wrong. Your Customer Acquisition Cost (CAC) has to be below your Average Purchase Value (APV). If it is not, it is just a matter of time until you run out of cash. In our case, we made sure our metrics were right. The average purchase value, which means the profit from the first purchase, was higher than our cost to acquire the customer. So, let’s say we spent 60 dollars on 100 potential customers and out of those 100 customers just one became an actual customer. Thus if we make a profit of 220 dollars from that customer, from that 60 dollars spent, we have acquired one customer, and we have created a net profit of 220 minus 60 equals 140 dollars. So, make sure your metrics are right.
You have to have something different from your competitors, so-called USP (unique selling point). Even if you do have it, it needs to be significantly different and unique to succeed. If it is not unique enough or if you do not have enough of a difference, forget it. There is no chance, you cannot succeed. Our website has things that help with searching. When people search for multiple hotels, they can use various filters to filter out hotels that are acceptable to their own halalness criteria. And apparently, to make it more searchable, it is essential to have the right data structures, to acquire data from suppliers and put it into the correct data cells. We pay a lot of attention to our data quality and data management processes. Those things are critical for our success. When you are at the beginning, you can do it manually. We did a lot of manual work when we started. But now we have about 1000 hotels on our website, and we are aiming for 10,000 by the end of the year. It is a very different challenge to scale up, so we can no longer work with each individual hotel and waste our time to get the data correct. The point is, how you ensure data quality when you start entirely different from when you grow from a 50 million dollar company to a billion dollar one. In the beginning, it is not just okay to do something manually, it is actually important to do it manually because you learn, you learn, you learn, and at some stage, you can say “Okay, I see the pattern now, and now I can create an algorithm and automate”. Always keep in mind that there is a point where you cannot keep doing it manually, you need to scale up.
The problem in travel is the fact that data is very inconsistent across different platforms, so we put a lot of effort into data mapping, to make sure that the information on our system maps correctly to the data on the other systems. Depending on your sector, this might be very important. For example, the airline industry is much more standardised regarding data, but the hotel industry does not have any such standardisation. It is a challenge, but it is also an opportunity. If you do it right, you are ahead of the competition.
I’ll give an example of what we don’t have. We don’t have an app. You might be surprised, but we still don’t have it. We do not have it because it is just not a high priority at the moment. We have about a thousand IT projects on our list, and it is probably not even the 200th project on the priority list. So the point is also for a company of our size, we still don’t have an app because it is not a priority. Tough decisions on priorities are very critical for business success.
The challenges we face now are entirely different from the ones in our past. For example, in the past, we worked as one team, but once you are beyond ten people, you cannot function as one team. So, you have to create bureaucracy. Bureaucracy is a word that everyone avoids. Do not prevent it. If you don’t create bureaucracy, it will establish itself. So, control it, do not leave it too late.
When you have challenges, come back to thinking why you are in this business. Are you solving a real problem? Do you have all the critical skills to execute this business model? If you do, don’t worry. I’ll give an example: during our first year, we had one month where we didn’t even have a single booking. But it did not affect us. Because we knew that we are solving a real problem, we are addressing it right, and we are the best people to answer it. So we just pushed on, and the next month things were back to normal. It was only one unlucky month. So when you don’t have traction, you need to ask the above questions and as long as you have clear and decisive answers to them – don’t worry, work hard, success will come.
Some people ask if it is good to have a VC (venture capital) investment or bad. It is good and bad. In our case, we did not have a VC investment, and the good thing about not having a VC investment is that it forces you to watch marketing metrics every month because you don’t have any spare cash that will compensate for higher customer acquisition cost. So you listen carefully, you spend your money right, you get real customers, and you make a real net profit, so you are very unlikely to run out of cash and burn. But not having a VC investment is terrible in the sense that, if you have found a significant market opportunity and you have a great team to execute it, not having a VC investment means that you have to move slowly. So there is good and bad. Which way you choose is up to you.
Choose your brand name early on and correctly. We changed our name five times, which is embarrassing. It costs a lot of money to improve your brand once the brand has some value. Make it short. ‘HalalBooking’ is, I think, a bit too long but make it quick if you can. Ideally, it should tell what your brand is about because then you don’t have to keep explaining what the message is in your advertising. Our brand does it very well, and it is evident to all hotels and many customers. So in that sense, we sacrificed the length and went for a long one. If your business is going to be a global brand think about something meaningful for all your audience or if it can’t be significant, choose something concise and easy to spell.
We say that we now have 75 countries, but we started with the UK as our customer base. So do not run after too many targets. Be very focused on your first target. We specifically chose the Midlands, we thought that it would be a smooth start. Regarding destination, the place to which the customers are going, we specifically focused on the Antalya region of Turkey first. Not just Turkey, but specifically the Antalya region of Turkey. Now we have hotels in 30 to 40 countries but at the time we were very focused, and I think it helped a lot, to survive and grow. And after we had some traction in the Midlands, we started targeting South East England and then Germany, Scandinavia and now 75 countries.
And again, I come back to the team. Make sure that your core team does not consist of people with the same core competencies because sometimes I see 3 great programmers saying “We’ll make the world a better place.” Well, it is not great for 3 founders in a tech company to all have only engineering skills. Businesses can’t function just with engineering, so you need to make sure that one of the founding members has the other critical skills that you need and that is why it is imperative to think about the business model you have and decide which two, three or four out of dozens of skills you need are the critical ones. If you don’t have one of these vital skills, you will fail. Once you know which critical skills you need, make sure that your founding team has them. And if you have them, all other non-critical skills can be complemented later. You can buy them by hiring people and so on. And that is what we have. We have people who really complement each other.
Question: What is your customer acquisition strategy moving forward?
When we started, we were doing a lot of things which we now wouldn’t do because it is not scalable. We tried lots of things, some were pathetically bad, some were good. One thing worked really well was that we sponsored a journalist from a newspaper to go on holiday. Off she goes, she has a fantastic time, comes back and writes an article about us, gives it to the Guardian and the Guardian publishes it. As a result, for a year we got substantial online traffic from it. It took a lot of money to engage and find that journalist, but it generated good traffic. Are we still doing it? Yes, but we are not investing everything in it. Now, we just add journalists to our mailing database, we continuously market to them and make it very clear that we organise these trips as groups and that we pay for everything. We can afford it now, and we end up with one trip for 20 people. In the past, we did not do any social media marketing. We absolutely do it now. For example, if you are a niche business, Facebook has some excellent opportunities because it has a lot of data about people. For example, you can make it target anyone who downloaded a travel app in the last 6 months and also at the same time who reads that particular religious book. You will probably spend a lot of money and gain some experience before you find the right targeting method. You need to have money for it. So, social media marketing, using personal data of those individuals to target them in a very customisable way is essential. We still engage with various influencers and bloggers. We send them on luxury holidays and have them write about us. So, social media is critical in niche marketing.
Question: At which point did you realise that there is a need to control the development of your culture, processes and bureaucracy? And moving forward, which is the biggest challenge in this area?
I suppose, the moment we were ten people, I started realising that I needed to pay more attention to it. So we began implementing some processes. For example, I worked at British Gas, and before that, I worked at British Petroleum. British Petroleum is a 100,000 person company, they have massive processes. There is a very formal process there, but there it is an absolute must, you have to have all of them. If you don’t, there will be lots of arguments and disappointments. HR, the Human Resource Department, watches it at BP and makes sure everyone does it correctly. So I took 1% of that significant process and started implementing it. I said “Every year, each person will have a one-hour conversation about their performance: no forms, no formality, just a meeting with their line manager. And I participated in every meeting because I had experience of this. I made sure that we achieved the aim. The primary aim was not to document anything, it was simply for each employee to get feedback so that they don’t think that efforts might be forgotten. It started to build a sense of fairness in the company. And only performance matters in this company, because when you start a business, it is normally with friends. When new people arrive, they may feel like “I am not one of them, I am not their friend. Do I have a future here?” And because we started building this pure performance management culture early on, it was apparent that it doesn’t matter if you are a friend or not. Only your performance matters. So the point is to take a small part of the significant process and implement it, don’t do everything at once. Coming back to your question, the biggest challenge moving forward is, I think, scalability because people are used to the way of doing things. There is a legacy, expertise. I actually find that re-developing system, such as data structure, and re-coding them is easy, but the process of human change is more difficult. The earlier you do it, the better. One thing we are paying a lot of attention to on new hires is how flexible people are. I mean if someone comes for an interview, we don’t really ask too many questions about their experiences because sometimes too many lessons can be wrong. What we look at is how easy it is for them to accept change and how easy it is for them to scale things up. For me, that is the biggest concern of our company: how to drive a constant change?
Question: Was it difficult for you to make a decision to go from a corporate career to a private business?
It was super difficult. There are a few reasons for that: I come from a Soviet Union background, and we did not have a concept of private business enterprise there when I was growing up. So it was a tough decision, but I made it because it was obvious to me that I would make it sooner or later, it was just a matter of time. I said, “I am taking it and I am doing it now.” I think people should be brave. There is a person who helped me with that. He said: “Forget everything else, Elnur, just ask yourself one single question: will you ever stop thinking about doing it (private business)?” I told him “ I do not think so”. And then he said: “That’s it – you have your decision.” So, if you are at that stage, simplify the question. Do not put many criteria into your decision making, just have one rule. Focus on the most critical , and you will have a decision. And I realised one thing; business means problems every day. Any question of the business is your problem. If you are as a person, psychologically and concerning your character, comfortable with having issues every day, and you won’t go mad – in this case, private business is for you. The other criterion is common sense. A lot of businesses are just about common sense, not rocket science, and if you believe that you have the common sense, be brave. Being successful in business is not about being 100% perfect, it is about being better than the competition.