David Cunningham is an experienced entrepreneur who has founded two startups both with successful trade sale exits. His first startup Shanghai Vision was a real estate investment company selling properties in China. In September this year he sold his second startup OurExplorer.com an ecommerce travel website.
David is a sales and marketing expert. In this interview I talk with David about how he marketed, built trust and sold offline. And then how he did it again selling online at OurExplorer.com, via SEO and SEM and then converting the customers to sales. Two very different approaches required.
After his recent exit, David’s is now an “Entrepreneur in Waiting”. He’s now looking for a Sydney based early stage startup to invest in and work closely with. See the end of this interview for more details.
The full interview, (in audio) can be downloaded here: Entrepreneur Interview - David Cunningham.
The full interview on video is here:
If you prefer text, here’s the Summary Notes:
David’s two startups:
- Shanghai Vision – Started in 2003, a Real Estate business selling residential real estate investments in Shanghai, China to the markets of Australia, UK and Ireland.
- OurExplorer.com – an ecommerce business. Through the website, customers can find and book professional private tour guides in countries all around the world. He sold this in September, 2010.
- Found the opportunity while working at JP Morgan in 2001. Released that there was massive property development in Shanghai,
- Bought their own property to test it, and found a lot of interest in buying Shanghai property from friends back home in London.
- They realised the business opportunity, quit their jobs at JP Morgan and started Shanghai Vision.
- This business was all about selling and offline marketing. Because they were selling high value goods, they needed to build trust to an extreme level.
- They initially wasted a lot of money in marketing in magazines etc. that didn’t work. Anyone can pay for an advert, and people know that so they don’t trust it.
- However, exhibitions and seminars did work. Because it is a high value product they really needed face to face contact with their customers to sell. But they needed to have an office in the same country as the exhibition / seminar location. At the exhibition they needed to be able to direct their customers to a physical office.
- Another way to build trust was on TV shows, talk back radio etc. They had lots of appearances on these. Having that interview gives you credibility.
- In order to get PR, it is easy when you have an exciting different product. If you have something that is exciting and different and people want to hear about it. Selling properties in ‘Communist China’ was different and exciting, whereas for example if you were selling property on the Gold Coast it isn’t different or exciting, and it’d be very hard to get PR
- So when he looks to invest in a business or in a business to build, it has to be different or exciting, or he knows he won’t get PR; articles, radio, TV interviews – which are a very powerful marketing tool
More on building trust offline (so they could make the sale):
- He’d always encourage the prospect to come in to the office, either 1 on 1 face-to-face contact or 10 clients in a workshop seminar.
- They had a law firm linked to their company, which legitimated their credentials. He also relied on his background at JP Morgan for credibility
- Focus on one product. His company wasn’t China Vision, or WorldWide Property Vision it was Shanghai vision. They focused purely on one product (Shanghai property) and grew very deep knowledge in that product.
More on Sales:
- Facts are the key to a sale. You never give your opinion. So not “I think”, instead “the fact is…”. Undisputed facts of why people will be driven to Shanghai and why the properties will grow.
- If you don’t know, you don’t know. Actively write the question down and get back to the customer. If you admit that you don’t know when you don’t, it builds confidence in the other answers you do give.
After they’d built up 3 sales offices in Aust, UK and Ireland they had something of value. They were looking into sales options, but as it turned out, the sale of Shanghai vision was a management buyout to one of their sales managers. Because the person who is buying the business knows the company very well already, the due diligence was extremely quick, and the deal was done in 3 weeks.
- As a second time entrepreneur, David chose to only risk a percentage of his winning from his first business. It came down to an ecommerce business because of the low set up costs.
- He came across the travel idea by chance while holidaying in Bolivia. The tour guides got most of their business from local travel agents and hotels who took 30% commission. The tour guides didn’t advertise online – so David saw an opportunity, researched it and discovered there weren’t many competitors online servicing this market.
- If you ask a lot of questions, stay observant and listen to complaints. A complaint equals an opportunity.
- It was a long process to start the business and grow it. The old saying of the entrepreneur “halve your projected revenue, double your projected expenses” was true.
There were three stages to growing the business:
Stage 1: Build the website
- His first website, he tried to build offshore. Using something like elance might be ok for a simple website but not for a complex ecommerce website. It failed and cost him a lot of time and money.
- His second website with a developer in Sydney was successful. Close communication was required.
Stage 2: Get quality unique product
- Getting quality product (quality tour guides) was very difficult. It was very difficult to get them on in the first place, and then when they did, the quality was low. The tour guides didn’t have photos, prices, licences. No-one is going to book the tour guide without the core details. It was very staff intensive to contact the tour guides and get all the information to raise the quality of the product (tour guides).
Stage 3: Drive traffic
- To drive traffic they used SEO, SEM (like google adwords), and Partnerships (with companies like Flight Centre)
- He didn’t know anything about Online Marketing before he started this business. So he went and learnt 80% top things in SEO, Google Adwords and Conversion. After reading 3 or 4 different ebooks and such he realised when they started to repeat themselves he’d learnt the 80% or so.
- From there he could engage a specialist provider, and with his knowledge he could have an intelligent conversation and pay them to learn the rest.
- He divides SEO into two parts. Onpage SEO – things in your control that you can do to have an immediate effect, the quick hits. And Offpage SEO – all the links to your site.
- The first step, and the key to SEO is doing the research to find the right keywords. Find the top 10 keywords in your business. And use them for your onpage SEO, and for your offpage linking.
- The quick hits for SEO are onpage. You can determine what your description says for each page, the metatags, copy, headings, url, domain name.
- The second part of SEO, offline, it very hard. It’s time consuming. Getting your websites’ URL in as many pages as possible around the internet. The more relevant the websites linking the better.
- SEO is slow. Be prepared for a lot of work with little results for the first 6 to 12 months.
- SEM, like Google Adwords is expensive, so do testing. You don’t want to be generating a large adwords bill if there is no conversion.
- The landing page is all about the conversion. Have a good landing page that is relevant to the keyword. If the person searches for “Tour Guides” in google, you want your ad to say “Tour Guides” and then your landing page to talk all about “Tour Guides.” You don’t want them arriving on your landing page where you use a different term eg. Private Guides. Keep it consistent right the way through.
- To increase click through, use offers and words like FREE. But only if you actually provide this on your landing page. Otherwise you will get a lot of clickthrough, which will cost you a lot, but no conversion to a sale.
- 2-2.5% click through rate is a good job. In general you can’t do much more.
- In order to get conversions online you need trust. Building trust online (for OurExplorer.com) – is totally different to offline. This is how they did it:
- Testimonials. There is a hierarchy of testimonials they are:
- Text, words (least credible)
- Text with a photograph
- A video, the customer giving a video testimonial (most credible)
- A secure website with SSL certificates etc
- Brand of trust. If you are dealing with trusted brands, put your partners logo’s on your website, at the top of the landing page, so your customer sees their brand, trusts them, then trusts you
- A contact. Physical office, live chat etc – make sure they think there is a physical presence behind the webpage
- The design of the website. What font you use, where you put the buy button, what colour the button is.
- A guarantee, 100% refund. They had less than 0.1% refunds so it worked well.
- The trick for conversions is, Measure. Keep testing the conversion, split testing to see what converts better. It won’t be something amazing, but there will be a difference of maybe 10-15% and it all adds up. Keep testing, if something is not working, remove it and try something new.
There was no ‘magic dust’ that made a massive difference to their traffic and conversion. It was just a slow steady accumulation of keywords and links. So be prepared for this. Don’t expect results overnight or even over a few months. It takes time.
Leading up to the trade sale, what OurExplorer had achieved was the building and aggregation of a lot of quality data. 2,500 tour guides in 142 countries around the world that was ranked and sorted by user reviews. This data was not available anywhere else in the world. And that was what was purchased.
What David is doing now:
As an entrepreneur, he’s had two successful businesses, both which he has successfully exited from and he wants to use this experience to help an early stage Sydney startup to grow. After his recent exit in September 2010, David is now looking to find a high potential business and then invest both financial capital and his time into the business. Actually work within the business day-to-day and help drive the sales and marketing of that business. Build it up and then exit through a trade sale.
Anyone who is interested can get in contact with David Cunningham via email@example.com
If you have any feedback on this interview, ideas, thoughts, please email firstname.lastname@example.org
If you haven’t already, you can download the full audio interview here: Entrepreneur Interview - David Cunningham.