Sam Jain is the founder and CEO of Fareportal, a travel technology company that operates successful brands such as CheapOair and OneTravel. Established in 2002, Fareportal’s initial focus was on developing e-commerce sites, booking engines, and management tools for the retail and wholesale travel industry. The company’s current multi-channel distribution model is what Sam credits for allowing Fareportal to thrive through some of the most turbulent times the travel industry has ever seen.
I had the opportunity recently to ask him about his experience growing his business from an idea to a multibillion-dollar organization.
What inspired you to start your business?
When I started in the travel industry, it was in the 90s. There were no technologies at that point to help organize the travel industry the way I envisioned that it could be. I came from a technology background so I was able to fill the need to add organization to a greatly cluttered business. A lot of the databases from airlines were all being done by hand and on paper, so we were able to organize those systems using technological advancements that would allow for easier distribution. Organizing the cluttered distribution methods was the inspiration to begin my business.
What was the most difficult part of getting funding to start your company?
Having no experience was the most difficult part. Investors didn’t want to provide any money to someone like myself. I had no proven experience in the industry. My initial investment came from my own personal credit card. I was able to take that initial $4,000 investment in myself and my company and turn it into the $3.2 billion business that I have today.
What are some effective ways to reduce start-up costs?
You really have to do a lot of things yourself and keep an eye on discretionary costs, which can really help. When I got my first office, we bought all the furniture ourselves from Staples for a few hundred dollars and assembled it ourselves. We didn’t have any luxuries such as secretaries; so many administrative duties had to be done by team members. Multitasking is how to keep your costs lean.
At the time, what resources or tools did you have to help you with the planning phase of your business?
When I first started, my team and I depended upon the experience I had gained in the travel industry. I noticed the gap in the distribution where I felt I could use my technological understanding to make it more efficient. That knowledge and seeing things firsthand helped me understand what I was doing. I didn’t need to source any data. Knowing the industry from an inside perspective makes a big difference. I was able to use my knowledge and leverage that in order to make distribution systems that would work.
What was your unique selling proposition that set your business apart from other travel companies?
We started out by working with airlines. They had a “wholesale” model in place where they provided special inventory to certain travel agencies. The inventory wasn’t widely available because of the antiquated way the airlines would do business. We were able to place their inventory and contracts into databases, and allow our agents to provide a fare code in less than 10 seconds. If customers called other agencies they would take 5 minutes to provide a fare code. The efficiency we were able to give to the customer really made a difference, and allowed us to provide a quality product at a fast rate. Mind you, this was prior to placing it on the internet!
What were some of the challenges you faced running your business in the early stages of development?
I faced being bootstrapped, since I was self-funded. I’m sure many entrepreneurs can relate to that. You’re not going to make any money in the first year of the business. I had to really make sure to pay all the bills, even though I wasn’t making any money. I had to closely watch banking accounts, and take time to manage them since I couldn’t afford to hire a CFO. Also any business development, marketing, sales, and providing customer support all had to rest on the shoulders of myself and my small team since I had to be conservative and make sure we were always good with regards to funding. That’s a lot of different functions that I had to juggle, and all factors which make the early stages of starting a business so challenging.Click here to join the conversation (0 Comments)
Like this article? Please share it:
How LivePlan makes your business more successful
If you're writing a business plan, you're in luck. Online business planning software makes it easier than ever before to put together a business plan for your business.
As you'll see in a moment, LivePlan is more than just business plan software, though. It's a knowledgable guide combined with a professional designer coupled with a financial wizard. It'll help you get over the three most common business hurdles with ease.
Let's take a look at those common hurdles, and see how producing a top-notch business plan sets your business up for success.Click to continue