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Simon Nixon was one of the co-founders of Moneysupermarket.com, and recently stepped down as CEO of the company. He launched Simonseeks, a travel review site, last week.
I have been talking to Simon about the idea behind his latest online startup, as well as the price comparison market, and his tips for other entrepreneurs...
What was the idea behind Simonseeks?
I had the idea about a year ago when I was still CEO of Moneysupermarket. It came out of my own frustration with searching for holidays and reviews. What I wanted was a site with a really powerful search so I could find holidays and trips specific to my own needs.
For instance, I might not want to specify a country, just Europe in general, or somewhere within 2 hours' flying time, or combine searches together, e.g. searching for weekend breaks, romantic places, and good food, before being able to select the type of budget I have to spend.
The idea was also to get plenty of guides written by people who know the destinations, and to use the community to rank and rate the reviews uploaded to the site, as happens with videos on YouTube.
We encourage writers, travel journalists and celebrities to write 800 word reviews of their favourite destinations, talking about local places of interest, good restaurants and bars, hotels and so on.
How does it make money?
The site generates revenue by taking a commission when hotels, flights etc are booked via Simonseeks, as well as from AdWords and display advertising on the site. So advertising on a review page, and commission from any bookings made is split 50/50 with writers.
We try to generate as much revenue as possible by providing users with all the tools necessary to research and book their holidays. This encourages the writers to make their reviews as helpful as possible, as the market effectively decides how much they will be paid.
How much can people make writing reviews?
Once the site has been optimised and we have built up traffic levels, a decent guide in a high volume destination should make £500 over 12 months for the author. This is on the premise that guides have to be kept up to date, and creates competition as time goes on.
We will send updates on the traffic stats and rankings scores to writers, as well as giving them feedback on the kinds of things that customers are looking for in reviews. It's a partnership between us and the reviewers.
How do you ensure quality of reviews?
It's like YouTube in that sense, and we will rely on the community
to self-regulate, and vote on reviews, so that the cream will rise to
If you write a rave review about a hotel that turns out to be naff, then others will review it and your ranking will drop. It isn't a long-term strategy for writers to make money, as bad reviews will be found out.
There are also tools for reporting reviews if there are inaccuracies, and users looking to book will take note of these scores before deciding whether to trust a particular review.
How do you ensure that there are enough reviews to make the site a useful resource from the beginning?
It's a chicken and egg situation, and a problem for any startup like this. To solve this problem we went to the travel journalistic community and asked for reviews from them for the launch. It was a big ask, since they are normally paid much more, but we manged to gather more than 1,000 reviews from 300 travel writers.
In a year's time, we hope to have more like 10,000 guides on the site. Community sites like this are a moving feast, and they evolve over time.
It must be easier for you, having the clout of Moneysupermarket.com behind you?
There is an advantage there, as well as the fact that I know about SEO, PR, product development, user testing and all the other areas from my time at Moneysupermarket.com.
What you cannot prepare for though is whether the idea is good enough; it's impossible to test that before launch, so you just have to go with your gut feeling.
What made you decide to step down as CEO of Moneysupermarket.com?
I had been a CEO for ten years, which is much longer than most, and now I've become Vice Chairman. I felt that I had taken the company through the growth phase, and we had taken on some talented people during that time who I felt were better suited to the corporate CEO role than I am.
I found the investor relations work, as well as dealing with all the staff issues and more to be time-consuming and as an entrepreneur, I wanted to be more involved in product development and with customers.
I also wanted to work on another startup; I've always thought: 'once lucky, twice good', and have asked myself whether I just got lucky with Moneysupermarket.com, so Simonseeks is a chance to answer that question.
Do you invest in online startups?
We launched a scheme called Making Millionaires a couple of years ago, and the idea was to take pitches from startups with good ideas for online businesses, and help them develop a business plan and launch with the backing of Moneysupermarket.
It ran for 12 months, but we didn't really find any that were interesting enough, and with the recession, we were were forced to focus back on the main business of Moneysupermarket.
Is price comparison now a totally saturated market? Is there any room for growth?
It is definitely a saturated market in the UK, and there is certainly no room for another price comparison site to enter the market, We have around 40% of the market in the UK, and have been looking overseas for growth.
However, the vast majority of people in this country don't research online and this does provide an opportunity as people become more used to doing this. There are still opportunities to diversify as well. We recently launched in Germany, and also maintain a watching brief for any other opportunities.
There are price comparison sites in Germany but they tend to be more specialised, and none are as diversified as Moneysupermarket.com, while many only list providers that pay commission, so this gives us an opportunity to launch a broader offering.
We have been successful by offering the breadth and depth of products on our site, and this gives people plenty of reasons to keep coming back to the site.
What advice would you give to budding entrepreneurs?
First of all, you have to have great idea or concept that resonates with people and is useful to people. It has to be unique, and be something that can potentially change people's lives.
Secondly, it's great if there is a business model but if you haven't, then that can come later. If you can drive traffic to your site then you can find a way to make it pay. For example, Google had built up a massive userbase for its search engine before hitting on the idea to monetise it by using AdWords a few years in.
The third thing is to have that passion and drive to push your idea through, as you will get kicked in the balls every step of the way. You need to take on people who are better than you in some areas and learn from them.
Some entrepreneurs make the mistake of hiring too many yes-men, but you need talented people to help make your ideas work.