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In Conversation with Adam Schwab: Building a travel business while knowing nothing about travel · What the Flux

0:05
Speaker 1: This is what the flus I'm the and it's Monday,
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Speaker 1: twenty seventh of October. Today Brett and Justin will be
0:11
Speaker 1: doing a deep dive interview with Adam Schwab, CEO and
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Speaker 1: co founder of Luxury Escapes. But before that, here are
0:16
Speaker 1: the top three business news stories from Australia and around
0:18
Speaker 1: the world. After a bullish eighteen months, gold price has
0:21
Speaker 1: suffered their biggest one day crash since COVID, dragging down
0:24
Speaker 1: the share price of major mining companies on the ASX.
0:27
Speaker 1: After the crash, gold prices were down by almost seven percent,
0:30
Speaker 1: while silver tumbled more than eight percent. In other news,
0:32
Speaker 1: Open Ai announced the launch of Atlas, their new AI
0:35
Speaker 1: powered search browser built to rival Google Chrome. Fifteen minutes
0:38
Speaker 1: after the announcement, Google shares plummeted by one hundred billion dollars.
0:42
Speaker 1: And finally, Westpack have agreed to assex twenty million dollar
0:46
Speaker 1: fine for misconduct within the Westpac owned RAMS homelow network.
0:49
Speaker 1: Following investigations, the RAMS mortgage broking franchise has effectively been
0:53
Speaker 1: shut down. That's it from me today. I'll pass it
0:56
Speaker 1: over to bretton Justin for their in depth and entertaining conversation.
0:59
Speaker 2: With Adam Foxam. Today we are very excited to be
1:03
Speaker 2: joined by Adam Schraub, co founder and CEO of Luxury Escapes.
1:06
Speaker 2: Adam has built one of Australia's most successful travel brands
1:09
Speaker 2: from the ground up, taking a leap from a legal career,
1:11
Speaker 2: surviving some of the most difficult years in travel, and
1:14
Speaker 2: now leading a global business that connects millions of people
1:17
Speaker 2: to luxury ghetaways. In our conversation today, we're going to
1:20
Speaker 2: go deep into how he's thought about risk, culture and growth,
1:23
Speaker 2: but also what luxury travel might look like in the
1:25
Speaker 2: next ten years. Trobby, Welcome to What the Flux in conversation.
1:29
Speaker 3: This is a massive one. My goal was to one
1:31
Speaker 3: day get on yourself finally done it. It's done it
1:33
Speaker 3: about eight years, but made it.
1:35
Speaker 2: You've been a huge ambassador for us as well, so
1:37
Speaker 2: big thank you for promoting What the Flux to all
1:39
Speaker 2: your podcast listeners.
1:40
Speaker 3: We appreciate it well. I think your listeners would love
1:42
Speaker 3: to know that you were one of our very early
1:44
Speaker 3: employees at a business we called My Table that was
1:46
Speaker 3: frankly a terrible business, but not because of you. You
1:49
Speaker 3: were the shining light. We actually sold that business to
1:52
Speaker 3: gapin has yet catch you sold it to Menulogue, so
1:54
Speaker 3: possibly the greatest result for the worst business in Australia.
1:57
Speaker 2: Amazing. We're going to get into that, don't worry. So
2:00
Speaker 2: we took us through your career. As I said, you
2:01
Speaker 2: started as a lawyer. Where's it gone since then? Obviously
2:03
Speaker 2: to greater heights.
2:04
Speaker 3: So it was a lawyer literally about one hundred meters
2:06
Speaker 3: where we're sitting right now in a firm called Free
2:08
Speaker 3: Hills that's turned for another firm since then. We then,
2:11
Speaker 3: me and my co founder guy called Jeremy Sham started
2:13
Speaker 3: a backpacker apartments business, one of the least glamorous businesses
2:16
Speaker 3: you could ever imagine, And if you think it's not glamorous,
2:18
Speaker 3: it's even worse than you think. We literally put it
2:20
Speaker 3: together the furniture we were moving. We wanted to move
2:22
Speaker 3: tenants to a different apartment, like literally moving sack of
2:24
Speaker 3: old potato. So it was. It was about as unglamorous
2:26
Speaker 3: you could expect, but certainly taught us some perseverance and grit.
2:29
Speaker 3: We then com pivoted to a corporate apartment's business, a
2:31
Speaker 3: bit more of a stable business, still unglamorous, still hard work,
2:34
Speaker 3: and still very unscalable. So it started at twenty four,
2:37
Speaker 3: did out til twenty nine and bought and sold some
2:39
Speaker 3: properties and had this million dollar sort of win for
2:42
Speaker 3: from buying and selling apartments that we were renting ourselves,
2:44
Speaker 3: and we so, what can we do here? We were
2:46
Speaker 3: sort of two thousand and eight, two thousand and nine
2:48
Speaker 3: Web two point zero sort of kicking off, and we
2:50
Speaker 3: started that business called my Table that you were a business,
2:52
Speaker 3: fantastic employee of horrendous business. And also started a business
2:55
Speaker 3: called zupon, which became deals dot com dot Are You,
2:58
Speaker 3: which became essentially sort of a predeces of Luxury Escape.
3:00
Speaker 3: So had it sort of this great for way in
3:02
Speaker 3: to learn the caper two years of deals dot com,
3:05
Speaker 3: which is really a business based on group on in
3:07
Speaker 3: the States, sort of marketing business for small business, and
3:10
Speaker 3: it was an interesting business to run. We learned a lot.
3:13
Speaker 3: We learned how to treat customers, we learned how to
3:14
Speaker 3: work with vendors, we learned how to work with staff.
3:16
Speaker 3: We went from zero staff to thirty thirty five, and
3:19
Speaker 3: then we bought a bunch of businesses and we realized
3:22
Speaker 3: pretty quickly that the experienced stuff was okay, but travel
3:25
Speaker 3: was a much better business, much higher we call AOV
3:28
Speaker 3: average order value I think you've talked out on the show,
3:30
Speaker 3: and great brand. So we could take this luxury Escapes
3:33
Speaker 3: brand to customers and they really liked it and hotels
3:36
Speaker 3: loved working with us. We found this what you can
3:38
Speaker 3: call a flywheel or a virtuous cycle, which is greating,
3:41
Speaker 3: great value for customers, so great discounts on amazing holidays,
3:45
Speaker 3: great curation, and we we're rather to make lots of
3:47
Speaker 3: money for our hotel partners as well. So creating this
3:49
Speaker 3: really rare win win in commerce. And when we started business,
3:53
Speaker 3: we knew nothing about travel. We'd never stayed a fast
3:55
Speaker 3: our resort like we'd stayed at like overtels or whatever.
3:57
Speaker 3: We never stayed at like the high end places. Yeah,
3:59
Speaker 3: we certainly didn't know how travel, and that was an
4:01
Speaker 3: advantage in the end because we had zero industry knowledge.
4:04
Speaker 3: We kind of fumbled our way through, created a new
4:06
Speaker 3: sector in a way, and have kind of built a
4:09
Speaker 3: travel business on the back of our complete ignorance and stupid.
4:11
Speaker 2: In So, did you offer some deals for travel within
4:14
Speaker 2: deals dot com, dou and that's how you realized the
4:17
Speaker 2: luxury escapes business exactly.
4:19
Speaker 3: So we people come to us actually, and we had
4:20
Speaker 3: a guy called Mark who I went to Union with
4:22
Speaker 3: as a good friend of mine. And this guy Mark
4:25
Speaker 3: was probably the best negotiator in Australia. So he would
4:29
Speaker 3: rock up to a a Bintan T shirt and thongs
4:31
Speaker 3: to Italian hotel and do a million old deal. And
4:34
Speaker 3: what made him so good was he put himself in
4:35
Speaker 3: the shoes of the hotel. He'd also put himself into
4:37
Speaker 3: the shoes of the customer, So do both. That's really rare,
4:40
Speaker 3: and we've got a team that does this now, incredible
4:42
Speaker 3: and he sort of was the first to do that
4:44
Speaker 3: and did an unbelievable job, which was working hard, and
4:46
Speaker 3: Josh was working hard, and I was sort of there
4:48
Speaker 3: and all was at SFR. We were sort of all
4:51
Speaker 3: over the place, and we sort of built this incredible
4:53
Speaker 3: team of generalists initially and then as you get better
4:55
Speaker 3: and better, you because you start hiring specialists. And we
4:57
Speaker 3: hired our amazing CTO Shi nine years ago and left Amazon,
5:01
Speaker 3: came back and built our development team from twenty five
5:04
Speaker 3: people to one hundred and thirty people now, so we're
5:06
Speaker 3: really a tech driven business now more than a travel business.
5:09
Speaker 4: Was there ever a stage once you'd made that decision
5:11
Speaker 4: to go all in on travel, that you really doubted
5:13
Speaker 4: or had any uncertainty about the direction that you decided
5:16
Speaker 4: to go down.
5:17
Speaker 3: It was actually the opposite. We took way too long
5:19
Speaker 3: to do what you like. What you used to do
5:20
Speaker 3: was a sensible thing. Yeah, but it's really hard when
5:23
Speaker 3: you're when you're in the thick of it. And the
5:24
Speaker 3: first year we did it, we did a deal with
5:26
Speaker 3: the Catch of the Day. You guys catch a day
5:27
Speaker 3: tragically rest in peace, West Farmers. Before that was an
5:30
Speaker 3: incredibly commerce business. It was the brand. I used to say,
5:33
Speaker 3: We're like a catch to day for travel. And now
5:35
Speaker 3: everybody's gotten about catching. People know us. But back in
5:37
Speaker 3: the day we looked up to Gabi and Hesi who
5:39
Speaker 3: ran catches, these sort of oracles of e comment as
5:41
Speaker 3: they were we had to deal with. We sold them out.
5:43
Speaker 3: We had these product businesses, we had experience, and we
5:44
Speaker 3: were just a complete can I say shit show on
5:46
Speaker 3: the show? What we were? A complete shit show, a
5:48
Speaker 3: bunch of different stuff. When we tried to list at
5:50
Speaker 3: one point and investors basically laughed us and said, why
5:52
Speaker 3: the hell you You guys liked three businesses. While we
5:54
Speaker 3: we love this travel thing, we hate this stuff like
5:57
Speaker 3: experience is okay, we hate this product stuff. Temple Webs
5:59
Speaker 3: did a great we couldn't quite get to what not hated,
6:02
Speaker 3: so we did a great deal of Gavin Hazy. We
6:03
Speaker 3: became travel only in twenty seventeen, so it took us
6:06
Speaker 3: really caught it four years since Luxury Escapes officially came
6:09
Speaker 3: into being, so we deals to come before that lucture
6:11
Speaker 3: of SCAP twenty and thirteen travel only twenty seventeen. It
6:14
Speaker 3: took us four years to kind of do what you
6:16
Speaker 3: just said in the sentence, because we were just pretty
6:18
Speaker 3: stupid in venice, and the first year of it was
6:20
Speaker 3: actually not great because you have what's called discynergies or
6:22
Speaker 3: dis economies of scale, where we were had a shared
6:24
Speaker 3: back end. When you go to travel only, you suddenly
6:26
Speaker 3: have pretty similar costs but obviously less revenue in the
6:29
Speaker 3: short term. So it took us a year of kind
6:31
Speaker 3: of pain to get to where we need to get
6:32
Speaker 3: to stage one, and then we got travel kind of
6:35
Speaker 3: settled by twenty nineteen. Did us private equity process back
6:38
Speaker 3: in two thousy nineteen COVID happened, Thank god, because the
6:40
Speaker 3: thisiness is far more avaiable now. But twenty twenty we
6:43
Speaker 3: started building a marketplace essentially, so not just our sort
6:46
Speaker 3: of famous flash deals that people know and love. We
6:48
Speaker 3: started building a bit of a mini book dot com
6:50
Speaker 3: in a way, and that's now about half our business.
6:52
Speaker 3: And we've grown sort of three x since COVID in
6:54
Speaker 3: terms of revenue, probably ten x in profitability, two extemps
6:57
Speaker 3: of staff developments, three x four xs of the team,
7:00
Speaker 3: So we've really transformed the business since twenty twenty. So
7:03
Speaker 3: it's kind of had look at our career, it's been
7:04
Speaker 3: like six or seven different chapters or pivots, and each
7:07
Speaker 3: one building on the learnings of the one before, but
7:09
Speaker 3: then very different. And now I've settled in being a
7:11
Speaker 3: travel only business. We understand travel a lot more. Now
7:13
Speaker 3: we're probably the biggest seller of hotels for leisure in Australia. Now,
7:17
Speaker 3: if you asked me ten years ago, I'd say I'm
7:19
Speaker 3: just laugh at you, because nobody in the right mine
7:20
Speaker 3: would have thought that. But I had chipped away, started
7:23
Speaker 3: to understand competitive vantage and sort of built our way
7:25
Speaker 3: to a business that we never would have dreamed of
7:27
Speaker 3: ten years ago.
7:28
Speaker 2: You touched on COVID and how you were going through
7:29
Speaker 2: that listing process during COVID when the world was collapsing,
7:33
Speaker 2: were you also thinking, shit, this might be the end
7:35
Speaker 2: of luxury escapes as well, or did you have a
7:37
Speaker 2: vision that COVID will land will be back? Like what
7:39
Speaker 2: did that look like for you?
7:40
Speaker 3: I'm generally, even my podcast, maybe you wouldn't think that,
7:43
Speaker 3: but a generally a pretty relaxed time business. We don't.
7:46
Speaker 3: I don't, and just to an extent as well, But
7:48
Speaker 3: I tend to not get overly optimistic or pessimistic. I
7:50
Speaker 3: generally think things tend to work themselves out. COVID has
7:52
Speaker 3: always got to end. I was saying that from pretty
7:54
Speaker 3: early in COVID, But the first maybe the first week
7:57
Speaker 3: was a little bit nerve wracking, but I was never
7:58
Speaker 3: I never thought it would I thought I think we
8:00
Speaker 3: all thought were over. The three months probably should have been,
8:02
Speaker 3: but it wasn't. But probably within three four months we
8:05
Speaker 3: knew to be fine. We need to cash, Like survival
8:07
Speaker 3: goes go from profit to cash, can you maintain cash?
8:10
Speaker 3: And we've got We're really lucky. Got an MPs of
8:12
Speaker 3: seventy three, probably on the highest in commerce full stop
8:15
Speaker 3: let alone travel, which sends to have a lower MPs.
8:17
Speaker 3: So we've got a lot of customer love and we
8:19
Speaker 3: sell a non unit. We sell a unique, non commoditized product,
8:21
Speaker 3: so people were much more willing to keep their purchase
8:24
Speaker 3: on credit on foot rather than if you're buying a
8:26
Speaker 3: booking dot Com or quantas air ticket, it's commoditized was
8:28
Speaker 3: we'll buy it again later. You can't buy out deals again,
8:31
Speaker 3: so they're unique. So we were lucky that almost all
8:33
Speaker 3: our customers were happy to keep their packages on hold
8:35
Speaker 3: or transferred to credit and buy something in Australia, so
8:37
Speaker 3: our cash balance didnt actually drop it all during COVID,
8:39
Speaker 3: although we were losing money when you wo'll be able
8:41
Speaker 3: to survive. We didn't want to do a diluted capital
8:43
Speaker 3: raise early in COVID. Like pretty much everyone, even the
8:45
Speaker 3: great travel businesses of the airbnbs, the web jets, the
8:49
Speaker 3: flight centers, had to really diluted capital raises very early
8:52
Speaker 3: in COVID. We were lucky we're at private for one
8:54
Speaker 3: and we had that unusual non commoditized product range, so
8:57
Speaker 3: we did a cap raise at very first. We're bootstrapped
9:00
Speaker 3: or twenty twenty two did a raige with the amazing
9:02
Speaker 3: guys up year twelve who did a really fair deal
9:05
Speaker 3: and Campbell's been on by board has been incredible. So
9:07
Speaker 3: we were able to avoid the dolution the pretty much
9:09
Speaker 3: every our travel company had. And we also grew our team.
9:12
Speaker 3: So every other travel business sacked either a little or
9:15
Speaker 3: a lot of people during COVID, we grew our team.
9:16
Speaker 3: So that's just the benefit luck of being private and
9:19
Speaker 3: having this weird cash profile. So COVID was invertcom was
9:22
Speaker 3: really unlucky for travel but really lucky for us. We
9:24
Speaker 3: were able to sort of caught four or five x
9:27
Speaker 3: value value of the business due to being this is
9:29
Speaker 3: really fortunate position.
9:30
Speaker 4: And for the Flex family's benefit, where is Luxury Escapes
9:33
Speaker 4: at now all these years past that, how big is
9:36
Speaker 4: the team to the extent you can share with revenue
9:38
Speaker 4: at bookings?
9:39
Speaker 3: Yeah, so we I looked at our or we did
9:41
Speaker 3: a twenty fourteen were called a path find a perspective.
9:44
Speaker 3: So this was just ridiculous that we thought we could
9:45
Speaker 3: list at that time, but we did any and I
9:47
Speaker 3: was actually reading through that just a few days ago,
9:49
Speaker 3: and we had three hundred staff back then. We've only
9:51
Speaker 3: we've actually got six twenty, so the staff size has
9:53
Speaker 3: actually increased that much since twenty five. We're probably if
9:56
Speaker 3: you go back then, we're probably that Back then the
9:58
Speaker 3: travel bus one hundred million bucks, TV were about one
10:00
Speaker 3: point three billion. Now it's just about thirty and x
10:02
Speaker 3: in termat and since COVID we're about three to four
10:05
Speaker 3: x top one profits many more multiple that won't disclose
10:07
Speaker 3: profits specifically, but you can go to actick and probably
10:09
Speaker 3: find it if you want to. But we're we're actually
10:12
Speaker 3: in the find financial review recently, so we're hoping to
10:14
Speaker 3: do we only we budgeted fifty meal this year. We're
10:16
Speaker 3: hoping to significantly beat that. We're trading well ahead of
10:18
Speaker 3: that now in terms of EBIT, and yeah, we go
10:20
Speaker 3: revenue first. This finitchuse so about forty percent you're on year,
10:23
Speaker 3: which is a lot for US US a bit lower,
10:25
Speaker 3: so we budget a sort of a twenty percent level.
10:27
Speaker 3: We've had a pretty nice tale when this year, good
10:29
Speaker 3: things come to an end. So we're paranoid optimists. We
10:31
Speaker 3: want to do well. We're always really worried about what
10:34
Speaker 3: could knock us about, and not that we'd sit up
10:36
Speaker 3: or not thinking about it. We plow ahead, but we're
10:38
Speaker 3: always very cognizant of what can go wrong, and we've
10:40
Speaker 3: really shifted the business and this is a lot my
10:42
Speaker 3: co host has really driven this. As a bad Ecgreans,
10:45
Speaker 3: we really focused on how do we build competitive avantage?
10:47
Speaker 3: So as a business, you guess would try and get
10:49
Speaker 3: product market fit, and you guys talk about this on
10:51
Speaker 3: your pod a lot, but go from product market fit
10:53
Speaker 3: to competitive advantage is a big jump. Hamilton Helmer talked
10:55
Speaker 3: a lot about this, and acquired podcasts talked about this.
10:58
Speaker 3: How to build brand and what he builds brand and
10:59
Speaker 3: you know about that heavy build scale economies again a
11:01
Speaker 3: pretty obvious one for us. How do we build switching
11:03
Speaker 3: costs is a really big one. We launched two loyalty
11:05
Speaker 3: program and actually one's called Lux Plus. It's getting to
11:08
Speaker 3: one hundred thousand members that pay two fifty bucks per
11:10
Speaker 3: person per year. And these members have far better engagement
11:14
Speaker 3: with us. They're buying sort of fifty percent more stuff
11:16
Speaker 3: than non members. It's behavior economics in real life. If
11:19
Speaker 3: you look at cardam and to Worsking, you guys talking
11:20
Speaker 3: about them on the show, it is real life think.
11:22
Speaker 3: It's low and fast, real life pavor economics. We've also
11:25
Speaker 3: launched a program called Society, which is our version of
11:27
Speaker 3: Quantus Frek and Flyer, which has been incredible as well.
11:29
Speaker 3: So you earn status credits when you bunk, so you
11:31
Speaker 3: go from Bronze to Silver to Goal to Platinum and
11:33
Speaker 3: get lots of really great stuff. And you're getting points
11:35
Speaker 3: that you can earn and burn. And we'll hopefully release
11:38
Speaker 3: a credit card in the next few months or the
11:40
Speaker 3: next three or four months as well to earn points,
11:41
Speaker 3: which is pretty topical. Guys, you've talked about the RBA
11:44
Speaker 3: changes every credit card, slashing the pointing get will be
11:46
Speaker 3: the most generous credit card in the trade by long way.
11:48
Speaker 3: So we want to create a loyalty every other loyalty.
11:51
Speaker 3: And this is they're almost a victim of their own success.
11:53
Speaker 3: Quantus Frequent Flyer, Velocity is such good programs that and
11:56
Speaker 3: Amex as well. To extent, they're just trying, how do
11:58
Speaker 3: we we don't need to be so generous, we can
12:00
Speaker 3: actually become less generous because that customers are so wedded
12:02
Speaker 3: to us. We're taking approach where a challenger loyalty program,
12:05
Speaker 3: we're going to be the most generous lawty, generous lawty
12:07
Speaker 3: program in the world. We're going to become more and
12:09
Speaker 3: more generous rather than less and less generous as we
12:11
Speaker 3: get better and better at it.
12:12
Speaker 2: Interesting trouble we want to ask you. We ask five
12:15
Speaker 2: questions to all of our guests on the show. So,
12:17
Speaker 2: if you weren't leading luxury escapes, what's a job that
12:20
Speaker 2: you'd secretly or not so secretly love to try? Apart
12:23
Speaker 2: from podcasting, which you already try.
12:25
Speaker 3: Producer of the Flot of the Flux will probably be
12:26
Speaker 3: out there on the list, probably writing something not for profits,
12:29
Speaker 3: doing a sort of not for profit business, if that
12:31
Speaker 3: makes sense. So divindend, is the money in your pocket
12:34
Speaker 3: got to be something I'd love to do?
12:35
Speaker 2: Is there any specific area that you'd be interested in?
12:37
Speaker 3: Probably something around corporate governance that's a bit separate, but
12:41
Speaker 3: probably something around kids like you. Look at guy raz
12:43
Speaker 3: he's got how I built this? And he always asks
12:46
Speaker 3: is a luck or skill? And in my view it
12:47
Speaker 3: is not luck us It's like one hundred and ten
12:49
Speaker 3: percent luck. And Jess and I have been so incredibly
12:51
Speaker 3: lucky in our JOm like in every sense, like every
12:53
Speaker 3: step of the way we means to lucky and this
12:54
Speaker 3: is like luck compounding on lucky. So not just not
12:56
Speaker 3: just being lucky to be born to a middle class
12:58
Speaker 3: family in Australia. Then what you do to compound that
13:01
Speaker 3: luck is double tripping. So it's like it's not even
13:04
Speaker 3: like a fifty fifty, it's like more than a hundred
13:05
Speaker 3: percent luck. So but there's a lot of people who
13:07
Speaker 3: don't have this luck, and how do I use like
13:09
Speaker 3: I've had to help people who have and have that
13:10
Speaker 3: would be something I'd love to do. How what actually
13:12
Speaker 3: that materializes in I don't know yet. I've always thought
13:15
Speaker 3: by fifty five, I'd like to be sort of focusing
13:16
Speaker 3: on that, unless on the for profit stuff. But you've
13:19
Speaker 3: got to have a degree of capital be able to
13:20
Speaker 3: do that. So that's involved in said we've got ten
13:22
Speaker 3: more years to try and create as much varger as
13:24
Speaker 3: we can and then hopefully how do you do and
13:26
Speaker 3: you can't get you so well? And who dies rich
13:28
Speaker 3: DICE's grace Like that's that's sort of a guy we'd
13:30
Speaker 3: love to do and hopefully can get there.
13:33
Speaker 4: Is there a leader inside business or outside of business
13:36
Speaker 4: that has inspired you most in your life?
13:38
Speaker 3: It's hard to be one. Specifically, if we go to
13:39
Speaker 3: the obvious, the buffets and all those guys, that's true.
13:42
Speaker 3: I've listened to most a Quiet episodes. There were so
13:44
Speaker 3: many amazing founders and people who create value. Actually the
13:47
Speaker 3: one lets just get his name right.
13:50
Speaker 4: But you have a big build up now.
13:51
Speaker 3: It was his first business, Chuck Feenie. I'm not sure
13:54
Speaker 3: if you've heard of degree, but he also created something
13:57
Speaker 3: else you know. Also, I'll put this question.
13:58
Speaker 4: Later around what else is he created other than duty free?
14:01
Speaker 4: I've got no idea.
14:02
Speaker 3: What Wasl's biggest private equy firms called General Atlantic? Oh? Really,
14:05
Speaker 3: basically General Antic gives us money to charity essentially, So
14:07
Speaker 3: Chuck Fanny gave all his money away, so he Bakshi
14:09
Speaker 3: before he died. And this is like tens of billions dollars.
14:11
Speaker 3: So you look at him and created this incredible duty
14:13
Speaker 3: free business, which is pretty impresive. You remember that. But
14:15
Speaker 3: he also created GA which is an unbelievable propat equity firm,
14:17
Speaker 3: So you look at him. It's pretty rare people have
14:20
Speaker 3: two acts like that, Like a lot of people have
14:21
Speaker 3: one act, and sometimes a business will have multiple acts
14:24
Speaker 3: like Microsoft and Apple. But it's pretty rare person has
14:26
Speaker 3: two incredible acts and he's done that.
14:28
Speaker 2: Very cool. We've touched a lot on kind of the
14:30
Speaker 2: COVID period. But were there any specifics, failures or setbacks
14:33
Speaker 2: that you now look back as like a key turning
14:35
Speaker 2: point in either your career or in luxury escapes as
14:38
Speaker 2: a business.
14:38
Speaker 3: It's been really two moments that were existential in our career.
14:42
Speaker 3: First one was we were running the apartment's business. I
14:44
Speaker 3: want me to the name, but a big developer who
14:46
Speaker 3: was very vertical to built the buildings. They kept the
14:49
Speaker 3: property management rights. They also had the cook Body Corporate
14:51
Speaker 3: and they basically just we had a bunch of apartments.
14:53
Speaker 3: They basically just lied to own, completely fraudulent. It should
14:55
Speaker 3: have gone to jail, but no, no trade jail. But
14:57
Speaker 3: they basically lied to these and said we're doing something,
14:59
Speaker 3: we won't do it. And we went to VCAT. I
15:01
Speaker 3: had fifty differ aplications like coming on the weekend and
15:03
Speaker 3: to fill all these applications. We went to VCAT. We
15:04
Speaker 3: won and they couldn't brought us out. We contacted as
15:07
Speaker 3: many eight owners as we could, we couldn't get all
15:08
Speaker 3: of them. Every only we spoke to gave us the
15:10
Speaker 3: property managment rights. So as soon as we showed them
15:11
Speaker 3: the knew these guys are lying. These guys now like
15:13
Speaker 3: billionaires or whatever, but such as life. But we had
15:16
Speaker 3: we lost that VCAT hearing business over. I'm back to
15:19
Speaker 3: being a lawyer or back or whatever. So that was
15:20
Speaker 3: one huge moment, and I was having sleepless night. It's
15:23
Speaker 3: pretty rare I get stressed. I was stressed there because
15:24
Speaker 3: that was a billion dollar business trying to crush us illegally.
15:27
Speaker 3: Credit to VCAT. We got a great member who clearly
15:29
Speaker 3: saw through these guys straight away and literally saved us.
15:31
Speaker 3: They had to withdraw the notices. We could lease other apartments.
15:34
Speaker 3: We were saved. We actually know that we were saved.
15:36
Speaker 3: We pivoted the business from backpacker to corporate and that
15:39
Speaker 3: was sort of created what became Lutu Escape essentially. The
15:41
Speaker 3: other time was two thousand and probably tenty twelve. Deals
15:43
Speaker 3: had always made money. We're a boot shop. We had
15:45
Speaker 3: to make money. But we bought a bunch of businesses
15:48
Speaker 3: and they had some debts with the integration costom wire
15:50
Speaker 3: with thought and we were having this cash crunch. So
15:52
Speaker 3: we got to December and January used to be our
15:54
Speaker 3: worst months. Now January's their best month, but back then
15:55
Speaker 3: it was our worst months and we're having what's called
15:57
Speaker 3: a classical liquided crunch. So even though we'd always been profitable,
16:00
Speaker 3: all these debts were you and we were literally running
16:02
Speaker 3: out of cash. So we have to put money in
16:04
Speaker 3: all the shelves, put Alan in. Mark the sales guy,
16:06
Speaker 3: did this free deal, like we couldn't get hold of
16:08
Speaker 3: someone this Vietnamese resort. He went enter a trade show,
16:11
Speaker 3: found this guy somehow signed this deal. Saved us and
16:14
Speaker 3: the loans as well. So we've got over that credit
16:16
Speaker 3: crunch and we were off to the races straight after that.
16:17
Speaker 3: That was another existential moment we came within probably days
16:20
Speaker 3: of running it, and there's almost every business has had
16:22
Speaker 3: this because to get it, to build a great business,
16:25
Speaker 3: you've got to sort of you've got limited capital, you
16:27
Speaker 3: to you're on the edge, and we generally we're pretty concerned.
16:29
Speaker 3: We weren't on the edge other than this one time
16:31
Speaker 3: where we didn't tend to go on the edge. Just
16:32
Speaker 3: we bought this business that had all these debts we
16:34
Speaker 3: didn't know about. We just expanded too quickly, and we've
16:37
Speaker 3: been much more conservative since then. So that's even during
16:39
Speaker 3: CO That's why probably why we got through COVID because
16:42
Speaker 3: in build conservatism. So those two instances were definitely extential,
16:46
Speaker 3: definitely within days of dying, essentially, and both times made
16:50
Speaker 3: us far far stronger.
16:51
Speaker 4: Perfect question for you, is there one or a few
16:53
Speaker 4: daily habits or rituals that set you up for your day.
16:56
Speaker 3: I get up pretty early, so I tend to be
16:58
Speaker 3: around five o'clock. I try and get to sleep. I
17:00
Speaker 3: do some sort of excise every day. I've started running,
17:02
Speaker 3: and I had a broken leg skiding with your boss.
17:05
Speaker 3: That's now a cup so I can start running again.
17:06
Speaker 3: I'll go to PTE or or whatever. I play golf,
17:09
Speaker 3: and then I'm patting to get into the office and
17:10
Speaker 3: work from the office sort of most days or every day.
17:12
Speaker 3: I want. There's that many rituals, but I'm tending to
17:14
Speaker 3: do something every morning, something exercise wise. And I don't
17:16
Speaker 3: know fast as well, so I don't need till like
17:18
Speaker 3: twelve top thirty one o'clock, so I can't excite.
17:21
Speaker 2: No coffees as well.
17:22
Speaker 3: Yeah, I drink water really and I don't need meat,
17:24
Speaker 3: and I don't drink alcohol. I don't smoke, so I'm
17:26
Speaker 3: pretty much boring. Guy on ear I want to write
17:28
Speaker 3: an article for aboutw before it died, taking all this
17:30
Speaker 3: stuff and saying part of the reason we're all put
17:32
Speaker 3: a footstrap the business because Jess and I both we
17:35
Speaker 3: never took drugs, weever smoked, we had all this. I
17:37
Speaker 3: think how much money you waste smoking, taking drugs, drinking coffee.
17:40
Speaker 3: It's like tens of thousands dollars. That was the money
17:42
Speaker 3: we used to start our first business. And I wrote
17:43
Speaker 3: this article and just goes, maybe look like such a loser.
17:46
Speaker 3: I'm never really there's never like Beny to that stuff. Yeah.
17:49
Speaker 3: So I'm hyperactive enough without it. So it's last time
17:51
Speaker 3: I need as any kind of artificial stimulant.
17:53
Speaker 2: Yeah, and she'll be last one.
17:54
Speaker 3: For you.
17:55
Speaker 2: What's the best investment that you've ever made? And it
17:57
Speaker 2: could be in money, could be in time, could be
17:59
Speaker 2: in your energy as well, just investment. More broadly, I think.
18:02
Speaker 3: You look at life and I think lots of people
18:03
Speaker 3: say this in scott At the Way says it's the
18:05
Speaker 3: three most important things you do is where you live,
18:07
Speaker 3: who you live with, and what you obviously live. Here
18:09
Speaker 3: in Melbourne, I met my beautifulfe Leslian ten fifteen years
18:11
Speaker 3: ago in the UK, randomly in a pub, but there
18:13
Speaker 3: before I was leaving. Without her ability to tolerate my risk,
18:17
Speaker 3: there's no way would have sort of done what we've done.
18:19
Speaker 3: A lot of people would never have sort of liked
18:20
Speaker 3: that we had a business who rolled everything on this
18:23
Speaker 3: new thing. So you need a partner's got a similar
18:25
Speaker 3: level of risk tolerance and values and all that kind
18:28
Speaker 3: of stuff. So that's been a great decision. I was
18:30
Speaker 3: having two amazing kids, and I've said a great business
18:33
Speaker 3: partner in jazz for more than twenty years now, with
18:35
Speaker 3: really similar values and really similar commercial goals. Both very
18:39
Speaker 3: not short term greeting at all. Both don't spend much
18:42
Speaker 3: money on ourselves. I being able to take virtually no
18:44
Speaker 3: salaries a whole existence, and if you get if I
18:46
Speaker 3: had a life partner and a business partner with different
18:48
Speaker 3: sort of morals and goals, that wouldn't have worked. But
18:50
Speaker 3: that's been really important choosing our part and obviously working
18:53
Speaker 3: with an amazing team and hiring people like Shy, people
18:55
Speaker 3: like JD, people like that, and people have been with
18:56
Speaker 3: us for sir ten plus years. He's pretty been great decisions.
19:00
Speaker 2: Amazing Trobby, great to have you on the pod. We'll
19:02
Speaker 2: have to get you on again, you'll have to come
19:03
Speaker 2: in for an episode as well to do the five
19:05
Speaker 2: minute bite sized news.
19:06
Speaker 3: Well, I'm waiting to one of you guys on holiday again.
19:08
Speaker 3: Hopefully I'll actual escape and I'll come in to place
19:09
Speaker 3: the other Trobby.
19:10
Speaker 2: Thanks so much for joining us on the pod.
19:11
Speaker 3: Amazing guys,