Viator: Rod Cuthbert

surreal set of circumstances. Took control of the business. Uh somebody broke into it.

Overnight. Mm. And stole The servers.

ran their operations. So w we had bought this business, we'd paid millions of dollars for it. was doing tremendously well. We were very excited. It literally disappeared.

Overnight. It was just gone. Mm. It was Nothing there. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

They built. Guy Roz and on the show today, how Rod Cuthbert made it easier for tourists to book day trips, cooking lessons, and hot air balloon rides by creating Viator, a multi-million dollar travel brand. Over the summer, I took my family to Italy. One morning we went to a website where you can book experiences, and we signed up for a pasta making class at someone's house.

A few hours later, we drove up an old dusty road outside a Tuscan village, only to be greeted by a menacing looking dude covered literally From the neck down? In tattoos. One of the tattoos was of a Glock seventeen dripping with blood. Another one read

Doug Life Needless to say I was not excited. In fact I looked at my wife wondering

How in the hell are we gonna get out of here? But as they say, never judge a book by its cover. Because four hours later, when we finished making fresh pasta, an amazing bolne sauce, and a delicious tiramisu, Me and Chef Dante were hugging our goodbyes and exchanging numbers and promising to visit each other again. It was truly one of the highlights of our visit to Italy.

And it happened easily and seamlessly. because of modern technology. Back when I visited Italy as a student in the nineteen nineties, Those things only happened if you were lucky. Now?

There are dozens, maybe hundreds of different companies that offer up these experiences in places around the world. Could be a bicycle tour through the Dutch countryside, a helicopter ride over Las Vegas, or a flamenco show at someone's house in southern Spain. And one of the biggest and really the first company to offer these things up was Viator. Now today Viator is part of the TripAdvisor family. they acquired it in 2014.

And it's estimated that Viator now accounts for up to 40% of TripAdvisor's revenue. So to say the least, it's a pretty successful brand. But it wasn't always that way. In fact, it took many, many years for Viator to actually make sense to consumers. It was built by a team out of Australia led by Rod Cuthbert back in the late 1990s.

Now before that time, it was really hard to pre-book tours and experiences and even get tickets until you actually arrived at your destination. And so Viator leaping on the nascent worldwide web. saw an opportunity to change that. But by 2005, Fayator was running into serious cash flow problems. and almost went under. Rod Cuthbert spent months trying to raise money in Silicon Valley.

But a chance meeting with one investor would prove to be a lifeline, which we will get to. Now before Rod started working on what would become Viator, he was a web designer for travel agencies in Australia. He actually grew up in Tasmania, the island off the southern coast of the country, and for as long as he could remember, he knew he wasn't gonna stay. And more importantly He knew

He wanted to see the world. It's probably true to say that some people Paint the story of their life on a really Small canvas, they're happy to They're happy to stay close to home.

And others just just need a bigger canvas. They want to explore. And I always wanted to explore, so it just made sense to me to Get on a plane and leave at the earliest possible opportunity. I think you were round seventeen.

When you're really Basically packed up and left and and That was essentially the last time I think it was nineteen seventy five, that was the last time that you lived In Tasmania. Correct. I've always had

brothers and my mum until recently. and so many cousins and friends, so m many reasons to go back. Uh but I haven't lived there since seventy five. I guess you You

You were a high school dropout. Not not I don't mean this is in a disparaging way, like, you know, to to tar you with this brush, but you dropped out of high school, right? I did. My uh You know, we were coming up to the end of your exams in Year twelve. Uh

We what you would call the senior year of of high school, I guess. And uh my dad died towards the end of the year and I I sort of I have to admit in looking back I I kinda used that as an excuse to just not Finish. all the exams. I just didn't see that they were gonna be important to

to whatever it was I was gonna do next. I wasn't gonna go to university. I'd made that decision. So I didn't complete my year twelve exams and After Christmas I packed a bag and got on a plane and there I was in Melbourne. Hm.

So what did you do? I mean, when you get there, you're seventeen I mean did you Wait table's? Like how did you earn a living? Tables comes into it. I didn't wait tables, I coached table tennis.

So you were like a serious table tennis player? I I was a serious table tennis player. I was in the Tasmanian junior team and and I had aspirations to to do more. And those aspirations lasted about Three weeks as I Spent more and more time.

Competing with The locals in In Melbourne. I realised I was never gonna make the cut. They were just way better.

They were just well, they went way better. Yeah they were. They were way better. Well, I've seen r really good p I mean, like You gotta put that spin on it and you've gotta like, you know

Question. Paddle and I mean it's It's no joke. I mean, if I played you guy, we could play all day. you may not win a point. Yeah.

I know. That's just the reality. And that w that's what would happen. You come to my party, we'd all be playing ping pong and you'd ruin the party'cause you'd crush everybody. I wouldn't ruin your party, guy. I'd I'd play left-handed. How's that? That's okay, all right, very generous of you. Um okay, so but basically the the the I guess the ping pong thing fizzles out and and then

The next thing you do is a apply for a job doing I guess something in in computers. Um how did you get into that? So I wrote in um application of a job that I saw in the paper. for a computer operations role.

And and my qualification was that my dad Did this job. And I occasionally went in there. I I got an interview, I got the job, and There I was. I was a computer operator in the time of mainframes. There was no PCs. At this time there wasn't even mini computers. It was just like huge rooms with raised floors and lots of air conditioning and disc drives and

Line printers. It's a very different world. Yeah. And from what I understand, I mean this kind of be launches f the next kind of ten years of your life. working I think primarily e eventually in sales, right? In in you know And and'cause this is the beginnings of the what would become the sort of the PC

boom, the personal con computer boom and and and you would go on to work for for D C uh digital equipment co corporation which was a huge P C maker back in the day. Um And and that's and I think you ended up staying there for for several years, right, as a sales rep?

Yeah, in eighty four, I think, eighty three, Dick released their personal computer. And my job at the time was to find dealers in Melbourne to sell their personal computer. It's called the Rainbow. IBM and uh and Apple had released their machines and you know, the market was a buzz with this new thing.

PCs. And I just couldn't find Enough dealers to sell This thing.

Yeah, we were not gonna be able to get this product to market. So I approached a couple of my buddies. At the office at Dick. and said, you know, we should do this ourselves. You know, let's find some money, big borrow of steel, go to the bank. Let's open a location of our own. So that's what we did. We we we started a business.

Selling PCs like a shop. Yeah, selling PCs. We quickly got an Apple dealership as well and an IBM dealership. And Guy, honestly. All we had to do was

Open the door. Wow. Turn on the lights and open the phone because in those days It was a shop open to the public. It was it it was just a anybody could go in. Yep. Anybody could go in. And we did sell um to some home users, but typically they were architects or engineers or schools or commercial operations, accountancy firms, et cetera, et cetera. 'Cause PCs were not cheap in nineteen eighty three. This is a significant investment.

Yeah, anywhere between five and ten thousand dollars for a sort of basic setup. And you haven't got a printer yet, so you need to spend some more money. But people were excited. Uh You know, whilst a lot of people were ignoring it. Uh there were many people who were just so excited, they saw the potential. All right, so you're you're doing this for a while and

And I guess you eventually, a after a few years, you guys sell the business. Yeah. And then after doing a few a few other jobs in computers, you you wind up taking a job with um on Australia. And this is important because th this will eventually lead you to what you would go on to create. But uh but this was from what I understand it was like the Australian arm of uh

Of Microsoft, of of Microsoft's MSN network, right? Yeah, so a at at the time that that sort of web explosion was happening, Microsoft decided to launch this network in Australia. For various reasons they call it. Uh on Australia. I got a job there.

Uh, and I was there for a few months. And I was probably pretty bad at it. Um I maybe I didn't like my boss. I don't know, maybe I was out of my Depth.

That's probably the right. Reason. But in any event, they decided to fire me. It happened that the day before A guy had come in.

His name was Peter Fox and he'd come in to talk about things that he wanted to do. Uh he was interviewed for a job. No, he was a content creator. Okay. Uh he had a background in television and production. Yep.

And he had a bunch of ideas, none of them very well formed, but I liked him. And I thought oh we could do something with this guy. Well, turns out we didn't do anything with him because I I got fired. The following day. So I'm sitting at home thinking what am I gonna do? And I thought

You know, I'm gonna go see that. T. guy that I I met and talked to him about doing things but not on the Microsoft Network. Uh Let's do'em on the web.

And tell me what was his what was his idea that that you heard that was so interesting to you. To be honest, all these ideas were pretty dumb. At the time. But he was a really good guy.

I just thought he and I could work together. and we would find a niche. It just seemed so obvious that the web was going to be important. And then what do you do? You call them and say, Hey Peter, you remember y I I met you yesterday at On Australia, I just got fired.

Yeah, um so he he had this background in television production, but he didn't understand Software he didn't understand You know, tick. So Like went in and sorting, we had coffee.

And we agreed pretty much on the spot. Two Uh We each put some money in, I think thirty thousand dollars each. Uh, on Australia had given me a terrific

payout. They were generous. They gave me six months salary. Mm-hmm. uh when they fired me. So I I had the capacity to take some of that and And put it into this new venture. We had no idea what we would do, just that we would Build websites.

Okay, so So but b basically were gonna you were gonna make websites for companies. You were gonna be a like a web served designer. For other companies. That was the idea. Exactly. And w we at that time were happy to build a good

Small business. That's how we started. Alright, so you guys call this Fox. Interactive after Peter Fox, you're Yeah.

Partner? Yeah. Yeah. Seemed like a logical name and because it was a service business building websites, it didn't seem really important that we have a snazzy name that people remember. It's just like, okay, let's go with that. Okay, so you guys start this business and and from from what I've read,

You basically developed like a specialty. Pretty early on where you would build websites for travel companies and and I think this was around Like nineteen ninety five and You know, and I guess a lot of companies started moving away from

Printed brochures, right? Yes. cost to them producing these. physical brochures. So the idea of moving their brochure production onto the web where they had complete

instantaneous control if they wanted to change price. uh if for example one of the hotels that they were using in Hawaii backed out or if for some reason they couldn't put their customers in there anymore. They wanted to take that off. They could do it instantaneously. in the brochure, it's there till next year. Yeah. So it was very attractive to to travel companies to move onto the web. Right.

So they would show us their brochure. And They would leave it in our hands and at that time Pretty much no matter what we did. Uh

Yeah it It looked better than what they had before, which was nothing, right? And In the back of our minds we saw that Uh

bigger things were going to happen in travel, you know, transactions were going to start happening. You know, travel really lends itself to sale on the web because there are no physical goods There's lots of product description and images required. It's just the perfect thing to sell online. So we had that in the back of our minds. We just didn't know how we would get there. So

this is what you're doing. This is what Fox Interactive does. And I guess uh uh around nineteen ninety seven you you you made a hire that would turn out to be fortuitous, um a woman named Jill Hazel And she had worked for Sabre, which is a huge it was, I think it still i is. um a big sort of travel technology company'cause I remember I used to work for a company and All the internal travel was done through th the saber.

interface that we had to use. You couldn't go to like Speedia or anything, you had to use Sabre. Um and you guys hired somebody from Sabre to come work for you. W was was this person based in the US or or in Australia? In Australia, Sabre had a very big operation in Australia, half of all the travel agents I think there were four thousand agency locations. in Australia at the time, so probably two thousand of them. Use Saber. Which meant that

If there were four. actual agents in each agency. There's probably eight thousand agents every day booking flights and hotels. You know, dozens of flights and hotels every day. and every booking sable we're picking up, you know, five or ten dollars.

uh in fees. Say was uh an amazing business. So you get you hire this woman, Jill, and I guess Uh and and and she comes to work with you and I guess pretty soon after she arrives, she says, Hey I hear Sabra's looking for

Uh a contractor to work on a on a pr a project for them. Tell me tell me what What you found out. Yeah, Sable were not uh Yeah.

They were not silly. They knew that the web was going to really impact their business. So They couldn't move. airline or hotel bookings over to the web quickly, but they they landed upon the idea of of what they called ground content. In other words, sightseeing. Tours, attractions, the Eiffel Tower, tickets.

That sort of thing. They knew that there was a lot of that out there. and there was no way for travel agents to easily book it. So they wanted somebody to build a web solution that w they could then market to their travel agents and that would be their first uh step into the agency locations

And it w it was a good idea. So tell me what you and Peter started to think. I mean, did you think, hey, let's pitch them on some on on on working with them. Yeah, we uh Jill made contact with them and said, Look, we've got a lot of experience at Fox Interactive on building websites for travel companies. We know exactly what is required. She she really sold us. There was no particular reason why Sabre based in Dallas, Texas, should contract with

a company in Sydney, Australia. There were there were plenty of people in the northern hemisphere that could do this, but They sent some of their people down. To meet with us. Uh to talk about.

The contract. And Lo and behold We won it and You know, the winning of it was it was kind of easy in a way.

Yeah. At the time I lived at Bondi Beach. I don't know if you've been to Sydney, but Bond Beach is sort of an iconic. Yeah. And it was

Uh early in the year and it was It was one of those Um After work.

We went out to dinner. And dinner finished at about eight thirty and the sun sets like nine or something like that, so the sun was very low in the sky. This doesn't sound like a business story, does it? But it is.

We we went for a walk from one end of Bonday Beach to the other. Uh the the the two women that had come out From Saber. And we Yeah, they took their shoes off. And

and were just walking in the shallows. And it was really beautiful. It was clear to me But They they've developed an emotional attachment to Sydney. Uh, they really loved it. It's a world away from Dallas, right? And we got the contract.

And whether whether they gave us the contract because they really wanted to come back to Sydney because they really loved it. Or because they thought we were the best. I don't know. So the idea to what they wanted you to build.

It was it was sort of A way to help. Travelers pre-book tours when they go on vacation. More or less.

A way for travel agents. Uh So you know, Guy Ross goes into an agency and says, Hey we're gonna go to Paris, what can we yeah. What can what can we do when they say, Well let's book your flight and let's book your hotel and now you know what? You really should Um see the Eiffel Tower. There's a Turig restaurant up on top. Let's book you a ticket for that.

And at the top. I wanna go there. Michelin two star. You may also want to go and see the Moulin Rouge, the Cabaret. Yeah. So I don't know if I I don't know about that. I don't know. Uh okay, all right, sure, okay. Alright, let's uh let's get those booked. So that's what they wanted. By the way, I did go to the Moulin Rouge once. Somebody took me there, uh f uh as a when I was a student of a friend's parent. This is in the

Mid nineties and not worth it. So I'm just saying Just not worth it. Don't waste your time. Alright, keep going. That is a very personal.

Choice guy. Keep going. Exactly. They So basically a travel agent, I this is crazy,'cause they were so critical to travel at the time, and and not no shade to travel agents, they're still critical, but you know, m you don't need them as much. But then really they were just booking your flights and your hotels.

Yeah. They they weren't able to book uh the on ground activities that you often would want to do when you get there. But Th there was also an an another more fundamental reason why they weren't doing it, and that is that the operators uh say the Moulin Rouge or the Eiffel Tower, etcetera. Now, if they get a single booking from a travel agent, is he ever going to pay them?

Right. The client has paid the agent. Has the agent paid the operator? That was the key question. The operators would have to follow up and follow up and it it was difficult in those days for an operator in Paris, for example, or Rome or wherever, to follow up with an agent in

you know, Sydney or San Francisco or wherever. Saying Where's my money? Exactly. The difficulty was just going to be building a system that was easy for travel agents to navigate and find what they wanted. get the booking to the operator and get everybody paid and happy.

Okay, so you guys you guys are building this thing and you actually Finish the project. Um, and from what I understand, you and Peter Uh You fly to Dallas, this is where Sabre is based, to present

this completed project to show to show them The project this is in nineteen ninety seven. you arrive to Saber headquarters. What happens.

Saber. was a large corporation. And like many large corporations, occasionally they do layoffs. Yeah, the CFO says we're top heavy. Or whatever.

We uh pulled into the car park and we immediately realized there's something odd happening. There are security guards in the lobby of the building.

And there are people standing around the lobby with And they're crying. And Took us a few minutes, you know, nobody wanted to talk to us really. It was a very emotional time.

I mean it was traumatic for the people involved, it was shocking for us. you you realize qu pretty soon after you get there that all these people are being let go. Just see people walking out with With cardboard boxes, you know the contents of their desks. Yeah.

That's what was happening. Um Multiple hundreds of people were let go. in in this particular layoff. Turned out that the people that we were dealing with

They weren't let go, but their division or their group was disbanded. They had uh simply dropped the idea of of this project. It it wasn't gonna go anywhere. Wait so wait, hold on. How did you find out you you're coming there to present the project that they hired you to do. And

And how did you find out that they don't want it anymore? We knew the names of uh various executives up the line. And we just kept calling the switchboard until we got through to one of them.

Who told us? Well, um Have you heard of collateral damage? That project of yours, that's collateral damage. We don't want it. We don't need it.

You are welcome. Two Uh do whatever you wish with it. When we come back in just a moment. How collateral damage turns into a two hundred million dollar company.

Stay with us. I'm Guy Raj and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1997, and something slightly surreal has just happened to Rod Cuthbert. The travel company that hired him to help launch an online booking service

Nope. Forget it, we're in the middle of layoffs and we can't do this project anymore. Uh by the way, were they gonna pay you for it? Yeah, they had paid.

What w do you remember how much they paid you? It was around a hundred grand. Alright, so they're like, and we're gonna pay you for it. We're dropping it. Oh, and by the way, if you guys want it.

You guys can have it. It's yours. You can keep it. It's you can do whatever we want with it. It was It was

Kind of an unbelievable situation. to be in. We were developers. We weren't Operators. Yeah. And and I say to us If you want, you can go out and do this thing yourself. It's entirely up to you.

So you basically had developed this technology to enable Travel agents to book. experiences for tourists and now it was yours because you had done it on on behalf of Sabre. They own the IP and you got it.

For free. You'd have to pay for it. Correct. I mean a gift that falls into your lap. So what but but I'm curious, I mean Initially Were you d was that your response? Were you guys like, Oh my God, this is amazing? Or were you more more like, huh, this isn't good because now This relationship's over with Sabre.

Although the idea of selling tours and activities on the web wasn't ours, it was absolutely Saber's idea. we very quickly. We could tell. that there was a terrific opportunity

in this business. the the one difference was we didn't like the idea of selling the travel agents because we thought the travel agents were going to disappear. And on that point we were Absolutely right. Yeah. So you decide that

You guys wanted to make this a standalone Website? Basically, because it wasn't gonna be back end. a backend product to for somebody else. This this was going to be the product.

Yeah. We we decided we'd build a consumer website. So we conceived of an online travel agency that was very focused just on tours. Activities, sightseeing, experiences. Alright, and you named it.

Well, we didn't have a name. Uh, so uh we it took us all of about forty eight hours, I think, to to work through that. But it was important that we have a name because Fox Interactive Media w wasn't gonna work. It wasn't gonna work, yeah. Um I I'm not sure why. we we hit upon the idea of looking for

The name of a saint. But we did. We we we thought it would be good to explore the name of all the Catholic saints. That's a strange thing to to admit who we were. I think it's Saint Christopher. Yeah, Christopher, right? You could call it Saint Christopher.

Yeah, that doesn't ring well. Um we went to the State Library of New South Wales, uh, which was near our office. And they had a book. called Uh The Book of Saints, published in nineteen twenty one. and according to the lady behind the counter. Nobody had ever looked in it. It had never been checked out.

It was dusty. Um we opened it up, we looked through the list and and there's Viator, which is the Latin word for traveller. And we knew Aviator. Aviator is an air traveller. We quickly uh the domain name. The domain is available for like Twenty five bucks. Buy a tour.

Vietal. Wow. Probably Probably Latin speakers would have said We are tour? But via tour sort of, you know. It it's easy off the tongue. We thought people would remember it.

So we went for it. So Alright, so this becomes the name. But did you have enough capital to actually launch a business and and

you know, to actually Have the infrastructure behind this website to To turn it into a business? We had just prior to Uh

This occurring, we had raised a couple of million dollars from a Sydney based venture capital firm. Who agreed with us that there was a lot of Potential. in the web.

Uh the partner. John Murray. like us, wasn't sure exactly what we were going to do, but he was confident that That there was enough. depth in this marketplace that something was gonna pop, so.

He took a risk with a couple of million dollars. Got it. Okay, so you you've got this brand and Tell me how you start. I mean, y essentially, I think you launched this. in early ninety eight or or maybe late ninety seven. To to to any fanfare? I mean

I remember Expedia. But I don't remember Viator entering So how did you get a attention for it initially.

Well, the travel industry has Conferences. And there was a conference called Focus Right that had popped up to focus on the uh On the online travel. Space. And we went along and

Rich Barton, who I know you've spoken to. Mm-hmm. Yep. Creator of Expedia and Zillow. Yeah. So Rich Barton gave a talk about

Where they were gonna go with the expedia product. What that was gonna look like. when it was fully formed. And one of the things he said was We don't just want to be able to sell you. uh a flight to Fiji, for instance, and a hotel in Fiji.

We wanna sell you surfing lessons in Fiji as well. We want to sell you the Eiffel Tower ticket. He was saying this in nineteen ninety eight. Yeah. And I approached him after his speech and I said

What are your plans for doing that? Because you know, we can maybe help you. Mm. And you know, we didn't have surfing lessons in in Fiji, I can tell you, but I I was confident we could get them. Yeah.

Uh And he said okay, we'll give you guys a chance. So our first bookings actually came not from Viator dot com but through a white label that we did with With Expedia. Wow. And and that quickly grew to many other white label

sights who sort of underwrote the business with the early bookings. Whilst we were figuring out how to attract customers directly to our own site. uh expedient travelocity, et cetera. But really you guys viator was powering The the bookings.

Yeah, we ended up with hundreds and hundreds of affiliate partners who would have a link on their site that said you know, book tours and activities with us. And if you clicked on that link You'd go over to a white label site, which had their logo, but it was really the Viator site, but they drove the traffic to it. I I I wanna just digress for a moment and ask about Australia.

As a Yeah, as a as a place from which to launch this. And and the reason why I a I I I raise this is because Australia's a small country. I think the population is smaller than California's. But it has a massive uh penetr like there's a huge

Like travel is a huge part of the culture, right? Like like majority of Australians have passports, for example, compared to the to Americans who I think still less fewer than fifty percent. Australians travel. They go they d they are

They spend a lot of money on travel. It is it is part of The Australian psyche. Mm. to travel. It was terrible being in in in lockdown during covet for us and there was a lot of revenge travel afterwards. But yes,

international travel is is sort of core to the Australian. Bing. And and it was easy for us to find People. Two

join our company who would work for companies like Qantas or Lonely Planet, for example, you know, international brands that are well known. And At the time, I mean, essentially, you know, you were sort of like Airbnb before Airbnb, right? You essentially you were a platform for people to

Offer. Experiences, I guess. Yeah, w w w when we started, you know, there were Group tours and double decker hop on hop off tours and mut museum tours, but

There was no, for instance, chocolate lover walking tour of Paris. Right, or a a bike tour of Gaudi Architecture in Barcelona, or or a Sunday morning Harlem gospel walking tour. These things all Emerged. Over the following years and they emerged

Because to a large extent They knew people knew that they could put that product on Viator and we would bring it to the marketplace. And you guys would get a commission. What fifteen, twenty percent, something like twenty five percent. Yeah, twenty five percent was was was pretty normal. An average per person price on, you know, a walking tour or a cooking class or whatever it was might be a hundred bucks and we would buy that from the supplier for seventy five bucks. All right, so you so you s really start kind of in the background, white

Label. Um How was I mean, how was the growth of the business'cause from what I've read It was relatively slow, but

Um And in the first let's say Five to seven years. Uh I mean I think you got I th I read that by two thousand five you got around about thirty million dollars in gross bookings, which obviously isn't your profit.

Um But you were having financial problems. What was going on? Tell me what's going on. Well, in

A venture back business. You're always hiring for the next growth phase. So you're not focused on profitability. You're focused on how many customers can we attract. Because there's gonna be a lifetime value associated with that customer.

And you in the back of your mind, you know that you're likely to have to go back to the marketplace for Another round of funding. It's a tight rope that you walk and you can it's it's easy to make mistakes, you know, projects that don't generate revenue quite quickly enough, you know, can

Can make your cash flow up. Um and In meantime, I mean, you had originally done l sort of this white label thing for Expedia, but from what I understand Expedia Pretty soon after just kinda Started their own thing.

similar uh offering, right? Yeah, and that didn't That didn't bother us. That's sort of standard. We knew that from the start, that they would sort of pick the eyes out of what works. So they see, for example, that Yeah, a particular tour in Rome is really selling well, so they send one of their people in and they contract the that

Directly. And that was fine because we were constantly by this stage introducing new things and we also had new white label partners who were picking up that volume plus their own direct business. So They played their role.

Yeah. Tell me about September eleventh because September eleventh was both the biggest disruption to the travel industry up until Covid of course twenty years later.

But it was also what I didn't realize It completely transformed the industry in ways that would benefit businesses like yours. Uh w ha had what what happened? Well

Uh I was in the US. Yeah. at the time, so I have a direct personal experience of what happened. I was in New Orleans uh with a colleague from the company. Nine eleven happens.

All flights in the US all travel. is stopped. There are no planes in the air. Everybody. who has a booking is on the phone.

to the airline, to the hotel, to the car rental company. Clearly their phone systems melt down. Uh it's just impossible to get through to anybody. They can't staff up quickly enough, they can't add enough phone lines. It's just complete mayhem. Some of those companies

had invested and and had sort of flagelling. Websites. And were able to direct Their customers.

to go to the websites to you know, find information, connect with them. change their booking, whatever it was. So people who hadn't previously attempted to do anything related to travel on the internet Found themselves.

going to American Airlines or Delta or Mario to Hilton or whatever. And they liked it. Uh they like what they found. They like not having to be on hold and listen to that music for forty minutes. My God, yeah. And certainly the companies realised.

This is scalable. You know, we can handle millions of interactions with customers. In an hour, whereas on the phone lines we can handle You know, at the most thousands of internet redirections in an hour.

Uh so For the online travel industry. there was this strange perverse effect of nine eleven, which is that it literally put a rocket under the industry. Okay, so but still The idea of booking experience so I I mean

all people start to migrate to the web and I I mean It was slow. It was still like This was a a a a a kind of a Niche.

Crowd still at this point. I indeed it was. We we were definitely early. I'm I mean I'm glad that we started the company and were doing what we did when we did. Right. But there were there were some underlying things that were happening at a societal level that helped us. And one of those things was that And i if you think back, you can probably

remember this, that people started talking about the importance of Experiences over material things. You know, it's it it became less of

He who dies with the most toys wins. And more of You know What have you done? Yeah, when you went

to Barcelona. What did you do there? Did you come back with it? T shirt and a snow globe. Well Um Or did you Do a bike tour of Gaudi Architecture. Did you see the Sagrada Familia? Did you learn anything?

and and we played a fairly key role. In this Which was changing the nature of Of the way. uh sightsee tour is operated. We've talked about the fact that

It used to be, you know, a A bus with thirty or forty people and a woman. A a guide anyway, with a with an umbrella. Yeah, flag on the top and you would follow them. Uh and

It just was the case that a lot of people looked down their nose at that and said, I just don't want to do that. That's not me. I'm not gonna be part of a group of forty people. So we had a uh A product manager, her name was Dominique Xman. Uh young Australian woman who who was managing

our our key European locations. And she was in Rome. Talking to one of the the tour operators we worked with there about the Vatican Museum. which is one of the most perhaps the most important tourist attraction

in Rome, and I don't know if you've ever been there, but you can stand for four or five hours in a line Yes you can. Waiting to get in. Yes you can. And

You know, Dominique said to herself. You know, these guys a lot of these guys you know, they come here on an easy jet flight or a Ryanair flight. They were here for two or three days. And they're spending four hours in the Italian sun.

waiting to get in there. That doesn't make any sense. So with the tour operator they approach the Vatican. The church. Uh and said. What if we

Uh did this thing that we'll call Skip the Line. What if we charge these guys Three times as much, but you let them straight in. And uh the Vatican, you know they they're they're commercial.

The church. They saw the value in uh three times the revenue per person. And they would quick to let us experiment. So we came we came up with this idea. Skip the line tours.

Yeah, small groups. Uh with a guide. Mm. Instant access and this started with the Vatican. Museum and the Sistine Chapel.

Yeah, it did. Uh so Dom said, Okay, this works, let's go to the Coliseum, see if they'll buy it. Wow. The call they were into it straight away. And uh Eiffel Tower. You know, everywhere.

Major attractions. Yeah. And and it's amazing, right? It's a great innovation. The skip the line idea. Exactly. We actually took it further. I think it was the the Vatican's idea, you know, we've got

The guards in here twenty four hours. If you'd like to bring groups in outside of normal hours, of course we'll need to charge more, so you you get these two the these sort of Pricing tears which is

You know where it's just your group. Like literally you are the only eight people in the Sistine Chapel. Well you might pay six hundred dollars for that. Yeah. Uh but believe me, there are many, many people that will pay it.

Yeah, and and listen, hey You're right. So did that kind of move the needle for you, did you start to see You know, an explosion of bookings at that point or or still not quite yet. Uh it definitely moved the needle. It wasn't an explosion.

But our other product managers saw what was happening and so we uh took the idea of Small group tours, skip the line tours. Um Basically premium touring.

And we propagated that around the world. And what that Mm. was the most important thing was The people who had previously look down their nose at the concept

of a sightseeing tour. We're now saying, Hold on. I can Do this. sightseeing like my grandmother knew sightseeing. It's it's sort of modern. It's

Cool, it's fun. Okay. You've got an innovative product, innovative offerings. But you're really too early still from fr and and I'm not blaming you, I'm just blaming the the forces of the world, right? Like Because from what I've read

Even though you did about a hundred thousand bookings in two thousand five. You guys were uh uh you guys were close to To the end. You were like Well, I can't think of the the cliche for some reason my brain isn't working, but you were you didn't you were near death. From what I gather in two thousand five. Is that is that right?

Well That's an emotional term, guy, near death. But I mean you were running out of cash. You were running out of money. No, it's a very accurate term, actually. What what startup companies tend to say is you've got a short runway.

You had a short runway, you had a you were walking a plank off of a pirate ship. Yeah, so what you do is uh You go out and you raise some more money. Maybe you've done a series A and a series B, so it's time for a series C, so let's put a pitch deck together. Yeah. And let's make a list of uh of venture firms that have that have looked at travel and invested in travel before and let's go

Let's go pitch to them. Uh could you do this in Australia? Could you was there was there money in Australia to do this? Uh no. the the venture capital market in Australia was still quite Nice and

You had to go to the US to get the money, basically. Yeah. And and so This is around two thousand five, and I guess you hire this this guy Barry Sidenberg?

Well, Barry is also a lady's name. Um Barry Barry's a woman. Yeah. Okay. Barry had uh been the VP of marketing at Preview Travel, which along with Expedia was the first ever. uh the first two online travel agencies and that was very successful business.

And she was based in California? Yep, in San Francisco. Mm-hmm. Uh so it was perfect. She had a team of people that she could bring in But we needed to raise some money. So We We

Uh, and we hide a car and uh and Headed for Sand Hill Road. When we come back in just a moment.

Rod eventually wins over One investor With a story that Kind of sounds like the setup to a joke. Danish prince walks into an Australian bar. Stay with us.

I'm Guy Roz, and you're listening to how I built this. Hey, welcome back to how I built this. I'm Guy Raz. So it's 2005 and even though Viator's growing, it's having serious cash flow problems. So Rod flies out to Palo Alto and starts doing meetings with venture capitalists.

We we saw I think Um fifteen to twenty firms. And It didn't go well. Uh that yeah we had lovely meetings with them.

But the meetings always went the same way. Uh we're Uh it would end by the partner saying I've I've really enjoyed meeting you guys. Love what you're doing. Let me talk to my partners and and I'll come back to you next week.

So nobody was saying to you in the meetings, hey, this idea just sucks. Or this isn't for us. Or we don't see the we don't really see this panning out. Generally speaking They were diplomatic, they just thought it was too early to do what we were doing. And and They were right about that in many ways.

How much were you looking for at that point? Between five and ten million dollars, um, you know, five with with You know, follow on would be would be great. You know, great companies who Visit.

Fifty or a hundred. venture capital firms before somebody finally says yes. Sure. So uh we knew those stories and we knew we really only needed one investor to believe in us. We just couldn't find that investor. But you were pretty confident you would.

Well, uh we grew less confident as as the weeks went on. Uh, and then a friend in the industry mentioned that uh Uh he had heard of a relatively new investor at Carlisle Ventures, part of the Carlisle group who

and we went and did our pitch. I think it was about the The twentieth person, he was certainly the last person we spoke to. Right. And i the meeting ended exactly like all the other meetings ended, which was that, you know, I've I've really enjoyed this. I like what you guys are doing. I'm gonna talk to my partners and and we'll talk again.

It didn't sound like any different to the previous meetings until We uh we went to leave, we stood up and I picked up his business card. And his name was clearly Nordic.

His name is Alan Tiggerson. So I asked him, I said, Are you Danish? Mm. And he said. Yep.

And I said, Well I'm Tasmanian. And he looked at me quizzically, but I could Till He sort of knew. What I meant by that and what I meant was

Prince Frederick. The Crown Prince of Denmark had a couple of years before married a commoner, a young woman from Tasmania by the name of Mary Donaldson, Now Que of Denmark. She is indeed Queen of Denmark and she's born.

Two sons and a daughter. She's she's more popular than Prince Frederick. I think most Danes would tell you. Uh but they had met During the Sydney Olympics.

The Danes are great sailors. Um Their sport was over. They were out at a a pub in Sydney, a pub called the Slip In one evening. Mary was there with a girlfriend. Um they met these Danes who they had no idea that he was royalty. He did not know he was the crown prince. No It's like a Disney movie. It is it is completely...

A Disney movie. And I can tell you Oh my god. Most Australians and certainly most Tasmanians absolutely love this story. We're so proud of her. And I said to Alan, I said, Dj what do you want me to tell you about it? And

I think Dane's you know, largely a monarchist. They they they They they love. Their royal family, perhaps a little more than the Brits do. And

He sat down and we spent fifteen or twenty minutes, uh With me. Telling him. You know, in detail what had happened. and how it had played out. And it's it's it's a wonderful story, as you said, a fairy tale.

But the important thing is that We spent more time with him and uh Uh, I think uh that turned out to be really important. Venture capitalists will often talk about the fact that they invest in people as much as they do in ideas. So you were just kinda shooting the breeze with him after the meeting was over, talking about the Queen of or the Princess of Denmark and your Tasmanian connection. Indeed. Wow. Mary saved us, man. That is a that is a Hail Mary, Mary.

Exactly. I mean and And a very very loose connection. Yeah. He asked if I knew Mary. And I said

No. But My cousins went to the same school. Yeah. Yeah, it's Tasmania, it's small. Now I I didn't mention that they had gone to that school twenty five years before Mary.

But I f I felt that that was a sin of a mission that I would be forgiven for in the long run. Okay, so so you have this chat with them, you leave. And then He does call the following The following.

Week or day or And he says, Okay, I'm in. Well, they never say that. Yeah. Uh they say come back and meet the rest of the team. Yeah. So how much do they okay, so they they invest and um And did you guys raise the

Five or six million you were looking for? Yeah, they put in six million straight away. They they put in six million, okay. Yeah, and John Murray down in Sydney put in some additional funds. So we were we were sort of off to the races. Um, and they were really terrific to work with. We really Had a great relationship. Alan was very involved in the business.

In fact Soon after making the investment. He On the grapevine, I don't know how, because we didn't know about it, he told us that there was a company that was kinda like our business called Look Tours. It was a an online travel agency.

Focusing on Tours and activities, but only in the Las Vegas area. Huh. And they They did really good business. Um, they were almost as big as us at the time and just from wow Las Vegas. So

you know, tours of the Hoover Dam and the Grand Canyon and all the shows, the Blue Man Group and Cirque de Soleil, all that sort of stuff. They had they had a real lock on that business. It was a single owner and he wanted to sell and And Alan introduced us and helped us negotiate and we bought that business. Right. It turned out to be a really important uh So the rocket force. Uh it was great business.

Fuck. in a surreal set of circumstances. A couple of weeks after we Took control of the business. uh somebody broke into it.

Overnight. Okay. And stole The servers.

ran their operations. Pre cloud. There was no Amazon or Or Google Cloud. Many companies ran their web businesses. On hardware that they had literally in the in the building.

Correct, and that's what Loop2s did. Sadly. They kept All of the back ups. Um

in a box that was sitting on top of the servers, and when these servers were stolen in the middle of the night. The back ups of all of the The code. and customer records, etcetera etcetera were stolen as well.

So we had bought this business. We'd paid millions of dollars for it. It literally disappeared. Overnight. It was just gone. If you went to look tours on the web, there was nothing there. So okay, so this company

Kind of. Collapses It disappears. Disappears. Which was a shock. Um And what on earth do you do in that situation? So um

Alan actually from Carlisle he flew out there as well. I was I think I was in Paris at the time. I flew back. You know, the staff are in shock. What do they do? So Alan was really good. He said don't Don't don't Focus on doing a post mortem year, just get the business

Back up and going. Um, they managed to over the next few days Rebuild. the website from, you know, using the Wayback Machine and And I don't know, a whole bunch of methods that they came up with on the spot. They got the site back up and going in about

Four or five days. Um It it it was Though Quite surreal.

The US Secret Service. Have responsibility for Uh financial crimes. That

involve credit card details. They couldn't figure anything out. There was Phone taps, analysis of hard drives, there was all sorts of things were going on. But they never figured out. Who had

decided they wanted to kill our business. A mystery remains. Well. Alright, so Now I mean but but i in terms of of

other growth opportunities. I mean how are you acquiring users. Because we were the first and there wasn't any competition Um, we were able to buy Advertising.

And also get Organic traffic. Um relatively easily. But

Conversely not having competitors was not great. When you've got competitors. You know, they bring customers. into the market as well, and those customers, you know, look at their website and then a percentage of them will say Well, who else does this? What are the competitors that I can look at? So

If there's other people out there who are also doing marketing, that's good for you as well. There was nobody out there who was marketing. Tours and activities. People selling it, like Expedia and Travel Osti and others were selling tours. But they weren't marketing. They were marketing hotels and flights. Yeah. We were the only one doing the marketing.

Alright. You are ostensibly the CEO. But two thousand ten. Your time at Vietora. What

W what was going on? That's you know, the the board meetings became very different. After Carlisle came on board. It was less about the sort of big picture strategy, and it was more about spreadsheets and more about gross margin and

and things that weren't really my sort of core expertise. I I was less comfortable and I was not really adding a great deal of value because by this time The direction of the company, what we did, was completely set in stone. So

mm, my ability to add value was you know, sort of It had sort of run its course. Um You know, The company becomes almost like your family, so you don't want to leave it, but I also realize that

you know, Barry did a much better job of this growth phase than I did. And we got on really well together and I was very happy to leave. the business in her hand. Wasn't really happy to leave, but But I got comfortable with it. Alright, so

So you are out of the picture, but you did retain some equity because you had c basically gr founded the company. Yeah, I retained enough equity to have a great deal of interest in the company's Yeah.'Cause up up until that point you probably were paid a salary and it was pretty decent, but you you had not it did not make you rich. Yeah, that's it's a really interesting point though. Um I remember talking about this to my mum when she was alive. She she died in twenty

thirteen just before we sold the business. And whenever we talked about the company, uh I would Say something like, You know, Well, we'll probably get an exit in the next couple of years and she's like Exit, exit. What's this

Exit business. Yeah. You know, you've got a couple of hundred employees and you're paying them salaries and you've got all these happy customers and Presumably the the people who are running the tours, they're happy with you because you're paying them. Isn't that what a business is all about?

And it's like well that's that's a really good point, right? Yeah. Mm. we we'd achieved tremendous success. Without an exit. But But still you have to have the exit. And and they're

would be an exit of course, which we'll get to in a moment. Um but but first, I wanna ask you about what you did after you left Viator, which which is I think around twenty twelve, because Um, I guess you became the CEO of another travel company called Rome Torio. Yeah. Um And and and you were there for for for several years. For how how long were you there for? Maybe seven or eight years?

Twelve till eighteen. Yeah, so so about six years. And and you were running them, you were the CEO of that business. Yeah, it was really uh and it's based in Australia. Yeah, based in Melbourne. Two software developers who were at Microsoft in Seattle.

Uh, they were senior developers, really smart guys, and they came up with this idea for A journey planner, essentially. That would tell you how to get from any place on the planet to any other place using any form of transport. That's a very hard problem technically.

Um And people just loved it. Anyway, I met them. When it They were working on

You know, the sort of first beta. And that's what they were good at, but they didn't know how to raise money or sort of Start the company. Uh, so I helped them do that. We raise money very quickly. and we uh found ourselves an office and and we got it launched.

Um When I think about sh well For about four years after you left. Biator was acquired by TripAdvisor, now owned by TripAdvisor. We've had Steve Cowford was on the show, the founder of TripAdvisor.

Um first of all, you had met him. I think twenty years before, you know, at some conference. And uh he took you you found out about his idea, this idea that he's gonna make a website based on on on customer reviews, right? Yeah, I I had

m met Steve I think the year before and then there he was again the following year at the Focus Right conference and he told me that uh they were gonna pivot to a new model which was Based around User reviews of hotels and restaurants, and I looked at him, I said, Man, you are smoking dog. That is the dumbest idea. Who cares? Who cares what Joe Blow thinks of the Marriott in New York? It's like I wanna read a professional reviewer.

And he he smiled and said, I think it's gonna I think it's gonna work. Well how wrong could be. Yeah. He was onto something, but but for a long time he wasn't. I mean for a long time they struggled. Yeah, they they did. It's been It's been a really interesting business to To watch and they certainly had the eyeballs to make the Viator acquisition work.

This is four years after you're out of out of the business anyway. They acquired Viator for reportly for two hundred million dollars. Yeah. And you were um I mean it's a g I think it's a pretty good outcome, but uh but I guess that some people in the industry who had similar kinds of businesses like Viator were not happy about that, because they thought A Vitor sold for too little.

That it it was worth more. Yeah, and it's easy with hindsight to look back and say Two hundred million. Wow, that's that's really low. And You know, I spoke to Alan just the other day and John and we all agreed it would have been great if we'd held on to Viator for just a few more years, tossed another twenty million dollars into the bucket and turned it into a billion dollar exit.

But at the time Everybody made money. Um I think Carlyle made Eight or nine times their investment. Wow.

Nice. It was life changing for me. It was life changing for many people. Yeah, no question about it. Um W so it is I mean it's part of TripAdvisor now. um still under the viator, you know, sort of name and stuff. But w w what's your sense? I mean I

Just as kind of an outsider. I think it's a pr pretty good service. I know that you're not obviously not involved, but wha what do you make of it? I mean, do you think that it it's still true to the original vision of what of what you had? For it? I I think it is today. In fact it's it's tremendously successful business today. They'll do, I think over four billion dollars in gross revenue in twenty twenty four. Wow.

And It is largely true to what we built when when we started. It's it hasn't deviated very much. And Uh I mean do you do you ever use it? Do you ever have any reason to use it?

Yeah. I use it all the time. Wow. L let me Share with you one of the things that

I learned from researching what Academics were We're talking about. Because there are a number of academics who study at the intersection of

Why does travel make people happy? The travelers who are happiest, it turns out, are the ones who plan ahead. And Book things in advance. When you book

A tour or a resort or whatever it is in advance. The sky is always blue. The sea is always green. The drinks come on time. The tool guide is really interesting. Everything goes

Really well. In your anticipation of that event. You go and stay at the resort and you take the tour, etcetera. Things are probably n you know, the weather might be terrible. the the the guide may be difficult to understand, whatever it is, it's not perfect like you imagined it.

But Later on when you remember your experience. Those two things, those two memories, the ones you had in the anticipation phase. And the ones who had W the ones that you had when you actually were experiencing your vacation, they get mixed up?

and you tend to gravitate towards the rosier view of your vet vacation. If you planned it in advance. People who do things at the drop of a hat. Who decide?

You know On a Friday afternoon, let's fly to Manhattan for the weekend. And then I book their their their activities in the lobby of the hotel the next day. They

don't get the value of that. So I'm always encouraging people to To plan ahead. Book in advance because your mind will play this excellent trick on you. uh where where y you know, the the the really positive anticipation memories will eventually take over from

the actual reality, which may not have been a hundred percent, but hey. That's live. Yeah. And and I mean when you think about just the journey that you've made from Tasmania to, you know, founding a pretty significant

um tech company. I mean it's a company that a lot of people know, millions have used, as you say We'll do four billion dollars in revenue this year. Um it's it's quite it's a quite impressive story. And so I wonder how much of where you got to you attribute to the grind and the work and how much you think had uh just has to do with

Luck or timing. Or f just good fortune. Well Yeah, I I know plenty of people who work r really, really hard. And I'd never

claim to be a hard worker. I I don't really have any Specific skill that I can work hard at. But things did. I guess work out. Pretty well.

You know, how did that happen? I guess luckily or coincidentally serendipity. Whatever you want to call it. I I took a risk at the right time.

Um what is luck? You know, it's You've got to get out there in the world. Um I I get frustrated with companies that are inward looking that think that the answers are

back at head office or or you know, that their team's gonna be able to figure everything out. I'm always telling people to to go out and and sort of interface with the world, go to conferences, go talk to your clients, go talk to potential clients, just be out there, don't stay home. And if you're out there I guess luck can find you.

That's Rod Cuthbert. Founder of Viator. By the way, Rod now sits on the tourism board for his home state of Tasmania, Australia. And a travel tip from Rod? If you're overseas and want to learn about the inner workings of a place,

Do what his wife does. My wife likes to go to the supermarket and spend ages looking at All the varieties of cheese. And surprisingly a lot of people like doing that. I always do.

Always go to supermarkets. I got so obsessed with pistachio Nutella in Italy. I was just buying it wherever I saw it and I was like man Come to Tasmia and we'll eat Vegemite together. Oh, I I like Marbite.

So I think I'd I'd be open to that. Vegemite is a step up from Mamad guy. Sure some people in the UK would have issue take issue with that. But I uh but I'm with you. I'll I'll be I'm I'm open to it. All right. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free! And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyroz.com. This episode was produced by Devin Schwartz with music composed by Rumteen Arab Louis.

It was edit by Neva Grant with research help from Olivia Rockman. Our audio engineers were Robert Rodriguez and Gilly Moon. Our production staff also includes Carrie Thompson, Alex Chung, John Isabella, Chris Masini, Carla Esteves, Katherine Cifer, Sam Paulson, JC Howard, and Elaine Coates. I'm Guy Raz, and you've been listening. to how I built this.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.