Everyone has certain days that are special to them - birthdays, anniversaries and other important events. For me September 14 is one of those days. It wasn’t obvious at the time and in fact took several years for its significance to become apparent.My September 14th happened in September 2008, when we were putting the finishing touches on the first version of ToursByLocals. The financial crisis was unfolding over the weeks previous and we were worried about starting a new business during such a time.
The situation came to a head on Sunday September 14, 2008 when the US government decided to let Lehman Brothers fail. Markets collapsed on Monday and ended down 550 points. The crisis continued with the stock market up then down, then up again. All the while, the headlines foresaw the end of western civilization. The world was definitely in a bad state and no one knew for sure what the future would bring.
In a state of blind optimism, we continued to work on ToursByLocals and released it for tour guides to sign up in October.
We knew the biggest issue we faced was a classic ‘chicken and egg’ problem - if we had no tour guides why would travelers come to the website? And if we had no travelers, why would tour guides sign up?
The classic response would have been to spend a great deal of money trying to attract guides - but we didn’t have much money and didn’t want to go the venture capital route. What we didn’t realize at the time was that the failure of Lehman Brothers and the slow motion crisis surrounding that provided a magic bullet solution to the problem.
The level of fear created throughout the world meant that it was easy to sign up guides. Travel was down so they had time to post a profile and set up some tours. Throughout the remainder of 2008 and 2009 our network of tour guides grew quickly. We ended 2008 with 33 guides but by December 2009, we had 456 guides with 977 tours published. The numbers doubled again in 2010. That we provided no sales didn’t matter because times were tough and no one had any great expectations.
As the world started to heal and we started to have the courage to spend money marketing (that’s a story for another time) our sales grew and the cycle of sales encouraging existing and new guides started to spin up.
And there’s a bigger lesson here - the best time to start a business is when things are in crisis. The bigger the crisis, the better the opportunity.
