Time for some major changes

The pace of life was increasing. With the Tiger deal done and dusted, and the team transformation well underway, it was time to turn our attention to the issue of growth.

FY2016 was the first year in our history that our product revenue, excluding Scoopon, had actually gone backwards (from $218 million to $187 million). How were we going to change this downward trend? The team had told us what they thought. Now we had to do something about it. But how? We were constrained by two critical factors: dollars and space. Put simply, the financial and physical resources we needed to grow were both in short supply.

We interrogated every aspect of the business and decided that Scoopon, and in particular Scoopon Travel, provided a great opportunity for growth. Luxury Escapes was our big competitor at the time and they were killing it, and us. Since their arrival on the scene a few years earlier, they had well and truly established themselves as the darling of the travel industry. They'd formed great relationships with hotel chains and airlines, and offered the mum‐and‐dad traveller time‐limited luxury travel packages at bargain prices (similar to the Catch model we'd pioneered a decade earlier, but for travel).

The founders of Luxury Escapes, Adam Schwab and Jeremy Same, were two switched‐on digital entrepreneurs. We initially spotted them when they launched, a competitor to Scoopon (how dare they!) back in mid 2010. They then ended up buying the Cudo website from Channel Nine, as well as the Australian franchise for LivingSocial. In 2013, they rebranded and called themselves Lux Group and launched shortly thereafter. (A great name, by the way!)

While we liked the guys and were impressed with their Catch‐like chutzpah and energy, we didn't let sentiment get in the way of business. We went head to head against them and did our best to take market share off them, but no matter what we did, we couldn't make a dent. Without a clear point of difference, we just couldn't cut through the clutter. Playing second fiddle to the first mover was not new territory to us. When we launched EatNow we bugged the shit out of Menulog so badly they decided that merging would be easier than competing. Maybe we could do the same here? Could lightning strike twice? We decided to find out.

If you can't join them, beat them

In 2015 we had had some exploratory conversations with Lux Group in regards to a potential merger of some of our entities, but sadly we were unable to agree on terms. Remember, one of the rules that defines a great buyer is ‘Keep the door open’, so we kept the door open, had regular catchups at the South Melbourne market with Adam and Jeremy and separately continued growing our respective businesses.

When Nati joined us in the latter part of 2016, we thought we might as well try a bit harder to beat them. After all, we knew everything there was to know about the travel sector. We had Jon Beros and his Scoopon Travel team eager to innovate and keep the spark alive, so in early 2017, just five months after Nati's arrival, we gave Jon the full authority and financial backing to go and build our own luxury travel brand. We decided that if you can't join them, then you should do your best to beat them.

We called it—a pretty cool name, hey?

You don't have what I want!

Logo of

The next order of business concerned Catch. We had to face the reality that our star performer had stalled. On the surface we looked strong. The business generated roughly $200 million a year in sales, and the warehouse was filled to the brim with $40 million worth of stock and more than 30 000 products on offer. This may sound like a lot, but compared with eBay, which offered hundreds of millions of listings, we were tiny. And that was our problem.

We didn't have to look too far from home to find out what was wrong. When we asked our wives why they weren't buying more from Catch, they had the same reply, ‘You don't have what I want’. Never a truer word was spoken—and from someone in our own home! They were right. We simply did not stock enough products in enough categories. It was a bitter realisation, but a lightbulb moment too. How could it have taken us this long to notice something so obvious? But what was the solution? We remembered what Jeff Bezos, the founder of Amazon, had said years earlier: ‘Marketplaces are eating the world’. We had often discussed adding a marketplace component to the Catch site but we were always too busy or the timing wasn't right, or the IT department was too busy, or … there was always a reason. Now we had no excuse.

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