← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
619: Airline Charged Me $65 - So I built a $250M Competitor | Adam Ewart
00:47:38
Adam Ewart turned a £50 excess baggage fee into a global bootstrapped logistics company operating in 145 countries, generating over $250 million a year, and staying profitable for 15 straight years.
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- [00:02]
A
Hey, founder fam.
- [00:03]
B
I want to talk to you about something super exciting. We're officially partnered with Omnisend, the email marketing and SMS platform built specifically for e commerce founders. We've been recommending Omnisend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling to seven figures, it really helps you automate your marketing and get real results. Did you know, on average, OMNISEND customers make $68 for every $1 they spend, which is an insanely good return. And because you're part of the founder community, you get 50% off your first three months with the code. Founder50. Just head to omnisend.com founder without the e to get started. All right, now let's jump back into the show. What if getting charged 50 pound for excess baggage on a short flight became the spark for building a $250 million company that now operates in 145 countries, all while staying bootstrapped and profitable every single year for 15 years? Well, today's guest is Adam Ewart, founder of Send My Bag, the international luggage shipping service that's moved over 250,000 bags annually with just 32 staff by ruthlessly automating everything after watching frustrated travelers get gouged by airlines, Adam tackled this problem head on. With just £100 to build a basic website and zero coding skills, he launched by cold calling local journalists about his young entrepreneur story, landed on TV and got his first customers without spending a penny on ads. Then came the real test. Brexit, Covid Trump Visa bans and freight cost surcharges that added $180 to every shipment, all while never laying off a single employee. This is a masterclass in building global logistics businesses through scrappy pr, systematic automation and turning the travel industry pain points into a nine figure opportunity.
- [01:57]
C
Hear the stories, learn the proven methods and accelerate your growth and future through through entrepreneurship. Welcome to the Founder podcast with Nathan Chan.
- [02:10]
A
All right, Adam, welcome to the show. The first question I wanted to ask you is can you take us back to the pivotal moment in 2010 where you were charged €50 for excess baggage on a short trip to London Gatwick?
- [02:29]
C
Yeah, absolutely. So my girlfriend at the time, now she's my wife, I used to travel to England from Northern Ireland to help her bring stuff home at the end of the university terms. And we were coming back this one summer and we got charged. We were a couple of kilos overweight and get charged 50 quid as you said. Couldn't really believe it. It wasn't really a thing at the time that we were aware of, you know, these high charges with the airlines for just such small amounts of excess weight. And I just couldn't believe it. I saw other people in the queue for the check in also paying extra amounts and lots of people feeling annoyed about it. And on the way home I just couldn't help thinking there had to be another way that this could be done. I had started other business at university which sold musical instruments online and then we manufactured musical instruments and we sent them all around the world. So I had experience in moving stuff and I knew that being charged 50 quid for a couple of kilos made no sense. And I actually wrote down on the plane on the way home, send my bag.com and not knowing obviously if anything was going to come from it, but I just thought that would be a good name. Got home, had a look online to see if anybody else was offering a service that we could just use to send my girlfriend's stuff back the next term. Nobody was using, there wasn't one. So yeah, we just cracked on and started it. It was about 100 points to set up a little website. It was a little Contact Us page that I made and tweaked into and then actual sort of E commerce type website. I had no skills when it comes to, you know, building, coding, anything like that. So done from a book basically. And yeah, we had a website, got a few customers away, we went.
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A
Yeah, so let's delve a little deeper there. So you said you set up the website and then had a few customers. How, how do you start a business like this? You know, the export business is, is not an easy business. It seems quite intimidating. How do you even tackle a problem like this? How do you start? You said there was no services out there. Like how does, how did you even start?
- [04:46]
C
Yeah, so I had started a musical instrument business out of university. Really. I had gone to university with the goal that by the time I finished university I would be making enough money to support myself. I didn't want to work for anybody else and I've never had a job, a full time job working for anybody else. So that was my goal. And at una I'd started this musical instrument business and it's got a lot of stuff that happened over the years with it. We ended up manufacturing our own instruments in China and sending them all around the world. So at that stage I had experience in shipping stuff. So I just knew, hang on, if I can send a saxophone or A guitar. Why can't I send my own luggage or my girlfriend's luggage or anybody else's luggage just through the various different freight networks that I would use for our large e commerce and items. And so I knew that I could do it and I knew that I could do it at a cost that would be significantly less than what the airline had just charged us for the sake of a couple of kilos. I knew I could charge around 20 pounds in order to send a large box or a suitcase for somebody. So I knew that we could do it from my experience in shipping and using freight networks. And then it was just a matter of I didn't want to spend a lot of money on it. I didn't have a lot of money. So it's a matter of how do we try and get some customers. And what happened was my music business had recently made some items for it. Do you remember the old pop band, reggae type band, UB40, red red wine and songs like that? Yeah. So they had a few hits back in the day and they were touring and somebody from that band had reached out and asked us if we could make some custom items for their saxophone player. Because we kind of specialized in sort of classical instruments and orchestral instruments and he needed a specialist saxophone strap and we had just made that for him. So I then called, I had won a kind of young entrepreneur type award, I think the year before when I was 19 or 20 or something. And I called one of our local journalists and said, do you remember me? I met you at this award, those awards last year. My music business has just sold some stuff to that pop band UB40. And I've just had an idea for this other idea, the semi bag idea, which I think would be really interesting. Do you think this would maybe make a good. And finally last five minutes of the news type story. And the journalist said, yeah, okay. And we ended up, or I ended up getting a few minutes at the end of our local news for Northern Ireland. And that sent a few hundred people to the little website I'd made. A couple of dozen people then used it the next month. I think that was maybe we'd had the idea in the June, traveling back from university. I think I got it on the news maybe in the July or the August. And then we had a couple of dozen people use us in the September to send stuff from Northern Ireland off to English and Scottish universities. And so that's where our first couple of dozen customers came from. 100 quid, me blagging a bit of a TV interview and then onwards and upwards.
- [08:00]
A
Yeah. So bit of pr. Is that how you got your first customers? Now you guys are $100 million year business. Did you think, ever think it would be this big?
- [08:11]
C
I, I did, yeah. I think we've got a lot of Runway still to go as well. I, I just, I just felt from maybe not the very earliest days at the start, I knew that we had a business that that could be interesting and that it had a, you know, it had a, hopefully a good future. But it was probably about three or four years end date is when I got the sense that actually this could be a much bigger business. And that's when I then wrapped up my other business at the time and I focused fully on semi bag. And I was in America in 2011 and just certain things that I saw there I went, this could work in America. And then I saw in Australia, this could work in Australia. And once I saw that I was like, yeah, this could be bigger. So I put a lot of effort into making sure that we started in various different markets as I'd done several years before in Northern Ireland. I got myself onto Tally in Britain and then onto Tally and United States to launch it and just try to blag as much. We didn't raise BC money or anything like that, so it was really just blagging as much as possible and delivering a good service and customers then started recommending us and it's just no matter what we achieve, you just keep pushing for the next thing. So it's just been busy for a number of years now.
- [09:35]
A
Yeah, you've also been on Dragon's Den, so that's the equivalent here in Australia or the US of Shark Tank. Um, so what happened there?
- [09:47]
C
Yeah, so that was, that really follows the, the idea of how much attention can we get for as little cost as possible. It was, I think it was 2012, ended up going on Dragon's Den, I can't remember. I think the offer was something like 3 or 6% for a, you know, £100,000. It was an offer that I knew wasn't going to get taken up on Dragons Den, but my hope was that the little I would get one of the 10 minute slots on the show, that would at least give me the opportunity to talk about send my bag, Just say send my bag as much as possible, give my sort of 90 second pitch and just hope when they all started shouting at me about my valuation that I was able to just stand there and take it. And yeah, Dragons Den went great. From a publicity point of view, we got thousands of thousands of hits. Even today, the odd time a customer might reference that, it was quite a long time ago now, but a customer might reference it. But it went sort of so well from a publicity point of view that I actually tried to go on Shark Tank in America, I think, in about 2014, but they wouldn't have me. So unfortunately I didn't get to do that. But we had actually also taken on a little bit of seed money. I'd never set out to raise money. I'm not. I don't really follow the whole raise lots of VC money. I think you just need to get out, do it, do it, do it, make money. And then if you need money, once you've proven it yourself to a degree, then of course go and raise it. But I thought we could do this without raising money. But I had met somebody locally who had a very successful business and had sold their business for an awful lot of money. And they asked if I was looking for any investment. And at first I thought, no, not really. But then I met them again at something and they said, you know, you're definitely not looking for investment. And we just got chatting. And in the end, he was just a great guy to bring into the business for advice more than the money. But we had taken some startup seed money around that time from him. So it also meant that once I went on Dragon's Den, I knew my offer was never going to be accepted, but we held back the announcement of that. So the day after the show aired, we were able to put out a bit of PR saying Dragon's Den failure. But this investor has stepped in and sees the, the potential in semi bags. We're able to get a little bit of PR out of that as well.
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A
Yeah, got you. So PR has been massive for growing your business. What advice would you give to founders when it comes to getting PR to get their brand out there, to get their brand on the map? Because, you know, from my experience, I've never really tried the whole PR thing, never really done a few bits and pieces, but it's never really been a focus for growing founder. I'm curious, like, what advice would you give?
- [12:50]
C
Well, for. For me, I suppose I basically had no other choice with any of the businesses that I was always starting businesses at school and at university, and I had no money and I just have no choice. If I wanted to get customers, all I could do was try to do whatever I could to get attention. And I think you just have to. You have to try and find Something which is interesting to the. You have to understand, I suppose, what the news or whatever program or newspaper may be, what they're trying to achieve. And certainly for me, at the very beginning, I was quite young, and there wasn't maybe a lot of young people at the time, certainly in Northern Ireland, starting businesses. And that was an angle that I was able to use and to talk to them about. Look at this, this is very. This is quite an exciting story and sort of just try to give them what you thought that they might want. And I mean, we have pitched so many PR stories over the years about all sorts of different things and, like, lots of them never go anywhere. But sometimes if there's something which is just genuinely uninterest, you know, people can get picked up and. But again, you also just have to put yourself out there. So Dragon's Den, I mean, that was just putting yourself out there. That could have gone badly wrong. But I knew it was a TV show that was getting 4 or 5 million primetime viewers in the UK at the time. So you just, you know, if you're not going to put yourself out there, what can you do? So I just went for it. And then actually we tried something else shortly after Dragon's Den, which I thought it might have got more attention, but it didn't really. That involved having a big mascot costume of this angry leprechaun that was meant to represent one of the Irish airlines trying to rob passengers. And so we just used to do whatever we could to try and get some attention. But actually now it's changed. That was more in the early days to get the. Excuse me, to get the snowball rolling. A lot of our growth has came from customers referring us and repeat using us. Especially in the early days, customers felt that the airlines were really ripping them off. Even now, you know, Qantas, Emirates, they can charge you $1,000 for a second suitcase and all that. So people feel really ripped off when that happens to them. But if you're relocating somewhere, if you're going to study abroad, you need to take more than one suitcase with you. And so once you find semi bag, that person then tells other people, other expats, other international students. So we've had an awful lot of NACLO growth over the years, but every now and again, especially in new markets, pr, if we can get it just. It gets the ball rolling, it gets the snowball started, that then allows that natural growth to take over. And again, in 2014, I managed to get on to Power Lunch on CNBC Big Business Show. I don't really know how we managed to get on that in the end, but got on it, was on it for about 10 minutes and that was Semi bag launched to the United States for very little cost. You know, just the PR guy Jim that we were working with out there, we just got a story put together and they just liked the idea of this business from Northern Ireland launching, coming over to the US to launch them and we got it. Whereas now we're doing other more marketing, advertising type things. You know, we just took over the entire of the immigration hall and JFK airport in New York with big semi bag banners running the whole way around it. And when people are waiting for an hour to get their immigration, to get their visas stamped or their passport stamped, they're now sitting in amongst that. So we do, we do other things now, but in the early days just trying to get any attention by any means was the name of the game.
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A
Yeah, that makes sense. So when it comes to I guess marketing, do you, do you re like, what would you say to a founder in the early days? Because oftentimes founders they just. You don't want to spend money on ads, right? Did you spend money on ads? Are you spending a lot of money on ads now? Like. Yeah, I'd be curious.
- [17:03]
C
Yeah, we, we do. I mean I remember Google AdWords pretty much being introduced. So I think in my first business we were bidding 4p a click or something like that. And you don't know that wouldn't buy you anything. And we do, I mean Google AdWords, we spent over a million pounds a year on Google adverts, so a couple of million Australian dollars. So it's not our biggest advertising spend, but it's an advertising spend that's still significant. A lot of it is spent on bidding on our own name, you know, just to protect your brand. So the more successful you are through other channels, the more you have to give to Google to make sure that we don't have other brands coming in and betting on semi bag and getting clicks by accident. So yeah, I think just in the early days it's the most important thing to do is to get as much attention as possible for as little cost as possible. And that's where I think PR was great. And people just need to do whatever they possibly can. You then as you can afford it, supplement that with other types of advertising, but try to get the absolute best deals you can, especially if you're a startup. I mean there's a lot of advertising companies out there, a lot of media Owners who, yes, they are potentially selling media for an awful lot of money to massive multinational corporations. But these media owners have a lot of media to sell and they will work with you and they will negotiate down, you can negotiate prices down and make things happen that you might have thought weren't possible. I mean last year in the UK we ran TV adverts to the entire UK across Christmas Day and Boxing Day. Actually it was a TV advert that had Santa Claus talking about how he was fed up in the North Pole and he wanted to move to Australia for, for better weather. So but we ran those TV adverts the entire UK we had last year if you were on a Qantas flight, before you could access the in flight entertainment, you had to watch a semi bag advert say we've taken over the carousel at. Or not the carousel, the immigration hall at jfk. Actually the first thing I, the last thing I'd done before coming on this call tonight was we just done a deal with Charlotte Airport in North Carolina in the United States to have a lot of stuff going on in their baggage halls this December. And I, I can tell you we're not paying what the big, big, big multinationals are paying. The media owners will work with you and you just have to like what I would do if we were looking at doing, doing a dealer buying something just to show we're serious, you know, I, I won't just sit on emails, I will go to them, I will go to the airport, meet the people who are selling the media so they know when I make them an offer that's maybe a little bit lowball, that they, if they've still got a serious, you know, person, they know that we'll pay them and yeah, you know, we, we make these things happen.
- [20:12]
A
Yeah, I see. So when it comes to, I guess building this business, one thing that has been massive as well is automation. So you guys are, you guys, you know, focus on profitability. You're using free cash flow, positive free cash flow to f fuel growth. One thing that's been game changing is the automation side. Can you tell us about the automation side of the business? How you've used automation to really drastically keep the business lean. So send my bags grown from, you know, handling 250,000 bags with 32 staff to aiming for a million bags annually with only a 50 to 70% increase in staff. So how does that work? How does even the logistics side of the business work? Because I thought you would use a third party service as you first, you know and how that has changed.
- [21:11]
C
Yeah. So as you say, automation has been massive for us and from about 2014 we have invested in building all sorts of our own systems, whether it's systems for handling customs processing that can then simplify the documentation and so on, which we then pass on to the partner that we're working with, whether it's tracking automations so many. We have literally dozens of tools that we've built over the years. We have a team of developers and we have employed developers probably going back to 2012 or 2013. And Carl, our CTO has been with us from that stage and yeah, it's just a constant. What we have always done is, as I was saying about trying to get that snowball effect, trying to deliver a service that people just want to use again and want to recommend. We try to go above and beyond and do whatever we can to ensure that will happen. And so, especially in the early days, that meant us doing an awful lot of manual processing work, an awful lot of manual tasks, just to make sure it could be as, as good as possible. But once we have established that that is a good idea, whatever the particular task that we're testing is and we've just hammered it manually, then we'll automate it. And by just this constant drive to automate has, has really worked very well for us. You know, we have a customer service team of around 30 people and that team operates seven days a week and we operate 24 hours a day, Monday to Friday and again that was. We just started opening at 9 o' clock and 10 o' clock at night because I thought people are home from work and they, they have questions why the business is only open 9 to 5. So we started opening into the evenings. But then we will do things like, okay, we want to have live chat, we don't want to hand our chat system off to one of these bots that doesn't work. Obviously this is changing now. There's been a lot of advances and you can get more help from AI solutions, whereas a few years ago it was just these awful chatbots that wouldn't work. But what we would then do is build a tool that helps our agents with canned responses and so on. So it can still be a genuine person there to help you, but they can have a database of canned responses and so on, various automated tools that can help them deliver more. So yeah, we'll always build a team and build as much as we need to, but it's not about going and raising loads of VC money to hire as many people as we can and to do whatever we can but just try to, as you say, move ahead with the user positive cash flow and just automate as as much as we can. Yeah.
- [24:06]
A
And you guys are in 145 countries now, over 10,000 routes. Talk us about these like logistics and operational challenges because it, it seems like such a daunting kind of company to run in many ways. When you look at from the outside like what you think of how many bags get lost now and all these different things like you guys are solving that problem as well.
- [24:32]
C
Yeah. The international aspect of Semi bag is something that I really love and a lot of the, the guys in, in Semi Bag love as well. The, the countries that we touch every, every month is just, it's so much fun sometimes just to see what we have going on in different places and the different reasons people are using us for. And the reason why we are able to do that is that we work with large international freight companies. So we don't have a plane or a train or a truck. We do have some of our own vehicles doing last mile, first mile stuff. But ultimately Semi Bag will get your item. It may be a partner collecting your item as well. And we will input that into a tried and tested international logistics network that will put it on one of their planes or it'll go into the belly of a freight plane and it will move through their network. And Semi Bag will manage the process, Semi Bag will manage the customs aspects of it to make sure it's all cleared as personal goods and not clear as commercial goods. And, and where this works is that the partners that we work with, they don't go out looking for luggage or personal effects shipments for them. That's very messy. Getting a box of somebody's stuff, that's very difficult for customs processing from their point of view. Whereas what we do, we take this messy freight as they would see it. We make it look like a very night, nice neat little package through what we do. But that goes into their network. It adds them volume to the network. They give us great rates for doing it, which we then pass on to our customers. And it kind of works for everybody because we're not in competition with the networks we work with. We're bringing them new business. But similarly for our customers, if they went directly to any to the networks, it would be much more expensive and they would have to try and work out the customs processes and various other things that the, the semi bag sort of wrapper takes care of. So that's why we have been able to go from one country to another country over the years and build it out. But we do have some of our own vehicles, say doing last mile, first mile stuff in the likes of London and Dublin. But yeah, it's mostly us making use of other large networks.
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A
Yep, got you. And when it comes to challenges, trials, tribulations, what have been some big challenges, has there ever been any times where you think that this might not work out, the business is going to go bust? Any really incredibly hard times?
- [27:23]
C
Yeah, we've had so many different things over the years. I mean in my previous business we had, I had a warehouse full of stock in England and I got a phone call from the warehouse and oh, by the way, we have gone bankrupt and the liquidators are coming tomorrow to seize everything in our warehouse and your stocks all here at I, we, we told them we don't own it, it's yours, but they're going to seize that as well and it'll take weeks or months to get it sorted. I say, oh, this is going to collapse my entire business. But got on it, got on a plane, stripped England, negotiated a deal with another pick and pack warehouse. Part of the deal was if they wanted all our business, they had to provide the vehicles to get to this warehouse for 6am the next day and just start moving all our stock out before somebody came with a chain to lock it up. So we got all our stock moved there. We lived to fight another day within semi bag. I mean so many things, even Brexit. Brexit in the uk we had built a really nice business which helped people in Great Britain send to Europe, primarily into Spain, France, Italy for holidays and Brexit. When the rules, the customs rules and various things changed for shipping between GB and Europe, we lost 40,000 shipments a year. So, you know, really a bit of a disaster completely outside of our control. We knew Brexit was coming. Didn't quite think that the processes put in place by the government and so on would be so terrible that it would end up like that. But that destroyed a large part of our business. Covid, obviously, as a travel business, Covid was a problem, but we found ways through it. We found in particular there was a lot of Americans living all around the world that when Covid hit, they wanted to get back to America. We helped an awful lot of Americans travel home. We worked with companies like Cirque du Soleil. We helped them repatriate the belongings of something like 500 of their performers. We consolidated belongings into Sydney and Australia, into Antwerp in Europe and into Las Vegas for the Americas. And then we got the belongings and sent them back to all the performers to their home countries around the world. So, yeah, and the list, the list goes on. We've had a couple of things this year that haven't been ideal timing. I mean, even just in recent weeks, as I mentioned a minute ago, all of the advertising that we have in the United States, jfk, Newark, fit various things around the United states. And on the 29th of August, Donald Trump changed a rule in customs that created lots of problems for us. Lots of postal systems around the world stopped sending into the United States for a couple of weeks because of this customs problem that was created. He also said we're one of our biggest customer bases are international students. And again, back in June, Donald Trump, banned or not banned, sorry, he stopped the processing of international student visas in the United States for a period which really spooked a lot of. You are an international student planning on studying in the United States next year. You're probably thinking twice about that now because it's, you know, if your visa was paused, it's a little bit more uncertain than it was. So we saw a drop off in shipments to the United States. So yeah, there's lots of things. But I'm very proud that no matter what, including some of those blows like with Brexit and so on, that could have really been a death blow to us. We have grown, even if only fractionally, every single year since Semibag was started. And we've made a profit every single year since then. My bag was started. So even in some of those worst years, which has only been a couple of, and we have maybe lost a large percentage of business through something like Brexit, we have still found in other countries in the world enough other revenue to make up that loss and still grow a little bit. So although I would have liked us if it wasn't for some of these like things like Brexit and so on, I think we could have been further on in our journey. I'm proud that we have managed to go through that and grow every year. And you know, during COVID we didn't lay off one, one employee. So. So yeah, there's, there's definitely tough times, but you just gotta, you just gotta do what you gotta do to keep pushing through.
- [32:09]
A
That's really impressive growth. When it came to Covid, that must have been really scary for you guys, just because a lot of people weren't flying. I had friends in the travel industry, they're doing exceptionally well now, but, but during that time, you know, they had to raise a lot of money to keep the company alive. They really, you know, they sold bags, they, you know, luggage bags. They, they were selling all sorts of other stationary items, masks, all sorts of things with, with such a loss in revenue and all these other things. Did you. Was there a point in time where you're like, I might be done here?
- [32:51]
C
No, we, we went from. In the March 2020 when lockdown was first announced, we actually got a spike of a couple of days where we became very, very busy as a lot of people rushed to travel home as various lockdowns came in around the world. Then we went very, very quiet for maybe four to six weeks. And I suppose during that time I had a concern, but I also felt like there was enough movements taking place that as people wanted to, they'd maybe left to go back to their home country but hadn't taken a lot of stuff with them. And it just felt like there might be an opportunity to help people get some of the stuff that they have left behind. And so we set up campaigns. We don't do a lot of Facebook. We marketing. We do a little bit now, but we never really done an awful lot of that. But that. Because it's quite hard for us because we will often end up in front of travel customers that aren't necessarily the customers that we're trying to target because we're looking for people that are traveling with more stuff because they're traveling for longer. Whereas you would often end up maybe reaching customers who are just traveling for a holiday who might not choose to use semi buy because they might not be requiring to take that much stuff with them. And so digital sort of Facebook and stuff was, was never great for us. But we spun up an awful lot of adverts at that time saying, are you trying to get stuff home? And because the actual vacation holiday market had stopped, our adverts were able to reach a lot of people at a decent cost. And so with. By about six weeks after the first lockdown, we actually went, oh no, look, actually we can, we can really help a lot of people get their stuff and, and so on around the world. And yeah, I mean, we didn't know what the long term was going to be because obviously once everybody was back, if everybody was staying put for a couple of years, that would have been problematic. But once things started to open up, you know, a few months down the line and also actually for us, even though Australia, for example, maybe opened up later, or New Zealand done things differently and all the countries in the world were doing it differently, but because over the preceding years we had built up a customer base in different countries. We could lean into different countries at different times. So once America announced it was opening, we could say to America, right, you can send stuff again one to the uk, we could say it to them. So by us having going out in those years before and kind of establishing ourselves in different markets allowed us to lean into different markets as they opened. And yeah, we, we got through it. And there was one of the biggest hangovers from COVID for us actually, which has been quite problematic for a few years afterwards, was because of the, the lack of air passenger flights that took place during 2020 and 2021 that really forced up freight prices because the lot of the logistics companies will use spare capacity and passenger planes, but without the passenger planes they had to schedule more dedicated planes. This then forced up costs. There was also a massive E commerce retail boom during COVID which also forced up costs. And then what happened was as Covid finished and the passenger flight came back, the E commerce boom started to tail off a little bit. A lot of the logistics companies had got used to the extra revenue they were bringing in from the additional fees they had been charging because they were having this scheduled dedicated aircraft. They didn't want to now give up that additional revenue because, you know, a lot of the CEOs of these multinationals is their, you know, their remuneration is tied to the share price and the share price is tied to revenue. And if they suddenly give up a lot of revenue, which they have been getting through these additional fees, the revenue goes down. Maybe people don't get their bonuses. So they just were all making any excuse they could to keep the freight prices high. And so that lingered actually we were still dealing with surcharges to do with COVID through the summer of 2023. You know, at one point it was costing us about 6 Aussie dollars a kilo insur charges to send to and from Australia. So if we were charging somebody $300, but it was a 30 kilo bag, there was then another 180 odd dollars in surcharges, you know, so it was absolutely crazy. So pricing and costs were one of the big issues of the tangles that obviously then puts people off using us. But yeah, we, we worked, we worked through it and finally that's washed through now. But that, that was probably one of the biggest challenges actually for our business during COVID after we knew if there was enough movement taking place to allow us to Keep going.
- [37:55]
A
Yeah, that must be incredibly tough. And how do you even work those numbers? I suppose there'll be other competitors in the space, and they're all comparable because it's been pushed onto everyone. But, like, how do you even work those kinds of numbers?
- [38:08]
C
Yeah, it was just. It was really difficult because it was just a lot of money we had to. A lot of cost we had to pass on. I mean, we passed it on at cost, so we didn't mark it up in any way. And in fact, we absorbed some of it as well. We're happy to go down to very slim margins where we needed to just to do whatever we could just to keep the wheels turning, because we don't want to lose that customer, because we know that 42% of our customers tomorrow are customers who have used us before in the last five years and so on. So we know that even if we don't make any money tomorrow, that customer will be back to use us again. We also know that 85% of our customers tell us that they've came to us through a referral from another customer. So it was really important for us just to do whatever we can to keep it moving. But, yeah, we had no choice to add on quite substantial surcharges. And if customers needed to use it, they still used it. And obviously, some customers who maybe didn't absolutely need to use it may have chosen not to use it, but at least we knew that in the marketplace, overall, we were competitive. And one of the things that we have just always done is just best price, best service, best customer service. We just try to be the best on every aspect. And then that means when we win, the customer, they do want to use us again, they do want to refer another customer. So if we are putting our prices up, we're probably still the best price in the market. But, you know, there's. There is an elasticity at a point that some customers say that was too expensive and that. That definitely curtailed growth for us over those few years. But luckily, those. Those charges have now finally moved on.
- [39:57]
A
Yeah, yeah, I can imagine that would be really tough. So, look, we have to work towards wrapping up. Adam, a couple last questions. You are a serial entrepreneur. How do you identify new opportunities versus, you know, deciding to pursue a new venture versus doubling down on an existing one? Like send my bag?
- [40:18]
C
Yeah, I've. When I first started, you know, as a teenager, as in school, at university, I was just going for. For everything. I was selling. Buying records and auctions and selling them around the world. When I find collectible ones. My music business actually started really by fluke because I was buying and selling different things. There was a music shop in London had gone bankrupt and a conductor who was a friend of the guy that owned the music shop had taken 2,000 music books off him and had them in his garage. And I just bought these 2000 music book for about £500. And then. So I'll not just sell these through music shops haven't really gone onto the Internet yet because they're more family owned independent shops. I'll start a music shop, an E commerce music store, use those books to start it. And then went on and suppliers wouldn't sell to me and all this kind of stuff because they didn't want to sell to some little upstart e commerce business. And I ended up having to find their factories in China, make our own products and all this kind of stuff. And so you were just going from one thing to another. We started a music school. We had all, all sorts of different things. And then the semi bag, it came along. It looked like a good opportunity. There was a few years overlap and I then started to wrap up the music business because I was just doing a hundred, I was doing anything I could to make it successful. We were sending containers of stock into the United States. In the end we were selling to schools, selling to trade, selling to shops. We were supplying violins for. I remember one time we supply 20 white violins for an Yves Saint Laurent fashion show. We're just, just doing whatever we could. And then with semi bag when it came along and I just felt, you know what, I could sell every violin in the UK next year I'm adding it's still going to be a massive business. Whereas the semi bag, this can go around the world. And this is why I was quick to go to America. I didn't want somebody else to become the semi bag of America. I wanted us to be the semi bag of America, the semi bag of Australia and so on. And with semi bag since that started really because we have this global customer base, I haven't actually found myself drifting into too many other things because it's more about, let's just like it's. I'm having such a great time at the minute. As we scale up further in Australia, we've made Australia one of our hub countries now which means we have a lot more roots from Australia. We're offering better services in Australia and you domestic services in Australia. So you know, advertising on airplanes, going around the world and all sorts of fun stuff. So it's at the moment it's more about sponsoring sports teams and things we're involved with Melbourne storm there, Sunshine coast lightning and the netball. We have a superbike team and the British Superbikes and sponsor the football team, the soccer team in Northern Ireland, our national team. So it's like I'm kind of, rather than having to go to other ventures over the last number of years, I've been able to do more exciting things within Semi Bag and we're probably going to have a lot of stuff happening further in Asia over the next couple of years, which is really exciting. We have loads more still to do in States and Australia. So yeah, I've kind of found that I've not had that desire to get dragged into other things. Now it's more about send my bag but in different countries, which is kind of the same thing, but it's good and that it allows us to drive. It's all sort of going for the same goal of Semi Bag because it, it is certainly in the earlier years it's easy to get a little bit distracted and start getting pulled from one idea to another. So it's, it's nice that Sell My Bag has this kind of global opportunity that allows me to do the, the fun stuff in different places without getting bored.
- [44:03]
A
Yeah. And I think that's when you're building a legacy based brand or you know, something of true worth and significance, it's a long term play. You've been building this business now what, 15, 16 years, you can open up other arms you can still stretch and kind of, I guess exhaust that entrepreneurial spirit into new products, new lines of business. But focus is still incredibly key and focusing on that core. So look, last question. Adam, what final words of wisdom do you have from your experience building your nine figure business, you know, being profitable every single year despite so many different setbacks. What, what advice would you give to founders? Parting words of wisdom?
- [44:50]
C
You just have to keep pushing every experience that you have, every minor failure or major failure. It's all a learning experience. I will probably do something tomorrow which has a basis in something I learned 15 years ago from something in my other business that maybe didn't work at the time, you know, and you just, you just need to keep pushing and pushing and pushing and it all builds, you build up this piece of knowledge and it means that whenever you have, there is an element of luck and all these things, but the harder you work, the luckier you'll be in the sense that if you just keep plugging away, I was lucky to have the idea of sending my bag because I had the experience, if I didn't have that experience of being charged the money by the airline that day, I would never have thought, this is a ripoff. There's a, there's a solution for this. If that experience hadn't happened, there would be no send my bag. But when that experience happened, I only knew I could solve that because I was sending violins all around the UK and I knew if I can safely send a violin, of course I can then send somebody's luggage as well, because I'm going to use the same systems. So you just, you build this knowledge over the year, this, this experience base, and then it means that when you have the, the idea, when you have the right idea, when you see the opportunity, you have the, the ability now to execute on it. So I would just say to anybody, you just keep going. If your current venture doesn't work, you'll have learned so much from it and just keep going onto the next one.
- [46:40]
A
Adam, thank you so much for your time and giving back to our community. Congratulations on all of your success thus far. I look forward to continue to follow your journey.
- [46:48]
C
Thanks a lot. It's been great.
- [46:50]
A
Hey Founder fam, thank you so much.
- [46:52]
B
For tuning in today and if you.
- [46:53]
A
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- [47:00]
B
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A
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