Sramana Mitra: Until 2012, it was you and your wife. In 2010, the travel stopped but you still continue in the same model and the same mode of just the two of you in the business?
Mattias Larson: Yes, correct.
Sramana Mitra: In terms of revenue ramp, what were the numbers for 2009 to 2012?
Mattias Larson: Keep in mind, the revenues are pretty high but the costs are also pretty high. This is a slim-margin business.
Sramana Mitra: This is not your affiliate commissions. It was your total sales?
Mattias Larson: What I quoted you was the affiliate commissions, but of course to make $500,000 in affiliate commissions, I might have to spend $300,000 in paid search.
Sramana Mitra: So paid search was a major cost of goods, almost.
Mattias Larson: Absolutely, it was huge. If you put all the spending on a credit card, you get quite a few points that you can then convert to miles. It all went hand-in-hand.
Sramana Mitra: Glad to have that clarification. Talk about what kind of numbers were you doing in 2009 to 2011? How far were you able to go just the two of you before you took on a business partner?
Mattias Larson: Our revenue was between $3 million and $5 million.
Sramana Mitra: What was the thought process when you chose to get a business partner? Whom do you select to be your business partner and why?
Mattias Larson: The concept behind it was that I couldn’t do this myself anymore. It was becoming too much of a burden. It was too much work. As I started to get more and more successful, all these merchant partners started to reach out to me and they wanted to set up conference calls and discuss how to do more business together, which was great. It just took a lot of time to schedule these calls. I had to do all the calls throughout the day and then do my regular work of development, adding deals, and optimizing my campaigns at night. It became impossible to run it as a two-man show.
My business partner’s name is Rob Gough. I had known him for a few years. He was on the merchant side. We had run into each other while doing some of these affiliate conferences. He had a lot of contacts with other merchants, which is a side that I wanted less to deal with because I didn’t have time to do all these calls. I wanted to focus more on the underlying piece of the business.
Sramana Mitra: You wanted somebody who could handle merchant relations while you focused on the business?
Mattias Larson: Yes, that’s a good way of putting it. He had a lot of contacts there. So we came together in 2012. January 2012 is the official start of Eckim, which is now the company that owns DefinitiveDeals and a few other web properties as well.
Sramana Mitra: What does that mean? What is the structure of the business partnership?
Mattias Larson: We own Eckim together. He has some other properties that he was working on. I had my DefinitiveDeals and we put them both into this company and decided to build it into something bigger – basically expand on everything that I was working on.