Andrew Webster and Nick Telson’s dream was founded purely on starting a business that would help tourists, “Londoners “and pretty much everybody, really”, find their ideal drinking venue. “The idea came about after we went to New York and the concierge in our hotel asked us loads of questions about what we wanted from a bar. It just clicked, and DesignMyNight was born,” says Telson.
Initially the idea was to build a nightlife site and make money from advertising. However, Webster and Telson realised that the advertising model wasn’t quite as lucrative as they imagined it would be, and they experienced a number of “peaks and troughs”. “The advertising model works if you get millions of views,” says Telson. “However, the problem is that at the beginning, we didn’t have millions of views (we do now), so it just wasn’t making money. The second model we tried was to get an income from bookings. If people booked through us, we relied on the honesty of the bars to tell us they turned up. It left us very open to be taken advantage of. It was very difficult to base our cashflow on this.”
So they decided to change tack. Rather than focus on advertising, they made ticketing the target. “We realised that from a B2B point of view, the bar, club and pub industry was rather undeveloped, so we had to work out how to become integral to a bar’s operations. This isn’t revolutionary: there are over 80 similar apps out there. But we have 2 million people a month on our site, so we can sell tickets to events at bars and clubs, and then in return, we give them free exposure.”
Over the past 12 months the business has experienced a complete shift, from a purely advertising model to a B2B model too. “By making this change, we’ve managed to break even eight months earlier than we expected.”
They created their own ticketing software that their partners (bars, pubs, clubs etc) can use to sell tickets for events. Ticket selling generates an income stream for DesignMyNight.com and is also immediate, as it takes the money first before passing it back to the event organiser, minus commission. “Now we get money upfront, there’s no admin at all, and we get an instant pot of cash. We’re getting more ticket partners on-board all the time, but we’re now processing around 30,000 tickets a month through our partners.”
As well as their own ticketing system, the business also developed Collins Bookings, bar-booking and inquiry-management software. “We decided to build this after realising that bars were using restaurant systems, like OpenTable, to book into their venues, which just aren’t suitable for bar needs. In a lot of London bars, especially exclusive cocktail bars, you 100% need to book; the tide is changing. If you have a party – and a lot of our clients are in their late 20s throwing parties – getting a nice space or area is imperative. Collins allows bars to do real-time smaller bookings from their own site, but also manage all their inquiries effectively.”
Launched in February 2014, it already has more than 150 customers. It works on a monthly direct debit for the venues and on at least a 12-month contract. This is guaranteed monthly income for the year for every venue they sign up.
Improvements to cashflow has meant the business has been able to invest in improving its website and growing the business. Telson says: “We’ve hired 20 people now, have offices in Old Street, a tech team, and are hoping to expand further than just the five cities we operate in. Currently, we’re making huge inroads into this sector, because we’ve focused specifically on nightlife, whereas our competitors have looked at broader areas.”
Telson says he is no Steve Jobs: “I’m not a tech genius. Creating ticketing and booking technology is not personally in my blood, but we’ve managed to do that, and it’s paid off, which has resulted in a really strong cashflow. In any business, cash is king.”
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