Young entrepreneur’s thrifty flight of fancy
Monday, December 10, 2012/
At 19 years of age, Elliott Donazzan is the founder of One Cent Flights, Australia’s first travel-based penny auction website.
One Cent Flights was founded in August this year by Elliott and his cousin Matt Donazzan. Elliott is based in Sydney while Matt is based in Melbourne, so the One Cent Flights team works across both cities. What’s more, the business is one of our Future Makers for 2012.
Elliott talks to StartupSmart about why One Cent Flights isn’t a one-trick pony.
What inspired you to start this business?
I’ve been really lucky to travel the world because my dad’s a pilot and I have a great passion for travel.
My first business (started when I was 16) auctioned limited-edition video game merchandise. I thought that combining the competitive nature of auctions with the excitement of travel could make for an exciting business.
Being a university student I couldn’t do it all myself, so after researching a number of auction systems used around the world, I teamed up with my cousin and some friends and family to launch One Cent Flights.
We launched to the public in September this year, and have been overwhelmed with the way our users have taken the concept on board and interacted with the site.
How did you fund the business and what were your start-up costs?
The business was initially funded by contributions from myself, my cousin and our management team.
We were fortunate enough to undertake a successful capital raising involving friends and contacts to fully fund our initial expansion and marketing push.
Our start-up costs have exceeded $100,000.
How many staff do you have?
Our team consists of six young professionals who are shareholders. They’re each experts in their own field and filling the roles of marketing manager, CFO and the like.
We’ve also just hired our first full-time employee to help with customer service.
You’ve established a Facebook presence. How important is that to your growth strategy?
As with many businesses, our most powerful marketing tool is still word of mouth, and Facebook is a really good way to tap into that.
As a start-up, Facebook has made it really easy for us to keep our marketing expenses under control while enabling us to build social credibility, increase brand awareness and slowly grow our user base.
It will certainly continue to support our growth strategy in the future.
How else are you promoting the business?
We’ve been fortunate enough to receive some great coverage by Australian media, including a feature on the Today Show and in online publications.
We’ll also be kicking off some ambient activity shortly that will continue into the new year while people are out and about.
The main promotion for our business will likely always happen online though. It just makes sense as an online business.
What are your revenue projections for 2012/2013?
We expect to exceed $1,000,000 revenue for FY 2013.
What’s the biggest risk you face?
We use an innovative auction model that is relatively new to the Australian market.
Our biggest risk is that Australian consumers will not fully understand this auction system and engage with our site.
However, our experience so far is that our users are very keen to get involved and do see our site as a way they can feasibly achieve their travel dreams for a fraction of the expected price.
You’re a young entrepreneur. How does that help and hinder you in a cut-throat industry?
I think being a young entrepreneur has helped the business get ahead. I believe the youth of our team helped build our ambitious company vision and really excited our users.
But being young means that you simply do have less experience than others – and for these areas we’ve been careful to build an expert team that can keep us on the path to giving our users the best experience.
I’m thankful that we have such a strong and cohesive team of young professionals.
Is there anything you would have done differently?
I would have built a more comprehensive website to launch with – foregoing a traditional staged-growth website build and instead built a scalable auction system straight away.
Within a week of launch we had figures like one sign-up every few seconds. This created technical challenges and meant that we had to invest significantly in upgrading our infrastructure to handle the demand.
Two months since public launch we have rebuilt our site to handle the “new normal”, which has allowed us to now refocus on marketing our business, and adding new offers and features for our loyal customers.
What advice would you give to other young entrepreneurs?
Reach out to everyone for feedback and advice. Many people, especially the most successful, love to help others and open doors for those they see as ambitious and aspiring.
Use these networks to build the strongest team you can, and empower them to deliver what you can’t alone.
Also, be aware that everyone has insight and information that you can learn from, regardless of who they are. Every time I meet someone I try and learn something from their experience.