Erik Paquet is the co-founder and CEO of Abroaders.com, a website that helps travelers earn and use rewards points to save thousands each year on flights and hotels. His mission is to democratize travel by helping others capture huge value from bank and travel loyalty programs.
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- You have to have a balance between short term and long term.
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Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [01:00] – Erik jumped from university to travel
- [01:29] – Major thing that made travel possible for Erik was using points
- [02:22] – Value Bomb Drop: It’s possible to get a flight anywhere in the world from $50 to $100. Getting into points and miles is positive for your credit.
- [03:20] – Channel the power of your regular spending
- [03:33] – Erik’s favorite travel cards – Chase Sapphire and the American Express Business Gold Card
- [04:27] – What is something you’ve changed your mind about in the last 6 months? “I used to believe that personal freedom and location independence were my primary goals”
- [06:16] – Worst Entrepreneurial Moment: $40,000 in debt in April 2016
- [08:17] – Double your timeline and create a savings account that covers expenses for that timeline
- [08:52] – Leave yourself a financial cushion in the event the unexpected happens
- [09:56] – Entrepreneurial AH–HA Moment: Re-imagining revenue completely and creating a more scalable process
- [13:00] – Erik ran the whole thing with credit cards
- [13:57] – You have to have a balance between short-term and long-term
- [15:03] – What is the one thing you are most FIRED up about today? Growth and the potential to impact a ton of people
- [16:18] – JLD talks about Uber
- [17:51] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – “College”
- What’s the best piece of advice you’ve ever received? – “Whether you think you can or you can’t, you’re right”
- What’s the personal habit that contributes to your success? Following up with people to strengthen my network
- Share an internet resource, like Evernote, with Fire Nation – Zapier
- If you could recommend one book to our listeners, what would it be and why? – Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
- Imagine you woke up tomorrow morning in a brand new world, identical to Earth, but you knew no one. You still have all the experiences and knowledge you currently have – your food and shelter is taken cared of – but all you have is a laptop and $500. What would you do in the next 7 days? – “Day 1 – create a free resource and landing page, and then create a podcast.”
- [24:08] – Parting piece of guidance – “Keep that relentless optimism”
- [24:23] – Connect with Erik on his website and email
- [24:36] – Get an extended Free Trial for Fire Nation!
Paquet: I’m ready man, let’s do it.
Dumas: Yes! Erik is the co-founder and CEO of Abroaders.com, a website that helps travelers earn and use reward points to save thousands each year on flights and hotels. His mission is to democratize travel by helping others capture huge value from bank and travel loyalty programs. Erik, take a minute, fill in some gaps from that intro and give us just a little glimpse of your personal life.
Paquet: I jumped right from university into travel and from traveling sort of to that inevitable financial crisis that happens when you’re out spending money and don’t have a source of income. SO I started my own, my first online business which was a web design and marketing company with my friend AJ, and it was sort of one of those classical entrepreneurial adventures; figuring out everything on the fly, just scraping by financially, fighting tooth-and-nail to sort of figure everything out as we went along, and the major thing that made it possible for us to travel and sort of explore our location of independence was that we were using points for all of our travel, and so we attended the Dynamite Conference Circle in Bangkok in 2013 and had an amazing experience, got some amazing inspiration from other entrepreneurs, especially about podcasting, and so when we left that we kind of walked away with this revelation that we really didn’t wanna be in the building websites and marketing websites for the next ten years. And so we started working on the Abroaders project to try and help other people do what we’re doing with using points to save on travel.
Dumas: So Erik, you’ve really become an expert in the area of capturing huge value from both bank and travel loyalty programs, so that’s kind of an area of expertise that you’ve acquired. Give us, Fire Nation, a couple of quick value bombs in this area that you think that we can and should really know that we probably don’t.
Paquet: Well the really important thing is that it’s possible to get a flight pretty much anywhere in the world for between $50 and $100, and the way that you do that is by putting the spending that you would do anyways on the right rewards card. So this isn’t like racking up a bunch of debt and buying things you wouldn’t otherwise buy, but just basically channeling the power of your regular spending into the right cards that’ll earn you those loyalty points, and if you have enough spending or depending on how often you travel, not only can you get flights anywhere for $50 to $100 bucks, but you can also do that adding business and first-class for around the same price. And the second thing is, is that getting into points and miles is actually really positive for your credit, which is a big thing that people ask us about, and I think a lot of people have a concern about that, and so this is something that you can sort of use to channel the power of your regular spending and dramatically decrease the cost it requires to be able to explore the world while you’re running your business.
Dumas: What’s your favorite travel card right now? And guys, we’re talking about in the middle of 2016 so this is gonna change and shift, but as of right now, Erik, what’s your favorite?
Paquet: There’s actually two. I think the Chase Sapphire is probably the single best card for folks that are just starting out. It’s really flexible and the points can actually be transferred to a bunch of different airlines, so that’s one of the really good ones, and the second one is probably the American Express Business Gold card, so if you have a business, that’s an incredibly good value, and it’s a different type of points, which gives you a whole bunch of other options. So those are two really good places to start.
Dumas: So what I kinda want to talk about now, Erik, is that you’ve been in this industry a while, I mean you said you went to the D.C. conference, and you learned about podcasting, and it kinda blew your mind a little bit, so things are always coming up and going in this world that we’re living in, so what is something specifically that you’ve changed your mind about in the last six months, like something that you used to believe that you just don’t anymore?
Paquet: I love this question, man. So, it’s actually been maybe a little bit more than six months for me on this, but it was one of the most important mentality shifts that I’ve had as an entrepreneur. I used to believe that sort of personal freedom and location independence were the primary goals for me. That was sort of the ideality I had when I started, and that the only real way to get there was to sort of boot-strap and struggle and create a self-sufficient lifestyle business, and while that’s actually a really awesome path, at the time I fundamentally believed that sort of venture capital and outside funding were totally at odds with those goals, and so that was one of the things that I had to sort of step back.
And what I realized was that for us, and for me, the goal of making a huge impact on the market, and in that case, how people travel, was way more exciting and more important to me than sort of building sort of a comfortable lifestyle business. We wanted to have a big impact. And so I reconsidered sort of my position on whether it was a good idea to look at getting outside help.
Dumas: That’s a great point, and Fire Nation, when’s the last time you’ve reconsidered your position? I mean, don’t just because you thought that you wanted to live or do a certain thing or live a certain way, you know, a certain amount of time ago, that that’s how you still think. You know, it’s crazy to believe but we live in such a busy world that some people never give themselves time to step back, to breathe, to just relax, and to sit down with maybe just a piece of paper and just write down, you know, “What are my goals?” Like, “Do these goals still fire me up? Am I still going down the direction I want to be going?” and if not, hey, tomorrow’s a new day. Pivot, adjust, and move forward. Now Erik, you’ve had some great times, you’ve had some bad times, I want you to take us to the worst entrepreneurial moment you’ve experienced to date, and really tell us that story.
Paquet: As you may have guessed, that mindset shift from sort of a lifestyle entrepreneur to trying to be a disruptive start-up created some really choppy waters for us, and I know we’re gonna talk about “Aha!” moments in a minute, so I’ll leave out some of the context that sort of got us to that position but – so to kind of go to this dark place, it’s pretty recent. So this was in early April of this year, of 2016, and we’re burning through money, super-fast, I’ve maxed out pretty much all of my credit cards, so I’ve got like maybe $40,000 in debt on my plate and this is, by the way, the exact opposite thing you want to do with rewards credit cards, but we basically – we had negotiated this deal with a group of investors to raise an angel round of about $120,000 in Brazil, and in the middle of actually doing the fundraising, the Brazilian version of sort of our SEC, made this ruling that delayed everything and totally shook this stuff up.
So at this point, we’ve got like $60,00, half of the money already committed but we can’t actually take it until we’ve resolved these legal issues, I’m in Barcelona with my co-founder AJ, and our CTO, our technology officer, George, we’d been working for like six months now on our product, and we’re just about ready to launch, but we haven’t paid ourselves in like two months, I’ve just overdrawn our bank account, everything’s looking super, super glum.
Dumas: Fire Nation, this is where you’re like, “Wow. How does he even come out of this?” I mean, this was just a handful of months ago, I mean, Erik, what’s happened?
Paquet: First of all, a couple of, I guess, lessons for us that we realized is when planning, you really need to sort of double your timeline and try and account for some of the unexpected. We almost didn’t make it just because there was that delay and we ultimately found a way out. I ended up getting on a plane which fortunately only cost me like $60, and fly back to Brazil, talked with our investors, and were able to get sort of a bridge loan, and the good thing is we were super close to launching, and so we were like at this point where like all the work had been done, but we just needed like a little bit of breathing room to get by.
But I guess if possible, the takeaway for us was you really wanna leave yourself, especially personally, a little bit more of a financial cushion, if at all possible. And looking back, even if that meant me taking sort of a real job or being an entrepreneur in a space that I wasn’t quite as excited about for a short period of time to give myself a little bit more of a safety net, I think that would have been a really valuable thing to have considered beforehand.
Dumas: This is a really im0ortantn focus, Fire Nation, is what is your runway? Like how far is your runway? I know when I launched EO Fire, I have about 18-20 months that I knew that I had this runway that would allow me to continue to just cerate free valuable and consistent content. Erik, he had to get a better vibe of his runway because his was running out really quick. In fact, in a lot of ways it had already run out and he was already past that runway, so what is your runway, Fire Nation?
Like really know those numbers and then before it gets too late, or before it gets too close you need to start making moves, making adjustments to making sure you can extend that runway, get a little bit more booshrash get a little bit more loan, whatever that may be, that is what needs to happen. So, to shift, Erik, let’s talk about an “Aha!” moment. Let’s talk about this lightbulb that went off at some point in your journey. Maybe it was for Abroaders, maybe it was for your podcast, I mean, whatever it was, take us to one of those greatest ideas that you had and how you turned it into success.
Paquet: Honestly our “Aha!” moment was really what led us both to our worst moment and also through to this incredible breakthrough that we’ve had in the last couple of months. And to be totally honest, Fire Nation, it’s, for us at least, it’s more of a “Aha!” month or just like this “Aha!” period of really taking a look at our core business model and whether we were on the path to what we ultimately wanted to achieve. And so, when we started out, we had validated our market over the course of a little more than a year, with a few hundred customers, and so it was a pretty high price, low volume model where we were coaching people through, sort of a consulting service where we were helping people earn the right points to book travel that they had planned, and so at this point we had booked maybe 50 reward flights and a total savings of line $370,000.
So in other words the results were fantastic. We were saving people like roughly $730 a flight, however, we realized we had this huge upper limit problem that there was a ceiling that the way we were doing things at the best-case scenario, we were gonna be able to help maybe 500 or 1000 customers using the tools and processes we had in place, and the gut reaction sort of at that point was, “Well, okay, how do we hire, and how can we scale these existing things more?” But the “Aha!” moment was the re-imagination of the revenue model completely, and we realized – we sort of sat down and were saying, “What if we don’t charge the customers at all?”
The original pilot program we were charging maybe $300 for this consulting service, and we realized that maybe we could go after some of the affiliate revenue with the banks that are offering with these credit cards, and essentially have the banks pay us to help you use their points, and so reimagining the business model, just taking a whole step back to think about it in a different way of how we could generate revenue, and then the second piece was creating an overall, sort of more scalable process which meant hiring a technology officer, which meant – because AJ and I, we kind of taught ourselves to build websites, we taught ourselves marketing, and we had the expertise with points, but we had no idea how to build an app that could take what we were doing for 500 people and do it for 500,000 people, and so that was where we had to make this, this big pivot and sort of cut off a big chunk of our revenue.
We just sort of eliminated this high price product, and so that was what sort of underpinning – we needed to have that investment, we had our runway projected out to maybe 12 months, and it took us about seven months to actually get the money, so for the first seven months we just basically had to run the who thing on credit cards and just burn the ship and knew that we had to make it happen.
Dumas: Fire Nation, this goes back to stepping back and giving yourself permission just to think, to breathe, to evaluate your business and to re-evaluate the path that you’re going on and say, “This might not be the right path,” and so often I see people that just look up like they just got out of this fog and they’re like, “Oh my God, like how did I get here? Years have gone by; like how did I get here?” Well, you got there by not taking a step back, by not thinking, by just allowing yourself to be just thrown down this river of life and just getting swept away.
We need to step off that bank, sit down and just breathe and relax, and Erik, that’s my biggest takeaway from your “Aha!” moment, because you were able to do that with Abroaders, and to adjust, and yeah it maybe hurt you a little bit in the short-term, but it set your business up for long-tern success. So what do you want to make sure Fire Nation gets from your “Aha!” moment?
Paquet: I think that the biggest thing is that you have to have a balance between short-term what’s gonna work, what’s gonna make your business viable, and what gives you enough breathing room to be able to go after that big, exciting goal that’s gonna make you fired up, that’s gonna make it easy for you to work 60,70, 80 hours a week. And honestly if you don’t have that, that hunger and that excitement about the end game, you’re never gonna be successful. And so, getting investment is not the right answer for everybody, so that definitely should not be the takeaway, is that you gotta think big and borrow money and do that. I think the key is that you just gotta really think about whether the path that you’re on can evolve into the end destination, and if not, you gotta step back and re-imagine.
And take your time with it. There’s no pressure to necessarily to just – you don’t have to figure it all out now. You gotta experiment and you gotta fail with a few things before you’re actually gonna have the “Aha!” moment or the “Aha!” month that really gets you on the right track.
Dumas: Erik, what’s the one thing that you are most fired up about today?
Paquet: Without a doubt I am most fired up about growth and the potential to impact a ton of people. So since the darkest moment back in April, we’ve at least doubled our users every month. August has more than tripled; July has recorded right at the end of August, here. And we’ve got this sort of amazing opportunity to share our story with a ton of people. It’s super exciting to be able to talk with Fire Nation and basically just be able to help tens of thousands of people cut down the cost of air fare by 80 or 90 percent. And the old model, the way were doing it, we were never gonna be able to help that many people all at once. And so I think the even more exciting thing is that the picture sort of slightly coming into focus that’s beyond the next three to six months, and that’s the opportunity to be disruptive in the travel market.
You know, Uber changed the way you think about getting from one place to another, Air B&B changes the way you think about accommodation. Of course, there’s absolutely no certainty that we’re gonna get to that level, but the market is big enough and the opportunity is there, and we’re the first to show up so I’m super excited just about where our path is taking us.
Dumas: You know, speaking of Uber being disruptive, I’m thinking of when I was in San Diego, I said this out loud and Kate heard me, and I said, “I don’t want to live in a world where Uber doesn’t exist,” like I really didn’t. I was like, there was a Chris Billibo book signing like 20 minutes north of me, and there was going to be a couple of beverages being served there, so I wasn’t going to drive, and I’m like, just the pain of having to even think about getting into a taxi now, and going up there, and how much that would cost, and just the annoyance of having to wait for it, and the rudeness of the people inside, and that’s a generalization but, you know, just knowing that I could just press my button and just like a couple minutes later, there was gonna be just a cool, clean car with a water bottle and a nice person who was banking on my high rating of them, I was like, “This is a world that I wanna live in.”
And in fact I don’t wanna live in a world without Uber, getting to that place for like $14 and being like, “There’s so much value here!” and that’s what you want to feel about your product, your service, that thing that you’re bringing to the world, Fire Nation. To go back to 2012, I wanted to live in a world where there was a daily podcast interviewing successful entrepreneurs. Erik wants to live in a world where you can go to Abroaders.com and get great value and save a ton of money and be able to have that flight for between $50-$100 anywhere in the world, so he’s being disruptive, and speaking of disruptive, we’re gonna be disruptive in the lightning round, so don’t you go anywhere, but we’re gonna take a quick minute first to thank our sponsors.
Dumas: Erik, are you prepared for the lightning rounds?
Paquet: I’m ready!
Dumas: What was holding you back from becoming an entrepreneur?
Paquet: Honestly, I think, college. I went to university of Michigan which is a really good school, but entrepreneurship simply wasn’t a topic, and I think that despite some personal growth, I think I would have rather spent that $50-60,000 learning by doing and failing in the real world.
Dumas: What’s the best advice you’ve ever received?
Paquet: My grandpa was an old-school entrepreneur. He ran a lumberyard for more than 50 years, and I remember talking with him about some of my ideas about location independence, and I expected this barrage of questions, like all the doubters, like all of the people in your life that are sort of saying, like, “You can’t do this,” and he just said to me, “Whether you think you can or you can’t, you’re right.” And I’m pretty sure that’s a foraged quote, but –
Dumas: Henry Ford.
Paquet: Yeah, but it was just really cool to hear somebody that was on a totally different planet as far as business and entrepreneurship, to hear a bunch of stuff he didn’t understand, and just to totally buy in and be like, “You know what? I believe it. You can do it.’
Dumas: What’s a personal habit, Erik, that contributes to your success?
Paquet: Following up with people that I’ve met and just doing everything I can to strengthen my network. Pretty much every big break that I’ve ever had in business has been tied to someone introducing a friend, sharing a lesson learned the hard way, cutting out all the extra painful learning, or just putting in a good word. Case in point, I think one of the reasons that we got introduced was through a mutual friend, Harry Duran, so thanks a ton Harry, and that’s definitely the thing that I think is really powerful that is a habit that’s easy to maintain and delivers big time.
Dumas: I was just hanging out with Harry in Chicago. Just a great guy. Erik, can you share an internet resource like EverNotes with Fire Nation?
Paquet: Absolutely. So I’ve been looking forward to this one. My resource is Zappier, and Zappier is a tool that lets you connect hundreds, maybe thousands of different apps without needing any technical knowledge, which is awesome if you don’t know anything about code. And so, for us, it literally does the work of two full-time VA’s doing data entry each month. And so, just sort of for an example, when we book a flight we just fill out a simple form using TypeForm, which I also love, and Zappier puts that into Google Docs, so it tracks our stats, it creates an Evernote for us automatically, and it puts a Trello card on our post-booking follow-up, so basically what it can do is just connect all of these different apps to create these automated processes, and it lets you test things before you spend a bunch of money trying to make your own solution. It lets you trial and error in a really flexible way, so it’s a super useful tool.
Dumas: If you could recommend one book, what would it be and why?
Paquet: Elon Musk: Telsa, SpaceX, and the Quest for a Fantastic Future. I just finished it and it’s super inspiring, just think big, and it’s a really good read.
Dumas: Well he is the guy that thinks big. Erik this is the last question of the lightning round, but it is a doozy. Imagine you woke up tomorrow morning in a brand new world identical to Earth but you knew no one. You still have all the experience and knowledge you currently have, your food and shelter is taken care of, but all you have is a laptop and $500. What would you do in the next seven days?
Paquet: So I’ve heard some really amazing answers to this question on your show, and so I really appreciate this, I mean you get the best out of entrepreneurs with this question because it strips away all the assets that you’ve built up, and puts you sort of back into bare-bones execution mode. So I think day one, I would create a free resource on earning and redeeming points for travel, and I’d create a simple landing page so that I could start building an email list. Second, I would start recording podcasts like crazy. I think, in particular, I’d go for shorter episodes. We sort of started out with like a half an hour to 45 minute podcasts, which was really a fun process but I think I’d try to build 30-55 seven-minute episodes in video format that would sort of be something that I could use on YouTube, and just answer like the basic questions that everybody has about points and miles.
And then maybe do some longer audio episodes like we do now that really dive in to the meat and potatoes of how to execute and how to get the savings. And then, I’d get each of those episodes transcribed, I’d start building up content on my website, and sort of assuming that I had all the knowledge I had today, I think I would probably start charging for some sort of consulting resource to sort of help take even more of the pain points out. But assuming that I were feeling out the market which I think is probably the position that a lot of people out there in Fire Nation are in, if you’re gonna start with some sort of product offering that’s not just an information product, I think it helps to do it for free for the first ten or fifteen people, and really avoid spending any time on sales and start to understand what problems people face and what they want.
And then I think, so, I’d wrap it up by spending a ton of time networking with other bloggers in the travel space and just sort of building up momentum to launch that podcast. And last, but not least, I would hunt down my team, AJ, Jake, George, Janelle, and Rosie. We’ve got an amazing team here and just totally could not get to the point that we wanna be without those people, so that’s what I’d be doing with my $500.
Dumas: Love that. Well Fire Nation, you are the average of the five people you spend the most time with, and you’ve been hanging out with EP and JLD today, so keep up the heat. And Erik, let’s end on fire with you giving us a parting piece of guidance and the best way we can connect with you, and then we’ll say goodbye.
Paquet: The parting wisdom is just keep that relentless optimism, even through the darkest moments. Truly, whether you think you can or you can’t, you are right, and that’s what’s gonna carry you through, and so have that drive. You can find me at Abroaders.com and if you want to send me an email, it’s Erik, E-R-I-K, @abroaders.com, and we also do have a special extended free trial for Fire Nation, so Abroaders.com/fire, and we’ve got our premium membership service, which is just a bunch of extra support and help getting you the right points, and helping you use them to get the flights that you want, helping to get the travel adventure of your dreams, so if you check out that “/fire”, we’ve got an extended free trial for three months, so you’ve got plenty of time to get your first trip booked.
Dumas: Wow, loving all of this, and man, Fire Nation, you just need to head over to EOFire.com, type Erik, that’s E-R-I-K, in the search bar, because his show and page will pop up with everything that we’ve been talking about. We’re talking best show in the biz, time stamps, links galore, and of course head over to Abroaders.com/fire for your extended free trial. That’s a direct call to action, and give Erik and email. E-R-I-K @abroaders.com, and he will definitely get back with you. Erik, thank you for sharing your journey, brother, with Fire Nation today. For that, we salute you, and we’ll catch ya on the flipside.
Paquet: Thank you so much man.
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