The Entrepreneur: Tom Leathes, Top10.com
The co-founder and CEO of the hotel recommendation site on the hardest thing he's ever done in business, multi-million funding rounds, and factoring in 'things going wrong'
Company name: Top10.com
Founder: Tom Leathes
Description of the company in one line: Top10 instantly finds you 10 amazing hotels, anywhere in the world and always at the lowest price.
Previous companies: Top10 Broadband/ Mobile Phones (sold to uSwitch.com in 2011) OfficialSpace.co.uk (sold to OfficeBroker.com in 2009) LifeCube.co.uk (sold to AOL in 2007)
Describe your business model and what makes your business unique:
- We think that for most people, finding and booking a hotel is far too complicated – reading reviews and comparing prices involves too many steps.
- We analyse thousands of hotels in every destination to find just the 10 best suited for your trip – and you can book instantly at the lowest available price.
- Our iPhone app (Top10 Hotels) was Apple’s ‘Best New App’ in 32 countries.
What is your greatest business achievement to date?
With Top10, we entered what is traditionally seen as the most challenging online sector – travel – but we managed to break through the noise by focusing relentlessly on a simple proposition and the quality of our product. We were convinced that the process of finding the right hotel was way too complicated using traditional services, and we wanted to solve that problem.
Building the traction so quickly in such a busy space has been a huge challenge and an amazing achievement for the whole team.
What numbers do you look at every day in your business?
It’s easy to get bogged down in the numbers, but we do a lot of detailed reporting on conversion rates, profitability, and marketing spend, so I look at that every day. I also always look at customer feedback and App Store reviews.
To what extent does your business trade internationally and what are your plans?
After launching initially in the UK in 2013, we’re now rolling out globally with a particular focus on the UK, Nordics and USA.
Describe your growth funding path:
We self-funded Top10 for the first few months to get an early product together, and then raised an initial Series A round ($3.5m) from Accel Partners and Founder Collective. The first product actually covered much more than travel (we recommended the 10 best in music, entertainment and travel) – but we swiftly evolved to focus on a single sector – hotels – and the platform took off from there.
After a year of growth, in February 2014 we raised $8m in Series B funding from Balderton Capital, Accel and other existing investors.
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What technology has made the biggest difference to your business?
The success of our product is all about how smartly we’re able to reduce down lots of possible hotels to a shortlist of just 10 in any city. To do that we had to build some really smart technology (an algorithm called ‘TopRank’) that looks at review scores, popularity, hotel location and personalised data to make the right decision every time. Getting that right, and making it fast, has had the biggest impact on the customer experience.
Where would you like your business to be in three years?
Whilst there are obviously some really successful hotel booking brands on the web, we don’t think anyone has yet nailed the experience on mobile, and that’s where we see the biggest growth for Top10. Within three years, I’d like to see Top10 as the default hotel booking app for mobile users on any platform.
What is the hardest thing you have ever done in business?
In our first company, a lead generation website for life insurance, we got into big personal credit card debt trying to acquire traffic and get the conversion funnel working. After months of iterating, developing and marketing the product, we’d hit a wall and the numbers had stopped improving. We decided to scrap six months of work and start again from scratch.
With hardly any money remaining, we rebuilt the site in 48 hours, and within two weeks of that decision, we were profitable. Four months later we were driving £100,000 a month in clear profit and had the biggest life insurance site in the UK – we learned then not be afraid to make bold changes when things aren’t going to plan.
What was your biggest business mistake?
I make mistakes all the time, but I try to learn from them rather than dwell on them.
Piece of Red Tape that hampers growth most:
Nothing I can think of – we’re working with hotels, travel companies and customers throughout the world without any issues or red tape so far.
What is the most common serious mistake you see entrepreneurs make?
Trying to do too many things too early on.
How will your market look in three years?
Mobile is having a huge effect on how people find accommodation: hotel bookings on mobile grew 20% in the first six months of 2014 alone, and mobile is predicted to make up to 50% of total online bookings by 2017.
This trend changes lots of the things that people had come to expect from the booking process, and the services people use to make their bookings, but it also has the potential to change the entire hotel experience. From checking in to a hotel on your phone, to opening your door without a key, to getting local recommendations and finding places to eat, mobile will fundamentally alter the whole travel experience over the next few years.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
As an entrepreneur, you need to build ‘things going wrong’ into your expectations. The future rarely happens the way you expect it to; sometimes its way better, but frequently your assumptions will be totally wrong. That’s normal, and it’s important to adapt quickly and don’t give up just because product development, adoption and growth didn’t go the way you’d hoped. You can always find another way.
Apple devices of all shapes and sizes. And vintage guitars.
Executive education or learn it on the job?
On the job, definitely!
What would make you a better leader?
More experience, but you can’t buy that. If you’re doing your job properly, you’re learning something new and becoming a better leader every day.
Eating the Big Fish by Adam Morgan; an interesting take on how new challenger brands can disrupt big market leaders.