Be disruptive but try not be the man in the middle.

In 2004/2005 I had a startup called “Aerleasing”.  The best way to describe it is eBay for commercial aviation.  It was a platform for bidding on leases and sales on aircraft and engines.

Easy… surely?

The industry loved this little upstart from the UK.  The end users and owners loved the concept.  The brokers HATED it and for a very simple reason, as the man in the middle I lost them money.

Now I’m not talking a few dollars here and there, I’m talking $40,000 – $100,000 a deal. To top it off there could be four or five brokers in the deal.  Still I carried on regardless until I couldn’t do any more.  

Some pretty major airlines started phoning up, some heavy duty Icelandic leasing companies starting emailing and the highlight was answering the phone one afternoon and hearing, “Hello this is [name] from Boeing”.

I didn’t figure out the warning signs until I was talking to the editor of Air Finance Journal and he explained why he published a full page editorial on the site (a magazine that I couldn’t afford the price of one copy let alone a subscription).

I then spent the following week being a broker… 1% commissions in that industry make all the difference.

So coming in to the working 2011 what can we deduce….

Man in the middle sites require traction from both sides: producers of one thing using you to sell to the consumers on the other side.  If either of those sides are lacking you may run into trouble. Without the consumers then it’s hard to convince the producers to sign up.  It’s a horrid catch 22.

Since the Aerleasing days I try to avoid such placement.  A direct sale to me is more manageable way of doing things for me.  The marketing required to convince two separate parties takes a lot of work and money.

While the world has his dog has created a voucher site/app (Yowza, VoucherCloud, I could name a bunch more) maintaining the balance for them was difficult.  With uVoucher it works closely with the retailer, if there’s one thing a retailer brand hates is the dilution of their brand so that’s why full subscribers get their own app to enable them to communicate with their own customers.  Brand loyalty is still very important in this world of social media.




2 responses to “Be disruptive but try not be the man in the middle.”

  1. Hi James, thanks for the comment. I agree it is a case of scale with a direct approach. To be honest though scale would be a factor in the man-in-the-middle approach as well. Without the scale you’ll struggle to get the growth.There are lots of web based startups with the "build it and they will come" mentality. I was catching up on a number of them from Northern Ireland over the holidays, it was amazing how many don’t work/exist any more. Shame as well as there were some good ideas out there (there were some potential competitors too…)Thanks againJ

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