This episode of the Breakout Growth Podcast, brought to you by Rise with SAP, includes some incredible stories! Paul Malicki is the founder and CEO of Flapper, Brazil’s first on-demand private aviation marketplace, and his journey has been anything but boring.
* A vision to change the way we travel (4:56)
* Learnings from the not-so-easy world of Easy Taxi (8:34)
*The value of PR in growing the business (15:39)
* Raising capital for the business (18:36)
* The Growth Hacking approach to marketing the business (20:01)
And much, much, more . . .
And much, much, more . . .
Hold on to your hats, as he tells Ethan and Sean about a negotiation he had in the Philippines where the other party placed a grenade and a gun on the desk and asked whether Paul was still not willing to budge from his proposed 70/30 revenue split?
That story stems from his days launching Easy Taxi into developing countries, but the excitement has continued, as Paul moved from building a terrestrial taxi service into building a taxi service of sorts for the skies. Paul’s vision is to turn private aviation into a mainstream travel option. From creating a marketplace where travelers can book empty seats on private jets and helicopters to offering on-demand charters, Flapper is blazing its own trail to breakout growth success.
In 2019 the business grew 251%, and even with the challenges of the global pandemic, Paul and his team still were able to realize ~100% year over year gains in 2020. Driving growth through the tumult required a quick pivot to leverage the skyrocketing demand for cargo and ambulance flights, but a scrappy, growth hacker’s mindset helped to keep the business on track through these difficult times.
Flappers ascent has been anything but easy. Aviation has traditionally been a tough industry in which to win, and Paul explains that it took 228 meetings to raise seed money for the business, and another 530 meetings to fund his Series A. But, he explains his determination very simply: “I was already here, I liked what I was doing, and it was a sexy business.”
So sit back and enjoy one of our most fun and entertaining conversations. We still get into the gritty details of team structure, growth engine, and all the other important elements of growth you expect from the podcast, but through Paul’s experience taking on challenges in developing, and not always friendly environments, we view growth from a unique and exciting vantage point.
Before you jump in learn more about RISE with SAP S/4Hana Cloud here. If you have ambitious goals, SAP is the technology partner you need to scale and drive innovation. Instead of relying on stitched together solutions to manage business finances, operations, and customer relations, leverage the flexibility of SAP’s cloud-based ERP solution to gain the insights that will help drive your breakout growth success.
Fasten your seatbelt for this one!
Introduction: 00:00:08 Welcome to the breakout growth podcast, where Sean Ellis and Ethan Garrinterview leaders from the world’s fastest growing companies to get to the heart of what’s really driving their growth. And now here are your hosts, Sean Ellis and Ethan Gar.
Sean Ellis 00:00:25 And this week’s episode of the breakout growth podcast, Ethan Garr and I chat with Paul Malicki, founder and CEO of Flapper Brazil’s first on-demand private aviation marketplace. So during the conversation, I mentioned to Paul that a couple of years ago, I was in Sao Paulo heading to do a keynote presentation and I’d spent hours fighting traffic. And I finally get to the venue and a few minutes later, one of the other speakers, I think the guy right behind me drops in on a helicopter. And I thought, man, that is so bad-ass next time that’s going to be me. So really that’s what Paul and his team are making that a much more affordable reality, whether you want to go by helicopter or by airplane, uh, they, they are solving that challenge and, and Brazil in particular is one of the top helicopter locations. And I think Sao Paulo, he said specifically, top helicopter cities in the world. So it’s not unusual to see something like that, but in the process of building this company and his earlier company, he’s he’s has some amazing stories. It’s, it’s very, very entertaining. So, uh, Ethan, what stood out at you from this conversation?
Ethan Garr 00:01:30 Yeah, I think as long as I live Sean, I will never forget Paul’s story of negotiating, a revenue split where the guy on the other side put a gun in the grenade on the table before asking Paul if he and his team had any wiggle room in the proposal. I mean,
Sean Ellis 00:01:44 Just to be clear, that’s not Brazil for anyone who’s in Brazil, maybe stuff like that happens, but that story was, I believe in Southeast Asia.
Ethan Garr 00:01:52 Yeah, I think you’re right. I mean, we’ve had some great discussions, Sean, with leaders from all sorts of backgrounds, but we have never had a conversation quite like this,
Sean Ellis 00:02:00 For sure. Yeah. Paul’s leveraging his experience, launching easy taxi in developing countries. And he’s been able to leverage that experience to really build Brazil’s Uber of the skies. And so if anyone’s not familiar with easy taxi or really successful competitor to Uber in a lot of countries around the world, I think they’ve now either merged or changed into Cabify, but that’s great experience. That’s one of the guys who helped launch that business and, and he’s really applying a lot of that learning to this business and, and in both he’s, he’s had a lot of amazing adventures.
Ethan Garr 00:02:34 Yeah. It was super fun to dig in with him. And while I think our audience is, as you said to find this really entertaining, I think they’re also going to get a lot out of the conversation. I mean, he is a serious and scrappy growth guy and he was able to really quickly identify and capitalize on emerging needs, like the air ambulance service during the pandemic to keep his growth on track. So it’s a really cool story and, uh, and a lot of really great growth learnings.
Sean Ellis 00:02:55 Yeah, definitely. There’s, there’s a lot to gain here and looking at persistence in raising money. I mean, that’s, that’s something that ends up killing a lot of startups, but he’s also got really interesting thoughts on team structure and just a bunch of other things. So we’ve chatted in, in recent weeks with, uh, growth leaders from some of the really big companies like HubSpot and Shopify. But I think even though this is a smaller company, his fast growth is something that we can all learn quite a bit from. So should we get to it?
Ethan Garr 00:03:24 Yeah, absolutely. It’s it, it really is a great con contrast interview from some of the things we’ve talked about recently. So, um, but before we jump in, why don’t you tell our audience about this week’s sponsor SAP?
Sean Ellis 00:03:35 Yeah, absolutely. So if you are listening today, please check out rise with SAP S four HANA cloud hyper-growth companies get up and running quickly with this low cost, easy to implement cloud ERP solution. So if you are working to power breakout, grow success in your business, please check out sap.com/high growth.
Ethan Garr 00:03:57 Excellent, happy holidays to all of our listeners, and please share review our podcasts wherever you listen. Thanks a lot. Now let’s get to all
Sean Ellis 00:04:04 Right. Let’s do it. Hey, Paul, welcome to the breakout growth podcast.
Paul Malicki 00:04:17 Hey Sean. How to eat them. Thank you for inviting me.
Sean Ellis 00:04:20 Yeah. And Ethan, uh, welcome as well. My co-host here, uh, welcome aboard and th this is gonna be a fun interview.
Ethan Garr 00:04:28 Let’s do this. Ah, I’m such an airplane geek. So when I, when I read about Flapper, I got really excited and I had to reach out to Paul. So we had a nice conversation a few weeks ago. And, uh, you know, when I saw, when you’re doing, uh, it’s, it seemed like it’s just seemed really interesting and, uh, it didn’t disappoint in our original conversation. So I’m excited to share it here with our audience.
Sean Ellis 00:04:47 Perfect. Well, let’s see. Let’s go ahead and dive in. So, um, Paul, maybe you can start by just telling us a bit about what Flapper is and, you know, the problem you initially set out to solve.
Paul Malicki 00:04:56 Right? So, um, we a Flapper in 2016 with a vision of turning private aviation into a mainstream travel option. Uh, back in the days I used to travel a lot with my co-founders and we, so that you have a country like Brazil with 2,500 airports, and just hundreds of them connected with commercial aviation. And on the other hand, whenever you tried to charter a jet, it was just so difficult. You know, many of those companies that don’t have websites, et cetera. So Flapper really is Brazil’s first on demand, private aviation marketplace, uh, already with, uh, a vision to expand abroad. We are, um, opening up in, um, Mexico, Colombia, Chile, and Argentina, and probably eventually coming to the U S in the coming few years.
Sean Ellis 00:05:39 Very cool. And is it only airplanes or do you do helicopters as well?
Paul Malicki 00:05:43 We do both airplanes and helicopters. Of course. When you think about it, volume, um, airplanes are what corresponds to the majority of my revenues, but, um, it’s worth highlighting that Sao Paulo is the world’s largest helicopter, uh, city, right? So we have around 200, um, uh, Henley peds in, in, in SOPA. And of course, you know, for a city which has 20 million people and doesn’t have access to the sea, um, many of those wealthy customers will simply book a helicopter, um, for the weekend and go to their houses, um, by the sea.
Sean Ellis 00:06:16 I know last time I was in Sao Paulo, I flew in for a conference and spent probably two hours in traffic. And it was kind of a miserable ride from the airport. I know there’s an airport in town. Mine was the further out airport. And as soon as I get to my hotel and I’m finally like, okay, I’m here. Time to time to gear up for a presentation and a few hours, I see a helicopter land at the hotel. And I was looking at that. That is so bad-ass, I was thinking one, one, it would have been amazing to skip the traffic, but two, it would just feel really cool to fly in on a helicopter.
Paul Malicki 00:06:53 Exactly. And you know, of the car and, um, exchange rate. It’s actually not that expensive. Right. So one of the benefits of using a solution like ours is that eventually, um, you know, you, you can choose the most affordable and also safe option for your nest next flight. Um, and we got quite a lot of those empty, like offers, you know, where you can literally fly private for the price of premium economic tickets. Uh, and people love it. They, they, they sell like, uh, like crazy, especially when you launch it on a route like Sao Paulo to Rio de Janeiro, which used to be, you know, many years ago, the world’s most, uh, flown routes. Right. Um, so still lots of demand for people traveling between these two huge cities. Um, and, and yeah, it feels like we are in the right place at the right moment.
Ethan Garr 00:07:37 Very cool. I know, years ago you were at easy taxi, which I think is one of the largest urban mobility companies in Latin America. Now you’re taking that concept to the skies with Flapper. Can you tell us a little bit about your history and your journey and how you got to where you are today?
Paul Malicki 00:07:50 And so be ready because these are some crazy stories that I will share. Uh, but yeah, so first, um, easy taxi used to be, right. Uh, the largest, uh, emailing platform. We used to compete with Uber and, uh, talking about Uber, you know, back back in the days, um, someone actually wanted to introduce us to Uber and we looked at the cost and you’re like, that just doesn’t make any sense. Why would I need an intro to a company like that? Right. And that was someone from rocket internet, which is of course, a huge venture capital firm, trying to make an intro and, and, and look how things changed. Right? Uber is huge and easy taxi. We eventually sold to KB five in a way to, um, you know, uh, create, uh, a larger conglomerates to compete with the likes of Uber. Right. But before Brazil, I was actually living in the Philippines.
Paul Malicki 00:08:34 Um, and that’s where I helped start easy taxi, uh, on a local level, uh, crazy market. You know, we had situations when we used to go on a meeting with a taxi corporation and the owner would put a gun and a grenade on the table and ask us whether we are ready to accept the 50, 50%, uh, you know, deal, uh, or, or show, shall we still continue talking about 70, 30? So it was a very dangerous, uh, sector in a way. And of course that’s the Philippines, but if you think about Latin, America is not much different. Right. So we had situations when we had to, for example, um, move our office in Columbia because the taxi drivers will literally execute us. Right. So very, very obsolete market, very fragmented. And, and, and, and you just make such a huge difference with such a platform.
Paul Malicki 00:09:24 You know, I remember when we were number one in Columbia as an app, uh, Uber was not even entering Paris, right. So it was also the first international inhaling, um, company. Right. Um, overall great experience. We learned a lot because many of the things we did, we were doing it like as the first company ever. Right. Um, and, and I literally made an upgrade, right. Because I went from a Texas to air taxi and, and, and the idea is basically the same, right? We are looking into the, you know, fairly fragment, fragmented market, which is not digitized. Right. I actually loved when I was in a conference in San Francisco, one of the VCs said that private aviation is the world’s only large sector, which hasn’t been digitized. And that’s true. Uh, only in the us and in some cities in Europe, you have digital platforms, which help you book a flight.
Paul Malicki 00:10:14 Right. Um, so long story short, you know, that, that was my upgrade from easy taxi to, to Flapper back in the days we were already discussing the sale of a company and they eventually I had to leave. Um, and, and that’s why, you know, we started a company, which by the way, the idea was of, of my co-founder, but, uh, I was the one who sort of directed it into the right mode because we can do so many things and you can do so many things wrong if you work with aviation. I don’t know if you know the saying, but, you know, it was the best way to become a millionaire. Um, you have to be a billionaire and fund innovation company, right?
Sean Ellis 00:10:50 Yeah. So has the model changed since you started it or was the initial model that you came out of the gate, kind of the, what, what works and, uh, and you’ve just sort of grown it pretty much as it is, or did you do a few pivots along the way?
Paul Malicki 00:11:04 So the main concept was really to offer paper seat flights, uh, between the airports, which are not available, um, on commercial aviation. Right. Um, what’s really changed is that’d be so a huge demand for charter flights. Um, and we simply decided to focus more on that part of the business. So today we have one route, which we share on a paper basis and we have around 10 routes, which we announced during high season, uh, holidays and, and similar events. Um, so you still can buy seats, right? And that’s definitely one part of the business, which we intend to scale. Um, but more and more, you can simply chart their individual turboprop jet or a helicopter. And what’s happened now with that with the crisis is that we also started offering cargo flights and ambulance flights, because that just makes so much sense, right? The whole world has changed. And, uh, there was a shortage of cargo flights, and of course, unblessed flights are just skyrocketing in terms of the demand.
Sean Ellis 00:11:58 Well, and, and the fact that probably a lot less people are traveling. So that pivot, um, kind of, kind of the same way that, that Uber made the pivot from primarily focusing on moving passengers to the bigger part of, or the bigger growth area of their business over the last years is clearly on food delivery and, and, um, who, who knows what it will be as, as the world gets back to normal. But, uh, that, that sounds like a short-term pivot. That makes a lot of sense. And then in the longer term, the charter and, and some of the other pieces sounds like you’ve been really responsive to the market, which, uh, clearly has, has worked at least from, from outside science,
Paul Malicki 00:12:37 Right? Because we see in our sector, you have billionaires and millionaires and multimillionaires and, and, uh, you can offer so many different types of services. You can sell an airplane, which by the way, also makes sense for us, right. We should enter this business, but you can also sell at, uh, you know, just one quarter, right. You can do the fractional ownership model and you can also do membership and you can also sell seats and you can charter. Um, so it’s sort of like different layers depending on how wealthy you are and how much do you travel. And also, what are your preferences in terms of socializing on the same airplane with perhaps eight people you don’t know? Um, so, so definitely lots of, a lot of, uh, let’s say, potential demand. Um, and I feel like we are still very early on, if you look at Latin America as 1000 airplanes, and we have right now, um, 1000 airplanes, uh, within the part 135, uh, operations, right. And we are with 550 on our platform right now. So still quite a lot of work to be done on in terms of supply. And is that
Ethan Garr 00:13:39 Really all in the Sao Palo and, you know, in your local area in Brazil, or is that, uh, has that expanded kind of worldwide and what made you choose that market?
Paul Malicki 00:13:49 Right. Well, I think that what really made us choose Brazil is that we were simply here and we saw that there was no competition, because if you look at the U S or Europe, the guys are competing big time. There’s lots of capital being involved now everybody’s going for an IPO. So I feel like, you know, uh, it was the right thing to do with Brazil. The world’s second largest privatization market. Mexico is number three, um, out of 10, the largest urban helicopter fleets, six are in Latin America. And that includes south polyuria. There’s a narrow, but also, you know, Mexico city or Santiago the Sheila. So in terms of market size, uh, it is very interesting as a, as a whole region, you know, and then definitely, uh, Bristol in Mexico in the long term would be the most important markets for us. Columbia is quite important as well because it serves as a hub.
Paul Malicki 00:14:34 Um, and, um, funnily enough, you know, you have a country like Mexico, where, uh, if you look at the tail number of an airplane, it says X eight, if it’s commercial and XB, if it’s private, but a lot of those commercial airplanes were bought using, you know, subsidies of the government. And you have no idea how many of those are actually a chart durable, if I may say so. Right. So the big job to be done is really to identify those companies, which, um, which offered their services. Um, so yeah, I would say Brazil and Mexico, that in the longterm, definitely the U S uh, it makes sense for us to sort of integrate it into our plans, but it will depend on capital and investors and probably our plans for, for IPO eventually. So, uh, uh, yeah, I’m, I’m a bit afraid of entering the U S to be honest, uh, lots of serious guys with, with great themes and we’ll see.
Sean Ellis 00:15:24 Yeah, no, it sounds like, um, just even the learning that you’ve had in terms of where, where those market opportunities are beyond what your original vision was there, have there been any other like key growth learnings that jump out at you that you’ve, that you’ve discovered over the last few years?
Paul Malicki 00:15:39 Oh, my dad, I think that there’s just so many things you can, you can learn, uh, by the end of the day, it’s affirmed mix of technology, but also your creativity. We’ve been doing lots of PR. And, uh, one great thing about the PR is that it raises your click-through rates on Google. So eventually your marketing becomes cheaper. And whenever you launch a business in a new market, which is just so let’s say fragmented and obsolete in a new, uh, in a way too many people, you need to do a lot of contents. So lots of, um, information about the airplanes, safety promotion of, you know, say flights, uh, all of that has been a part of our strategy, but also don’t, you know, lots of, uh, very unique growth hacking techniques. Um, one thing that I really liked in terms of the campaign is that I was asking my colleague from, from Telefonica, which is the largest, uh, operator here.
Paul Malicki 00:16:29 I was like, listen, you probably know who travels between Sao Paulo and Rio, because we can get this data from the towers. And it was like, well, we can do it. I said, can you message those people? Technically we can do it. So we built a campaign where we were targeting people that travel at least twice a month between Sao Paulo and Rio. And we were offering them at that time, our service. So Paolo Rio on a private jet, so fantastic in terms of performance and a lot, a lot of, you know, digital campaigns, um, really focused on, on, on Facebook and Google, but with a lot of marketing intelligence behind it, right? So using custom audiences, targeting people who earn at least $20,000 a month, um, and so on and so forth. So, uh, yeah, that’s basically my cup of tea, so I love it. Uh, marketing and growth is the essence for me.
Ethan Garr 00:17:16 Yeah. That’s awesome. And, uh, yeah, you mentioned, uh, being scared of coming to the U S I can say I very rarely, I think, well, someone put a grenade on the table in the U S when the, when trying to work a deal with you. So you have that going for you if you do come into, into this market. Um, but Hey, can you tell us a little bit about, I mean, I think you said you founded the company in 2016, tell us what growth has looked like and how it’s, how it’s been going, not just, uh, you know, in the beginning, but also through COVID
Paul Malicki 00:17:42 Last year, we grew our revenues by a more than 100%. So we are happy with the results, you know, very difficult time, um, times for, for everybody. And, um, you know, you mentioned that private aviation to some extent, can perhaps substitute, um, commercial aviation, but also what we’ve seen is that those wealthy foreigners, including Americans, where they come to Latin America, you know, first, first class flight, they want to travel internally on a private jet. And unfortunately this market almost disappeared. Um, so yeah, talking about the last year, I think we’ve done a decent job before in 2019, we grew 251% in terms of revenues. Um, and to be honest from the very beginning, what we knew is that this is going to be like a hockey stick. You know, when you have a startup and you have any region, much maturity. Uh, so I feel like we are heading towards that moment when the angle is sort of heading, getting into upward direction.
Paul Malicki 00:18:36 Um, and, and you can see it by the, the amount of prepared, the number of clients coming through recommendations, right? The word of mouth is just crazy. I would probably say 90% of my new clients right now is all recommendations. Uh, body took us a while, right? It was very difficult and, you know, uh, most difficult part was always the funding. Uh, I ended up sleeping in a sofa for a friend of mine because I just didn’t have any money. Um, we started offering consulting services with my partner just to sustain the business. So I was an advisor at new bank. I was an email@example.com before their IPO and this cash was being used to pay developers in some other cost of hours. Um, and then it took me 228 meetings to raise my seed, uh, around. So you can imagine that that’s just insane and 530 meetings to raise my series a, so obviously you need to be very determined and really believe in the business and maybe a bit crazy, even because why would you just do it? But since I was already in it, and I liked it, it’s a sexy business, right. Then, uh, I just went ahead with it,
Sean Ellis 00:19:39 But I got to imagine what the growth rates that you mentioned you’ve had over the last couple of years that, uh, investors are very interested. Now, have you, have you, uh, looked at taking on new money and, and if you, if you did, what, what would you do with that money?
Paul Malicki 00:19:54 Right. So I think that, you know, the cash right now, which we’ll be using, uh, you know, uh, technology and operations, right? So technology is always going to be important. We are hiring 12 developers right now. We just want to develop more platforms, uh, et cetera. Um, in terms of the actual, uh, experience with investors recently, yes, it does change my view. You know, you become sort of a public person and your company appears on all the media, then people start looking after it. Um, and funnily enough, you know, we closed the fastest crowdfunding campaign in the history of Brazil. We raised, uh, in, in seven days, 2.5 million house, which is around $500,000, which by the way, for the local market, that’s a lot because, you know, everything is cheaper here. Um, and it was, it was just insane because, you know, you, you, that’s when I realized, gosh, I think I’m creating a nice business because, because people just know about, you know, and, um, we did some fantastic growth hacking tactic as well, uh, where basically there is a portal called administra, Doris, which is like the largest entrepreneurship portal in Brazil.
Paul Malicki 00:20:58 So I talked to the guy was like, look, I pay you 10,000 for you to post that you invest in flipper and you name all the other famous investors that are going to be investing in me. And instead of you taking this money, you’re going to also invest in my company. And he agreed and he posted it. And one of the persons that was mentioned on the press release, she’s one of the biggest Angela investors in Brazil. So I posted it on LinkedIn and I asked her to comment that she’s so happy becoming an investor Flapper. And it just virals, you know, I got so many views on this post and people were just trying not to miss the chance. You know, they were like commenting, oh, I also want to become an investor. Oh my God, that girl from shark tank is your investor.
Paul Malicki 00:21:39 I also want to become an investor. So yeah, seven days, it was just crazy. You know, we had a call with the last few investors, which were interested in, in, in entering the business. And we were like 90% of our crowd funding. And I was just looking at my screen. I was like, oh my God. I was like 91, 92, 93, 94. And I was like, look guys, if you want to invest, you have to do it now because by the end of this call, we’re going to be at 100%. And we were at 100% by the end of the call. So yeah, you have those nice moments as well, which inspire you a little bit, but overall it’s been so difficult, you know, to scale up this business. And I think that only now we see, uh, we see it like looking back at the past how much effort it took.
Sean Ellis 00:22:17 Yeah. So one thing as you were talking, uh, just kind of through that full financing journey, it reminded me of my time at log me in where we also, I think we had 40 VCs give us second meetings and, um, who all ended up saying no after the second meetings. And, uh, the good news is, you know, the, the business sold for $4 billion last year. And the good news is that, um, that even when we did our IPO on NASDAQ, all of these venture capitalists, who said no, followed our journey. And, and, uh, so it turned out a really to be a really great way to get to know a lot of venture capitalists and have credibility in the future because they all had said no. And then they’re a lot more interested in what you’re doing next. So hopefully, hopefully now that you went through hundreds of them, you, uh, you, you definitely have the, have the relationships to continue to feed the funding if you, if you need it.
Paul Malicki 00:23:14 Yeah. And you know, I’m not trying to burn bridges as well as those people, even though I’m sometimes just so pissed with them saying, no, um, gosh, you know, you just need so much patience. I was, was entering the meeting with a VC and he, he sat next to me and he was like, look, I will never put my kid in your airplane convinced me. And I was like, well, that’s not the best way to start a conversation, but if you want, I I’ll convince you. Right. Um, and I was just, you know, you have to behave, right. So, uh, today what I’m doing, I’m doing interests. I’m making for lots of entrepreneurs in Brazil who need VC contacts because I just feel the pain. Right. I know how much effort it takes. And I think that I just became very good at fundraising. Uh it’s, it’s one thing that, you know, it will be here. It is here to stay right in this capacity of yours. Um, so overall we, we shouldn’t be negative about the past. It took a while, but right now it’s all good
Ethan Garr 00:24:10 Out of curiosity. You mentioned, you know, that, that, uh, that investor said he never put his kids in, in one of your plans is his safety. And is that the big, the big thing that you have to get over in terms of convincing users that, uh, you know, fliers that this is, this is a great way to travel. Is it getting them to trust that your airplanes are safe?
Paul Malicki 00:24:31 Absolutely. If you look at the how legends explain, uh, explains their business, uh, they are very clear that, you know, it’s two things, it’s safety and availability, right? Uh, that’s why the welfare people want to be not just customers, probably I’m not, not just yet. Right. We, we also fly turboprops. Um, but definitely we look into safety as one of the most important factors out of 500, around 600 airplanes in Brazil. We only homologated 350. So it’s still a quite limited in terms of, uh, safety centers. Right. Um, uh, and, and you need to take care and need to really like look into these things, right. Um, yeah. And I don’t think it will, it will ever change, uh, you know, there’s this joke, what is the safest mode of transportation? So by 2017, commercial aviation became the safest mode of transport before people used to say elevator, cause elevator is also a mode of transport, right. But it’s not as safe as commercial aviation. So what do we have to do right now is we have to promote business aviation because although the safety ratings are not as high as for large commercial flights, it is a very, very safe sector. It’s just that you need to really fly with the right people and with the right in the right wedding, uh, weather conditions, um, and, and, you know, not put too much pressure on, on pilots. And, and that’s the filter we are trying to do
Sean Ellis 00:25:55 This week’s breakout growth podcast episode is sponsored by SAP. SAP helps businesses increase productivity and achieve real-time transparency with the power and flexibility of rise with SAP S four HANA cloud. If you have ambitious goals and are working to lead markets and industries, then you probably already know how important it is to align with a technology partner who will scale and drive innovation with your business with grow by SAP, future industry leaders like yourself, don’t have to rely on stitch together solutions that don’t talk to each other to manage business finances, operations, and customer relations. Instead leveraging the flexibility of SAP’s cloud based solution. You can power all these in one place and gain unprecedented into the performance of your business from end to end, whether you’re on the brink of, or have already achieved breakout, grow success, learn more by visiting sap.com/high growth.
Ethan Garr 00:26:57 Sure. And I think we’ve seen that. I mean, you think about like, uh, the Kobe Bryant story, I think, you know, commercial aviation or private aviation, like, there’s always that fear, like, is this being managed the way that a commercial aircraft is being managed, but, um, it sounds like that’s an important part of, of what, how you communicate with your audience. That that’s what
Sean Ellis 00:27:17 Just to build on that real fast. The Kobe Bryant was what came to my mind as well. Like, it’s, it’s just so news where the, when aviation goes wrong, that you just kind of over-index on, on the accidents when they happen. And so I think that’s why there’s that perception that it’s scary. And then obviously like when someone famous is, is part of it, which the famous high profile people are, the ones who are doing more of the private aviation than, than it, it creates probably even more fear.
Paul Malicki 00:27:47 It’s a lot about that. The, the data, uh, is being polluted by the news. Um, there’s a huge difference between commercial flights and private flights. That’s number one. So within private aviation, you have a sub-sector, which is called part 135, that’s way safer than private flights. Uh, it depends on the countries and states, uh, where you’re at. So for example, in, in Brazil, almost all accidents happen in Amazon, right? Because the runaways are not homologated and the government cannot do much about it, and people still need to fly. So, but if you look at the Southeast of Brazil, including style power going to Rio, we almost had never accidents in the last few years. Um, so, so I agree with you and I, and I think that, you know, that, that that’s a difficult part of the job. You need to really communicate properly and promote private aviation, uh, in the right way. Then the customers will come
Ethan Garr 00:28:38 Last week. There was this, uh, this triple seven here in the U S where the engine, uh, exploded and the, you know, it was so routine for the pilots. You know, it made big news because pieces of the plane fell off and stuff. But the reality is that it was, uh, for the, you know, commercial aviation has become so safe and so reliable that even, you know, those are what becomes really noteworthy. Um, but it’s not necessarily, uh, you know, these aren’t necessarily really, uh, huge dangers to, to the flying public. But, you know, I think, um, that’s an interesting challenge that you guys have to overcome. Can you tell us other challenge, you know, you said that it’s been really hard, a tough business to scale. Can you tell us about the other challenges and kind of growth challenges you’ve been facing through this journey?
Paul Malicki 00:29:19 I think, you know, as, as, as an anti marketplace model, you really need to look into the supply and you need to have perfect relationship with your supply in this case air carriers. Right. So it’s always been a bit difficult for us to scale up because sometimes they are jealous. Sometimes they are, they feel like we are their competitors, even though we promote, uh, you know, the market. Um, so definitely that, that is a bit of a challenge. Um, right now, when we are becoming more of a mainstream, uh, I dunno, I feel like sometimes I worry about my safety as well, because, you know, then if you’re becoming a well-known entrepreneur, uh, and you’ll leave in an emerging country, you know, uh, uh, it’s, it’s like, I don’t want to offend anyone or anything. Right. Because by the end of the day, we are here to build businesses.
Paul Malicki 00:30:00 Um, but yeah, like it, it, like sometimes I really feel like something might happen. Um, and I think right now the biggest problem really in the world when it comes to like, you know, building startups is, is just lack of developers. I mean, uh, with this current, um, exchange rate in Brazil where Brazil, and how was the second or the third worst, uh, currency in terms of valuation, right? Last year, um, American companies pay, uh, in dollar to the local developers in Brazil. Um, and it’s just still cheap for them, but for us, it’s just horrendously expensive. Right. Um, so I feel like, you know, as of today, this probably my main problem, uh, but hopefully we’ll go over it in the coming few weeks.
Sean Ellis 00:30:45 So one of the things that jumped out at me that you’ve said so far was that you’ve got, gotten to the point now where the majority of new customers are coming in through word of mouth. Um, would you, would you say that’s that that’s, I mean, I guess you’ve already said it, that that’s the most important, uh, channel, and then more importantly, how, how do you actually feed that word of mouth? Is there, is there a way that you can accelerate that incentivize people to do it, or it just, it happens naturally, and there’s not much you can do with that.
Paul Malicki 00:31:16 We are trying to help this word of mouth as well, by running a Google ads, uh, doing, you know, lots of, uh, uh, organic, uh, glow blog posts, et cetera, just so people really find the content. Um, but, um, yeah, like I feel like it’s always difficult to say, um, when we measured at easy taxi where the customers came from, like asking them, how did you get to know about using taxi? People just prefer to say friends and family, even though, you know, there was some underlying, uh, sort of factor. And I don’t know, maybe they were watching a TV and they just saw you and they, they can’t recall. Um, so we started measuring then both the attribution, as well as the awareness. So I wanted to clearly understand where do people get to know about flipper for the first four easy taxi that time, right.
Paul Malicki 00:32:06 For the first time and where do they actually convert? So everything was tracked and we are trying to repeat it, uh, right now with, uh, with flipper. But I think that the difference is that it is just one of those, you know, businesses where you look for, you know, as, as, before you, you start using a service, um, and someone, so a friend posting a picture of flying with flipper is probably going to ask and then, um, get a response. Um, so no, no silver bullets really. I mean, I feel like, you know, marketing has to be multi-multi, uh, we do things like executive secretary associations. We do some events, we do big media, small media, um, but always looking at the target audience, being wealthy customers and trying to find where those users congregate. Um, and from there on, it’s all about the execution, because if you provide a good service, if you have a good NPS, the customers will come.
Ethan Garr 00:33:01 Yeah. I think, uh, Sean and I are a big proponents that it’s about finding product market fit and execution and marrying those things together really well when it comes to execution. Can you tell us a little bit about how you’ve organized for growth, how you’ve organized your teams, whether it’s product growth and marketing.
Paul Malicki 00:33:16 Right. Um, I I’m a little bit, uh, bias because, you know, on the market tier by profession, right. So when we started the business for the first two years, I didn’t have anyone doing marketing for us. I was doing everything. And, you know, once you set up a decent, uh, Google ads campaign, uh, is there, once you set up a descent, a user acquisition campaign, um, on Facebook, where, for example, I was a, geo-fencing all the airports, right. Trying to target folks that are at the airports, um, Dennis there. So it’s just a matter of scaling it up. Um, the first two years were a little bit difficult because I had to aggregate that 1000 customers to create my first lookalike audiences. Right. And some of those customers don’t want to share their email because of privacy reasons. And, you know, again, private aviation is like a separate ecosystem.
Paul Malicki 00:34:02 Um, so yeah, so right now I have one person working with me directly, um, in Brazil on a marketing, we have one intern and that’s it, the rest is basically, uh, using what we know works. Um, we have a PR agency, uh, which by the way, for a long, long time, I was also doing everything on my own because as a CMO at easy tax, I just gained all those contexts with the journalists. But, uh, yeah, there was a moment when you just kind of do everything on your own and execution just takes so much time, especially content. Uh, and we do quite a lot of collaboration with freelancers. So design, uh, we have three journalists working for us full-time as well as part-time sorry for, um, for content. Um, and, and, and, you know, I feel like, uh, and that’s, by the way, that’s very typical for Latin America, but there are some countries like Brazil and probably Argentina, especially where you just try not to hire too many people because there’s so many legal cases. And, uh, it’s just a difficult market to, you know, from the human resources standpoint, um, until 2020, I believe sometime at the beginning of 2020 Brazil was concentrating 90% of all the legal cases in the, in the workplace. So basically imagine you fire an employee and then please sues it’s, it’s like, it’s a basic finger. I dunno why they do it. But then of course, you know, things go a little bit better with the new law and I feel like, um, it’s improving, but, uh, but yeah, it’s challenging, you know,
Sean Ellis 00:35:36 But it really that, um, the, the marketing that you did in the beginning and, and having that be your background, I think for a network effect business, where you’re trying to, trying to build supply, build demand, manage that kind of network liquidity. And it sounds like that’s really the perfect background for the founder to have in that type of a business. And that even as you start to hire new people in there, um, that, uh, I’ve got to assume, like on the scaling side, that kind of keeping everyone on the same page and pulling in the same direction. Obviously you have to have trust and turning some of that over, but where, where have you found some of the challenges in it kind of building out the organization and is it really just that, that small group of marketers that thinks about network liquidity and, and, and growth, or is there kind of a broader perspective on, on growth across the company? And everyone kind of understands their part and contributes it to it in some way.
Paul Malicki 00:36:31 Right. And also I think that the growth mentality, uh, is, is a company culture, right? So I think that everybody understands from the calls we are having, et cetera, what you really have to do here at Flapper. What are the values? Um, everybody contributes to too many things. You know, if you work in a private aviation, which is such a complex sector, you also need to be fairly, you know, intelligent in a way that you need to learn, what are the airplanes, what do they offer? People can ask you anything from, you know, cargo to, uh, ambulance flights. So my team is being trained every single week. We have an alignment call where we discussed, you know, what we learned, et cetera. Um, to your second point. Uh, look, I think that if there was one thing that I really learned doing well in the last few years is hiring people.
Paul Malicki 00:37:18 Um, and for some reason, I dunno, maybe, maybe because I just became so good at it, but, uh, almost all my key employees right now, they came organically to Flapper. Uh, they were following it on LinkedIn. They saw that we are onto something and they were like, bolt, I love your business. I’d love to join the team. And that was the case for almost every single person that joined once we, uh, as, uh, as co-founders, you know, set up a company, uh, it is still challenging, right? I’m not saying that it was easy, but, uh, and probably it’s more challenging to actually maintain the teams and then to hire. Um, and you have two types of sort of profiles for farmers. You have more of like creators and you have management guys. Right. And I’m, I’m, I’m probably into both, which is good because I don’t mind creating, but I also don’t mind managing people.
Paul Malicki 00:38:08 Um, so, so yeah, I think that, you know, it’s, it’s never easy, right. Uh, think about it, right. I mean, it’s, it’s still, we work mostly with emerging markets. Um, but I feel like, uh, we, we, we manage it quite well. I remember crazy times at rocket internet where, you know, they would, they would ask us, um, Hey, let’s hire 500 people tomorrow. And they’re like, no, we can’t hire five people, you know? No, no, we have to hire 500 people. Uh that’s rocket internet mentality, you know? And, uh, so we had to learn a lot about hiring. I think we, we had 1,300 employees, uh, in, um, in easy taxi, right. And easy taxi. So, uh, yeah, lots of learnings
Sean Ellis 00:38:54 And realize that easy taxi was a rocket internet company. That’s, uh, that’s, that’s a good background to have that’s. Uh, I actually, when I was working with Eventbrite, that was also kind of pre rocket internet, but the Sam wire brothers. And, uh, and so I, I, I got to follow the rocket internet journey from pretty early on and was, I think it’s, uh, even though a lot of, it’s kind of a fast follower mentality there, the execution is amazing. And the aggressiveness and that’s, that’s a good background to have
Paul Malicki 00:39:23 We learned a lot with Oliver’s summer. Uh, he was just crazy about execution, you know, uh, he wants, did, like, he went to visit three countries in three days and he was just literally lending visiting the country manager, uh, telling everything he’s doing wrong and going to another country. So I was like, gosh, if he can do it, I can do it too. So recently I, I did my, um, my, my travel to eight countries in 10 days. I think I came back a little bit sick because my body didn’t manage to survive this trip. But, uh, yeah, he, he was, he, he has been, um, a great mentor in a way,
Ethan Garr 00:39:59 One thing that’s so interesting, you know, ultimately word of mouth is really the driver, but what’s the path that gets people there. What, what is the path of new customer, you know, how does someone discover Flapper? How do they become a raving fan? Have they become that, that refer and, and a user of the, of the service over and over again?
Paul Malicki 00:40:17 Right. Um, you know, we are a mobile app that some remain a distribution channel, so people would probably just look for apps. And if they hear about the Flapper, they’re probably going to go to iTunes and play store and download it. Um, but you know, one thing that I’ve noticed in the last few years is that some of the keywords, which did not appear on Google in the past, such as shirt, executive flight, right. Um, they, they start popping up on Google as well because people are just looking for alternatives to commercial aviation during the pandemic. Uh, so I would say that organic discovery is very important. That’s why you want to appear everywhere. We want to have articles. We want to explain things, right. Uh, and of course, you know, you have those social networks these days. And I feel like private aviation has just made for Instagram, uh, or Instagram has made for private aviation. So we post a lot, we do lots of campaigns of influencers, and eventually people are going to discover this content and, you know, downloading that. Great.
Sean Ellis 00:41:12 So, yeah. Ethan, you want to take that last question? The question we always like to ask.
Ethan Garr 00:41:16 Yeah. We always like to ask, what do you feel like you understand about growth now that maybe you didn’t understand a couple of years ago? What’d you learn? Oh gosh,
Paul Malicki 00:41:24 I think you always learn. But, uh, yeah, like I, I feel like in the past, I was just crazy about reporting, you know, and I wanted to track everything and report everything. Um, and today I would say that if I’m sure that something works, I’m just, I’m not even gonna gonna, you know, measure it to report it. Um, I’m just gonna make a campaign because I know that it will give me a good result. Um, just as an idea, we used to track performance of every single influencer campaign right now. I look at the guy, I was like, oh my God, this is my public. So I want him to post. I’m not even going to measure it. Of course, you know, my downloads are tracked and everything, but, uh, I feel like that in this crazy data driven world of growth, uh, sometimes we need to be a little bit more human as well, and just trusting our creative, uh, you know, uh, skills and, and content strategy.
Sean Ellis 00:42:15 Yeah. It’s interesting you say that because I remember one of the companies that I worked with where in the early days we could track everything because it was all kind of attributed to the efforts that we were doing. And then eventually momentum kicks in. You get word of mouth, you’ve got PR, you’ve got all these things that are much less trackable. And I remember my CEO kind of panicking, like we’re losing control and having to have the conversation that this is a good thing. That means that this flywheel is turning to the point where it’s beyond just the things we’re doing. We need to understand the interrelationship there, but you know, when you, when you graduate beyond purely attributable everything, that, that can often be a good thing. It’s just, you get, you’re going to have to model more as opposed to have fully tracked an attribution. Yes.
Paul Malicki 00:43:01 I, I remember, um, there was once a call between the rocket internet and like, they, they did calls basically with all the founders. So let’s say 100 founders from different ventures and Oliver entering there and literally going like five minutes per company in 24 hours, like the guy wouldn’t sleep. And he was, while I was asking the CMO, what is your CAC? And he was like, um, let me check. I’m like, no, no, no, wait, you don’t know what’s your CAC. I have a jotted down here. No you’re fired. He fired a guy during the call. It was just funny though, because, uh, that’s exactly the type of, um, you know, obsession about the numbers that those guys had that today. I sort of want to avoid, you know, I understand the numbers, I know where they are leading, but, um, the truth is you need to create good content and you need to do it in the right way. Um, and, and numbers are not the only thing that will lead you there. You have to be creative. You have to give yourself some space, you know, so, yeah. Uh, that’s, that’s a funny episode episode.
Sean Ellis 00:44:01 Yeah. So, um, I appreciate it so much. You telling your story to us. My, my big takeaway is as I, as I think about the, the full Flapper story is that, you know, you, you started with really a need in that market, but that you’re getting, getting the engine going was what’s tough in the beginning, everything from financing to just, just getting, getting the ball rolling, but being really sophisticated with the geo-fencing and some of the things you were doing on, on, and building a big enough audience to do the lookalike audience. And then, but to the point now where it feels like you’re, you’re in the momentum play, where you have enough success, that, that the money is coming to you more aggressively, that the team is coming to you more aggressively. The word of mouth is a huge factor in, in spinning things up. And, uh, and that’s cool. I mean, I think, I think to a large degree, that’s, that’s kind of classic marketplace dynamics that they’re really hard to start, but it’s a, it’s a really powerful engine when you can get there, particularly if they map to a market need that that’s big and, uh, and, and important. So congratulations on all the successes. It’s really impressive where you’ve gotten to, and it’ll be exciting to see where you take it from here. I don’t know, Ethan, did you have any other big takeaways from the conversation?
Ethan Garr 00:45:21 And it just, you know, I think, you know, you said you’re biased as a marketer, but it sounds like you really started that marketing from the side with this idea that you have to build trust and building trust and airplanes is a, is not easy. Um, but it’s, it was really, I think a key learning for me is that you really use a lot of the tools like PR content, uh, to drive the word of mouth and to build sort of, to help build that growth engine from the ground up. So, uh, really interesting stuff. And that it really do appreciate you sharing the story with us.
Paul Malicki 00:45:48 Thank you, gentlemen. And I feel like, uh, our business is a little bit of a mission impossible, and we do actually have this mission. So, um, yeah, I’m very happy. I appreciate your kind comments and, and hopefully, you know, all of this will be published one day in, in, in my next book, which I already said will be called, uh, the immigrant just to really sort of put it all in the context because, um, you know, it’s not easy to leave abroad. It’s my eighth country. Uh, and, uh, yeah, still we managed to build interesting businesses. So, um, there was a lots of, uh, there are lots of things we, we should share with the next generation.
Sean Ellis 00:46:26 Well, well, congratulations again, and thanks so much for sharing your story and for everyone tuning in. Thanks for listening. And we’ll, we’ll be back with another episode soon.
Ethan Garr 00:46:41 Thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform and while you’re at it subscribe. So you never miss a show until next week.