Slowly, the world is opening up again: Countries are easing Covid-related travel restrictions, and airlines are lowering prices to entice travelers back aboard. If you haven’t already booked a fall vacation, you’re probably googling airfare deals or planning a Thanksgiving trip to reunite with family. If that’s the case, you might find a great deal with Scott’s Cheap Flights.
The newsletter, officially founded in 2015 by its namesake Scott Keyes, started out as a hobby two years earlier when Keyes found an incredibly cheap flight to Milan. After friends kept asking Keyes for the next great travel deal, he decided to send out mass emails. Then those friends sent the newsletter to their friends, and Scott’s Cheap Flights grew into a mildly profitable venture.
But it wasn’t until Brian Kidwell, the company’s CEO, reached out to Keyes for a job that the newsletter became a fully fledged business. The two found that their skills complemented each other — Keyes could find the best travel deals, while Kidwell handled the business side of things, like growing an audience and monetizing the newsletter.
While it may seem like there’s some other newsletter to sign up for each week, Scott’s Cheap Flights preceded the newsletter/Substack boom by about four years. The company launched its own site in 2016, and now has around 40 employees and over 2 million subscribers. Keyes even wrote a book demystifying airfare booking. Even the pandemic wreaking havoc on the travel industry wasn’t enough to reduce those numbers, and the company’s revenue only decreased by 5% from 2019.
Keyes and Kidwell spoke about the company’s humble beginnings as a newsletter spread via word of mouth, how they kept costs down during the pandemic and resulting travel downturn, and their top bucket list destinations.
This interview has been edited for length and clarity.
The Business of Business: How did the two of you meet initially? How did the newsletter first begin?
Scott Keyes: I'll start with how the newsletter began and then get into how Brian and I met. I was not one of those entrepreneurs who really grew up wanting to start a company, I wasn't somebody who just had dreams of founding a huge startup and then looking for my million dollar idea. I was just a guy without much money, who really wanted to be able to travel and see the world. And looking at my bank account on most days, it was a pretty, you know — you imagine those flies kind of going out of your wallet as you open it. That was me on most days.
I knew that the only way I was going to be able to travel and visit some of these places I wanted to see was through cheap flights. But the problem was, I had no idea how the heck people find cheap flights, I knew they were out there somehow. But every time I looked for flights, it was like they were really, really expensive. What I ended up doing was, you know, I was working at the time as a journalist, and it really put my investigative reporter hat on and started to dig in. Why is it that flights are sometimes really expensive, and sometimes really cheap? Why does the same flight change in price three, four or five times a day? And over, like the course of a couple years, frankly, I got really good at finding cheap flights.
And so this all culminated in 2013 when I got still, to this day, the best deal that I've ever gotten in my life, which was nonstop from New York City to Milan for $130 round trip. The funny thing about that was I was not even intending to go to Milan, I had no plans to visit. But I just happened to be searching and stumbled across this $130 round trip flight. And the question was not you know, had I been thinking to go to Milan. The question was, do I want to go to Milan for $130 round trip? And that's not a very hard question. So when I took this amazing trip I got to go skiing in the Alps, hiking and Cinque Terre, and all this great stuff. When I got back, all my friends and co-workers kept coming up to me. “Hey, Scott, I heard about that great deal you got, listen, next time you find a deal like that, can you let me know so I can get in on it too.”
Rather than trying to remember every single person I needed to let know, I decided, why don't I start just a simple little email list? And that way I can let everybody know at the same time. Far from it being this grand plan to start a company, this is just a simple solution to be able to let many people know at the same time anytime I found a great deal. Now fast forward a couple years, it had grown large enough that it was no longer something that I was just doing as a hobby. This is something I was doing to actually try to at least cover some of my expenses and break even on that.
“I am so so lucky to have met Brian and open that email that day, because I don't think SCF would have become a fraction of what it has without him.” - Scott Keyes
I was drowning in work, I was finding deals, I was sending emails, I was trying to build a website, trying to handle customer support, all this type of stuff. And in that moment, I get an email from Brian, this is in, gosh, probably September 2015 or so. And I love this story, because it's not something that you're going to hear in business school, this is not how they would teach, you know, going about finding your great co-founder. But at this moment, I realize I have so much work. I need a partner here. I need a co-founder, and I get this email from this guy named Brian, never met before, never heard of him, but he was like, “Hey Scott, look, I'm starting this travel blog, this travel community. I'd really like to interview you for it and see where we can go from there.”
And so we ended up having this really great discussion, talking both about travel, and then afterwards just about the business and how things were going and what we could do and what could be done to improve it. And in that moment, I kind of realized, gosh, I could spend the next six months trying to tap my network and interview and re-interview. Who knows how the heck anybody's going to work out as a co-founder, or I could see if this guy I just met on the internet a half hour ago is interested in being my co-founder.
When I look back in retrospect it feels kind of risky, but at the time, you know, SCF was not making tons and tons of money. It was making beer money at the time, and so when Brian and I saw the potential together and what we could build, we realized that our skill sets really mirrored one another, really complementing each other. I was good at finding cheap flights, talking about them, interacting with members, Brian was just so sharp and all that, kind of a jack of all trades skill set behind the scenes, building the website, building this piping and infrastructure that keeps a membership organization going, creating the right sort of pricing loops and email drip campaigns and all these types of things that got way over my head.
Because again, I was not an aspiring entrepreneur, and so us coming together, that marriage really, I mean, I tell my wife all the time, I am so so lucky to have met Brian and open that email that day, because I don't think SCF would have become a fraction of what it has without him. From there, it's just grown significantly since then. Was there anything I'm missing there Brian? Any major points I left out?
BK: I think he captured most of it. I think the main difference between us is all I ever wanted was to start and run a business. And Scott, on the other hand, he had no interest in that. I didn't have a lot of money. And I wanted to backpack Europe. I just searched how to find cheap flights. And Scott had written a book called “How to Find Cheap Flights.” And that's actually how I found him. And then one thing led to another after I got back from Europe and started to build my own thing. And that's how we got in touch.
It sounds weird, you know, looking back as a co-founder. But like Scott said, it was a side project for us at the time. And it evolved into what it is today. But I think my favorite part about our story is we didn't even meet in person for a year. I mean, we barely even talked on the phone. We were just Google Chatting back and forth. For the first year while I was living out in Southeast Asia, and Scott was living in Colorado, and then eventually we're like, “Hey, let's meet up.” So he did that, and, you know, eventually led us to where we are today. So it's been a fun journey.
At what point did you realize that this was taking off and that this didn't have to just be for beer money, that this could be the main gig?
BK: Oh, I'll try and take this one. And Scott, you can share your perspective as well. I was looking for growth opportunities early on for the business. And one of the opportunities that we found was this journalist who had mentioned us in an article, and it wasn't about us, it was just a one off comment. I was like, Oh, that's interesting. And I ended up hunting down her email, her college email address, because I couldn't find her work email address. And amazingly, she responded. And that turned into an article about what we were doing.
“We've grown significantly beyond just being a paid email newsletter company.” - Scott Keyes
We went from, I think we were at like, $2,000 a month at the time, in like January 2016. And then this article got published in February 2016. And we had $22,000 month. And that's when we're like, Wait a second, like, there actually might be something here, this might be way bigger than we were thinking. And that's when we started kind of offloading our other projects. I think Scott, you know, got out of his day job. I had a client at the time that I started working on getting out of, and then a few months later, in May of 2016, we launched Scott's Cheap Flights.com. Because before that, it was all on Scott's ebook website as this little email list thing. So I think for me, that was the catalyst and the real eye opener.
Whenever we would have one of those big spike events, we would always talk to each other and be like, Oh yeah, that's just a one off, like it's gonna go down. And then, you know, we kept having them and over time we built a business.
SK: I mean, speaking of those spike events, the one for me that really kind of solidified in my mind that while we've found something here, we've been able to make something that really has legs, was in Thanksgiving 2016 when Scott's Cheap Flights was set up where it had both a free list and a premium list. And folks had to pay, it worked out to about a few bucks a month to be on the premium list. For the very first time on that Thanksgiving in 2016.
We sent out an email to everybody on the free listing that prices were about to go up for folks who were signing up for the premium list and if you signed up before, let's just say December 1, you would be a legacy member and you'd be locked in at the lower price. We hadn't really done this before, we weren't sure how people were going to handle this. Are they going to be mad?
What we realized was, Oh, my gosh, you know, as soon as we sent out this email, we saw that the numbers in Strike just go way up, like a vertical line. I mean, it was an incredibly, incredibly lucrative campaign. And what we realized in retrospect, was that that price increase, far from being something that would be taken negatively, especially if we let folks lock in their price and be legacy members at the price that they got in at, what ended up the ultimate result of it was that it pushed all the fence sitters who thought, Oh, maybe I'll sign up for premium someday, but no real rush, no real hurry, this gave them that hurry. This gave them that deadline where they realized I have to get in by November 30. Because if I wait, then the price is going to be higher for the rest of my life, or however long I'm going to be on Scott's Cheap Flights. And so that ended up really kind of showing up to us, proving to us that we could find those little growth hooks, those growth loops to help really increase the business.
I've read about growing newsletters and how there is a sweet spot for suddenly making a paid newsletter and catching the upward curve on that right moment. I'm curious about your other growth strategies for growing that newsletter. You mentioned that, at the beginning, growth was really through word of mouth, but then once you started getting press, it became almost like it was the car driving itself.
SK: I'll start just briefly here, and then turn it over to Brian. So I mean, one thing that again, I think, if we're looking back at like, what could we have done better, what could we have done differently with the benefit of 20/20 hindsight, coming at this from my vantage point, as somebody who was not especially entrepreneurial early on, not especially, you know, this sort of grand vision of building a company, somebody who just loved cheap flights and wanted to share them with people, I was very wary of marketing, of spending a lot of the money we were making to reinvest and getting new customers.
And so that's why you know, what Brian, to his credit, had much more vision had much more ability to see how this would benefit, but I was really pumping the brakes and so for the first, gosh, four or five or six years or so, we did almost no paid marketing. Virtually all of our growth and user acquisition was through things like word of mouth, was just members telling other members, people telling their friends in group chats and other sorts of ways, and then trying to really garner good earned media, good press by, you know, either the deals themselves generating excitement or by maintaining good relationships with reporters. And by being able to demystify what is happening in airfare, what is happening in flight travels.
“My favorite part about our story is we didn't even meet in person for a year. I mean, we barely even talked on the phone.” - Brian Kidwell
It’s one of these things where you often have people who are focused, who are experts either in the real kind of mechanics of aviation. That's not really a broad interest subject, or the real kind of more fluffy, Hey, what do you do when you're traveling? What should you do in Rome or Paris when you're there? But very few people I think are able to speak with expertise about what's happening with airfare. When should you book your flights? You know, does booking on Tuesday at 1pm work? Does clearing your cookies work? And those are the things that I think a lot of people are really hungry for answers on. Airfares are one of the most confusing things that folks normally buy, and so they're not sure and looking for some sort of authority or expertise to guide them on this. What did I miss there, Brian?
BK: Looking back, things seem so obvious. But as you know, we were in it. We were just trying to figure everything out for the very first time. When we were getting so many members for free from word of mouth, it was really hard for us to convince each other that it was worth any money at all to go spend on advertising, which like Scott said, like hindsight, I wish we did it, right. Like if we had been spending up earlier, we would be way beyond where we are now. You can't split test reality.
But I think one of the things that we did, you know, there's certain tactics that you can use that are hot in different areas, and then you kind of burn that channel out and you’ve got to try something new. So we were doing giveaways for a bit, like give away a trip, and people would refer their friends and get more entries. And so that helped us not only grow our membership, but also our social channels. I think Scott, just like going on answering people's questions on Reddit for like, 12 hours straight, really helped drive interest in what we were doing.
But the core aspect of what we came to understand about our model is that the deals themselves are such a great growth channel, because what they do is they spark that thinking of, Oh, maybe I could go here with my friend, or you know, you're in an office and saying, Hey, did you see this deal? This is incredible. And so I think the deal itself really contributed to our growth over time. And now we're in a much different place, we have a full marketing team, we have people way better than Scott and myself at these things. And they've been able to prove out channel after channel after channel. They’re treating them as growth channels and tracking the metrics accordingly, to make sure that we're doing the right things. And it's been incredible to see what can happen when you're firing on all cylinders and spending on paid advertising at the same time.
SK: One thing I would add there, too, is look, it feels very obvious in retrospect. Of course, people love cheap flights and want to be able to get more of them and be, of course, people are willing to pay, you know, a subscription premium for an email newsletter. But those things were not obvious at all, at the time, when we launched I mean — nowadays with things like Substack and others, the model has really been proven out and replicated.
But in August 2015, when SCF launched as an actual business, they were, gosh, I struggle to be able to say, more than one or two other paid email newsletters at the time, and we've grown significantly beyond just being a paid email newsletter company. But at the time, there was this concern, are people going to be willing to pull out their credit cards from their wallets and pay money to be able to receive this product, and we didn't know. And so there was a lot of almost proving it to ourselves, period, that this was something that there was definitely demand for organically and not just something we had to induce demand for.
The newsletter grew for four years, and then the pandemic hit, and travel ground to a halt. And, you know, I didn't go anywhere. And no one I knew really went anywhere for a long time. How did that affect the company, while everything in the travel industry suffered? I imagine that it was a time of real challenge.
SK: Brian, you want to take this one?
BK: Yeah, I can start and then you can fill in any gaps. It was hard, you know, there's still some uncertainty right now. You can see just the flight trends, or like the flight search trends over time, because of what's going on with the different variants. And that has a very real impact on the business. I mean, we can see it in our numbers. And last year was very, very difficult. Just so much uncertainty. And you have to just make the best decision that you can with the information that you have, and there's no answer in the back of the book that can tell you if you're right or not.
I think some of the things that we did to get through it, you know, we sold multiyear subscriptions, which really helped boost revenue, so we were actually only down 5% compared to 2019, which was fantastic. But I think some of the other things to keep in mind is like, people don't just subscribe to Scott's Cheap flights because they're gonna book every deal that we're sending them, you know, like a deal a day, maybe two deals a day, at least, you know, a deal a week. Nobody travels that much. We get that. But there's an aspect of the inspiration and the excitement and I think people really wanted to hold on to that during this time. And just keep in mind that that travel is there.
We did a couple of other things that I think helped as well. We set up a destination newsletter to keep the travel excitement alive. And so we would highlight a destination each week, and we're still doing that today, and just sharing, you know, from different perspectives, what's great about these destinations. And then Scott and some of our other flight experts have also been writing an advice newsletter because of how many things are just constantly changing in the travel industry. We have a team of people that are keeping up with that and trying to keep everybody informed. And making sure that our members are aware of what the various restrictions are, and how to get through these different things and make sure that if they do want to travel, they can do so in an educated way. Scott, what did I miss?
SK: Two brief things. I mean, I think that touches on like, what we did to try to do right by the business. I think the first two most important things that we were trying to do, even ahead of that, was to do right by our teammates, and to do right by our members.
And so a few things that we did first on with respect to teammates — I still remember how terrifying it was in March and April of 2020. Not just for, you know, family and loved ones, but for a company whose job it is to help get people excited and engaged about traveling. I mean, you saw airlines and other people in the travel industry laying off people left and right, really, really cutting back. And so we set as our north star, we want to do everything we can to try to prevent any layoffs and any pay cuts, we want to try to hunker down and hold the fort together.
And so you know, this was everything from cutting costs, making sure that Brian and I would be the first ones to drop our salaries down to $1, the leadership team taking pay cuts, and we get this six point plan, everything we would do first, before we had any consideration of any layoffs or pay cuts, and I'm so thrilled, and frankly, just relieved from a human aspect that we didn't have to do that, that we didn't have to get anywhere near any layoffs, because we were able to still pull out so many of those growth loops and excitement that the company didn't ever, ever get anywhere close to that precipice.
So not only being able to hunker down and, you know, keep everybody's jobs, keep everybody's salaries moving forward, but then also by our members. Making sure that — look, people were in March and April of 2020, sitting on, you know, millions of flights that were no longer going to be valid, who didn't know if their jobs were going to be around in a month or two, who really could use refunds for the flights that they weren't going to get. And with airlines that were not, frankly, doing much to help try to inform customers about what their rights were. And so we realized, this is our opportunity to step in, and really kind of inform the public about things that they shouldn't have to know about, but right now are going to be really important to know about.
For instance, the fact that there is a federal regulation that says if an airline cancels or significantly changes your flight booking, you're entitled to a full cash refund, if you want one. The airlines were sending out emails, Hey, your flight’s been canceled, we've already processed a voucher for you, please click here to accept it. And you wouldn't necessarily know that you could get your money back, unless you're told by an expert and authority that that is the case. And so we wanted to really try to help guide and inform our members about what their rights were and how they could navigate this kind of new world going forward for the foreseeable future. That was the advice emails, but then also just on social media and elsewhere, doing our best to try to make sure that folks had an advocate by their sides to help them even with the airlines, we’re always willing to do that.
So now we're at a time when people travel a lot more easily than they could a year ago. What is your take on the current climate for travel right now, both in terms of people going out there and traveling and getting those deals and also just how prices are doing right now?
SK: Yeah, absolutely. Look, I think we're in a really interesting moment in travel where you're seeing it bounce back significantly from where it was in 2020, but off of a very low base. But still there's so much further to go to get back to where we were pre-pandemic, both in terms of the number of flights and in terms of the number of people flying. I mean, the amount of international travel right now for instance is still down 40%, 50%, in some cases 60% on some routes to where it was in 2019. And so there's still a lot of ground to make up from where we were.
This is one of the reasons why you see so many cheap flights to places like Europe, places like Latin America and the Caribbean. In the past couple weeks alone, we've seen flights for instance, from Billings, Montana to Barcelona for like $290 round trip, and from Tucson, Arizona, up to Copenhagen, Denmark for like $320 round trip. Those types of fares are popping up constantly, because airlines are still having to do the main thing that they know, sell seats, and that's cutting the price. So while I think there's a lot of potential, you know, still room to grow, I actually think it's one of the best times to be able to travel internationally. And the reason why is — look, I took a trip to Spain in June, right as they reopened, and a lot of folks, including one of my heroes, Rick Steves, had been advising folks, Look, don't go to Europe this summer, don't go this fall, it's not going to be the Europe you remembered, let's wait until maybe 2022 when things are more back to normal.
And while it's true that there was a little bit that you couldn't do this in summer 2021 compared to previous trips to Spain, the fact that there were probably 90% fewer tourists in some of these places then there had been pre-pandemic made the overall trip way better than I ever could have imagined. I mean, one of our teammates spent the past week in Venice, Italy. This is probably one of the capitals where folks would think of, you know, overtourism, so many people, and the fact that he was able to be there, wander through the canals in the streets, virtually on his own, is this experience that we may never see again in our lifetimes, I certainly hope we never see again in our lifetimes, because that would mean we'll face some sort of, you know, similar calamity. And so there's this window of opportunity right now.
I think now and for the next six months or so, to be able to visit some of these iconic, worldwide tourist destinations with a fraction of the tourist crowds I would expect by summer 2022 that we're going to reach essentially parody from where we were pre-pandemic in terms of the tourist numbers, but until then, I think there's still a real opportunity to be able to visit these places and have much more breathing room than you had before.
Lastly, what’s your advice for entrepreneurs either for entrepreneurship in general or advice for growing and maintaining a newsletter? Also, what’s a bucket list destination that you're dying to go to?
SK: Brian Well, I'll let you start on this one.
BK: All right, I'll start with the destination. I really want to go to Tokyo, that's been on my list for way too long and I need to make it happen, so I'm keeping an eye out for cheap flights.
The advice I would give is very simple and that's to get started. If you are waiting for the perfect idea or the perfect opportunity or until you feel like you're ready, then you're waiting too long, because I mean Scott, I had no idea what we were doing when we got started. We didn't even know what this was going to become, you know, we're still figuring things out every single day. And so if that's what you want to do, I would say just get started with anything because once you're in the game then you can kind of see all the opportunities and start learning and that's what's gonna help you get where you ultimately want to go.
“I wasn't somebody who just had dreams of founding a huge startup and then looking for my million dollar idea.” - Scott Keyes
SK: Yeah, that's exactly the sort of idea that came to mind for me. It's really easy to see this with friends who are starting companies or thinking about businesses that they spend so long, months, sometimes even years, on a business plan. And it's not that preparation is ill advised per se, but that I think there's a temptation to want to spend so much time preparing a business plan when in reality you know, it's the old Mike Tyson quote, “Everybody's got a plan until they get punched in the mouth.”
Once you actually launch this thing, once you actually see how do customers respond? What are people doing? You know, are they signing up and then canceling right away? You can start to see where the gaps in your armor are. What did you know? What are the assumptions that you thought were going to work that don't, and be able to adjust accordingly. Whereas when it's all just theoretical, there's not a whole lot that you can really test out, then see and really be able to test your assumptions.
Bucket list-wise, I'll go with one that I know Brian's been to that I haven't been to, New Zealand. I would love to be able to fly there, rent a camper van, do the whole kind of exploring around the country. I haven't been able to make it happen yet, but it's not going anywhere. I know it's gonna be there once it reopens for tourism, hopefully sometime in early 2022.
Those are great destinations. I have not been to Tokyo or New Zealand. Yeah, that's definitely on my bucket list too. And to see the Shire, that would be that would be great.
K: Oh yeah, it was a lot of fun. Really, really cool to see that. What's your bucket list destination?
Oh, man, I should have had an answer to that question. Tokyo is really high up there. Mount Fuji maybe as well. To get more specific, Machu Picchu is up there. So I guess maybe some natural wonders would be great. But it's so hard to decide.
SK: Brian, you've done Machu Picchu, haven't you?
BK: Yes. That's one of those ones that everybody talks up. And it's still amazing, like it's not overrated even after everybody talks about it.
That's what I figured. I've traveled enough to know that very little is too hyped up. You know, a lot of the time it really is that good. Well, well thank you both so much for taking the time to talk. And maybe next time we'll spill the secrets on exactly how you find those deals.
SK: I’m happy to add that, I'm always an open book. That's my favorite thing to talk about.