Andy Phillipps: Active Hotels, via, to angel investing PART ONE

Podcast transcription - 8th February 2018

Peter Cowley:                  Hi, and thank you for listening to all our previous podcasts. This is a first for The Invested Investor, as I'd like to introduce a two-part podcast with Andy Phillipps. We're benefiting from hearing a fantastic and interesting entrepreneurial journey in part one, followed by an insightful look into how Andy transitioned into angel investing in part two. We hope you enjoy.

                                             So, welcome again to another Invested Investor podcast. This time I've got an angel I've co-invested with who's had a very interesting entrepreneurial journey, Andy Phillipps, who I've known for about 6 or 7 years, has become a friend. So, Andy, tell us a bit about your background.

Andy Phillipps:                 Thank you very much, Peter. I started at Cambridge, so I had an undergraduate degree in natural sciences at Cambridge, and then moved on to do a Ph.D in Cambridge in natural sciences again, so in material science. The grand title of mixed mode interfacial fracture of biomimetic ceramic laminates there, which wasn't a good way to meet people at university. I then went on to work in industrial research. I worked for a company called Cookson Group, followed by some time at BOC Group, and then at the end of that, I was basically trying to imagine what I wanted to do next.

                                             I had a career crisis and realized that I really wanted to understand how businesses fitted together, with a slightly critical eye on the departments I was working in. You always look at businesses and think, why is it done this way? I'm sure it could be done better, et cetera, et cetera. And with that in mind, I went off to INSEAD in 98, 99 to do an MBA, and then when I came out of MBA, I set up my own business. And the original business I was looking at doing was actually, I was trying to buy an olive business with a friend, which was very expensive spiced olives you can get in the delis. The grace margin on those can be quite attractive, and so I was looking at buying a business down in the south of France. And my co-founder Adrian Critchlow, who's also my cousin, rang me up and said, "You are right in the middle of the biggest thing to hit business in the last 40 years, and you are buying an olive business."

                                             And so we looked at setting up an internet business, and we fixed on the travel sector. So, I ran that business with Adrian through 'til 2004, 2005, as a business called Active Hotels, when we sold it. And then I bought into a company called Toptable, along with Karen Hansen, and we grew that into being a significant player in the European market for online restaurant reservations.

Peter Cowley:                  Yes, okay, let's go back to Active Hotels, because that's your first entrepreneurial journey. I mean, Toptable, we'll come back to later on. That was combination of investor and director. Active Hotels, you had the idea. Why did you pick hotels? Because you just felt like almost anything, at that point, in the late 90s was going to grow, I guess, on the internet.

Andy Phillipps:                 Yes, it was quite calculating in retrospect. We were looking at what industries were expected to be impacted by the internet, and there were many, many industries being impacted, but the biggest one at the time was probably travel. And then we looked through travel, and where people have traditionally, or historically, made margin in the travel industry is in insurance and in hotels, and we knew very little about either, actually. But we decided to pick on hotels, so we set up an internet hotel booking business, but with a ridiculous, in retrospect, amount of research. So, I was quite conservative, and we did 760 hotel interviews to try and work out exactly what the proposition was. We really wanted to make sure we understood very well what hotels needed, what the problems were, what the challenges were, and I would argue now, 760 was ridiculous.

Peter Cowley:                  These were face to face, or on the telephone?

Andy Phillipps:                 We probably did about 150 face to face, and we also hired a call centre to do interviews for the remaining.

Peter Cowley:                  And so that's one side of the platform, you're a specialist in platforms. What about the other side? Did you use your own knowledge? Your friend's knowledge? You need to also attract customers.

Andy Phillipps:                 Yes, we spent less time on that, and probably we should have spent more time on it. If I illustrate why we spent less time, the research so indicated that slightly. If you speculate hotels at the time, everyone knew the internet was going to, or was expected to, be a massive impact on the travel industry. But there was some quite big brands already launched,,, Expedia, those kind of people, with many, many millions behind them. But, when you speculate hotels, there was a big problem. If you're going to sell through multiple different channels, you have to make sure your availability and your prices are aligned, otherwise you can double sell a room, or you can sell it to the wrong price. And if you're having to update your availability across all these different platforms at once, it gives you a real technical challenge.

                                             So, we actually set up this kind of hub model, where we had a central database where you would maintain your availability and pricing once. You would add your room descriptions, et cetera, and then we distributed it out to whoever might want it. But as a result, we did have interest in what the consumers wanted, when we started at least, we were B2B2C, if you like. So we spent a bit more time talking to websites than we did speaking directly to consumers. That changed as the business progressed.

Peter Cowley:                  How do you define those initial weeks and months?

Andy Phillipps:                 Painfully, actually. So, we managed to persuade an awful lot of friends to come do stuff for free. I put some more money in, and it was quite difficult putting more money at the time, because I'd just funded an MBA. We were struggling a bit for cash, but we managed to persuade some people to write the code. We managed to persuade some people to do some marketing for free. And we actually started bluffing things, like we hired the premises, et cetera, while we were doing the funding round, but there was quite a lot of pressure to actually close the funding round by the time we actually did it. So there was an air of desperation slightly when I was pitching.

Peter Cowley:                  And how much did you raise in that first round?

Andy Phillipps:                 405,000 pounds, which I know is a rather puny amount of money, but the 5 was because we met one guy who wanted to invest 5, and he was a really nice guy, so we let him.

Peter Cowley:                  Who do you pitch to?

Andy Phillipps:                 As with many entrepreneurs, we wanted useful money, and we were very specific about what skill sets we want, and then as you gradually get more and more desperate, you want any money. So, we got some brilliant investors. We had the chairman of ABTA, the Association of British Travel Agents. We had a very successful technology entrepreneurs there. We had some very good marketing people, and the marketing director for Pepsi, for example, invested in us. And then as we got slightly in need of money, and also because of personal chemistry, we took money from Britain's largest potato farmer, for example, and a BBC correspondent, which are difficult to justify operationally, but actually they were nice people.

Peter Cowley:                  So, these are all angels at this point. There wasn't any funding there.

Andy Phillipps:                 No.

Peter Cowley:                  So, that was the first 405. When was the next round?

Andy Phillipps:                 Next round was through in October 2000, so about 10 months out, which was much earlier than we expected, and it was basically because when we launched the business ... The original concept, when we spoke to hotels, was that they didn't understand how to get on the internet. I know it sounds ridiculous, in retrospect, and were very nervous about having internet connection because they thought their staff might surf off around other websites. So, we did a deal with Alcatel to provide a thin client, that when you switched it on, it came up with our page. All you could do was add in the availability and check your bookings. And we launched that, we managed to sign up 500 hotels quite fast, and we did a distribution deal with a US company called Worldres, which was pairing ... And again, this dates me. The largest travel website in the world, at that point, was Yahoo Travel, and they were pairing Yahoo Travel in the US.

                                             So, one of the challenges when you're trying to set up a marketplace, is if you haven't yet got any distribution, then why would any hotel work with you? And if you haven't yet got any hotels, why would any distribution partner work with you? So, by doing the deal with Worldres, it enabled us to get some marketing benefits, at least, with hotels. So, we got 500 hotels up and running. We were expecting to be delivering 2, 3 bookings per hotel a month. And when we actually launched, we were delivering .4 bookings per day total. That wasn't per hotel, that was per day. So, we had great margin of about 3 pounds a day, and a cost base of about 35 grand a month. So, we were way off break even, is a polite way of putting it.

Peter Cowley:                  Okay, so you decided that you better go out for more funding.

Andy Phillipps:                 But we didn't have much choice.

Peter Cowley:                  So, you actually went back to your angels, and they come up with some cash, I guess, between them. But that wouldn't be enough. You needed to go after some fund at that point.

Andy Phillipps:                 We went out to funds, but to be honest, the traction we had was so appalling, that it was very, very hard to justify. This was also in October 2000, or September, October 2000. In case you've forgotten, the crash in the dot com market happened in February 2000, so it wasn't a great time to be going back for money. One of the reasons I'm so enthusiastic on angels, actually, is the angels slightly, irrationally, backed us, because our revenue model was very, very far from proven. You know, to put it in context, we'd signed up 500 hotels, which was probably more than had at the time. So, we'd got some inventory, but we hadn't gone anywhere near proving the demand model, and the angels did it out of a combination of hope, and trust in us. And naively, I didn't realize that most angels, when they put money in, don't really expect you to hit the plan. I was deeply disappointing, and apologetic, and groveling. And possibly on the back of groveling so much, they put some more money in, which was, the business would have gone bust without them.

Peter Cowley:                  Excellent. And how much did they put in that time?

Andy Phillipps:                 500,000.

Peter Cowley:                  So, that was another 20 or so months at 25k per month, but you then ramped up costs, I guess.

Andy Phillipps:                 Yeah, so costs gradually went up, and I wasn't paying myself anything in the first year, and Adrian, my co-founder, wasn't either, and that meant that I now had 24 months without salary, and I was beginning to get quite desperate, at that point, you'd be slightly, absurdly so. I was walking down the aisles of the supermarket checking out the cheapest brand of pasta that they had. It just got absurd, and so I went back to my investors and said, "I'm sorry, I need to pay myself something." And they all went, "I'm sorry, we didn't realize you weren't already paying yourself." It was slightly frustrating, I could have taken a salary much earlier.

Peter Cowley:                  We'll come back to how the board was constituted in a few minutes, but just let's carry on the journey of investment. So, you've raised another 500. How quickly was that spent? And when did you decide you need to raise some more?

Andy Phillipps:                 Once we began to work out the dynamics for marketplace, we realized we needed to go reasonably fast, that there's a natural dynamic in the marketplace that once you've got every supplier on your market, then every demand partner wants to come to you. So, there's a natural barrier to entry, but it does rely on scale. So, we wanted to raise significant money. It was a very difficult time to raise money because the stock market was plummeting, and we also began thinking about, we have the Gulf War, we had SARS, we had foot and mouth.

Peter Cowley:                  And 9/11 in there.

Andy Phillipps:                 And we had 9/11. So we went back and our next funding round, actually, was supposed to close on September 12, 2001, and that was a group of VCs, and that was incredibly difficult. I remember, very distinctly, having to give a presentation to Close Brothers on September 12, 2001 and what the impact of September the 11th was going to be on the travel industry, which was, obviously, not particularly well-researched, and it could also predict the answer that I was going to give, was no impact whatsoever, don't worry. But to their credit, they did invest. It took a bit longer, they did invest. And I think they invested slightly less than they were going to.

                                             So, we took another million at that point, and then followed, in about 6 months time, with 1.6 million. So, in two collecting, we raised 3.7, from memory.

Peter Cowley:                  In the period of about 2 and a half to three years, so quite a short time, really.

Andy Phillipps:                 Yes.

Peter Cowley:                  And that was your last funding round, so that would be in '02, your last funding round.

Andy Phillipps:                 I think it was '01, towards the end.

Peter Cowley:                  Really, and you exited in '04 didn't you? And your growth was stellar. You mentioned earlier on that 43x in two years, was it? You were growing 43 times revenue?

Andy Phillipps:                 Yes, and you can read two things, that we were growing very fast. You can also read that we were very small at the beginning of that growth. The denominator was quite small, but yes, we did grow very fast. And I think when we sold, we were still growing at a couple hundred percent per annum.

Peter Cowley:                  And you were profitable?

Andy Phillipps:                 Yes, which I didn't realize was so unfashionable at the time. We had some brilliant non-execs on the board, who could see through the hype, at the time, and said, "Ignore it. Focus on what makes a good business. Make sure the underlying economics were pretty well. You don't build in excessive costs into the business, and you set up for scale." And it's really, really good advice. It's hard when someone is throwing millions upon millions at a competitor to maintain those business dynamics, but actually, because the industry was collapsing. At that time the VC industry was collapsing, very, very few people wanted to invest at that time period. It kind of helped that we had good operational advice on how to grow a business from cash-flow, and as a result, as you say, we got profitable quite quickly. I think it was in 2002, we were profitable.

Peter Cowley:                  So, just three years into the journey? But looking at the accounts, it doesn't appear you reused much of that profit. You were still profitable on top of the profit you reinvested in growth, weren't you?

Andy Phillipps:                 Yes, and in retrospect, I think we should have invested more, but the challenge, and this is a reflection on my inadequacy as a junior exec, if you're earning a couple of hundred percent per annum to launching new initiatives alongside that, requires a lot of bandwidth. And so, I was always nervous that ... And one of the big things I've been taught from my non-execs, and also INSEAD, was focus on doing one or two things really, really well. So, we focused all our resource on that, and actually, many of the other activities ... Like we should have probably have expanded more aggressively geographically. For example, we did very well in France, but we were number 2 in Spain and Italy, and maybe if we had invested more time and more money in that. And I think other areas that I probably would have done better, I probably have invested more in technical infrastructure. We built up technical debt with time, and I wish I could say I'd do that better now, but unfortunately, I still look at my businesses and you still build up technical debt, and you always have a challenge on how to get rid of it.

Peter Cowley:                  It's prioritization and cash availability, isn't it? And market pull, as well. Let's see about people now. So, we're gonna talk about the non-exec board and the investors that came on and helped you. But, let's talk about the staff. How was the growth, year by year, if you can remember, in terms of team size?

Andy Phillipps:                 We were probably 15, or so, in the first year, somewhere around that, and we were very cheap. At the time, I hired everyone, pretty much, from an engineering background. And my engineer now has come to me in software, but actually at the time, it was heavy engineering. And they were fantastic because largely speaking, heavy engineering has been undervalued by UK economy, and they were very cheap, so I could pay them not very much, and they still had a pay rise coming from where they were.

Peter Cowley:                  Where were you based? In Cambridge?

Andy Phillipps:                 Was based in Cambridge, but I hired my old boss, actually a guy called Matthew Witt, who is brilliant and, you know, really held the business together. So, he came in as Chief Operating Officer, and he had managed manufacturing plants with thousands of orders per month, and a couple thousand people, had all the experience, expertise to prioritize, make sure the team is coordinated, make sure the management reporting grows, et cetera. He was a God-send to me, and then balance with that, my co-founder, who was brilliant on coming up with the innovation, the ideas, et cetera. Trouble is, when I talk about this, I try and wonder what I did, actually.

Peter Cowley:                  You sold equity. You had the vision.

Andy Phillipps:                 We got a very good sales guy called Dan Smith, and a very good marketeer called Rebecca Lily at the time, she's since married, alongside [inaudible 00:14:08], who helped us expand into France. So, we were very, very fortunate to get very good people, and relatively cheaply at the time.

Peter Cowley:                  And how many people was it when you exited?

Andy Phillipps:                 About 130, probably around there.

Peter Cowley:                  That's strong growth, because in 4 to 5 years, that's 20, 25 a year you were growing, which is one every second week.

Andy Phillipps:                 Yes, and actually, one of the challenges, or one of the big shifts, having gone bust twice, probably arguably...

Peter Cowley:                  But not really.

Andy Phillipps:                 Probably, actually. There was some challenging moments at least, put it that way. And your culture is very much on conserving cash, and making sure that you're not spending needless overhead. And actually, coming back to your previous point, as soon as you become profitable, we're not constrained by opportunity. The hotel industry in Europe is probably 165 billon or so, so there's a massive opportunity in there, but to change the culture so you are now spending money more readily than you did in the early days. Actually, it took a lot of time saying, "Let's stop faffing about with getting the cheapest brand of photocopier paper. We've got more important things to worry about."

Peter Cowley:                  Right, okay. So, let's talk about the board, and then we'll move on to the exit. So, the board, I think you mentioned earlier, that you didn't actually take on any non-execs for a few months after you started.

Andy Phillipps:                 No, the original board, I think we had a guy called John McCallion, and we had Michael Ullman on there.

Peter Cowley:                  From day one?

Andy Phillipps:                 From very early on, yes. And then in October, and this is blindingly obvious in retrospect, you know, business had been generating 3 pounds gross margin a day. We were clearly not succeeding, and what would be blinding obvious to anybody else, was that we needed some people with hotel experience. The only experience we had with hotels, really, was talking to lots that had been staying in them. So, we went out and we mercilessly tracked down a guy called George Franks. You won't know him, but he was founder of a company called Utel, which at the time, was the largest hotel booking company in the world, and he lived in Woodbridge, and this poor guy, we rang him up and said, this was Adrian's idea I'd like to stress, but we said, "We're in your area tomorrow, could we meet you for a coffee?" And then he said, "I'm busy tomorrow." And we said, "We're also in your area the next day." We literally said, "We're in your area every day for the next month, can we please meet you?" And luckily he laughed, and then met us for a drink, and agreed to join the board.

                                             And the seismic difference in confidence, that suddenly you have someone who has run the largest hotel booking company in the world, advising you in your incipient, rather dwarf-like hotel booking company, you suddenly have confidence to make the decisions. Because if he doesn't know it, chances are it's not worth knowing. So, he was brilliant.

                                             And we also got a guy called Paul Dukes, joined the board, who has been a hotelier all his life, and absolutely knows the economics, the drivers, et cetera, of the hotel industry.

Peter Cowley:                  And the funds? The VCT that you had Close Brothers? They didn't put anybody on the board?

Andy Phillipps:                 They did, but they were happy to be represented by George Franks and Close Brothers were represented by Paul Dukes, so, to their credit, they probably recognized how badly we were doing to some extent. But they recognized that we needed that expertise, and helped us get it.

Peter Cowley:                  Yes, okay. And Michael [inaudible 00:17:00], I have been on a board with, in fact. We interviewed the entrepreneur that was a founder of that company. He is a professor ... He was an entrepreneur for many years, wasn't he? Or he set up a number of businesses, and then he's a professor of entrepreneurship at INSEAD.

Andy Phillipps:                 Yeah, which is where I met him.

Peter Cowley:                  Can you just talk about what value he added during the journey?

Andy Phillipps:                 Enormous, actually. So, as Michael had been involved with lots, and lots of start-ups previously, so he recognized the challenges. He expected it to be chaotic. He had no naivete at all about what was about to happen to me. I had lots, but he didn't have any. So, the sounding board, almost the personal mentorship, was very, very valuable. He also knew about board dynamics and he's got a brilliant business head on him, as well. He can be slightly volatile at times, but there's always sense behind what he's discussing. So, he added a lot of value.

Peter Cowley:                  Why did he join you?

Andy Phillipps:                 He originally, he asked me to make him some introductions to other people in the industry, and I told him I was raising this money here, and I think we were raising money at 2.5 million pre. And he said, "Don't be so ridiculous, and so absurd valuation." And then I said, "I'm sorry, I'd like to have you as a shareholder, but now I'm not going to drop the price." And he went away for 2, 3 months, and then came back at the end and said, "Oh, all right then." And invested anyway. And I'm really grateful he did.

                                             And Michael, in particular, we had times, as I mentioned, where we were absolutely desperate for cash, and him and John McCallion, they put in loans to the company to tide us over the period when we had to pay staff or whatever. And completely irrationally, they did it as a personal vote of confidence in me, but they got no return out of doing it at all. I'm incredibly grateful.

Peter Cowley:                  They got their money back?

Andy Phillipps:                 They got their money back, but they didn't know at the time that they were going to.

Peter Cowley:                  So, Andy, you benefited from a number of great board members. Was there anyone else that contributed to Active Hotels success through their mentoring and advice?

Andy Phillipps:                 Yes, definitely. One of the most influential figures, at least on my early development as an entrepreneur, was Roger Graham, and he was an absolutely fantastic chairman for me. He had the great benefit of he'd run his own business, so he knew exactly what I was going through. And, as an entrepreneur, you particularly value, I'm sure it's obvious, but, you absolutely value the ability to be completely straight, completely honest with another advisor. And that's quite hard to find, because you need a level of trust there that it means, that they're not going to panic when you tell them the problems, the issues, with the business, and Roger was absolutely that person for me. I could tell him pretty much anything that was going on in the business, and he wouldn't panic, he'd give me his advice. And because he'd run his own very successful software business, that advice was hugely instrumental in shaping our vision and our strategy.

Peter Cowley:                  So, move on to exit. So, were you approached? Did you decide to sell? I mean, what was the discussion round the board? Who did you sell to, et cetera?

Andy Phillipps:                 It was a strange dynamic at the time. There was one other company in Europe, a company called Bookings BV, at the time, who we regularly competed for deals with, and for deals, I mean distributors, selling through front-end websites like  in France. And we had some very informal discussions about trying to merge those two companies, and I took that to my shareholders, who were concerned, and rightly so. I mean, we were growing several hundred percent per annum here, and everybody knows that merging companies is very distracting, takes your eye off the ball, and they were probably slightly smaller than us at that time. And so, saying if it's going to take 6 months to merge, you'll have sacrificed 100% growth here, so it needs to be a really, really, really good merger, and it died out.

                                             Over that period, we were being approached by lots of people. So, they're probably confidential, but most of the titans, if you like, in the travel industry. And, as is the wont of acquirers, there's a threat associated with it when you're being ...

Peter Cowley:                  Yes, we'll squash you otherwise.

Andy Phillipps:                 Yes, you either sell to us, or we will beat you up. And whereas there's certain aspects of the travel industry where you can afford not to win, I mean, in hotels you can't. Hotels are really where you make money, so having a competitor who's saying, "I'm going to squash you." Who's got not just tens of millions, probably hundreds of millions to deploy at it, it made me very nervous as a founder.

                                             So, I probably persuaded the board to exit, actually. I was there thinking, whether we have a better, underlying model than, for example, Expedia or one of those people, it's probably irrelevant if they can afford to spend a hundred million killing me. And so, I thought we needed better backing there.

Peter Cowley:                  So did Adrian agree with you on this?

Andy Phillipps:                 Adrian had left by that point. Adrian left in 2003 or so. And Adrian did agree, but probably because Adrian had other ventures he was looking at doing and probably needed some cash.

Peter Cowley:                  Yeah.

Andy Phillipps:                 There's no probably about it--did need some cash. So, he wanted.

Peter Cowley:                  So, you lost your co-founder?

Andy Phillipps:                 Yes, Adrian left in 2003. That's probably a reflection on my lack of ability to integrate here, but he was brilliant and still added massive value after 2003 as well. So, very, very creative. He had founded one business before that, and absolutely knew the ropes, and he was a great asset certainly in the early days of Active. It just wouldn't have happened without him.

Peter Cowley:                  So, did you approach the acquirer, your eventual acquirer? Or did you use a corporate financier to help you with this?

Andy Phillipps:                 I didn't realize at the time, it's quite a typical story, actually. We got approached by lots of people, and then you've got to appoint an investment bank, who then salues the people who have already approached you.

Peter Cowley:                  And charge you for it.

Andy Phillipps:                 Yes, and charge you for it. Again, I'm being slightly flippant. They absolutely helped us with how to position the business and the presentation. It was brilliant.

Peter Cowley:                  And probably the price.

Andy Phillipps:                 It certainly sustained the price during that process. We were slightly hampered, you alluded to it earlier, actually, that we were profitable and we were slightly hampered by the price of an earnings ratio. We could probably have got a higher price if we were loss making, rather ridiculously.

Peter Cowley:                  Exactly. We'll do a blog about that at some point.

Andy Phillipps:                 So, we appointed an investment bank, they ran a beauty parade, and we didn't quite take the highest offer, actually. But, we took the offer where we thought the chemistry was absolutely right, and Priceline, who is the people that purchased, were a brilliant acquirer. They absolutely understood the dynamics of how to work with start-ups. They understood how to structure the deal. Lots and lots of wisdom from Bob Mylod, Jeff Boyd, and Glenn Fogel, who's now Chief Executive at Priceline.

Peter Cowley:                  And how did you work out a price? Was it a bidding process, or?

Andy Phillipps:                 It was a bidding process, run along the normal lines there. The valuation metrics, I still struggle with valuation metrics. It seems to be such a mash of fashion, and you know, the norm at the time. There's also a dynamic going on the other side, that the VC's, in particular, are saying, "You should be able to get more than that, or that's not a reasonable price, or they've got more expertise in that circumstance than you have." But there's no great science to how we came up with the price. We ran the process and we took a price that was at the higher end of what we were offering, as you might expect.

Peter Cowley:                  Did you ever have an earn out, or were committed to stay for a while?

Andy Phillipps:                 We were forced to reinvest 10% and, at the time, lots of my investors had said, "If you're going to exit, exit, get cash." And so I reluctantly reinvested 10%, and it's the best investment I've ever made. It went up by a factor 12, I think, in the first year.

Peter Cowley:                  So, you made more out of the second exit than the first?

Andy Phillipps:                 Yeah.

Peter Cowley:                  Amazing.

Andy Phillipps:                 That's absolutely my best ever reluctant angel investment that I could have taken.

Peter Cowley:                  Excellent. Okay, so this was in late 2004, wasn't it?

Andy Phillipps:                 Yes, that's right. Very worth mentioning is, I ran Priceline, I was Chief Executive of Priceline's international business, which is everything outside the US for the next year and a half, two years, whatever it was. And what generated at that point, was we bought the company we talked previously I mentioned, Bookingsbb, put those two companies together. And again, that was forced by the Chief Executive of Priceline, who said, "If you think this company's so great, put your money where your mouth is." Because I had reinvested several million into the entity, so if you think it's great, put your cash behind it. So, we merged the two businesses and the business has flown since then, and I can't take any credit for that. It's grown, I think it's over 50 billion now.

Peter Cowley:                  Thank you for listening to part one of Andy Phillipps Invested Investor podcast. We have learnt so much about how he formed a hugely successful company, including what makes a business profitable. In the next podcast, Andy will be talking about another company he founded, followed by his transition into angel investing. This will be available on our website shortly, so be sure you are subscribed for our regular content. Thank you.