How I Started A Multimillion Business Offering Walking Tours
Hello! Who are you and what business did you start?
Hi. My name is Paul Bennett and I’m a co-founder of Context Travel. Context connects intellectually curious travelers with local experts in cultural capitals around the world for walking tours.
Context’s core product is small-group and private walking tours. The small groups are super small—six people max—which means that they are incredibly hands-on and personalized. They actually feel nothing like a normal walking tour (which I hate, by the way) and something more like walking around the city with a wonderfully conversational professor who knows everything there is to know about Rome, London, Shanghai, or any of the 65 other cities where we operate.
We grew Context from zero to multimillion in revenue over a decade until we took investment and stepped back from the day-to-day in 2018. Today I sit on the board, mentor other entrepreneurs, and am working on a new start-up.
What's your backstory and how did you come up with the idea?
My wife, Lani, and I started Context after fleeing the dot.com crash on a sailboat and sailing across the Atlantic to the Med. After 18 months of voyaging, we landed in Rome penniless and expecting our first child. You’d think that starting a business would be the last thing in the world we’d want to do in that situation. But, in fact, we had nothing to lose and our risk appetite was pretty great.
Rome is an amazing city for several reasons, one of which is that it’s home to hundreds of Ph.D.-level experts in art, history, and archaeology. Since we were perpetual travelers and knew a bit about the travel business (before starting Context I was a journalist, working for National Geographic and a couple of travel magazines), we started connecting these local experts with visitors to the city, and Context was born.
We knew right away that we were onto something when the emails started flooding in from travelers who’d been on our tours telling us how we’d transformed their travel experience. We began planning for expansion right away.
Take us through the process of designing, prototyping, and manufacturing your first product.
Starting a business in Italy is tough, so we opted to found Context as a U.S. business. But, being based in Rome with our customers based in the U.S. meant that everything was remote and time-zone challenged, which in turn meant lots of middle-of-the-night phone calls.
Since we were completely bootstrapped Lani and I, along with a very small group of early employees—some of which are still with the company—did everything. Lani has a background in art direction and website building, so she handled the brand and building the website. I focused on everything else: marketing, customer service, recruiting the experts (the product)... you name it.
Context is a service business, which means it’s 24/7. In those early days, we had an emergency phone, which was literally a mobile phone that we would pass around the three or four employees, on which we’d field all the “I’m lost and can’t find my expert” calls. One year early on the whole team decided to run in the Rome marathon. Since there was no one to hold the phone I tucked it into my running shorts. Just after the starting gun I got a call from someone lost at the Vatican and had to get that sorted while huffing along the first miles. We still chuckle about it.
It’s these kinds of experiences that bind a team together early on.
Describe the process of launching the business.
We had no strategy at launch other than the knowledge that we had a killer product. We were early in the market for walking tours, which was a very localized service, and so did very well with SEO in those early days. As we grew and expanded I learned a ton about digital marketing and eventually built an acquisition marketing strategy that included paid advertising (SEM, social) and content marketing (email). I learned it all by necessity and on the fly, which I believe lend themselves to efficient learning.
We started Context long before Shopify and other platforms, and since we had a complicated model involving multi-vendors (the experts) and an appointment-based product (the scheduling of tours) we had to build our own custom app. We began with single freelancers—U.S.-based and India-based—and went through dozens of iterations and a couple of big stack changes over the years until we eventually grew enough to build our own engineering team.
This was an expensive route to follow, and not one I would pursue today given all the options at hand for running an eCommerce business. But, it was all we had in 2005.
We financed the business mostly out of revenue, dipping into personal credit cards when necessary to smooth out cash flow. This is a tricky road with a lot of risks. However, it also meant that Lani and I owned almost 100% of the business when we finally exited.
Since launch, what has worked to attract and retain customers?
Context’s biggest customer magnet is word of mouth, and it has always done an incredible job of blowing peoples’ minds. I can’t tell you how many emails we’ve received or TripAdvisor reviews start with something like, “I thought I was just joining an expensive walking tour, but by the end, it felt like I’d gone back to college to spend three hours with a really engaging professor.”
Super happy customers tell other customers. It’s a pretty simple strategy. Throughout our history, word of mouth has accounted for about 50% of our business.
I always urge entrepreneurs to prioritize marketing and customer acquisition, as it’s impossible to grow a business without it. This is something you want to be ace on.
Tour operators—which is sort of how Context gets categorized—generally realize the majority of their revenue through indirect channels like travel agents. We resisted this for many years and focused on direct to consumer. Eventually, once we had a strong brand and had figured out the product we went to the indirect market and started selling to travel agents. We built a smart sales team, and had a lot of success here, which meant a lot of solid growth in the last years, ahead of investment.
How are you doing today and what does the future look like?
By 2017 Lani and I were looking for a new challenge in both life and business. So, we decided to find a buyer for Context. We spent two years pitching the business and entertaining offers. We turned down a lot of low-balled, multiple EBITDA offers. We were also super clear with potential buyers that we would stay on for a short while, but we wanted to exit the day-to-day within a few months of a deal. This condition meant that we had a smaller set of suitors. But, by investing in the process and having a lot of conversations, we ended up with multiple bidders, which any investment banker will tell you is the optimum situation.
We went with a UK-based growth investor called Active Partners who specializes in consumer-facing businesses and were in great alignment with our values and perspective. They also had the best offer. Negotiations and diligence were a bear, as they always are; but, by September of 2017, we had a contract. By June the following year, we had a new CEO hired and I was out the door.
Since then, we’ve been living on a sailboat in Southeast Asia with our three daughters and working on our next startup. I still sit on the board of directors at Context and work with the senior management regularly on all sorts of matters.
Travel was hit hard by the pandemic. Luckily, Context had an agile team in place and moved fast into a new line of business: Putting its experts online and running remote learning experiences called Context Learning. In less than 12 months we’ve built this into a multimillion-dollar business. The next question will be how to integrate this digital travel or learning experience with our traditional walking tour business when travel comes back. There are some super exciting possibilities to extend the customer lifecycle.
Through starting the business, have you learned anything particularly helpful or advantageous?
I’m a firm believer in the entrepreneurial process. It forces you to be a lean thinker, but also to contemplate widely.
One big pitfall for founders is falling into a navel-gazing rut since you are working in the business and so close to the details. Lifting your head to see the wider context can be difficult, but there are some hacks. One that I like is hiking. Getting outdoors and huffing and puffing your way up a mountain is a great way to forget about the details and contemplate larger issues like market positioning.
Another hack is chatting with peers. In a small business, you spend most of your time with staff or selling to customers, and not a lot of time talking to other business leaders—either in the same space you occupy, somewhere adjacent, or even in entirely different industries. But, these kinds of conversations are super valuable for helping you keep perspective.
What platform/tools do you use for your business?
We’ve used everything in Context. As I mentioned above, the core business runs on a proprietary app. However, the new digital business runs on Shopify, which I love. We used Mailchimp for email marketing for years, but now use Drip because its automated features are a little more robust.
We had a cautionary experience with Salesforce, and I would avoid that CRM like the plague. It’s a horribly run company with a terrible product. Also, it’s crazy expensive. I would lean on less expensive alternatives like Yesware or Hubspot.
In my next startup, we’re using WordPress and its amazing ecosystem of plugins. WordPress is giving Shopify a run for its money. (Note, beware of Hubspot for Wordpress. It slows down Wordpress sites and isn't a good solution there.)
What have been the most influential books, podcasts, or other resources?
I love Marc Randolph’s That Will Never Work, about the founding of Netflix. Marc’s a Context client and smart, scrappy entrepreneur. Although he’s built huge companies his advice is quite applicable to small business makers.
The NPR podcast How I Built This is inspiring and full of lots of nuggets. It’s like getting some free mentoring.
Advice for other entrepreneurs who want to get started or are just starting?
Since stepping back from Context I’ve started working with a couple of founders who are working through similar issues that I’ve faced on my journey. The most successful ones stay hyper-focused on the customer. Part of this means obsessing about the product. But, for me, it’s important to understand that the product serves the customer. It’s secondary.
Conversely, it can sometimes be easy to find yourself in a product echo chamber where it’s just you and your assumptions about what works. That’s a big danger zone. You never want to forget about the customer; and in fact, you should use the customer—why she buys your product and how she uses it—as the lens for thinking about the product.
Founders in small businesses have to juggle a lot of things. Inevitably you have to choose where to focus, and what to (partly) ignore or at least put aside for later. I always urge entrepreneurs to prioritize marketing and customer acquisition, as it’s impossible to grow a business without it. This is something you want to be ace on.
I also see a lot of founders spend a ton of time focused on investors, pitching, and raising money. I understand that. A lot of ideas require capital. (Not all, mind you.) But, I think we’ve built a bubble-like sexy ecosystem of VCs, big checks, and silly valuations that beguile some founders early on. You can waste a ton of time on this when, in actuality, you should just be building, selling, and learning. In some situations, the longer you can starve the business for capital, the better.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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