(MoneyWatch) How often do you listen to your mother when she says "I think there's a business in ... [fill in the blank]." I know I've given my mother the silent eye roll on many occasions. Well, if Jonathan Weinberg, CEO of AutoSlash, hadn't listened to his mother two years ago, he might not be running a profitable business today.
Weinberg was trying to find a deal on a car rental and spent a lot of time digging around for discount codes. "I bragged to my mother that I was tracking the rates, rebooking when a deal came up and saving real money," says Weinberg. That's when his mother suggested there may be a business in this sort of thing. In all fairness, Weinberg wasn't a complete stranger to the travel business. He had worked for a travel deal company called AirFareWatchdog.com for three years until it was sold. Prior to that, he designed real-time trading and analytics systems for a number of Wall Street firms. And, before that, he worked in management information systems at a corporate travel agency.
After investigating further, Weinberg discovered that there is high volatility in the prices rental car companies charge. "People think that there is a standard price and don't realize there is such variability. But rental car companies use 'yield management' software to constantly re-price cars based on daily fluctuations in supply and demand," Weinberg explains. As you may expect, fares go up on a holiday week, but what you may not realize is that car companies often have to deal with no-shows and last minute cancellations. Those factors can suddenly drive prices down. That's where AutoSlash comes in.
Customers reserve a rental car directly through the AutoSlash service at the then-prevailing price. The AutoSlash software then constantly "watches" the local prices, monitoring for sudden changes as well as new discount codes. Once a better price pops up, AutoSlash automatically re-books your reservation at the lower price. When you arrive at the rental car counter to pay for your car, the car has already been seamlessly re-priced.
Weinberg has a strong independent streak that has sometimes worked against him. When he first launched AutoSlash on Travelocity, he didn't inform any of the rental car companies of his plans. Suddenly, droves of travelers began getting discounted rates and the car companies were caught off-guard. They quickly protested, sending cease-and-desist letters to AutoSlash and Travelocity. "I had a choice at that point," says Weinberg. "I could have thrown in the hat or hired a lawyer." He did the latter, worked on improving relations with the car companies and now business is booming.
Watch the video to find out Weinberg's thoughts on growing carefully, being a lean startup and, of course, the importance of risk-taking: