INNOVATORS VS COVID 19
Alexi Vereschaga of AwardWallet Tells Us How the Miles and Points Tracking Startup is Navigating the Challenging COVID-19 Times
First of all, how are you and your family doing in these COVID-19 times?
Alexi Vereschaga: Thanks for asking; we are doing fine given the circumstances. Nobody in our family got sick, but at the same time, we didn’t do any of the things that we wanted to do as a family this year.
Tell us about you, your career, how you founded AwardWallet
Alexi Vereschaga: My name is Alexi; I worked my way through college, so the first time I had an opportunity to start something on my own was after I graduated. I worked for an enterprise software company, and I had a co-worker at the time; his name was Todd Mera. He had different ideas for different products, so we decided to team up and start a company.
We launched a number of different solutions, such as a website for buying and selling horses, we created a website for summer camps to let the parents communicate with their kids, we created software for managing Microsoft virtual servers, we made a website for selling furniture, and among other things we created a service for tracking frequent flier miles and different types of loyalty points. The goal was to increase our chances of success by creating products in completely different verticals. After a few years of running these services, it became clear that AwardWallet (the service that tracks miles and points) became the winner, so we focused on that one service and decommissioned all the other projects.
How does AwardWallet innovate?
Alexi Vereschaga: We are always looking for ways to use the latest and greatest technologies to make AwardWallet work. For example, to retrieve your point balance, we have to parse websites; for that, we needed to take existing solutions (libraries and frameworks) and put it all together for the parsing to work.
There are two ways of how ideas for innovation come to fruition at AwardWallet. First, once we had a working product, we started getting requests for improvements, we listened, and implemented those suggestions thus allowing us to innovate. The second way of innovating is to think abstractly about the features and the data that we already have and try to come up with ideas for what we think our users would want. We’ve been constantly taking both of these approaches to innovation over 16 years of running AwardWallet.
How the coronavirus pandemic affects your business, and how are you coping?
Alexi Vereschaga: Our traffic to the website and our apps fell about 3 times at start of the pandemic. Less traffic meant less revenue. As a result, we had to cut all the expenses that were not necessary, and even with that, the year 2020 will probably end up in the red. The traffic to our website correlates with the amount of travel that our users do. We even created a visual representation of the amount of travel our users do every month: https://awardwallet.com/travel-trends.
Did you have to make difficult choices, and what are the lessons learned?
Alexi Vereschaga: Yes, there were some difficult staffing decisions, and the biggest lesson that I learned so far is the importance of diversifying our revenue streams. We primarily make money in three different ways:
(1) An in-app purchase of AwardWallet Plus ($30 / year). Only about 4% of our users pay, but the ones that do really help to support the business, and even after the pandemic started, this revenue was not significantly affected.
(2) Affiliate revenue. This revenue stream was hit the hardest as advertisers withdrew from the affiliate channels, and as a result, our revenue plummeted 5x. So lesson learned – we cannot rely solely on the affiliate revenue.
(3) AwardWallet API sales. Our technology became less relevant with travel on the decline, so we lost a few API clients. I would say our revenue dropped about 35% due to that, and it is next to impossible to find new API clients for travel-related products during the pandemic (we only signed up one new API client so far).
So the biggest two lessons learned are:
(1) Diversifying your revenue streams helps a lot during times like these.
(2) We should not be relying on the affiliate revenue.
How do you deal with stress and anxiety? How do you project yourself and AwardWallet in the future?
Alexi Vereschaga: To manage stress and anxiety, I try to focus on what I can control and be mentally prepared for the worst-case scenario. Also, having an open dialog about the current state of affairs is vital for both our employees and myself. As far as the future goes, unfortunately, I don’t have a crystal ball, but it seems that the travel is trending up (see chart above) and especially if a vaccine is made available in the near future, I believe travel will return to almost normal levels which is what we need.
Who are your competitors? And how do you plan to stay in the game?
Alexi Vereschaga: AwardWallet does not have competitors when it comes to tracking miles and points, we have partners who use our technology (our APIs) for tracking miles and points on their websites and apps, and we really wish they survive this crisis. To stay in the game, we need to continue making revenue and limit the spending. I think we can do that.
Your final thoughts
Alexi Vereschaga: Thank you for the interview. Please check out some of the amazing tools that AwardWallet built:
https://awardwallet.com/account/list/ – track all of your frequent flier miles and loyalty points
https://awardwallet.com/timeline/ – track and share your travel plans in one place by linking your mailbox and auto-importing your travel reservations.
https://awardwallet.com/merchants – type any name of a merchant and we will tell you which credit cards you should use at that merchant to maximize your reward earnings.
https://awardwallet.com/spend-analysis – link your banking accounts, such as Chase, Amex, Citi, or Bank Of America and we will analyze your past spend and tell you what cards you should use at the merchants that you shop at to get the maximum number of points with the highest value.
https://awardwallet.com/transactions/ – transaction analyzer puts all of your transactions from different cards into the same view with the ability to search and it shows you the totals so that you can see how many points you are earning on average with any merchant and what your potential earnings are.
https://awardwallet.com/mile-transfer-times – if you are looking to transfer or buy points we can tell you the average times it takes to do these transactions.
https://awardwallet.com/awardBooking/add – if you have miles and want to redeem them for a first-class or business class international trip (after the pandemic) you can submit this form and one of our agents can find the best options for you where you spend as few miles as possible and pay as little as possible in taxes.
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