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Las Vegas Review-Journal Nevadan at Work column
[July 26, 2006]

Las Vegas Review-Journal Nevadan at Work column


(Las Vegas Review-Journal (KRT) Via Thomson Dialog NewsEdge) Jul. 24--Ben Rafter has spent his career pioneering on the frontier of Internet commerce.

Rafter started his career in Seattle with Westin Hotels & Resorts, where in 1994 he helped the company develop its first online booking site.

Rafter blazed trails again in 1996 when he co-founded LiveBid, an Internet company that streamed live auctions from around the world. Among the auctions the site hosted were sales of the Batmobile from the 1989 movie "Batman," items from O.J. Simpson's estate and artifacts from the Titanic. In 1999, Rafter and his partners sold LiveBid to Amazon.com. He re-entered the online travel industry in 2001 when he went to work for Get2Hawaii, an Internet booking engine.



A year ago, Rafter took the helm at TravelWorm, an 80-employee company that sells hotel rooms, airline tickets and vacation packages online. Las Vegas-based TravelWorm sells about 500,000 room nights a year, which places the company among midsize online travel agencies, Rafter said. TravelWorm's active marketing database includes nearly 1 million consumers, and two-thirds of the company's business involves travel to Las Vegas.

QUESTION: In 1994, when you started developing the first Internet site at Westin, travel search engines were scarce. What gave you the idea?


ANSWER: That was the technology side of me coming through, saying, "We need to do this." Of course, the marketing executives at Westin wanted to know how we could make money off this thing called the Internet. And we were both right: Clearly, the Net was going to be huge, and clearly, in 1994, it was very difficult to make any money off it.

Q: Were you one of those creative tech types who didn't want to worry about a specific business plan for making money?

A: That's where I think going the business and communications route (at school) helped, because you have to look at everything in terms of what you can make from it. It may not be money, but you have to quantify it somehow to look at the potential.

The difference was, I was looking five years down the road, and what I didn't understand back then was that people are looking at budgets six months to one year out. That's one of the reasons a lot of entities have trouble innovating. When you're a small startup, you can look two years out and build as the market changes. A Fortune 500 business is generally looking at its budget for the year, with all the processes built around it. That makes it very hard to continually innovate.

Q: What has been the biggest obstacle in all your businesses?

A: Harnessing growth and innovation. You have idea people and you have execution people, and you have to build a company in a fast-moving environment. Convincing people why your project is better or different is also hard. Raising capital the first time is always hard.

When I was 23 or 24, I didn't want to think about processes or human resources, but you need some semblance of structure so you can get your work done. I always wanted to be out in front saying, "We should be doing this or that," and there always needs to be somebody else saying, "OK, here's how we're going to execute on that plan." And I appreciate whoever that is in any entity, because it's harder to execute an idea than it is to think of one.

Q: Las Vegas doesn't have the venture-capital community of more developed states. How can local businesses raise startup money?

A: They should create their own group of angel investors and local individuals who have the capital and maybe have not made angel-type investments. The models that have worked have involved partnerships with successful companies or people who founded successful companies who are now looking to seed new companies.

We have good proximity to (venture-capital) markets in California and Washington. It seems there would be some interest in investing in Las Vegas.

Q: Could Las Vegas develop a mature tech sector similar to California's?

A: Not yet, but there are a lot of good assets here. Even in the hospitality industry, there's a lot of innovation. And compared to San Francisco and Los Angeles, Las Vegas is a lower-cost place to live. You start building on those assets and the pieces can fall into place.

Q: What cautionary advice would you give entrepreneurs about avoiding startup mistakes?

A: Don't be afraid to solicit opinions. A lot of people, particularly in technology and particularly when they're young, think they know a lot about their field, but there's always a wealth of information other people have.

And finding the right balance between how quickly you can grow a company and how much structure you need to support that company is a challenge. That personally was a learning curve. With LiveBid, we wanted to grow so quickly, and there wasn't much infrastructure behind it.

If you have a great idea and you want to build a company around it, make sure you have a good network of people you're getting opinions from. They can help in so many different ways, from raising capital to offering new business ideas.

Q: What's next for the online travel industry and TravelWorm?

A: We need to be able to sell the whole experience online. More complex vacations -- say, spending two weeks in Europe, with half your time in a hotel and the other half hiking -- are very difficult to purchase online right now.

There's also a lot of interest in social-networking sites (such as My Space and Friendster). Tying demographics to social networking and content creates a new way to reach out to consumers.

I would like to see us bring that together and offer recommendations. There may be a person from Vancouver, British Columbia, for example, who's never been to Las Vegas before, and someone else on the site who has purchased from us before roughly fits the same profile and says, "Well, knowing the city, here's something that will make your Las Vegas experience the best."

Q: How much untapped customer potential is there in online travel?

A: Travel is one of the most mature online-commerce segments, but there are still millions of people who aren't buying travel on the Internet. There are millions more who have dabbled with buying an airline ticket but who could go to the next step to booking packages. There's untapped potential in serving new customers and expanding the experiences of existing customers. My take on it is, getting my parents to buy an airline ticket online was the first step. The next step is to say, "Hey, buy the whole vacation online."

Q: Is Las Vegas TravelWorm's fastest-growing market?

A: No. We offer what we call sunshine markets, which include Hawaii, San Diego and Anaheim. Growth in some of those markets is in the triple digits.

Q: Does that mean the popularity of Las Vegas is slipping?

A: Las Vegas is definitely not losing consumers, and our bookings to Las Vegas continue to grow. The growth in our sunshine markets is driven by our customers' saying, "We liked what you offered in Las Vegas and Lake Tahoe -- what can you give us in San Diego?"

Las Vegas is sort of its own planet. People always want to come to Las Vegas. But people won't come to Las Vegas four times a year. Maybe they'll come to Las Vegas twice a year, and they'll go somewhere else twice a year.

Q: You plan to stay in Las Vegas a while. Why?

A: There's so much opportunity and excitement in Las Vegas. Perhaps five or 10 years down the road, a group of people in this town could get together and generate dozens of other ideas that could flourish here. I can't complain about the opportunity in this city.

As an entrepreneur, to see that excitement and to see the capital and technical resources here, you know people can create new companies, new jobs and, more importantly, new ideas. It's a very idea-driven place.

VITAL STATISTICS:

--Name: Ben Rafter.

--Age: 34.

--Occupation: President and chief executive officer, TravelWorm.

--Quotable: "A lot of people, particularly in technology and particularly when they're young, think they know a lot about their field, but there's always a wealth of information other people have."

--Position: President and chief executive officer, TravelWorm.

--Family: Wife, Kari.

--Education: Bachelor of communications, University of Washington

--Work history: Marketing and distribution, Westin Hotels & Resorts; founder, LiveBid; president and chief executive officer, Get2Hawaii; director, Innovation Center and NewCo Solutions practices of Cambridge Technology Partners.

--Hobbies: Traveling, food and wine, collecting and restoring vintage German cars from the 1950s and '60s.

--Favorite book: "The Great Gatsby," by F. Scott Fitzgerald.

--Favorite movie: "Rear Window."

--Hometown: Seattle.

--In Las Vegas since: 2005.

--TravelWorm is at 6280 S. Valley View Blvd., Suite 502 and can be reached at 407-8000.

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