Lastminute.com: Brent Hoberman

Mr Lastminute is living up to his name. Brent Hoberman is late for our meeting. But then for someone who has only just relinquished his ties with the online travel and leisure website he founded in 1998 – stepping down as part-time chairman in January – and who, in theory, is at liberty to enjoy some of the reputed £26m he has made from it, Hoberman is a remarkably busy man.

As well as his recent appointment as non-executive director of the Guardian Media Group, he’s on the eSuperbrands Council, governor of the University of Arts London, an active angel investor in several internet businesses, has set up networking organisation Founders Forum, and was just made chairman of WAYN, a social networking site for travellers. And that’s before we get to project X, but more of that later.

 FAST-MOVING ENTREPRENEUR

Hoberman has packed more into the last decade than most businessmen do in a lifetime. Although it seemed that Lastminute emerged seemingly fully formed in 1998, the business plan had been in gestation for two years. During that time Hoberman worked in various technology strategy consultancies where he specialised in future gazing on the effect that the internet would have on business.

In between telling corporates how the web would change everything, and helping launch auction site QXL, Hoberman met Martha Lane-Fox, his accomplice at Lastminute.com. “The ability to raise £600,000 was not as simple then as it would be today,” he says. “We were one of the earliest consumer-brand internet plays. By using the power of the internet to match buyers and sellers we were able to add value to both.”

Although keen to play down the idea that he and Lane-Fox were trendsetters for a new type of business, Hoberman admits that they didn’t play by the established rules. “I think we did bring a sense that you could just ‘do it’ to business, and that it could be enjoyable,” he says. “We showed that you could launch a consumer brand from scratch, and that the internet enables you to do it much faster.”

DOT COM PIONEERS

Indeed, Lastminute can be seen as a pioneer for the look and feel of many of the websites that are successful today. It wrestled the internet experience from the tech geeks and made the web a more friendly place. Simple ideas, such as emails that made helpful suggestions on what to do at the weekend, as well as functions like the ‘boss is watching’ button, linking immediately to business-like charts and graphs, presented a more playful technical experience.

Hoberman was just 29 when Lastminute started, and Lane-Fox, 25. Part of their success came from an ignorance of what they were letting themselves in for. “If we had known then what we know now, maybe we wouldn’t have done it,” says Hoberman. “But there’s a great power to start-ups. You always think that it’s the giant companies that will do what you are doing, but they fi nd it harder to move on a dime as Bill Gates said. They don’t take risks. I saw it when I was consulting on VoIP [voice over internet protocol] for Cable and Wireless in 1996 and they said it wouldn’t happen.”

Hoberman’s business outlook has been shaped by the Lastminute experience. Starting the business, he says his core skills were refi ning the application of technology to solve consumer needs, something still close to his heart. Quickly he had to develop his sales pitch to a whole host of parties. “We were selling to employees, suppliers, marketing partners and consumers and saying that it was going to be big,” he recalls.

As the company grew quickly, Hoberman had to develop “lateral problem solving skills”. He delegated where his own skills were not honed. “I don’t love managing lots of people and we ended up with 2,000,” he says. “There were better people in the organisation than me at that.”

GOING PUBLIC

Another skill he had to develop quickly was the ability to deal with the media. The company, which skillfully used interest in its sexy, young founders and their business model to build a high media profi le, soon found it was a double-edged sword after it listed in 2000 and came under greater scrutiny. As the share price plummeted from £5.55 to 17p, they were seen as epitomising the bubble economy.

Yet even when the share price was below cash, Hoberman insists he did not panic. “Core investors stuck with us,” he says. “I was surprised at how many people thought the business was performing terribly, yet we were ahead of plan and still had £50m in cash. I suppose that’s the hard thing about running a public company.”

Like everything Lastminute did, its growth strategy was also on fast forward. Although it bought 14 companies during his time as chief executive, Hoberman says it’s unfair to say it bought growth. “It was responsible for about half of our growth. Organic growth excluding this accounted for about 100% a year,” he explains. “It wasn’t just about financial engineering.”

The deals helped give Lastminute the scale it needed to compete against bigger players such as Expedia. “Strategically we needed to do it and some deals were better than others,” he admits. “There are a couple that we maybe shouldn’t have done, such as Travelprice in France, but others like Med Hotels were superb in what they brought to the business and they all had good strategic rationales at the time.”

Having built the business from scratch, the sale of Lastminute to Sabre Holdings in July 2005 for £577m was an impressive piece of business, considering the company had made a £77m loss in 2004. Hoberman says the deal was good value for shareholders and that the business was stalked by several possible buyers. “We had scarcity value at the time,” he says. “We had good hotels and car rental businesses rather than just relying on low margin fl ights. We had a strong brand across Europe and Travelocity did not have that scale.”

LEAVING LASTMINUTE