Startup Spotlight: lastminute.com

Startup Spotlight is a new weekly feature on techTrader, focusing on the bright sparks of the UK's Internet startups. Today we talk to Martha Lane Fox, the high profile co-founder of lastminute.com.

lastminute.com has one of the more innovative business models on the Net: it takes advantage of the left-over inventory of entertainment, gift, travel and hotel suppliers, and the real-time nature of the Web, to offer deals that would be difficult to get any other way.

And the world has taken notice. For example, an index of high-tech movers compiled by management consultants Bain recently awarded the first position to lastminute, and an American journalist has called it "the toast of the European internet community".

lastminute co-founder Martha Lane Fox, 26, has had her own degree of fame, doing the rounds of chat shows and even making Tatler's top list of eligible women earlier this month. She spoke to techTrader about the need for an entrepreneurial culture in the UK and her own experiences starting a business.

Do you think that UK venture capitalists are too conservative for technology companies?

I think that the attitude of UK investors is changing. A year ago, very few companies would have taken the gamble of investing in an Internet start-up, but today there are more funds, incubators and niche capital investors.

Will the new techMARK index improve conditions for entrepreneurs here? What else can be done to foster UK technology startups?

The entrepreneur culture in the UK is not brilliant, but is definitely improving for the Internet. We need role models, and an education that encourages those with an entrepreneur spirit to take a risk and give their idea a whirl, without being afraid of failure. The notion of starting up a company needs to be made cool. On a practical level, we also need to be taught to understand options and shares schemes, since the Internet is about making sure that everyone has a share of the success.

Your target audience has been described as closely matching the Internet user demographic. How would you describe your typical users?

Cash rich, time poor people. We are expanding to reach a more mainstream audience though, as everyone likes a good deal.

How would you describe lastminute's goals?

Our aim is twofold. We are the first place to look at the last minute, offering a fantastic service for last minute needs. We also provide a great place to work, which is constantly at the cutting edge.

Where do the bargain prices come from?

lastminute.com offers both good prices and a service that is convenient. The suppliers of all premium products are always left over with 50 to 10 per cent of their inventory at the last minute. We realised that by offering a price that is so cheap, people are encouraged to buy at such short notice.

Who came up with the idea?

The idea came from Brent Hoberman who is now managing director of the company. He was an early doctor of the Web, who understood the most practical applications that can be served by the Internet. The kind of service that we provide cannot be done anywhere else.

I thought that it was a bad idea to begin with that would be impossible to implement. I was also very concerned about the regulations surrounding such a business venture.

How did you raise the venture capital to set up the company?

Brent and I put together a detailed cash flow plan, and presented this to about eight venture capital investors. We knew that there was a high element of risk in the business plan that we were presenting, but we also had a lot of self-belief. We were working under the conviction that big risks reap big rewards.

What is the current market like for buying online?

It is great and growing -- we have a 40 percent sales growth each month. Confidence is growing, and as more great consumer sites are launched, the more inviting the Internet becomes as a marketplace.

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