The Business Traveller
Tony Wheeler and his wife Maureen started Lonely Planet, now the world’s largest independent guidebook publisher, in 1973. In 2007 the company was sold to BBC Worldwide for £89 million, with Tony and Maureen retaining a 25 per cent stake. Here, Tony reveals how his relaxed, unorthodox, but fair-minded approach to business has paid dividends.
(Interview: Andrew Geekie)
In 1972 [my wife] Maureen and I were living in London. I had just finished an MBA at London Business School, so we decided to take a year off and travel around the world to get travel out of our system – which didn’t exactly work! We set off from London with not much money, the plan being to end up in Australia, spend three months there, and then head back to London where I had a job waiting for me. In actual fact we stayed in Australia for a year and then travelled around Asia for another year after that. When we returned to Australia afterwards, so many people there wanted to know our story and what we had done that we decided to write a book about it – our first Lonely Planet guide. We published it ourselves and to our amazement it was an instant success in Australia and New Zealand. We then decided to write another one about Southeast Asia, which had almost no tourist books written about it. Once we had been there and done our research, we ended up writing the book in a hotel room in Singapore.
We had decided to base the business in Australia. It was where it had started and we had good contacts there, so we set up an office. New businesses don’t start by themselves – if it’s the right time for something, it will happen. Look at low-cost airlines – suddenly Ryanair and EasyJet appeared at the same time. There’s always a right time for certain types of business to come along , it’s just a question of who’s first. In travel books we were the ones who got there first and were therefore able to grow faster and become the recognised name, but if we hadn’t done it, someone else would have. The early stages were pretty much hand-to-mouth – we would get money from one job and use it to pay for another one. It was very gradual, organic growth and we had to be very tight with money at that time. I remember seeing friends who I’d been to business school with driving around in BMW company cars and I was still getting by with a crappy old Ford Cortina. But the fact is, if I’d had an extra £1,000 I’d have sent someone off somewhere to write another book.
Those early days were really about laying the groundwork for the company. We knew every aspect of the business at that point – we researched books, edited them, drew the maps, designed the covers and layouts and went round bookshops selling them. I think that’s something important for small business owners to do – I think that a lot of the companies that started in the dot.com boom were being run by people that didn’t know the ins and outs of their own business, and although they sometimes shot up in value overnight, things often went wrong afterwards. We were much more a snowball going down a hill – it took a while to get rolling, but we gradually got momentum.
There was a period in the mid-80s when we had got to a reasonable size – by that I mean we had a half dozen or so employees and our bills were being paid without us having to sweat about it. Maureen and I moved to the US to set up an American office, and that turned out to be a wise move. America was a huge market and we weren’t covering it properly before that, so by moving out there we really did tap into that market in a much bigger way. From that point in the mid 80s, right through to the 90s, we grew incredibly quickly. Journalists would ask how many people we employed and I’d say, “We’ve got around 30 staff,” and someone would shout over to me that it was actually 50. The key was finding those bigger markets, doing the groundwork and then giving customers what they wanted.
We didn’t think it all out very well at that point. Just before we decided to open the US office we had a meeting with a chap who’d become our business partner. Like all meetings at the time, it took place in a pub near our office. I’ve still got the minutes for that meeting, they go something like: “Go to America. Buy a car to drive around in. Find an office. Sell a lot of books.” That’s about as far as our strategy went.
We became more professional as time went on, but we were still a bit slow in some respects – we should have had an accountant years before we did but despite that, our books sold well and we kept having success.
We had done guide books on everywhere and they had generally all been a success, but we needed a new market. In the 90s we decided to launch cycling guides to various countries – the books were drawn up and we started to go into production. When I looked at the printer’s proofs I noticed that they were beautiful, complete with contoured maps and lots of colour photography. I couldn’t believe they had been brought in on budget. Then, after some further investigation, I found out that they weren’t on budget at all and that we would need to sell them for something ridiculous like £100 per book to make our money back! I can tell you that a few people got fired over that, but it was a real wake-up call for Maureen and I that we needed to run things a bit more professionally. We hired an accountant and made sure that people were given strict budgets to stick to.
It had been a conscious decision from the beginning to look at other ventures to complement the core business of books, but for quite a while it seemed that, no matter what we tried, the books kept making money and the other products struggled. Now it’s more important than ever to diversify, and we’ve achieved success with our digital offerings. We always had an excellent and popular website, but its taken a lot of time and effort to get to the stage now where we make money from it. We’re also doing very well in iPhone apps, which came out of nowhere in a business sense, but have been profitable for us.
Maureen and I had never gone into business to make lots of money, or with the idea of selling up in the future, but there comes a time when you do start to think that it might be time to sell up. We were getting older and we didn’t want to run the business forever. The future of the business is much more in the digital side of things and that wasn’t our area of expertise or interest. We started looking for an outside partner – someone who could afford the business and also bring in the expertise needed to drive it forward. We received a lot of interest because of the success we’d had and there was a mixture of potential buyers, some of whom would have made good owners and others who didn’t fit with our culture at all. In the end the BBC showed up and they were the perfect fit for us, and the deal they offered made sense.
It was simple on our part, but the BBC is a huge organisation, so they had a lot of Is to be dotted and Ts to be crossed. They had a huge team of analysts going over every last detail of our business, while we were much more relaxed and were happy to let the BBC go through our books in detail and ask what they wanted. But overall it went through without any major disagreements, so we both got what we wanted.
I was very open-minded about that. If the BBC had wanted me to walk away I would have done that, but equally if I thought I had a useful role to play – which they felt I did – then I was happy to stay on.
I don’t think Lonely Planet has changed much at all – BBC Worldwide has put resources into the digital side of things, but the book side of the business is pretty much the same.
Do it because you love the business you’re in and not because you hope to make lots of money in the long run. I don’t think Bill Gates started off thinking he’d be the richest man in the world – he was just a computer nerd who loved solving computer problems. If you have a passion for what you do and you really believe in it, then you’ll have no difficulties making other people believe in it either.
I’m obsessed with the subject matter of my business – I love travel. I’m also good at delegating tasks to people who will do a better job than I would with them.
Because we sell products in a few countries where it is notoriously difficult to get paid, we have to deal with customers carefully. I remember one business that bought from us had a bad reputation for not paying quickly, but they always used to pay us on time. They said that they always paid us first simply because they liked us. We had developed a great relationship with them over the years and so we were top of their list for getting paid.
Likewise, we’ve got on well with bookshops and they always tell us that they like dealing with our team. Of course those relationships go the other way – we use suppliers and writers and we always try to treat them fairly, too. It’s important to keep both directions happy – your customers and your suppliers.
Absolutely. You can’t sit around feeling sorry for yourself – if you’ve got through the bad times, you’re in a great position to make the most of any recovery.
Technology is changing and we need to make sure that we take advantage of whatever method of getting travel information out comes along next. Writing will always be around, it’s just the medium that you read it on that may change.
Branding is a word that I don’t like because I think it sounds fake, but I know that people put a lot of faith in our name and reputation. I’m bound to the Lonely Planet name for the rest of my life because I set it up, so it’s important to me that no one wrecks it.
Wheeler's Progress
1973: Tony and Maureen start Lonely Planet Publications to publish Across Asia on the Cheap
1980s-1990s: The company expands into Europe and North America
2005: Tony and Maureen receive the Eric A Friedheim Travel Journalism Lifetime Achievement Award
2007: Sells majority interest in Lonely Planet to BBC Worldwide but remains involved with the company
2009: Sets off with a Lonely Planet TV crew to film the Laos and Alaska programmes for The Road Less Travelled series
Tony's Commandments
This article is taken from NatWest's Business Sense magazine (Spring 2010)
Discuss your business at the everywoman Network
(Interview: Andrew Geekie)
How did Lonely Planet come about?
In 1972 [my wife] Maureen and I were living in London. I had just finished an MBA at London Business School, so we decided to take a year off and travel around the world to get travel out of our system – which didn’t exactly work! We set off from London with not much money, the plan being to end up in Australia, spend three months there, and then head back to London where I had a job waiting for me. In actual fact we stayed in Australia for a year and then travelled around Asia for another year after that. When we returned to Australia afterwards, so many people there wanted to know our story and what we had done that we decided to write a book about it – our first Lonely Planet guide. We published it ourselves and to our amazement it was an instant success in Australia and New Zealand. We then decided to write another one about Southeast Asia, which had almost no tourist books written about it. Once we had been there and done our research, we ended up writing the book in a hotel room in Singapore.
How did you grow the business in the early years?
We had decided to base the business in Australia. It was where it had started and we had good contacts there, so we set up an office. New businesses don’t start by themselves – if it’s the right time for something, it will happen. Look at low-cost airlines – suddenly Ryanair and EasyJet appeared at the same time. There’s always a right time for certain types of business to come along , it’s just a question of who’s first. In travel books we were the ones who got there first and were therefore able to grow faster and become the recognised name, but if we hadn’t done it, someone else would have. The early stages were pretty much hand-to-mouth – we would get money from one job and use it to pay for another one. It was very gradual, organic growth and we had to be very tight with money at that time. I remember seeing friends who I’d been to business school with driving around in BMW company cars and I was still getting by with a crappy old Ford Cortina. But the fact is, if I’d had an extra £1,000 I’d have sent someone off somewhere to write another book.
What were your business strengths at that stage?
Those early days were really about laying the groundwork for the company. We knew every aspect of the business at that point – we researched books, edited them, drew the maps, designed the covers and layouts and went round bookshops selling them. I think that’s something important for small business owners to do – I think that a lot of the companies that started in the dot.com boom were being run by people that didn’t know the ins and outs of their own business, and although they sometimes shot up in value overnight, things often went wrong afterwards. We were much more a snowball going down a hill – it took a while to get rolling, but we gradually got momentum.
When did you get away from the hand-to-mouth stage and really start to grow?
There was a period in the mid-80s when we had got to a reasonable size – by that I mean we had a half dozen or so employees and our bills were being paid without us having to sweat about it. Maureen and I moved to the US to set up an American office, and that turned out to be a wise move. America was a huge market and we weren’t covering it properly before that, so by moving out there we really did tap into that market in a much bigger way. From that point in the mid 80s, right through to the 90s, we grew incredibly quickly. Journalists would ask how many people we employed and I’d say, “We’ve got around 30 staff,” and someone would shout over to me that it was actually 50. The key was finding those bigger markets, doing the groundwork and then giving customers what they wanted.
Did you have a specific growth strategy in those early days?
We didn’t think it all out very well at that point. Just before we decided to open the US office we had a meeting with a chap who’d become our business partner. Like all meetings at the time, it took place in a pub near our office. I’ve still got the minutes for that meeting, they go something like: “Go to America. Buy a car to drive around in. Find an office. Sell a lot of books.” That’s about as far as our strategy went.
How did things change as the business grew?
We became more professional as time went on, but we were still a bit slow in some respects – we should have had an accountant years before we did but despite that, our books sold well and we kept having success.
What difference would an accountant have made?
We had done guide books on everywhere and they had generally all been a success, but we needed a new market. In the 90s we decided to launch cycling guides to various countries – the books were drawn up and we started to go into production. When I looked at the printer’s proofs I noticed that they were beautiful, complete with contoured maps and lots of colour photography. I couldn’t believe they had been brought in on budget. Then, after some further investigation, I found out that they weren’t on budget at all and that we would need to sell them for something ridiculous like £100 per book to make our money back! I can tell you that a few people got fired over that, but it was a real wake-up call for Maureen and I that we needed to run things a bit more professionally. We hired an accountant and made sure that people were given strict budgets to stick to.
Obviously in that case diversification didn’t work out, but how important was it to find new products?
It had been a conscious decision from the beginning to look at other ventures to complement the core business of books, but for quite a while it seemed that, no matter what we tried, the books kept making money and the other products struggled. Now it’s more important than ever to diversify, and we’ve achieved success with our digital offerings. We always had an excellent and popular website, but its taken a lot of time and effort to get to the stage now where we make money from it. We’re also doing very well in iPhone apps, which came out of nowhere in a business sense, but have been profitable for us.
How did the sale of Lonely Planet to BBC Worldwide come about?
Maureen and I had never gone into business to make lots of money, or with the idea of selling up in the future, but there comes a time when you do start to think that it might be time to sell up. We were getting older and we didn’t want to run the business forever. The future of the business is much more in the digital side of things and that wasn’t our area of expertise or interest. We started looking for an outside partner – someone who could afford the business and also bring in the expertise needed to drive it forward. We received a lot of interest because of the success we’d had and there was a mixture of potential buyers, some of whom would have made good owners and others who didn’t fit with our culture at all. In the end the BBC showed up and they were the perfect fit for us, and the deal they offered made sense.
Was it a straightforward deal to negotiate?
It was simple on our part, but the BBC is a huge organisation, so they had a lot of Is to be dotted and Ts to be crossed. They had a huge team of analysts going over every last detail of our business, while we were much more relaxed and were happy to let the BBC go through our books in detail and ask what they wanted. But overall it went through without any major disagreements, so we both got what we wanted.
And you stayed active in the business?
I was very open-minded about that. If the BBC had wanted me to walk away I would have done that, but equally if I thought I had a useful role to play – which they felt I did – then I was happy to stay on.
What has changed since the sale?
I don’t think Lonely Planet has changed much at all – BBC Worldwide has put resources into the digital side of things, but the book side of the business is pretty much the same.
What advice do you have for SME owners?
Do it because you love the business you’re in and not because you hope to make lots of money in the long run. I don’t think Bill Gates started off thinking he’d be the richest man in the world – he was just a computer nerd who loved solving computer problems. If you have a passion for what you do and you really believe in it, then you’ll have no difficulties making other people believe in it either.
What qualities have made you a success in business?
I’m obsessed with the subject matter of my business – I love travel. I’m also good at delegating tasks to people who will do a better job than I would with them.
How would you describe Lonely Planet’s dealings with customers and suppliers?
Because we sell products in a few countries where it is notoriously difficult to get paid, we have to deal with customers carefully. I remember one business that bought from us had a bad reputation for not paying quickly, but they always used to pay us on time. They said that they always paid us first simply because they liked us. We had developed a great relationship with them over the years and so we were top of their list for getting paid.
Likewise, we’ve got on well with bookshops and they always tell us that they like dealing with our team. Of course those relationships go the other way – we use suppliers and writers and we always try to treat them fairly, too. It’s important to keep both directions happy – your customers and your suppliers.
Should businesses be preparing for a recovery?
Absolutely. You can’t sit around feeling sorry for yourself – if you’ve got through the bad times, you’re in a great position to make the most of any recovery.
What’s the future for Lonely Planet?
Technology is changing and we need to make sure that we take advantage of whatever method of getting travel information out comes along next. Writing will always be around, it’s just the medium that you read it on that may change.
How important to you is the Lonely Planet brand?
Branding is a word that I don’t like because I think it sounds fake, but I know that people put a lot of faith in our name and reputation. I’m bound to the Lonely Planet name for the rest of my life because I set it up, so it’s important to me that no one wrecks it.
Wheeler's Progress
1973: Tony and Maureen start Lonely Planet Publications to publish Across Asia on the Cheap
1980s-1990s: The company expands into Europe and North America
2005: Tony and Maureen receive the Eric A Friedheim Travel Journalism Lifetime Achievement Award
2007: Sells majority interest in Lonely Planet to BBC Worldwide but remains involved with the company
2009: Sets off with a Lonely Planet TV crew to film the Laos and Alaska programmes for The Road Less Travelled series
Tony's Commandments
- If it’s the right time for your business idea, it will happen – but you need to act quickly on that idea
- Don’t be discouraged by slow early growth – businesses can take time to flourish and the early stages are about laying the groundwork
- Do your research – its important to understand every aspect of your business in order to succeed in the long term
- Get an accountant! You need to stay on top of your budgets and make sure that your employees do the same
- It’s more important than ever to diversify – look at digital applications for your business and be prepared to put time and effort into it
- If you are passionate about your business, other people will believe in it
This article is taken from NatWest's Business Sense magazine (Spring 2010)
Discuss your business at the everywoman Network