1930 Frequent Flyer Point
Publications: InsideFlyer magazine, Milepoint online forum, Boarding Area blog site
Members: 75 million members earning 650 billion frequent flyer miles per year
Employees: 13 local, 25 total
Randy Petersen started his multi-million-dollar Frequent Flyer Services business with $800, an idea and little else.
He never borrowed a penny and built his headquarters, persuading the city to name the street for his business, at 1930 Frequent Flyer Point off Powers Boulevard, before there was much of anything on the east side of town.
Petersen said he invented an industry. He built a business around advising frequent travelers on how to earn award points faster for free travel from loyalty programs.
Now he’s starting something new.
“This is my most personal project,” he said.
His company is sponsoring Launchpoint, which will award $50,000 to an edgy entrepreneur with a travel-centric business idea. The first of two qualifying competitions will take place in Washington, D.C., later this month. He’s solicited nearly $10,000 in in-kind travel for the winner from sponsors like Delta Airlines and Marriott Hotels. And he’s just started asking for sponsors, he said.
“It’ll be like Shark Tank meets American Idol,” Petersen said.
The idea is that entrepreneurs will prepare their business plans and have a few minutes to present them in front of an audience of 600 of Petersen’s frequent flyer customers, who will vote for the winner.
The project is Petersen’s way of giving back. He’s had a lot of success. And looking back from where he is now, he’s proud, humble and even a little surprised. Now he wants to help someone else get started.
“I was just a guy who worked at a men’s clothing company in New York,” Petersen said. “And like a lot of people, I had aspirations of one day traveling a bit.”
But he traveled for work in the early 1980s, when airline and hotel loyalty programs were getting started, and spotted a beautiful picture of Hawaii in the in-flight magazine that said ‘if you do this and this, you too can go to Hawaii for free.’
“So, I did this and this and I ended up in Hawaii,” Petersen said. That made him the most popular guy around the watercooler at work. People started asking for so much advice about frequent travel programs that he felt he was neglecting his work tasks.
But when his boss came to him and asked about the ritzy Marriott rewards program, the light bulb went on. If Petersen’s smart, wealthy boss needed help navigating travel rewards programs, there was a business in it.
He wrestled his way out of his steady job with the idea to make a newsletter. He had no writing experience and had never touched a computer. But he had seen an Apple commercial advertising the power of desktop publishing.
“I woke up Monday morning and thought, ‘What the hell did I just do to myself?’”
He had to make it work. So he cut out pieces of information from different travel programs and pasted them to some blank pages, photocopied them and folded them up like a newsletter.
“It looked like a bad ransom note,” he said.
He wandered the terminals of JFK and Newark airports asking travelers to sign up for his newsletter. He kept changing the price until he settled on $12 a year. But New York was expensive for a fledgling startup owner. Petersen loaded up a car and went west. He stopped over in Colorado Springs and decided to stay.
He bought a ranch in Peyton in 1986 and his newsletter quickly turned into InsideFlyer magazine. He was online before most people had computers, selling content to Newsnet and Compuserve starting in 1987, then to AOL. He had his first website up in 1995.
The same year, he launched Flyer Talk, an online forum for frequent flyers. “A lot of people say I invented social media,” Petersen said. But he had to take it down after four months because it filled up with inappropriate sexual messages that took hours to delete.
“But I still thought I was right,” he said.
He re-launched it, creating one of the most popular online forums in the country, though Petersen sold it four years ago.
After the noncompete period was up, he created a new online forum — Milepoint, which he said is growing faster than Flyer Talk did. “And it’s harder today,” he said. “There’s so much out there.”
His Boarding Area, which he started five years ago, offers a menu of blogs for frequent travelers. The site gets more than 50,000 unique hits a day, he said. When he started it, everyone told him to stick with the forums. Boarding Area is now his No. 1 property.
“When you’re looking for information, there are 714 posts on a forum,” he said. “Tell me which one is the right one. I don’t want your idea of the answer.”
Blogs have become increasingly popular, he said. The magazine subscriptions have fallen off. They’re down to 70,000 now; they were double that in 2005. The online products outshine it.
“I have always created my own competition,” Petersen said. “Sooner or later competition is going to come. You might as well be the competition.”
Right now, he’s preparing for the Freddie Awards, a people’s choice awards gala for travel rewards programs that Petersen created in 1988 because he didn’t want to have to say himself which programs were best.
There will be 400 travel industry executives gathered at the Washington, D.C., event sponsored by USA Today.
He had 700 travelers vote that first year. This year, there were 3 million votes. “When I first started this, my friends and family all told me to go get a real job,” Petersen said. “Now the whole world wants my job.”
He has 27 million frequent flyer points and travels to Paris, Amsterdam, Dubai and Brazil to meet with travel executives.
“My parents always told me I’d meet a lot of smart people, smarter than me,” he said. “The trick is to never let them outwork you. My whole thing is to be the first one to turn on the lights in this place and the last one to leave.”