An Interview with Jay Hoffman
Jay Hoffmann’s first job out of college was as a summer associate in BCG's Chicago office. It was a job that often required up to four days of travel per week, and—as the then 21-year-old Jay was thrilled to discover—one that allowed him to keep his accumulated frequent-flier miles.
“Before I knew it, I had saved up enough miles to travel anywhere in the world. Up until then, I had never been outside of the United States, so I planned an epic travel adventure and set off for Nepal during my A2 year,” said Jay (Chicago, Boston, San Francisco, 1997-2000, 2002-2006).
It was in part his experience traveling as a consultant, he explains, that was to inspire his current entrepreneurial venture, Rocketmiles—a service that lets today’s frequent fliers earn significant mileage by booking rooms at premium hotels in 32 cities across the U.S. Or, as he puts it when explaining where the name came from, “we attach a rocket to your mileage balance and accelerate the amount of time it takes to save for your next adventure.”
Jay’s professional experience also includes three years with United Airlines’ Mileage Plus program and, more recently, a year and a half as an executive at e-commerce company Groupon.
Rocketmiles, which was launched earlier this year in North America, and internationally in June 2013, benefits its partner hotels by putting high-value customers into rooms that would otherwise go unsold—but, importantly, without diluting the brand through public discounting.
Supposing, Jay explains, you book a couple of nights at a Rocketmiles partner hotel—that booking could earn around 7,000 miles. For the busy executive out there making, say, 15 trips per year, he suggests, this could mean an additional 100,000 miles per year to be redeemed as desired through one of five airline loyalty programs.
“Central to the success of this type of virtual currency is the whole notion of delayed gratification," Jay said. "We give people who travel for business year-round a chance to stockpile resources and, as such, the fuel to fund an adventure. For somebody in their early twenties, that adventure might be a backpacking trip to Cinque Terra; for young parents, it might be a comfortable trip to Disney; and for empty-nesters, it might be scuba diving in Sipadon.”
Jay, who enjoys reading books about behavioral psychology, says that he’s intrigued by the emotional aspects of e-commerce.
“I learned at Groupon just how much more powerful a curated online shopping experience could be," he said. "In the hotel business, for example, companies like Groupon realized the market was already flooded with ways to slice and dice the thousands of rooms available in a particular city. The successful curated-e-commerce player cuts through that clutter by saying, ‘We’ll give you select, personalized results aligned around what we know about you; we’ll take responsibility for all service elements of your shopping experience; and we’ll give you remarkable incentives.’”
Indeed, as he worked on his design for Rocketmiles, Jay would often picture his target customer in terms of “the typical BCG consultant.” “Let’s face it, they’ve grown accustomed to four-star hotels over the course of their careers, precisely the type of hotel we highlight,” he said.
Prior to Rocketmiles’ launch, Jay and his team—having learned that building a product and getting it into people’s hands is “a faster way to get real feedback than just talking or doing surveys”—built a mobile-software prototype and brought it to prospective hotel and airline partners, and to about 200 individuals. Among those involved with this beta-testing were friends and former colleagues from BCG including Alan Wise, Eduardo Leon, Raj Varadarajan, Matt Krentz, and Michael Silverstein.
“I’ve found the BCG connection to be powerful and generous," Jay said. "For instance, I spoke with Alan Wise—who is very knowledgeable about travel and tourism—about whether he thought loyalty programs might be interested in working with a business like Rocketmiles. I had lunch with Michael Silverstein and had an opportunity to share the product with him. Michael appeared interested in the emotional component of the business and in the psychological element of delayed gratification.”
The BCG alumni network, too, says Jay, has been a fantastic resource.
“Folks like Brian Weed and Mike Marcus, both of whom have lots of entrepreneurial experience, have been incredibly helpful in answering my questions about issues like fundraising, structure, and the investment community," Jay said. "David Oppenheim, now at Mileage Plus, has been an important partner on the commercial side, while Braden Beng at Hawaiian Airlines has also been helpful. I feel there’s instant credibility with all these guys because of our shared BCG history.”
Rocketmiles, based in Chicago, currently has 14 employees. “We’ve got a very talented CTO, Kris Helenek, who is a terrific software architect and, along with Kris, came a team of developers that is very loyal to him," Jay said. "We’ve got a fabulous COO, Bjorn Larsen, somebody who has done a number of startups in the past. The combination of our diverse talents gives us a better shot at being successful.”
Nonetheless, Rocketmiles has been born into an incredibly complicated environment: for it to survive, it must adapt to a world that includes airline partners, hotel partners, individual consumers, and, often, those consumers’ employers. To keep it all working correctly requires, as Jay puts it, both a comfort with ambiguity and a sense of empathy for what’s unique to the needs of all stakeholders.
“The BCG influence is strong in this regard," Jay said. "During my time at the firm I worked on about 24 projects, each an exercise in developing empathy both for what the client was trying to get done and for what was happening in the marketplace. Having had so many ‘at bats’ on different projects is something that’s proving invaluable as I work to nurture Rocketmiles in this complex ecosystem.
“Invaluable, too, is the sense of self-confidence instilled in me as a young BCGer. Expectations were high. I remember many times my project leader saying, ‘Here’s what I want you to do next,’ and I’d think, I’m not really qualified to do that, at least on paper. But you come to realize that each problem has less to do with qualifications and knowledge and more to do with drive, solid data, asking the right questions, and, of course, empathy.
“That attitude has brought me success at subsequent stages in my career. While people like Marin Gjaja and Rohan Sajdeh in Chicago, or Grant Freeland in Boston had very high expectations for me, they always gave me the chance to live up to those expectations.”
That said, what are Jay’s expectations for Rocketmiles as it blasts off through its first year and beyond?
“We will be in more countries—especially after our international launch this month— more categories, and building a following among consumers who come to us because they know they’ll get a quality product—be it a hotel room, black car service, or a fine meal—and that they can fuel future vacations," Jay said. "Our brand aims to enable people to be heroes in their personal lives.”