Hipmunk: The Secrets To Negotiating With No Leverage – with Adam Goldstein

How does an upstart with no leverage negotiate with some of the biggest companies on the planet?

Adam Goldstein is the cofounder of hipmunk.com, the travel search site that partnered with dozens of airlines and hotels on direct deals.

I want to ask him how he did it, and how “finding his customer’s pain” helped make Hipmunk become a travel site that has not just users, but fans.

Watch the FULL program


 

About Adam Goldstein

Adam Goldstein is the cofounder of hipmunk.com, the travel search site that partnered with dozens of airlines and hotels on direct deals.

Raw transcript


Mixergy’s audio transcription is done by Speechpad

Andrew: Coming up in this program, are you going to negotiate with someone
who has more power than you? Listen how today’s guest did it and learn how
you can do it right also. Also, you’re going to find out how to improve
your company’s user experience. I spent a lot of time on that on this
interview so that you and I can both learn.

And finally, the one thing that’s not coming up actually on this program is
good video. Today’s guest tried to record his part of the conversation and
it didn’t come out so good. I tried to record his part of the conversation
and the video didn’t come out so good. So bottom line, if you’re looking
for good video, you’re not going to find it in this interview or frankly
anywhere on Mixergy. This isn’t about good video. It’s about great ideas,
and if that’s what you’re looking for, we got a lot of those for you. Stay
tuned. Three messages before we get started.

First, do you need a single phone number that comes with multiple
extensions so anyone who works at your company can be reached no matter
where they are? Go to grasshopper.com. It’s the virtual phone system that
entrepreneurs love.

Next, does anyone you know need a beautiful online store that actually
increases sales but is easy to set up and manage? Send them to Shopify.com,
the platform that top online stores are running on right now.

Finally, do you need a lawyer who actually understands the startup world
that you and I live in? Go to WalkerCorporateLaw.com. I’ve known Scott
Edward Walker for years so tell him you’re a friend of mine and he’ll take
good care of you.

Here’s the program. Hey there, freedom fighters. My name is Andrew. I’m the
Founder of Mixergy.com, home of the ambitious startup and home of well over
700 entrepreneurs who come on here to tell you their stories so that you
can learn from them.

In this interview, I want to find out how does an upstart with no leverage
negotiate with some of the biggest companies on the planet? Adam is the co-
founder of Hipmunk, a travel search site that partnered with dozens of
airlines and hotels on direct deals. I want to find out how he did it.

I also want to ask him how finding his customers pain helped make Hipmunk a
travel site that doesn’t just have users, but has fans, raving fans as
you’ll see in this interview. So Adam, welcome.

Adam: Thank you. Nice to be here.

Andrew: And thank you by the way. Thank you for recording your side of the
conversation. It looks like the video already froze so we’re definitely
going to have to rely on your video for this interview.

Adam: All right.

Andrew: Hey, I mentioned that you have fans and I know it’s true because
I’ve seen my friends talk about Hipmunk and frankly I’ve written a fan
email to your cofounder, to Steve, but beyond my personal experiences, how
do you know and how can someone in our audience understand that you have
fans? What indication do you have that people aren’t just using your site?

Adam: Well, you know, when people see Hipmunk, they always smile and if
they’ve already come to our site, and they see someone in a Hipmunk
costume, which happens from time to time, it’s like they met a rock star.
They crowd around from miles away to hang out with the Hipmunk.

We’ve got just, if you look at our Twitter feed, if you look at what people
are saying about us on blogs and on their own Facebook feeds and all sorts
of things, it’s like they use language like love, and like amazing and
things like that that I’ve never seen them use for other travel sites.

Andrew: And they’ve done things for you to show support, right? The first
iPhone app, was it built by a fan?

Adam: Yes. So, we found our first iPhone developer because he was just such
a fan of our website and he knew how to program for the iPhone that he
decided he was going to try to convince us to hire him to build our app and
we ended up doing it. We’ve got a great app and it keeps getting better.
Same guy’s doing it right now.

Andrew: I see. Cool. And the video explaining what Hipmunk is, who made
that?

Adam: Oh, man. So the video “How to Use Hipmunk” was made by one of our
fans. We’ve had people who drawn their own version of our logo by hand or
using computer programs. We actually have at our office a wall of the
things that our users have drawn for us or sent to us because they love us
so much.

Andrew: All right. So, I use Priceline, I use Orbitz. I’ve used your
competition. I’ve never seen this kind of passion for your competition, and
more and more I’m finding myself reaching for Hipmunk. So I want, in fact,
I don’t think I use the competition anymore now that I’m on Hipmunk, to let
everyone know my personal bias walking into this interview.

Adam: Awesome.

Andrew: But, as much as I love you, frankly I love myself and my audience
even more. And I want to know how you did this so that my audience can do
it and, frankly, so that I can do it, too. How I can build this kind of
love for my product? Maybe we can just go back and see the very first
version of Hipmunk, what was it based on? How did you build the first
version in a way that would draw people away from your competitors who have
way more money than you and way more name recognition than you certainly
had at the time?

Adam: The idea to do this came about because of my own personal
frustrations. This is one of those stories where I just knew there was a
problem and I didn’t know exactly how to solve it, but I knew that there
was such a big area for improvement here that it was worth a try. The
reason that I knew that was because in college I was on the debate team and
I was the guy that booked all of our travel as we competed in places like
Turkey, Botswana, Ireland, all over the place. I found myself spending so
much time searching for flights and hotels on all our competing sites that
I knew that there was an opportunity here.

When we started out, it was just me and Steve Huffman, my co-founder. We
didn’t know what we were going to build, what it was going to look like,
how it was going to work, we just knew that we were going to try to solve
this problem. Our standard really was, “Let’s see if we can build something
that we would prefer to use over anything else out there.” It took us about
two and a half months to get to that point and that’s when we launched the
site. That was in August of 2010. What we told ourselves was, “This is an
opportunity to find out whether other people agree with us, whether they
think that this is actually better than the tools that they’ve used
before.” It turned out that they did, but if it had turned out that they
didn’t, we were going to start from scratch.

Andrew: Let me take a step back. You co-founded a company called
BookTour.com. You’re an author, it was co-founded with an author, it was
built for authors, it was addressing the frustration that authors have
about how to promote themselves. Same issues, essentially, that Hipmunk
faced when it launched, but it didn’t work. Why was that dead pooled? Let’s
learn from that and then see how that experience is different from the
Hipmunk launch experience.

Adam: That’s a great question. BookTour was something that I never put my
heart into it the same way as Hipmunk. Partly, that was because I was
working on it part time when I had hours free during college. It wasn’t
something that I could devote all of my attention to and I think that that
showed I wasn’t able to build things quickly. I wasn’t able to incorporate
customer’s feedback quickly, and the other thing was that when you’re in an
industry like travel, you can reach a huge number of people because tons of
people travel, even if it’s just once a year. When you’re in an industry
like publishing, or a derivative of publishing, you have to hit a certain
kind of user who is particularly passionate about books. There are lots of
people that read, but it’s only a small fraction of those that care whether
a particular author is coming to their town, which is how we were trying to
orient the site. I certainly learned a lot from the experience there, but I
think we were tackling too small of a problem or too small of an audience
and I wasn’t putting in the time that I needed to to make it really work.

Andrew: It does seem to bring up to me this understanding that, whenever
someone says to me, “Andrew, I was trying to scratch my own itch and I
built this product that would be perfect for me.” I think, “What if you’re
the only one who has this specific problem and are happy with this specific
solution?” It feels to me like BookTour exemplifies that and what I want to
understand is, I don’t doubt that what you’re saying is true. I’ve seen it
enough. What I want to understand for me is, “If I’m going to scratch my
own itch and build a product that solves my personal problem, how do I not
walk in a direction where it only solves my problem, and how do I make sure
that it goes broader?” What do you think about that?

Adam: That’s a great question. One trick is just paying attention to how
people are receiving something. At Hipmunk, on day one, people were telling
us how much they loved it and that was incredibly motivating and that was
what kept us plowing ahead in this direction. With BookTour, people would
say, “This is cool. I like this.” I’m sure that a couple of people said
that they really loved it, but for the most part it was a pretty muted
reception, even among people who knew about it. In that case, we built
something good, but not amazing. If you’re going to try to scratch your own
itch in an industry that’s pretty well established, I think you need to hit
the amazing threshold to get people to switch.

If we had approached BookTour the same way, if we’d said, “We’re going to
give this a couple of months. See if we’ve built something that people are
amazed by, that they love, and if not, then we’re going to pivot and try
something new.” I think that that would have probably put us on a track to
keep climbing ’til we found something that really did satisfy millions of
people’s needs. That was also hard because I wasn’t paying attention to all
of the feedback that we were getting everyday. I would try to respond to
emails, but I never had enough time to focus and really figure out what
were the things people liked and what were the things that they didn’t
like, for months at a time.

Andrew: I want to come back to that. I actually wrote down a quote earlier
from you about incorporating feedback quickly because it’s so important to
me to come back and understand that, but let me make sure that I understand
this part. What you’re saying to me is, “Andrew, if you’re going to scratch
your own itch, first, make sure you really are living this experience that
you’re trying to come up with a good solution for.” Second, “Be prepared to
show it to people quickly and adjust just as fast because there’s a good
chance that you’re off base by a lot and you want to bring it out to people
and get a reality check.” Am I understanding that right?

Adam: That’s right. The third thing I would add there is, “Make sure that,
through whatever means you can, that it’s a need that many, many people
have.” Even if you do those first two, if you’re solving a very niche
problem, it depends on what your motivations are. We wanted to solve a
problem that millions and millions of people had and I think we were able
to do that on Hipmunk a lot better than we were on BookTour.

Andrew: With Hipmunk and the travel industry, the way that you knew other
people had this problem, actually, maybe not. I was going to say, the way
you understood that other people had this problem was because there’s so
many people who are traveling, but how did you know that a lot of those
people had a problem with travel sites? When I thought of my pre-Hipmunk
life I was excited that I actually got to use a website to buy online and
compare rates and I thought, “Those airlines. They’re never going to outfox
me because I’ve got all these sites, like Priceline.” I never thought to
myself, “This isn’t really the user experience that I deserve”‘ It wasn’t
until I saw something better that I would have complained about the
competition. How did you know that people had this issue?

Adam: That is something that’s worth touching on because when we started
Hipmunk, before we had anything to show people, we would tell people,
“We’re working on this thing. It’s going to be a better travel site.” What
they would tell us is, “There’s nothing wrong with the existing travel
sites. I use Kayak, Expedia, Travelocity, Priceline.” They would say, “I
use one of those all the time and it’s great.” We weren’t able to sell
people on the promise, we were only able to sell it to them once they saw
it, and so I wouldn’t take people’s stated opinions with too much [??], if
you genuinely believe that you’re going to be able to do better, but
ultimately, it needs to be tested against whether you have done a lot
better. That was something that we started showing people pretty early and
if we just had gone in our own direction, I think, without incorporating
any other people’s feedback, we would have ended up with something that was
not very good.

Andrew: That’s so interesting that when you ask people, if you even ask
them, ‘Do you have a problem?’ They say, “No. I don’t.” I did a little bit
of research on you, of course, and you seem to talk about Kayak a lot so I
went over to Kayak just to experience what the frustration was. I wanted to
punch my computer screen. I love Kayak as a business. I want to interview
the founders and I’ll, of course, interview them with respect and want to
learn from them, but as soon as I did a search, it popped up two or three
different browser windows on my screen. They each took a portion of the
screen, not the whole screen, so it was an odd layout so I had to open it
up to really experience this pop up or pop under. Then I was still on the
Kayak page and, if I clicked to select the leg of the flight, it
immediately changed my whole page over to American Airlines where I was
picking the first leg, but I didn’t understand how to pick the second leg.
I never would have told you that I had this problem.

Where was I going with that? I just was getting a little bit frustrated.
This thing that I didn’t think was an issue, I’m recognizing now is an
issue. You get it out in public, why did it work? It was just that you,
what were the elements? You have to, if you’re going to launch within two
or three months, as you did, you have to say, “I’m going to narrow my
feature list to these core needs and then I’ll get some feedback.” What did
you narrow it down to?

Adam: So the three things that we wanted to do were, first, we wanted to
have real time flight data, which is to say, we wanted to have up to date
prices and availability information. The second thing was, we wanted to be
able to present it in a way that made it really easy to understand the
trade-offs, and for people to get the best option. And then the third
thing, was, we wanted to have some place where people could actually book
those. So, that we weren’t just sort of an informative site, but we would
actually help you move through the progression to book your ticket. Then
number four was something that we were hopeful for, but wasn’t a
requirement. That was that, we’d be able to get paid for those customers,
because we wanted as early a date as possible to be able to turn this into
a real business model. And so, those were the three requirements and the
fourth nice to have, that we needed?

Andrew: What was that first one? I got trade-offs, so that people can see
the trade-offs, and the options that they had available to them. Number
three was to book. Number four, you’d like to get paid. What was that first
one?

Adam: The first one was accurate flight information.

Andrew: OK.

Adam: Prices and availability.

Andrew: All right. I’m going to come back to how you got partnerships to
potentially get paid and to get the data. Yesterday, I recorded an
interview with Emmett Shear of Twitch TV. I asked him what he’d want to
know from you and what he wanted to learn from you was business
development. Alexis Ohanian, who is an adviser to your company and also the
founder of Reddit, said, “Ask him about how he creates these partnerships,”
and I promise the audience, I will get to that. Let me first understand a
little bit about user experience, because it will give us the flavor for
the product. You launch it. You say that people are excited. But the
excitement is a little more nuance than that, right? You’re getting some
things that you know you need to improve, and some things that you know you
need to keep and others that you need to kill. Can you talk to me a little
bit about that? What were you getting?

Adam: I’ll walk you back to before we even launched it. We were just
starting to show it to a few of our most trusted advisers. We originally
just had a page full of text. It was like reading an Excel spreadsheet
because each flight had a very thin row and it was the departure time and
the arrival time and all those sorts of things. And when you look back at
that, you can see a number of things that ended up being really important.
Like, we were never sorting by price, we were always sorting by this sort
of, multi-valuble metric that incorporated things like the number of stops
and duration. But at first, it was still a very programmery data-nerd
display. And when we showed this to just some folks, the reaction was,
“This is not enough better for me to really switch.” We thought, “That’s
really disappointing,” because we put a lot of work into it. But what we
decided was we’re going to experiment with different ways of presenting
this information. Because that presentation was ultimately, where people
spend 90% of their time when they’re searching.

And what we decided was we were going to play around with this visual idea,
see if we could represent all of the most relevant pieces of information in
a way that makes it easy to understand trade-offs. So what are the trade-
offs you care about when you’re searching for flights? It’s things like,
who’s the airline? Does it have a stop? What time does it leave? What time
does it arrive? All those sorts of things. And the problem that we realized
is that the existing interfaces, both ours and other peoples, didn’t make
it easy to keep multiple of those things in your head at once and
understand how they (?).

So, we started playing around with this timeline approach or the Gantt
chart for flights, as some people call it. Originally, it was only the
backup option. We thought that it was too radical for most people to get on
their first try. So we made it the option you could click if you didn’t
like the default. But once people discovered it, we found that they loved
it and so we switched to making the visual display the default. Then a few
days before we launched, we said, we’re just going to take this the whole
way. We got rid of the text display altogether. We sort of made a statement
that, “This is the way that we think you ought to be shopping for flights.”

Andrew: Who are these people that you’re showing it to, to get feedback
where they said, “Hey, it’s just not enough better, the first version.?”

Adam: It was mostly the folks in (?), the program that we went through that
first summer. I know Hologram had a bunch of feedback on the display that
we originally had. Paul Buchheit, who is the Gmail creator, he was the one
who had the most direct, sort of criticism that made us rethink how we were
approaching the display, and there was those two guys in particular and
then obviously a bunch of the folks within our batch.

Andrew: When I asked Paul Graham about this, your first investor and
founder of Y Combinator, I asked him how he knows the guidance that he
gives you for improving the design of your site how he knows to do it,
where it comes from. And I think Jessica, the other co-founder of Y
Combinator said she doesn’t know and he doesn’t even know where it comes
from, it’s almost like an artist, like a sculptor. He can’t express to you
how he’s sculpting, he can talk in riddles like you can eliminate all the
pieces that aren’t necessary and what you’re left with is this finished
product. Maybe you, a guy who’s analytical and is watching from the outside
can tell me: how do they know what kind of feedback to give you?

Adam: I think it’s less about the kind of feedback and more about the
directness. Paul is extraordinarily blunt and that is a wonderful thing.
When you’re working on this thing all day, all night and for weeks at a
time, you can get very caught up in the nuances of how you design things
and why you laid them out they way that you did, and ultimately if Paul
Graham or Paul Buchheit or one of these folks says, “You know this is still
too confusing for me..” that is a very powerful message that you’ve been
thinking about the wrong thing. And he doesn’t hesitate to say that, he
wants his companies to succeed and he realizes the best way to do that is
just to be extremely direct and that works wonders.

Andrew: And that’s a clear question that seems to come for him a lot: do I
even understand this, is it so simple that if I don’t pay attention to you
fully and if I’m not fully engaged with your side I understand it? And if
it’s not, I’m going to tell you clearly, bluntly: it’s too confusing-
that’s what you’re looking for.

Adam: Yep. And to be clear, I know a bunch of people that are like that and
when I look at other startups I try to emulate that. When Steve looks at
our own products, when all of our engineers and designers look at things,
that’s the same approach that we use. It’s helpful to get that from someone
who is an outsider. Especially when you’ve been working directly with
insiders for so long.

Andrew: You were saying there was something about the design and layout of
information that made the difference and you started to talk a little bit
about how you figured out that layout. I understand how you knew that you
hit it because people found it on your site and chose it over the default
layout that you gave them but can you tell me a little more about how you
came up with this layout? You say you sort it by agony, it’s like price
goes into consideration but also stops go into consideration and so on, so
how did you figure out that was the right layout to use?

Adam: The sorting order was one of the earliest decisions that we made.
Actually, originally it wasn’t called “agony” it was called “suckage”
because we thought that that was the most appropriate way to describe
flying. And how did we incorporate- how did we decide how to sort it- we
didn’t actually put a huge amount of thought into the design, we just hit
some initial parameters, tweaked them a little bit and said, “Does this
roughly look like it’s putting the flights that we would want first?” And
once it did, then we moved on. Honestly, I don’t think that we played that
much with that algorithm for a long time. With the way that we present the
information visually, that was actually an interesting process.

I’d been familiar for a long time with the work of a guy named Edward Tufte
who wrote a book about how to present quantitative information, and there a
bunch of things in there about presenting complex information that takes
place over a period of time that incorporates more than just a linear
graph. And there are train schedules from the 1800s, there’s project
management tools that display things similarly to the way that we do. There
are even people in online travel group experimented in the past with proves
the concept similar to the way that we present things. But it was only when
we combined the sorting order, the visual presentation and all of the other
things that helped us pick which flights to display that it all felt like-
wow, this is the simplest way to do things. If we’d only picked some of
those as we did originally, it doesn’t gel in the same way.

Andrew: I see. All right, you launch it, people like it, it has this new
layout, what kind of feedback did they give you that you didn’t expect?

Adam: You know, there’s a lot of feedback they gave us that we probably
should have expected, but didn’t. We had a surprising number of people from
outside the United States who were saying, “Why is everything in English?
Why’s everything in dollars?” It’s something we still get asked, because we
haven’t gotten around to internationalizing it. We got a lot of questions
about, “Why can’t I search for multi leg trips? You’re one way or a round
trip. Why doesn’t this work on my iPhone? Why is this price different from
the one that your competitor is showing?” All those sorts of things and we,
actually, our first hire was a customer support person because we were
being so inundated with these questions that we had no time to actually fix
anything.

Andrew: Why are people giving you feedback? What did you do to encourage a
lot of feedback?

Adam: We put a really cool real time chat feature on our website, powered
by a company called Olark, which is an otherwise [??] company. We had that
since day one, and what it lets us do is people can click on the link on
the website, type messages to us and we’ll get them as instant messages. We
can just reply directly alongside all the other work we’re doing. Early on
we got this constant stream of things that people were noticing, bugs,
feature requests, whatever. There was a certain immediacy to it because we
could, in some cases, we could fix stuff while the person was chatting to
us. Push them a new version of Page and say, “Check out this one instead.”
They’d be so excited. It was like, “Wow. These guys just fixed it.” We
can’t do that so much anymore, but it’s been really useful because even
when we’re not online to answer people’s chat, they can still send us
questions and comments through that system and we’ve got folks, including
ourselves, who are reading through everything that people send us. It’s a
super useful way to get feedback.

Andrew: I know Ben, the founder of Olark, by the way. I’ve had dinner with
him here. We’ve hung out a lot and every time I ask him the same question,
“Will you come and do an interview?” He says, “No”. He wants to sponsor
Mixergy, but not do an interview yet. Why not? What does he have to hide?

Adam: I have no idea. Maybe, he would do an interview over live chat.

Andrew: Over an Olark chat. At this rate, we might actually be reduced to
that because the video is going down a little bit, audio isn’t as
dependable as it should be. You’re getting a lot of feedback, how do you
know what to respond to and what to push away?

Adam: The thing that we always look for is why is someone frustrated, or
why is someone asking this question? It’s not, “Can we answer their
question?” It’s, “How can we keep them from having that question?” In the
case of certain things, like international currency support, the need and
the solution are very clear. Someone wants to search in their own currency.
We’re going to have to let them do that. In the case of other things, it’s
often very different. People will ask, “Can you help me add my events, my
[??] to my calendar?” We think to ourselves, “Why do they want to add it to
their calendar?” They want to add it to their calendar because their
calendar is where they organize their life.

If that’s the case, then maybe instead of letting people add things to
their calendar, we should also let them pull their calendar into [??], so
that we can help them up front in finding the flights that fit in their
schedule. So, they don’t have to have two windows open. No one had ever
done that before. No one had ever linked up a flight or a hotel search with
people’s calendars, in real time. That just came about from us thinking
about the way that we shop. Listening to the way that our customers were
talking to us and thinking, ‘Actually, there’s probably a more fundamental
thing we can do here that no one else is doing.’

Andrew: This is something that Paul Buchheit told me about years ago on one
of my first interviews that I hope is still available somewhere online. He
said, “Whenever people give you a solution that they’d like, find out what
the problem is that they’re trying to solve because the solution is
probably convoluted or disconnected from the problem. Your job is to find
the problem and then solve it, not ask them to do your job by coming up
with the solution for you.” What else? Emmett and I were talking yesterday
about Twitch TV, and how he was looking for pain that people who broadcast
out video games have. Do you do that, too? Are you trying to categorize the
pain that people have and then, based on that, figuring out what to tackle
next?

Adam: Our decision process for features and products is driven partly by
what our users complain about. It’s also driven partly by things that we
think we could have a disproportionate impact on, where we could build
something that’s so much better than what people have done before that it’s
worth the investment of our effort. If we can only slightly improve on
other things, that’s not so interesting to us. If we can dramatically
rethink things, that’s much more fun.

Andrew: Give me an example of something that you gave up, and maybe
something that you didn’t, based on this criteria of can we dramatically
change the way things are done?

Adam: Yeah, I’ll give you an example. Basically, since day one, people have
been asking us to search for flights that have more than three legs. They
want to go from San Francisco to New York to London to Beijing to San
Francisco to Seattle, or whatever.

Andrew: Mm-hmm.

Adam: We’ve always only let people do three. It’s not because we don’t want
to fix it. We’re going to fix it. It’s just that that is not a huge
problem, and it’s not something where we can do anything, at least, we
haven’t come up with anything yet to be super creative in solving it better
than anyone else. When you get to five or six legs, there are only a few
options that you can pick, anyway, and any site can show those to you.

Andrew: OK.

Adam: I’ll give you an example of something where we thought we could
really have an impact, on the calendar feature, in particular with hotels.
We’d rolled out this great hotels tool. We thought, “What is the biggest
pain point for frequent travelers when they’re booking hotels?” It’s often
they don’t know where the hotels are in relation to where their meetings
are, or where their friends are, or whatever it is. When we can pull in
people’s calendars and show them on a map, “Hey, here’s where your meeting
is. Here’s where your dinner is, and here are the hotels right nearby,” it
cuts the problem from a 20 minute problem to a 10 second problem. It’s
super, super easy. That’s something that we love to build.

Andrew: What about tabs? I think this is what I sent Steve a note about at
first. When I do a search, the search results show up in a tab and I don’t
even notice that it’s really there. Then when I go and do another search,
that’s when I notice that my new search results are in a new tab, and that
first search is still available to me to go back so that I could compare
them. How would you even know to do that?

Adam: I think that just came about because we observed the way that we were
searching on other sites. We found often we’re searching for a flight and a
hotel at the same time, or were considering multiple different places to
fly out of, or into, or dates, or whatever it is. Our view has always been
if we know that there’s something that people are wasting their time on,
let’s see if we can build it into Hipmunk to save that time. Tabs have been
something that we’ve had since the first day, I think. Man, that’s a. . .
I’m glad you noticed that. A lot of people don’t even realize that they can
run multiple searches, but for those that do, it’s a super convenient
feature.

Andrew: Yeah. All right. So again, going back to (?), he told me he’ll ask
people what their problems are, where their pains are. He’ll come up with
the solutions. He’ll make sure, first of all, make sure that he understood
their problems, then he’ll come up with a solution and show it to them and
say, essentially, “Does this solve your problem?” Then, if they say yes, he
builds it. If they say no, or are confused by it, then they don’t build it.
Do you do anything like that? Do you check in with your audience before you
build?

Adam: We don’t check in with people before we build. We check in with
people when we’ve got a basic download to show them. As we’ve been building
these calendar features, and things like that, we’ve shown it to a few
folks, once we’ve decided we think it’s a good idea, but before it looks
polished, and we see what they think.

I think the way that we like to work is we want to get something that works
and makes clear what it will do and has sort of the basic flow already
thought through before we give it to someone, because small tweaks to the
workflow can have a big impact on people’s reaction. It goes back to what
we were talking about, in terms of asking people for an opinion before you
want it. If you show someone something that’s half-baked, their probably
going to say, “I don’t like it,” but if you show them something that’s 75
percent baked, you can often get a sense from them as to whether it would
actually be useful.

Andrew: All right. Let’s understand, then. I’ll come back a little bit to
your process for creating and making sure that what you’re building is what
people actually want. I’ve got to move on to business development, just
because of the people who asked me to talk about this. Can you give us a
sense of why business development is so important, Hipmunk, just so we
understand why it’s a topic that others are admiring you for doing so well?

Adam: Yeah. This is something that, actually, a lot of people don’t even
realize when they come to any travel site, but, in many cases, every single
link that you see on the site, every single price that you see on the site,
those are the results of a multi-month and in some cases, multi-year
negotiation with a travel agency, an airline or a hotel. And we realized
early on that we were not going to be able to launch this site unless we
had the participation, the cooperation of people like that.

So, we did, when we first launched this, or before we even launched this,
we realized that we were going to need flight data and a place to send
people to book their flights. And that’s when we started talking to or
calling up Orbitz, Expedia, Travelocity, all of the big travel sites and it
was incredibly disheartening because none of them answered of phone calls
or emails.

Eventually I just got on a plane, flew to Chicago, told to Chicago to
Orbitz, that’s headquartered there “I’d really like to grab coffee. I’m
going to be around” and they said “OK”. I showed them what we were working
on and actually right then and there they said “It’s cool. We’ll
participate” and that’s what allowed us to launch.

Andrew: But it was you showing up unannounced, no invitation, saying I’m in
town, could we meet.

Adam: It was actually me saying, “Hey, I’m going to be in town in a few
days. Can you guys meet up?”. And that was what allowed us to launch. And
once we got a deal, the rest just came a lot easier. Because in many cases
the airlines were already showing their flights on Hipmunk through Orbitz
and so it was easy for us to say, “Hey, we can send these customers
directly to you instead of to Orbitz if we can work out a deal here” and so
generally they were pretty receptive to that. And then we went through the
same process with [??].

Andrew: So, why would Orbitz make a deal with you knowing that you can
quickly cut them out?

Adam: That’s a good question. I think, I don’t know for sure but my sense
would be because the airlines would rip Orbitz to pieces if they didn’t
allow it. The airlines ultimately are the ones that control the less access
to their information and so if Orbitz was keeping that information to
themselves and not allowing us to send people to the airline, I think the
airlines would have had a beef with that.

Andrew: But then why would Orbitz make a deal with you in the first place?
Wouldn’t they say “Hey, you know what? This guy is looking to compete with
us. Why are we inviting into our home and helping him compete?”

Adam: I don’t think that we are competing with them. No one in the travel
business has a majority of users. There’s no clear winner. There are people
who got a lot, but there’s no one who’s got a majority. And what that means
is that any customer that you get, any new customer that you get, most
likely came out of one of your competitors.

So, in so far as we are stealing people from Expedia, Travelocity and
Priceline, and sending some portion of those to Orbitz, Orbitz is better
off than they were before. Similarly, when we send somebody to an airline
instead of to Orbitz, that’s someone that that airline might have gotten
before. Certainly, everyone in the travel business seems pretty open to
paying for customers because chances are they wouldn’t gotten those
customers before.

Andrew: I see. All right. So then, is your first deal just a matter of
showing up or saying that you’re going to show up and that’s how you got
that deal?

Adam: I think that helps a lot. If I were doing it again, I would try to
find someone through an investor or through a friend or something who had a
good contact that could make an introduction to it at the company. But I’ll
tell you this, when we were trying to get our deal with United Airlines, I
had no idea who to reach there. None of our contacts knew people there. I
literally sent an email to the CEO and said, “Hey. We can lower your
distribution costs. Let me know who to talk to”, in like two sentences. And
within 15 minutes he replied and introduced me to some very Senior
Executive there and I got handed down the chain of command at United
Airlines and we had a deal with United now. You can see it live on our
site. But you can trace that deal which took more than a year back to that
original email that I sent to that CEO. It’s a matter of just being
persistent.

Andrew: How do you lower their distribution costs?

Adam: Well, basically we don’t do bookings ourselves. We hand people off to
other sites to do people’s transactions. So if someone’s currently going to
Expedia, the airline is paying for distribution through Expedia and they’re
paying a lot most likely because Expedia is big and they have a lot of
negotiating leverage. As a small startup, we were willing to undercut the
established guys because we wanted to get our foot in the door. That was
how we lowered the cost.

Andrew: The way that you make money is by, you show me search results of
different airlines, I pick the one that I want, I go and buy the ticket on
that airline’s website. You send me there. You get a commission, an
affiliate cut, essentially.

Adam: That’s right. We get commissions when people book their trips that we
referred.

Andrew: I book through Amtrak. I book on Amtrak through you guys a lot.
Same thing?

Adam: Yeah. I can’t comment on the specifics of any particular person, but
that’s the general [??] and how we structure these things.

Andrew: Even though you had this CEO of United take your email and pass it
to the right person, and still you said it took you a year? What happens in
that year?

Adam: They went through a huge merger. This is constantly the case in the
airline business. People are merging, spinning out, going bankrupt,
becoming solvent, then all over again a few years later. There’s tons of
turnover within the airlines, as well. People moving, [??] divisions,
moving between airlines. Just when you feel like they’re about to be
finished, there’s always something that comes up. We budget months and
months for these deals to get, just because that’s historically how long
it’s taken.

Andrew: It’s not because they don’t want to make the deal with you. It’s
not because they’re trying to squeeze better terms, or are they trying to
squeeze better terms out of you? Is that part of what’s taking so long?

Adam: I’m sure that that’s some factor, but I don’t think that that’s, they
don’t gain anything by waiting out the clock because, in the mean time,
we’re sending people to higher cost websites for that. They’re losing money
everyday they’re not working with us. I think it’s really just the inertia
of big companies. The legal department needs to sign off. The senior head
of whatever needs to sign off. If there are any changes, that new person
needs to sign off and then two days before you sign, there’s a change in
the legal department and now they’re re-evaluating every agreement from
scratch. Start the process over again.

Andrew: I’ve got to tell you, I still don’t fully understand this biz dev
process that you take, but I need to take a step back from it for a moment.
I’m determined to figure this out and to learn from you about business
development and how you make these relationships work and how we can do it
too. What seems to come up a lot in these conversations is the amount of
people that you can send. If you can send a lot of people to Expedia,
you’re more interesting to Expedia. If you can send a lot of people to
United, they’re more eager to take your calls. I’m wondering how you get
your users.

Adam: Up until this point it’s been mostly just through word of mouth and
through PR and other kinds of organic sources of traffic. People love
Hipmunk, they love sharing it. They love talking about it. That sustained
us and helped us through since we launched. It’s been great. We’ve had a
million downloads of our mobile app and 99.whatever percent of those are
people who discovered it without us paying them anything. There was no
advertising that took place to get those people.

Andrew: The other one percent? Where does that go?

Adam: We run experiments to figure out how we can get people cost
effectively and whether it makes sense to advertise here or there, but for
the most part people are discovering us on their own. I don’t have a great
answer for you other than, if you build a product that people love, they’ll
tell their friends about it.

Andrew: [??] on Hacker News asked me to ask you, “What percentage of your
traffic comes from paid advertising?”

Adam: It’s a small percentage. I don’t know the exact number, but it is a
small percent.

Andrew: Less than 15 percent?

Adam: I would think so. I don’t think that we share the specific number,
but that sounds like it’s about right.

Andrew: Another travel site that [??] invested in, Adioso, I think is their
name, you go to their site and you see that they ask you for an email
address very quickly and the reason they do it is so that they can keep
that relationship going with you. You guys don’t do that. In a world where
I have so many options, where Priceline is advertising to me nonstop with
the Star Trek guy and Kayak’s name is on everyone’s lips apparently, and
Google is coming in, how do you make sure that I remember you well enough
to come back? How do you bring me back?

Adam: It’s something that we’re always working on, but this goes to our
philosophy of why do we build the things that we do? If we want your email
address, we want to have a good reason that we want your email address. We
do ask for it when we need it. If you want to link your calendar into
Hipmunk, you need to sign in so that we have access to your Google account,
and we need your email address to do that. That’s an example where it’s
very clear what you’re giving and what you’re getting in exchange; that’s
the kind of thing that we like. We don’t want to get your email address and
then sell it to a million other people so that we can make an extra dollar
from you. That’s just not our style.

Andrew: What about just so you can build a relationship with me? Usually,
if I buy from United they will email me offers in the future unless I ask
them not to, because, you know, I bought from them. They, at least, remind
me that they exist. That seems to be the way that most businesses work. You
guys don’t do that. So what do you do, then, that does work?

Adam: Certainly, we’re going to do more of that stuff. I mean, if you’re
someone that wants to hear from us, we have a newsletter you can sign up
for, you can follow our blog, and you can do all sorts of things that keep
you engaged. But, you know, we’re still building up that contact. We only
want to send you stuff that reminds you we exist if you would benefit from
that email.

Andrew: So what do you do for the majority of people who don’t specifically
ask for a newsletter? What do you do to get them to come back? What do you
do to get them to share it with their friends?

Adam: Well we make it increasingly easy for people to share stuff that they
find on Hipmunk, whether it’s sharing it with their friend’s calendar,
whether it’s emailing links, whether it’s talking about it on Facebook, or
whatever it is. And a lot of people do that. You see a lot of tweets from
people who have come from Hipmunk and said: “Hey, this is really cool.”
We’re going to be building a lot more of that stuff. I think you’ve hit
something very significant, which is that travel is a business where
historically people have not had a lot of loyalty toward a particular site.
They tend to shop around at a bunch of different places. Some people that
come to Hipmunk think “Wow, that’s really cool,” but they don’t bookmark
it, and then 6 months later when they’re booking their next trip, they’ve
forgotten what Hipmunk is. This is something that we need to counteract. So
we’re building all that stuff to do that.

Andrew: All right. Asin Hisoka [sp] on Hacker News asked me to ask you: How
much time do you as a business spend on SEO, on link building, on getting
Google scalable, indexable content?

Adam: I would say a little, but not a lot. Our philosophy is that we want
to make it easy for people to find us wherever they are. We want them to
have a good experience when they come to our site, wherever they’re coming
from. When we first built the site, we played around with ads on different
sites like Google and whatnot. What we found is that people would come to
Hipmunk and we didn’t have anything that was special for them. They would
just land on our homepage and they wouldn’t know where to begin. If they
did a search for flights to New York they were expecting to land on a
Hipmunk homepage and learn about flights to New York, and all we did was
give them a form so they could fill in their dates. So, we’ve been
rethinking how me approach that so that we can give people a better
experience, but until we do that we’re not going to try to drive people to
a site that’s not going to them a good user experience.

Andrew: Henry Bosen [sp] from Hacker News asked: How much of your company’s
success has to do with Reddit–the insanely successful community that
understands that the founder of Reddit is the founder of Hipmunk? How has
that helped you guys?

Adam: I think it’s helped us a lot. I mean, when we’ve made big
announcements we’ve been on the front page of Reddit, which is an
incredible source of traffic and great feedback. Certainly it’s helped us
in term of our reputation within Silicon Valley. Steve, one of the co-
founders of Reddit, has an incredible reputation there because twice now
he’s built really solid engineering teams. He did an amazing amount with a
few people. Hipmunk does an amazing amount with a few people because we
think as an engineering company and culture, and that comes straight from
his time at Reddit. So I think we’ve had an easier time than other
companies because Steve has an easier time of attracting engineers and
keeping them. He’s just so good at that.

Andrew: Back to business development. What is your process for building a
deal?

Adam: We start with the introductory pitch. We try to find someway to get
into the company even if it’s just a cold email to someone who’s title on
LinkedIn looks like they’d be [???]. And we send them a fairly standard
pitch. In the case of an airline, it’s “Hey, we can save you money and send
customers directly to your website which means that you can then sign them
up for a frequent flyer program or whatever.” It’s better for you, it’s
better for us, it’s better for everyone. The norm, 90% of the time is that
they don’t reply. So we follow up again, follow up again, follow up with
different people, and try to get in somehow. The ultimate goal is to get an
in-person meeting. That is goal number one, because travel is an old
business that is built on relationships. A lot of people that have been
doing this have been doing it for decades. If you can see them in person,
demo the product in person, and explain it in person, it is infinitely
better than doing it over email or the phone.

Andrew: So, in person with whom? Who are you trying to get that in-person
meeting with? What person within the company?

Adam: The most senior person that we can talk to who still understands the
dynamics of what we’re talking about. In most cases it wouldn’t be super
helpful to talk to the CEO (although we wouldn’t turn down a meeting with
them), because the CEO is removed from the day-to-day economics and
marketing. Similarly, if we’re just talking to the analyst who builds the
models for the airline, they don’t have the decision-making power to
actually sign an agreement. So we like to go in a couple of notches above
to reach someone who has a personal stake in driving more people to their
website by partnering with innovative companies.

Andrew: OK. And if someone who is too low or too distant from the person
you are trying to meet is open to a conversation with you, how do you work
that into a meeting with the right person who is higher up?

Adam: That’s really tricky. We’ve been in that situation a couple of times.
I think the way we’ve handled it is to treat them as if they were the
decision-maker, and eventually they realize that they aren’t so they hand
it up the flagpole. You know, we’ll send them the contract and say, “Can
you look over this and give us your feedback?” If it gets to that stage
they’ll typically say, “Nope, I’m not the guy you should talk to. You
should talk to this person instead.”

Andrew: I see. And do they then become, as the old sales books used to say,
“your champion within the organization”?

Adam: Often they do. Yeah, it’s really nice when you’ve got people
throughout the company. And we sweeten them up too. We send them Hipmunk t-
shirts and luggage tags, which they love to give out. So, we try to make
everyone feel like they’re not only getting a good deal, but that they’re
also working with friendly people, which is something that is fairly novel
in the travel business.

Andrew: You know what? I don’t think you’ll take this the wrong way,
considering what I said earlier, but who cares about getting luggage tags
from Hipmunk? I understand when other companies send me stuff that doesn’t
have their logo on it, but what’s the deal with that?

Adam: I think people really like the character. I think people really like
the Hipmunk. If it’s not the employee itself that likes the Hipmunk, it’s
their kid, who’s 5 years old or 2 years old. For whatever reason people
really like him. Sometimes you hit a brand, you hit a logo, you hit
character, you hit a user experience, and it all comes together. I wish I
could tell you exactly what it is, but I’m not sure.

Andrew: And it’s Alexis Ohanian who created that Hipmunk?

Adam: That’s right. Alexis created that logo.

Andrew: So, what’s the toughest part of business development?

Adam: The toughest part for us is dealing with the frustration of things
not happening. When you’re at a startup, I mean, we released new code every
day or multiple times a day. That’s the pace that I liked to move at. When
we try to cut a deal and it drags on for a year, even though we’ve agreed
to terms at the beginning of the year, and yet we can’t do anything until
we’ve signed the deal, that is just incredibly demoralizing. The only way
I’ve managed to deal with it is to look back and tell myself that it’ll
happen eventually, because it always does. You just have to keep working
through it.

Andrew: And “working through it” means what? When you need to take that
frustration and challenge it into positive energy, where do you channel
your energy?

Adam: Well I try to move it a lot. Probably what I should do is go for a
long walk and think about other things, but what I actually do is send
people emails every week. I say, “Hey, how are we looking? Are things
getting near? Is there anything I can do to help?” I show up at their
office, announced, and say I’m coming to your office next week and let’s
grab coffee, or grab dinner, or whatever. I just do everything I can to
stay on their radar screen because we have a disadvantage, which is that
we’re still a startup. When it’s Expedia calling and Hipmunk calling and
you can only answer one of those calls, typically, people answer the
Expedia call because their going to make them 50 times as much money. We
just have to take what we can get in terms of attention and time, but
fortunately, things are starting to move in our direction. For the first
time, people are reaching out to us and saying “Hey, would you guys be
interested in doing a deal?” Now, I feel like we are coming over that
mountain.

Andrew: Is there some kind of need you’ve discovered that the companies you
want to partner with have that you can give them? Is there some way you try
to analyze what frustrations and needs your users have on the site, so that
you can create a delightful experience for them? Have you done anything
like that for your partners?

Adam: Yeah. There’s a lot that they want, but most of it cuts against our
core principle, which is helping users. There are a lot of airlines who
would pay for preferential treatment. There are a lot of hotels that would
pay to remove negative reviews. There are all sorts of tricks, and a lot of
our competitors do engage in this kind of stuff. That’s just not how we
think. That is a frustration, because often these companies are used to a
negotiation that goes something like: we ask for a straight deal, they come
back with a crooked deal, and we meet somewhere in the middle, but we don’t
do that. They have to wrap their heads around the fact that this is going
to be straight-up, you’re getting the same treatment that everyone else is
getting, no special favors, sorry. That definitely hinders us in some
places but is ultimately why we exist.

Andrew: If you were, and I’m sure that a lot of them are listening to us, a
lot of future Y-Combinator [sp] funded companies are listening to us; if
you were to give them some advice on how to do business right, what would
you tell them?

Adam: I would say, do it in person, every time, especially for the first
couple meetings. Be extremely persistent. It’s very hard for someone to
turn you down twenty times, but maybe it’s easy for them to turn you down
ten. Get an introduction through anyone who can possibly help, who knows
someone who went to school with someone there, is an investor, whatever it
is. Make a very short pitch on how you can help. If you send someone a
page, they’re probably going to ignore it if they’ve never heard of you,
but if you send them two sentences, they might actually pay attention.

Andrew: Who is the toughest company for you to partner up with?

Adam: It’s actually one we haven’t announced yet, but stay tuned.

Andrew: Can you say anything about them without saying their name? Anything
about the experience on how you did it without saying their name?

Adam: Yeah, the experience was similar to the ones we’ve had so far. There
are some airlines and travel agencies that we have been talking to since
literally before we launched. Continuously, we’ve been talking with them
and still have them, so those are coming soon, hopefully. Keep your eyes
out.

Andrew: What’s an OTA? This is what Alexis said to me: “Ask him about the
amount of hustle it took to get us in the door,” us meaning you guys at
Hipmunk, “with OTAs airlines at first.”

Adam: OTAs are online travel agencies. We are not an OTA because we don’t
do bookings ourselves. OTAs are the sites like Oribitz and Expedia that
actually process payments.

Andrew: So, what kind of hustle did it take to get in the door with them?

Adam: Well, I told you about the Orbitz story…

Andrew: Oh, so Orbitz is an OTA?

Adam: Yep.

Andrew: I see. Did you need the others after that?

Adam: For hotels, we wanted the best coverage we could possibly get, and
there are certain OTAs that are stronger in certain regions of the world
and in certain cities, so we tried to build as many relationships there as
we could. We got Hotels.com and Booking.com and a bunch of other online
travel agencies in addition to Orbitz for hotels.

Andrew: Are you guys profitable right now?

Adam: We’re not, but that is an active choice on our part. We have been
investing in hiring engineers and hiring business developments folks so
that we can ramp up faster. We’re certainly making revenues; it’s pretty
gratifying to see.

Andrew: What size revenues are you doing?

Adam: Not sharing, sorry. [Laughter]

Andrew: I figured. Let me take some questions from Hacker News. I’ll
polish these off and then I’ll ask you one other question. First, I want to
say anyone who’s watching this, if you watched this far and you want to
know more about how to get traffic, how to convert that traffic into
customers, we talked a little about publicity, but we didn’t really get
into it, I want you to know that we have something called
MixergyPremium.com where I invite entrepreneurs on to turn on their
computer screens and teach the things that they are especially good at.
Like how to…all those things that I talked about a moment ago. Its real
entrepreneurs, really walking you step-by-step through the problems that
you’re likely to have as entrepreneurs and how they solved it.

You go to MixergyPremium.com, if you’re already a premium member all those
courses are yours, if you’re not a premium member I hope you join us
because you’re going to get those and so many others as I keep adding them
on. Of course I absolutely guarantee it, if you’re not 100% happy, if
you’re not convinced that this worth thousands of dollars to you or $1000
or removed agony for you, then of course, you know where I am, I will
absolutely give you 100% of your money back. Thousands of people have
signed up. They’ve been happy with it and I’m confident that you will be,
too. I’m going to tell everyone whose watching or listening, go to
MixergyPremium.com.

Here are the next questions we’ve got here from Hacker News…Velando Vengo
[sp] says: One way flights are often as competitive as round trips. He
wants to know your thoughts on that and also on couch sourced flight
sourcing, like Flight Fox.

Adam: I book almost all of my domestic trips as one way tickets. The
reason for that is because I don’t always know when I’m going to come back
from somewhere, I don’t always know where I’m going to go. I’m sort become
a business traveler in working on [??]. Domestically it’s almost always the
case, at least in the lower 48 states, that two one-way tickets together
are the same price as a round trip. That’s not the case internationally, so
I book internationals as round trips, but I recommend people who are
flexible or who think their needs might change, that they book one-ways
instead. The other benefit in doing that is that you can combine two
different airlines that wouldn’t otherwise work together. For example, out
of San Francisco there are a lot of flight on United and Virgin, but you
can’t put them on the same ticket as a round trip.

Andrew: What is that sound? Are they shredding something in the
background?

Adam: I think that was someone blowing their nose.

[Laughter]

Adam: You can’t combine United and Virgin on the same ticket, but you can
have two one-ways that you book separately. That’s one advantage.

The second part of your question was crowd sourced flight information. I
think that what Flight Fox is doing is very interesting. There’s still a
lot of agony in searching for international tickets and that’s an area
where we put effort as well as how we make sure we’re getting the best
rates from as many places as possible and how do we make sure that those
rates are actually bookable because in some cases international airlines
are a few days out of date with what’s actually for sale. So when we
display a price, it might be gone by the time the person gets to their
site. That is really annoying, something that we’re working on, and I know
all of our competitors are, too. I think that they’re taking a very
different approach and I’m glad that there are other people experimenting
with that stuff. Hopefully it works out really well for them.

Andrew: Max Gabriel [sp] asked a question that’s a really good one…this
is kind of a niche question, but it’s really important. I’d like to know if
Adam thinks his debate experience helped him prepare for running a start
up. What about that? Not just running a start up, but managing specifically
the people in the start up and also persuading potential partners to work
with you. How did debate training influence you?

Adam: I think it helped a lot in persuasion. When people come up with
objections for things, I’m pretty quick at telling them why those don’t
fly. In particular, airlines and hotels, they’ll often come back with 20
different changes to a contract. Usually we can them down to only a few. It
definitely helped there. In terms of management, I think it may have
actually been counterproductive because it turns out people don’t want to
hear why they’re wrong. Some people want to hear why it’s a good thing, or
how to improve, or whatever it is and that took [??] still learning the,
good management is very different from [??].

Andrew: When you know that someone is wrong and you need to correct them,
understanding that saying they’re wrong won’t get them to listen and to
take the right action, what do you do? How do you nuance it?

Adam: I try to explain how I think about it and see if I’m missing
something, because sometimes I am. It’s not that it’s actually objectively
a bad idea, it’s that I just didn’t understand the reason for it. If both
people agree on what the goal is, or what all the goals are, I’m now pretty
comfortable saying, “Yeah. That’s a perfectly valid way of doing it. It’s
not the way I would have, but still, go for it.” In the rare cases where we
don’t agree on goals, well, ultimately it comes down to me and Steve to
say, “These are what the goals are. This is what we have to do. Here’s why
we think these are the right goals.” We’ll change course if they’re the
wrong ones, but this is the direction the company has to go.

Andrew: What kind of goals did you have? I understand sharing them publicly
gets everyone working in the right direction and it also helps you say,
“No”, or helps you show people why their suggestion doesn’t fit within a
goal, but what kind of goals do you have that help you set that kind of
direction?

Adam: We have [??] goals, like, when we rolled out our [??] tool. It’s
like, “We want to have a [??] product. We want to have it done by this
date, because we want to launch it for this event.” That [??]. There are
other ones that are goals around usage. You want to get the [??] in front
of this many million people by this date. We have goals around revenue. We
want to get these deals done so that we can make this much money per user.
That kind of thing.

Andrew: When you tell everyone, I can understand how that could drive them
in the right direction. Final question, actually, is something that I wrote
about earlier. You mention this, and I didn’t follow up, you said, “With
new markets, you do want to scratch your own itch.” But this wasn’t so much
a new market. Can you help me understand what you meant by that, or maybe,
do you remember what I’m talking about?

Adam: I think so. The way that we approach travel was we looked at what
there was already and we saw that there was a big room for improvement, and
the reason that we thought that was because we noticed our own frustration
with this existing market. I think that also applies to new markets. At
some point in the next few years, there’s going to be eye class [SP],
cameras and undoubtedly there will be all sorts of problems that rise
because of that and opportunities and people will scratch their own itch.
Say, “Wouldn’t it be great if this existed?” I think that there’s also a
huge number of industries where there’s just a level of complacency that
has arisen because big companies grew out of the first web [??] and have
kept doing things the same way that they’ve been doing, since then. In
travel, we did that.

When you look at even something that’s not particularly sexy like payments,
you look at a company like Strype and you say, “They went in where everyone
thought that I was the dominant guy and they rethought it in an incredible
way that helps simplify it.” It was another case of scratching their own
itch [??]. Just to put it in context, I think scratching your own itch
works in established markets where people are complacent. It’s harder to do
in new markets where people are thinking about the problem from scratch.

Andrew: I see what you’re saying. When the industry is so complacent that
everything about the way they operate, they just accept as the way things
have to be, we the users and customers are also that complacent. We also
just accept, “Well, this is the way life is.” You can’t come to us and say,
“What problems do you have” because those problems are invisible to us.
We’ve just accepted, “That’s the way it is.” In those cases, asking
customers for their feedback, or where their problems are is just useless,
because they don’t recognize their problems. You want to stop and ask
yourself, or you’re going to get a better response if you stop and ask
yourself, especially if you’re sensitive to it, “What’s bothering me? How
would I [??] this?” Going back to the glasses case, if there are a new
Google glasses coming out tomorrow, the day that they come out, if you want
to develop a new camera app or some other app for it, you can’t go out and
ask people, “What problems did you have with these glasses” because it’s
too new. They haven’t discovered problems yet, but if you’ve experienced it
for a few hours or a few days, there are opportunities that you see, or
frustrations that you see, and so you’re in a better position to solve
those frustrations and jump on those opportunities without asking people
for their feedback. Do I understand that right?

Adam: That’s right. You got it.

Andrew: Anything else that I missed in this interview? I know I’ve been
really thorough with this and I really appreciated your patience as I went
into [??]. This is good.

Adam: Nothing else that I can think of. I’ll let you know if I think of
anything afterwards.

Andrew: Thanks so much for doing this. Thanks for spending all that time in
the beginning to set it up. Thank you so much. Thank you all for watching.
Bye.

Sponsors I mentioned

Walker Corporate Law – Scott Edward Walker is the lawyer entrepreneurs turn to when they want to raise money or sell their companies, but if you’re just getting started, his firm will help you launch properly. Watch this video to learn about him.

Grasshopper – Don’t make the mistake of comparing Grasshopper with other phone services. Check out their features and you’ll see why Grasshopper isn’t just a phone number, it’s the virtual phone system that entrepreneurs (like me) love.

Shopify – Remember the interview I did about how the founder of DODOCase sold about $1 mil worth of iPad cases in a few months? He used Shopify. It’s dead simple and very effective. To get a longer free trial, use this code: Mixergy

  • Mark

    Thanks Adam for sharing!!!

    Thanks Andrew for an excellent interview!!!

    I’m lovin’ it :)

    Mark

  • http://mixergy.com Andrew Warner

    Thanks!