How do you sell a company? How do you even find the people to sell your company to? In this interview I’m lucky enough to get to talk to a founder who sold his company. Check out what he did. It goes against common belief and I want to find out how his company ended up being acquired by Trip Advisor.
Evan Schneyer founded Wanderfly, a site that helps travelers discover and share personalized travel recommendations.
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Evan Schneyer, Wanderfly
Evan Schneyer is the founder of Wanderfly, a site that helps travelers discover and share personalized travel recommendations.
Andrew: Coming up, how do you sell a company? How do you even find the people to sell your company to? Check out what today’s guest did. It goes against common belief, and he made it work, and he’ll discuss it in the interview. Also, what do you do if people don’t come back to the site you built? Today’s guest had that problem, and he talked about what he did to solve it. Finally, you need new users for our site? Check out the one thing that today’s guest did that got him 5,000 registered users for his new website. All that and so much more is coming up.
Listen up, I hate to have commercials interrupt this interview, so I’m going to tell you about three sponsors quickly now, and then we’re going to go right into the program, starting with Walker Corporate Law. If you need a lawyer who understands the startup work and the tech community, I want you to go to walkercorporatelaw.com. Next, I want to tell you about Shopify. When your friend asks you, “How can I sell something online?” I want you to send them to Shopify and explain to them that Shopify stores are easy to set up, they increase sales, and they’ll make your friends products looks great. Shopify. Finally I want to tell you about Grasshopper. Do you want a phone number that people can call and then press 1 for sales, 2 for tech support, etc., and have all the calls be routed to the right person’s cell phone? Get your number from grasshopper.com.
All right, let’s get started.
Here there freedom fighters, my name is Andrew Warner. I’m the founder of mixergy.com, home of the ambitious upstart, and I’m glad I don’t do interviews in person, because I’ve got a cold, and I don’t want to infect anyone, and I don’t want to limit my opportunity to talk to new people just because I’ve got this cold. In this interview I’m lucky enough to get to talk to a founder who sold his company. I want to find out actually how entering his idea into a business plan competition led this founder to have his company acquired by Trip Advisor.
On a trip to Rome, Evan Schneyer came up with a business idea. He entered it into a competition, and less than four years later his business was acquired. This is the story of how he built Wanderfly, a site that helps travelers discover and share personalized travel recommendations. Evan, welcome.
Evan: Thank you. It’s great to be here.
Andrew: What was it about Rome that led to the idea?
Evan: We were visiting Rome. I was there with my girlfriend, long-term girlfriend, Christy, and we were actually visiting a close friend of ours from college from, I guess at the time, six years prior, and a girl who I had subsequently lived with, and she had lived with me in college, so really close friend. He was actually working at Expedia at the time. Christy, I and a few other folks had recently left jobs and were starting to do some consulting under a brand we had called Living Breathing. We were there visiting our friend, Reggie. Reggie was actually in room on another acquisition deal. They were buying Beneret at the time, which was a major European OTA. We kind of just got to talking. It was the first or second day we got there. We were all jet lagged, and there was just good vibes to get new idea in. I always find traveling helps with getting out of your head and getting new ideas. We just kind of casually started talking over fresh pasta and house wine, which they have at every Roman cafe. It was not even a special restaurant or anything. We started casually talking about how we had gotten there. Christy and I had chosen Rome because Reggie was going to be there, and that gave us a reason to go and somewhere to stay for a couple days. It kind of started getting a little business-y, and I think we thought we had lofty plans for our consulting business and thought Expedia would be a pretty good first or second client.
Andrew: You were trying to convince Reggie, who worked at Expedia, to hire you guys.
Evan: Exactly, and that (?), so he was not in a position to be contracting work out, but he did know a lot about the industry. We started talking about how we had gotten there specifically, and Christy was actually the one who said the original idea. She said, “There should just be a site that gives you ideas for where to go based on where (?).” It was that simple. It wasn’t groundbreaking. It was that we kind of thought about, and we were like, “Yeah, that’s true. That should exist.” We started talking and Reggie was saying, ‘yeah, I haven’t really seen that. We’ve tried it a number of times.’ Christie wasn’t suggesting it as a new venture. But, I think you were asking me about the mental chatter a second ago.
Andrew: Yes, before we started.
Evan: Immediately, I started thinking how would that work. We started talking about how it worked. Pretty much immediately felt like there wasn’t anyone who had done that the way we were envisioning it, in a very open ended browsing inspirational kind of way. It seemed like online travel was a lot of work. You get an idea for where you want. Once you know where you want to go then you have all this work and research and planning and comparing prices on a lot of stuff. But, what about getting the idea? It’s this very manual process looking at magazines and talking to friends. We felt like there should be a website that just gives you ideas. So, Christine and I pretty much from that first discussion we started thinking of it. This was like our first day in Rome. So, so much for taking a break.
Andrew: Did it keep you from enjoying the vacation as a vacation because you suddenly had to keep thinking through this business idea?
Evan: No, in the first few phases there is no responsibility.
Andrew: Laying back and having fun thinking through an idea.
Evan: Yes, just fantasizing about what this thing could be. Too, we had just started doing contract work and for me more on the web production and technology side. For Christie more on the digital marketing and brand strategy side is her background. We had done some client (?). Did you see the cats run out?
Andrew: Yes. Let me ask you this. I want to understand how you built this out. How it goes from this little fantasy you have on a vacation to a real business that got acquired by Trip Advisor. Understanding that I don’t do any editing; would you feel comfortable talking about what you said to Jeremy about why you left your previous company? I think that there is nothing dangerous about that and it’s an interesting story.
Evan: Yes, I think that was my what’s the thing most people don’t know about me?
Evan: When we went to Rome I was already on a contract with NBC. That was a short term thing. I had decided that I was going to end that and do more shorter term project work.
Andrew: But, before that you were fully employed somewhere. Where?
Evan: I was employed at a gaming company. Initially it was Mobile Gaming. Then it was Social Applications. And, then it was I think now they are Consult Games. And they merged with another company. I don’t know what they do now. Basically, I had started there wanting to be in gaming and ultimately social apps and stuff. Also, very much wanting the startup experience. When I joined there were 13 people. They grew a lot to well over 100 in three different offices. All the growth was basically funded through investment and all the investment was they didn’t have the same urgency as a typical startup because the Founders had a lot of money from other ventures. That trickled down into the rest of the culture so it was this kind of weird environment. It seemed like it was going to be a startup, but the actual experience was a lot more kind of 9 to 5ish. There wasn’t the real team comradely and sense of urgency.
Andrew: I’m sorry to interrupt that but, I want to emphasize what you just said so it doesn’t just because another snippet of our conversation. You said because these guys had done well and because they had money they didn’t have the sense of urgency that other startups have. The reason I want to emphasize that is because just yesterday I was talking to an entrepreneur who told me every time he launches a company and a competitor comes into the market he gets scared. And, if that competitor has experience and success behind them he gets even more scared and he might even turn away from running the business. Here you are saying, ‘wait a minute, that’s not necessarily an advantage.’ It could actually become a disadvantage because there isn’t a sense of urgency. There isn’t the comradely. It becomes a 9 to 5 culture for people because the Founders don’t have that hunger anymore. So, in that environment you are not thriving. That’s not what you are looking for.
Evan: It wasn’t just the Founder. The Founder was personally very wealthy and was able to bankroll the whole thing out of his and his families funds so they didn’t even have to prove out successful milestones to outside investors. I think the story, the scenario that you’re relating, I think, that would be scary. I wouldn’t assume that an experienced entrepreneur doesn’t have urgency. I think, you know, that’s how you raise money sooner, in a larger series added sooner, when you have some experience. But in this case, I think, there was a lack of urgency because the money was pretty easy.
Andrew: We said, before this interview, that your cats, Digit and Megabyte, are going to make some appearances here, totally fine. Alright, so, in that environment, this is what you’re looking for. You wanted out, didn’t you?
Evan: Yeah, so, I wanted out. But, it took me a long time and ultimately, in that case, never even did make the pro-active step out. So, what ended up happening, I, basically kind of, tried to quit a couple times. And, every time I tried to quit, they said, well, here’s more money and here’s more responsibility. And, I said, well I’m still really young, I was, like, 23, that’s something I should really do and so I stayed and kind of took a salary bump and took some more responsibility. As a result, I, kind of, got some more experience there and was able to, you know, run a team and launch a couple of products from my idea to market, which was great. I was, at the end, 24-25 and had all this experience running a team. But, it was at my third cycle of that I started to become disillusioned and wasn’t happy there. I was in the process of moving to go part-time and I talked to Christy’s dad he said, that’s great. What you should do is ask them to become a consultant. And, I said, okay, that makes sense. Part-time, consulting, hourly pay. And, we hadn’t started, living-breathing yet, so I wasn’t in the mode of pitching contract work yet. And, he said, you should charge $90-100 an hour. And, that came out to, what it boiled down to was my ass getting to work three days a week and getting paid the same amount. I guess I had the balls, or the naivete to pitch that and they weren’t having it. And the next day that I came in, they said, I don’t think this is working, you need to leave. So, I managed to get myself fired from that last job.
Andrew: Alright, so now you are fired, you then ended up starting your consulting company with your friend B.C. for a while and you said, you know what, I want to do shorter projects, I want to be a consultant. You go to Rome…
Andrew: And then you come up with this idea.
Evan: Yep. So, initially, go ahead.
Andrew: So you have this idea, it’s fun when you’re in Rome, you come back to the U.S., how do you end up in this competition that I talked about at the top of the interview?
Evan: Yeah, there was a Wharton Alumni competition, and as alums we got the email or something. It was timely. We had done a little of design work on it and started to think a little more about the idea. The first step was low investment, it was a one pager. Which, we, kind of, already had. So, we said, alright, let’s enter it. And we entered it and a couple weeks later we got the feed-back and it said we were advancing to the next round. And the next thing was a four pager, or whatever it was. So we were, like, I guess we’ll do that. So, we spent the additional time. And, we had been continuing to develop the idea anyway so it wasn’t a ton of additional work. So, we entered that round and got the feed-back a couple weeks later and it said, okay, now you are in the finals. And the final submission is a full business plan. So, we really procrastinated on that one, and just put off talking about it and then, I guess it was sometime around April. So, we got the original idea around October of 2008. Which is four years to the day of losing to Boston for the acquisition. So there was some nice closure there.
Andrew: So, you made this whole business plan?
Evan: Yeah, so that was April-ish of 2009 and we were six days away from the deadline and we hadn’t done anything. And, we said, are we going to do this or not? And, Christy and I, and one of the other founders at the time, there were three of us initially. All right, let’s go for it. So, that was our first true start-up week. I don’t think any of us had any real client work at the time, so we did nothing but research and plan and talk and work and edit and put together a really nice-looking polished plan. It was 40 pages long or something. It was a proper, a couple of us had gone through the whole business plan. I had taken a class in writing business plans and [??] the idea the co-founder had as well.
So we kind of knew the sections to do and just, you know, gave it our best.
Andrew: How did you do in the competition?
Evan: We ended up being one of the finalists. There were like six finalists and we didn’t win. But by that time, you know, we had gone through this additional process. Now we had it all planned out and we felt like being a finalist in a pretty solid competition like that was reasonable validation. We’ve been talking to everyone we knew about the idea. We had some, we actually did have a, I don’t know if we had a prototype by then but we ended up making a prototype. Just kind of a hard coded, interactive demo of the idea we wanted to build.
So we kind of fell into starting this business.
Andrew: There’s something about it that kept making you guys proceed. Something that captivated you. What was it about this idea?
Evan: Well, for one it was truly novel. It really wasn’t anything and I still remember finding anything on the web as far as that initial idea of giving you ideas for where to go based on your interest and your budget and timeline. Nothing else, I haven’t found any other executions that kind of nail that problem. And certainly not at that point.
So I think it was the sense, even though as part of the business plan we had identified like fifty competitors and various players in the space, we really felt like no one was executing a missed problem the way that we wanted to. And I’m sure there’s a lot of group dynamic stuff [??]. Me personally when I get an idea, it’s kind of like this thing should exist and I want to make it exist and I’ll keep pushing until it gets out of my head and into reality.
Andrew: What does the first version of the product look like?
Evan: So the prototype looked very different from today. The first version, the prototype style was a little different but conceptually was not very different from the first version that we had ultimately launched. So we ended up getting, we raised money and I’ll take you through all that. We launched the first version of [??] October of 2010. And the first version looked pretty, functionally it was the same as the prototype. It was really this super-simple, fun to use, hey traveler, what are you looking for? There were these big, friendly icon buttons that said Romance and Food and Culture and History and stuff and you basically clicked a few buttons and it’d go and we started pitching ideas.
So we’d say OK, romance and beach? Check out Miami. Check out Pacific Coast Highway, whatever. And there was this very kind of casual browsing oriented experience. And we looked a lot like, I can send you the original prototype which might not even have the original name. We were originally calling it Triple Bolt before we had a name. And went through a whole meeting exercise to come up with Wanderfly.
Andrew: I’m actually looking at Wanderfly.com as it looked in early 2011. It basically is asking What do I want? Food, Outdoors, Beach, Snow, Shopping, etc.
I click on that and then you take me through this process of finding things based on what are my interests. So if I click on Snow, you’re going to show me lots of opportunities to experience snow on my vacation.
So you launched this thing. Revenue was going to come in from Expedia?
Evan: Revenue was pretty much from Day one was a major question. And yes, I think the first plan was we knew that we were at the top of the funnel. And we kind of mapped out the whole travel process from inspiration to planning to booking and so forth. We even haven’t mentioned how much narrower it gets from that first top of the funnel inspiration to booking a trip.
However, investors kind of demanded that we had a booking process on site as part of our offering. His investment was actually contingent upon us having that. And very soon after we launched, the initial idea was OK. Some percentage of users will make it all the way down from saying I’m looking from snow to we pitch [??] and they’ll say Yeah, I want to book that and they’ll book it. That percentage was 0.
Andrew: Why? I mean, ideally I would think I’m interested in going away somewhere by the beach. I’ll click on this website called Wanderfly. I’ll just keep hitting Next, Next, Next. I’ll come across a beach destination that I’m into. You know what? Let’s book it. And I go to Expedia and book it?
Why isn’t that the way it worked out?
Evan: Exactly what you said. When you get that to that Next Book it point, you go to Expedia and book it.
Andrew You don’t take me to Expedia or I’ll go to Expedia?
Evan: Initially, we weren’t taking you to Expedia. We were initially saying Book it here. So we very quickly said OK. So that was one of the reasons like, Who the hell is Wanderfly? No one is going to drop hundreds of dollars or thousands on a trip on travel site they’ve never heard off. Let’s send them out to a partner.
So we started sending people out, a couple of months in. And we were generating a few leads but even there on the lead site, it became fairly apparent that we would have to get real volume to make any real money. And also, as long as there was commission based, which was kind of what the kind of default affiliate agreements are, they’re waiting months and months to get paid.
So it was we’ll send some small, already small portion of our traffic to Expedia. If they [??], so if they happen to manage to make it on Expedia through that booking process within like 7 days and they do make a purchase and then they actually take the trip and Expedia gets paid, then we’d get paid 25 days later.
So it’s like [??] never got a check from Expedia.
Andrew: Very small percentage of people end up doing that and even if they do, it takes you forever to get paid.
So let’s talk a moment about how you changed the model.
Evan: Well, I think just to answer you rather the rest of your question. The other thing was that we were aiming for users who were really still in that inspiration space. We weren’t getting users who were thinking booking because you kind to have to have it as a wish in mind when you’re ready to book.
So we were getting people who were just kind of dreaming and looking at stuff 6 months out or even not with a date. Saying someday I want to go to somewhere and a bunch of people [??] Wanderfly. They would just kind of sit there and just sit there and dream and look at the nice pictures.
Andrew: Right. I can see myself doing that too.
How did you get all these people onto the site?
Evan: So that was really entirely Christy’s department. She has a knack, just a natural knack for kind of gift of gab and she did a lot of interviewing and PR. Initially, actually, I hired a PR firm and we hired them, we weren’t sure when to start hiring them. We felt like we should hire them before launch but we weren’t sure how far before launch. Probably hired them about two months too early.
The reality is you pretty much only need them like two weeks before the launch. Maybe even at launch because you’re going to push your launch date back anyway. So we very quickly fired the firm and then hired directly the contractor they were hiring for a business and cut our PR costs in half.
And she was [??] and she basically showed Christy the ropes and set her up with a lot of interviews and just did the PR blast thing. We had a good story because we truly were doing something novel and we had a great research experience, really right out of the gate. It was just very fresh and it [??] all of the normal you crap you see on online travel. We didn’t have ads, we didn’t have like [??] in your face. It was really purely solving that user problem saying What do you like? And just immediately giving you an idea and letting you sit and dream the places you can go.
Andrew: What kind of interviews did she set Christy up with?
Evan: I know we had, so we were in New York so we had some early alliances with folks like [??] that really helped us out. There’s my other cat.
They even pre-launched. We did a private beta for a few months and they had sent out some kind of contest that was like, I don’t remember what the goal was but they blasted it out and they got us like five or six thousand registrations with a single email. That is when we only had a splash page out in it was like Be one of the first to see this awesome new travel site.
Andrew: Five thousand people came because [??] emailed their list and said go check it out and you got email addresses. How did you get [??] to do that? Did they get a share of your sales or anything?
Evan: I think they just, I think for them it was like they got the opportunity to break news about this completely new site so they, in a lot of cases, that’s enough. I know being the first and having exclusivity on the story is advantage enough. We didn’t pay them, and I think that, honestly I don’t remember if there was really anything valuable we gave back to them, but I think they really liked startups. (?) relationship that preceded and met with the founder, and he liked her. He liked what we were doing and wanted to blast us out.
Andrew: How many people who came to that site ended up giving you their email address?
Evan: I don’t know what the conversion. I think probably most of them for that first blast because all we had up went through Thrillist and blasted us out, and all there was was an email splash page. I think it was before the days of LaunchRock that was essentially the same thing. It was here, give us your email, and we’re let you know when we’re live. [laughter]
Andrew: You’re being climbed by the cat.
Evan: Yeah, probably most of them, and that helped to then, when we got to relaunch, we seeded it ourselves and had a small consistent base of users to blast out to directly but also had a lot of really good press in that first . . .
Andrew: How did you get your small base? Is this the small base you mean? The Thrillist people?
Evan: From Thrillist. I think between that and friends and family we had been kind of collecting emails for a couple months and debugging and continuing to add polish the product. I think we had around 10,000 or 12,000 people to email to say, “Hey, we’re live now.” On top of that we got really good press on launch day. I forget exactly who were the major ones to break on the day of, but we got a lot in our first week. I know Mashable was up there, The Next Web was one of the early ones.
Andrew: It seems like Cool Hunting was also?
Evan: Hunting, yeah, was the other big one.
Andrew: I’m doing a search for the time of the launch. Life Hacker I think covered you guys. This was 2010 when you launched and then all kinds of other sites.
Andrew: Here’s one from Business Insider from the following you. Watch out Expedia Wander Fly offers a much better way to plan.
Andrew: They were wrong because that didn’t really work out, but they had the same expectations and hopes that you did. What about this. Jeremy, who pre-interviewed you, talked to you about where you got your first customers, and you talked about a partnership with Samsung. What was that partnership and how did that help you get users?
Evan: It’s funny that you’re using customers and users interchangeably, but a big learning is that they’re not the same thing.
Andrew: What’s the difference in your business?
Evan: A user comes and uses your free consumer web site, and a customer pays you money. [laughs]
Andrew: Who’s your customer? We know who the looky-loo users are, but who are the customers?
Evan: Ultimately, and this took us a couple years to figure out. Well, I guess it took us about a year to figure out, relaunching the site and finding more of a sweet spot. Our customers were business customers, really. We did have a consumer offering, and we were getting paid, and we actually still get small checks from a few kind of commissioned and quick based and impression based partners that just kind of roll in a couple hundred dollars a month, but I think really we found our business towards the end, which was B to B. After we launched B2 in early 2012 we started, and this was Christy again, just basically hammering out a B to B kind of branded page offering. We found a lot of people, even in B1 had come to us basically saying kind of some version of, “I love Wander Fly. How do I use it for my brand?” My brand was anywhere from a company like Samsung who, at the time, was working with Conde Nast on some kind of promotion around some new products, to more travel-oriented companies like tourism boards. We talked to a few hotels, but we never actually ended up working directly with hotels because Wander Fly’s kind of bread and butter was always more multi-destination focused, so there wasn’t a great offering for an individual hotel. Ultimately we found that we were able to charge and have a repeatable business model charging, and I don’t even know if I should share price points, but we were able to charge something that was a nontrivial amount.
Andrew: What are you talking about? I mean it’s so far in the past that no one can be upset at us talking about it.
Evan: It really varied, so there was a repeatable that was in the hundreds of months generally range for a brand to go in and have kind of a custom- branded version of Wander Fly that they could then share with their audience and start to get leads through, or almost use it as a mini site or another channel. Kind of the way people would use Facebook pages. The challenge with this cell Facebook pages are free so we started to see why should I pay for this when Facebook is free and has an enormous audience. So we started moving in the direction of a travel vertical specific (?) supported by a nice consumer site that had a good ecosystem for travel.
Andrew: Sorry. I am not following. Why would Samsung want to have a site to let its customers view different destinations based on interest?
Evan: Samsung wasn’t actually the first example of that. In the case of Samsung, I shared this story about Samsung because I thought it was a good example. I think they were the first ones that paid us for something. What they paid us for was a cross promotional blogging thing. We had a Content Manager. As Content Manager for hot travel site Wanderfly shared some perspectives on some of Samsung’s consumer products. It had nothing to do with Wanderfly.
Andrew: You were trying to make money at the time.
Evan: Yep. That was kind of a technicality in a way. It kind of resonates with a general perspective I have that got more and more reinforced as we went on which is do whatever works. Who cares if we started out saying that our business was going to be a consumer based thing where we make commission. It wasn’t working and here comes Samsung willing to pay a couple of thousand dollars for some blog posts.
Andrew: And if other companies had offered you money for the same thing, Wanderfly might have been a blog post writing company.
Evan: I don’t know if we would have gone that far. Yeah, I’m sure there is criticism along those lines of getting swayed by whatever comes, but I think towards the end we did a few months after Samsung we did a deal with Jeep and Telegraph in the UK. And that was larger. It was in the tens of thousands. We were probably undercharging for what we did, but it didn’t matter. That was kind of like part promotion part white label technology. Basically using Wanderfly to some degree our brand more just our UI, our engine to promote adventure travel for Jeep.
Andrew: Different places you can go travel with your jeep.
Andrew: And at that point if I am doing it vicariously that is fine. Jeep is not trying to get me to ship my Jeep to these fun destinations.
Evan: And, it was also good because it was leading some traffic back to our site, but it didn’t rely only our sites traffic so we built a widget for them. It was something that Telegraph was actually publishing on their site. So, they had the funnel and we were a vendor. We were a vendor using technology that we built in our expertise and our space. I think had things gone different and we had well I want get into that complete, that would become our business.
Andrew: Won’t get into what? What were you going to say?
Evan: In a lot of ways I was going to get into stuff I can’t really talk about.
Andrew: I won’t let you talk about stuff you can’t talk about it. What was the topic you were going to talk about? Talk about it vaguely.
Evan: I can’t go there.
Andrew: I’m on Wanderfly. I don’t see this anymore. When I look at archive .org our archives version of Wanderfly by back from the time we are talking about. I see what you are describing. A beautiful picture. Lots of category options for the kinds of trips I want. I click a button I get to explore them. Today when I am on there and I happen to count on Wanderfly, I see on the left I see different people’s recommendations for trips that they think I should take or that they recommend. One woman who is recommending San Diego for a vegetarian Vegan trip. I click it. I see a hotel. I see tags. How did you guys shift to this?
Evan: In looking at the user experience, separately from the whole revenue business model discussion we pretty quickly identified we had this great user experience for a one time use or maybe a once a year use. Where people would love the site and love what it gave them and have a really good time for 15 to 20 minutes. We had a pretty long session length but ultimately we were giving them these great ideas and that was kind of it. There was no reason to come back. How frequently do you really need travel inspiration? Especially if it’s good. If it’s good inspiration you come to our site and get 20 ideas for the next five or ten years of travel. And, you know, you can come back and browse the pictures again, but beyond that initial value prop. There wasn’t a reason to return. And, we identified that taking that same kind of exploration experience from the destination level into the local level, and saying, okay, maybe I do have a few places that I’m looking to go, but now I want that same kind of, I’m going to Miami, or maybe I’m thinking about Miami, what should I do there. And that same kind of tagged, structured, personalized recommendation approach, but more in the restaurants or hotels and just attractions and stuff to do in that place.
Andrew: How did you know that this was the next thing to try out?
Evan: Well, I think that the main thing we were concerned with was that, that we weren’t giving people a reason to come back. A lot of people loved the user experience and they would tell us and they would tell their friends. But, it’s like they wanted more and we kind of had this drop-off.
Andrew: Now, how did you know that, I understand your problem, but how did you know that this was solving a customer’s problem. A user’s problem, actually, to use the right language.
Evan: At that point, so I guess the original problem of, where should I go, came from having that problem ourselves and validating that with everyone we talked to. The question of, how do we know that was the right way to extend it? Kind of in that same way, I mean, users told us and we would see people try to use the site in that way. We saw that we were turning, we were, kind of, turning away users who actually did have a destination in mind. And that was a problem from day one, that we had this notion of serving the open-ended search. People who were expecting a more conventional experience would come into that home page and say, well I’m going to Miami. And, we’d, kind of, say, well that’s not, well you’re too far in the funnel, you should go to Triple Prize or go to…
Andrew: So, if they, how did you know that they were saying that, I’m going to Miami or I need some places to go within Miami?
Evan: People would tell us, but it was also barely, at that point, kind of, intuitively obvious. We found a lot of people that want to fly were just not using the site on a regular basis because they had no reason to. There was…
Andrew: There wasn’t any real validation, right? There wasn’t any way to say, hey, measurably this is what they are looking for. We’re having conversations with customers and they were telling us that if we build this it would be worth that much to them.
Evan: Not exactly, no. I think there was, it seemed like it was a natural extension of the process. We saw other sites, we say that local, there are a lot of local sites and we, of course brushed up against some of the local sites. This is right around when 4 Squared was starting to get big. Again, kind of, was just product intuition and just really thinking through the customer experience and realizing that we’ve got this great discovery experience and then we give you this great idea. And, we also, we had a version of that. So, I guess, we did have some validation in that, when you would land on Miami, we were sourcing the restaurants. We had all these API partners, we had stuff from Yelp and Eventful and all these other places. And we would see people, kind of, clicking around there, but, we could tell in the traffic, in the analytics, and just, talking to people. And, again, kind of, primarily using it ourselves, that piece of the experience was just falling short. Because we were relying on third-party information. We didn’t have control over it, and it was just, not a curated experience.
Andrew: So, you know what? I interviewed Adam Goldstein of Hitmonk, and Adam said that he had this need that just seemed obvious, that shopping for flights is too tough. And I asked him what he did afterwards and he said, essentially he went to talk to other people to see if he was crazy or not.
Andrew: Like is he the only that’s bothered by this? And it turns out he wasn’t crazy about that, but by showing it to other people within Y Combinator, and his friendship group, he found that he was too data driven, too analytical. He wanted an Excel spreadsheet, essentially, and most human beings don’t want to ever look at an Excel spreadsheet especially when their looking at vacations. And so, those kind of conversations validated his idea but also invalidated much of his approach to his idea.
Andrew: And it seems like that’s not the approach that you had. You were thinking I have this vision, I know what I need.
Evan: No, we certainly did that. I guess, I was kind of just taking that process in my description of it, what I was taking, that process for granted. And I mean when I say we, and what we knew, this is through, you know, a daily questioning internally through the people at Wanderfly and everyone we knew of, you know, sharing what we were building, bouncing it off of partners at the time, showing early comps, taking feedback, so yeah.
Andrew: What is the process that you had to show it to users and say “Hey if we move from this vision to this vision, does this work for you?” How would you even find them? How would you ask them these questions?
Evan: Well we had a lot of partners, because we had a kind of business heavy founding team, so with Kristy and the other founder, one of the other co-founders, Cesary were talking to a lot of these partners, so we had a base of people to start sharing some of these ideas with. We also saw that they were asking for it too, just like users were. We had this feature that we launched as part of B1 that we had called Wanderlists and had a cease and desist around the name from a travel company, but basically a Wanderlist was a list of destinations. And that was kind of a fun way that we tried early on to try and extend the user experience and give people a reason to come back and, you know, not just browse these things one time, but also start to save them and you know, create a list and share it with your friends. And there too, it was the same kind of thing where to us a Wanderlist was a set of destinations, but what if you were browsing Miami and had a set of things in Miami that you wanted to save? So we already had some cases already where some of our partners and ourselves and our users were kind of hacking that system and creating, had started to create, local venues as if they were destinations.
Andrew: I see.
Evan: [???] That more local list. So yeah, we definitely, I’d say we had it validated on a lot of different fronts. So it wasn’t just us in our little bubble. At the same time, you don’t know how many people you ask, you know are there entrepreneurs, investors, partners, and users who are asking for you. You don’t really know if it’s going to work until you put it out on the market. So it definitely was still, launching B2 was definitely a significant risk. Because, we still have B1 sort of in there, if you happened to click that big input box and see the thing shift down and now you’ve got your little icons that you can search for, but it’s no longer the primary focus. And so we made-
Andrew: Oh, yeah.
Evan: -a big risk but it was, product-wise, it was the right move.
Andrew: There’s also a… you guys are big on partnerships. A partnership with the New York Times where essentially in their Travel Section, you had a section of their Travel Section.
Andrew: How do you get that?
Evan: We powered a widget for them. So it was barely, I mean, we had our tiny little logo on it, but basically it was leading to their pages. So we kind of used our technology, we basically overlaid our algorithms on their data. Which was a cool little tech project, actually. And you know, in retrospect, it was cool to be able to work with the New York Times, and you know as a little start up, and see our name on New York Times. It didn’t do anything for us.
Andrew: You weren’t making money off of that?
Evan: There was no money. There was even any real, there was no traffic. Because it was on their site and stayed on their site. And no one really, you know, we got, I think there were a couple pieces of news. And it kind of helped in making us, you know, kind of puff up our chests and appear more legit than we were. Or just appear legit. But there wasn’t really tangible benefit, I think that the main things being traffic or users or revenue and we didn’t really get any of those out of that. I would say that was certainly a learning experience.
Andrew: I told you in your pre interview one of your big challenges, as you were building this business, was sticking to your vision.
Evan: Yes. Not, just vision. I think we were good about sticking to our vision on a product level. This thing should exist and we built it and we put it out there. And, we went through that whole cycle a second time and we said this thing should do these other things. Let’s build that and put that out there.
But in truth that initial idea we had in Rome was exactly as I stated it earlier. This site should exist. It would be cool if this existed, which I think is a pretty common kind of vibe for a founding moment. Then when we started looking at it we said it would also be cool if we built something and sold it and we are all millionaires in a year. That was kind of the other piece of the initial goal.
I think the truth and I don’t know how many people admit it and I don’t know if I should be admitting it on interview, but the truth is that it was the founding idea was and this can easily change, was we want to build this cool thing and create this thing for the world and we want to build something and sell it and have the full entrepreneurial cycle of that experience.
I think the business model was kind of, not an afterthought, but was added on in order to make it seem more filling or to raise money. Even with the user growth goals of having it try to grow it into this mass brand and everything, again, there were obvious pros to pursuing both of those, but neither one was part of the original. We didn’t wake up and say, ‘we need to build the next Trip Advisor. We need to be a mass brand everyone uses. Everyone is going to use this and that’s our vision.
The vision was a product vision and kind of a personal experience vision. (?) What’s funny is that it took a lot longer. It took four years instead of one on the financial specifics. But that’s kind of what happened in terms of we are going to build this thing and sell it.
Andrew: You did and did you become millionaires? Did you become a millionaire from that sale?
Evan: I don’t think that I can answer that. In terms of sticking to the original goal, as I was saying, in terms of the overall experience that was real, we ultimately achieved not the numbers we were aiming for and in a much greater time length than we were aiming for, but ultimately did return back to that original goal and said, ‘you know what, we built this thing. A lot of people like it and we have buyers who are interested in buying the company.’ That is what we originally set out.
Andrew: How did you get that? How did you get buyers that were interested in buying your company?
Evan: For Trip Advisor, we reached out to them. Which is an interesting another kind of myth I feel like I should dispel. I’ve heard companies are bought not sold. I’m sure some are. I’m sure if you are going gangbusters and exploding and buyers come to you. But on the same token it’s like saying people get hired they don’t find jobs. You sit around and wait for someone to hire you; you are not going to get a job.
I have been in contact through Reggie, who is a would-be founder. He didn’t have the same risk profile as Christine and I, but was an avid supporter and had introduced us to Expedia and made the introduction to Trip Advisor and I followed up several times and finally got an email back from Adam who heads up product there. Pretty much from that first email it was a smooth, positive process. It was a good fit. Just like a really successful job interview process. It was very similar. Way more complex second half of it I would say, but the initial is it a good fit? Do we want to sell to them? Do they want to buy us? It was very smooth. It was pretty fast. It was like five or six weeks from that initial phone conversation to assigned time sheet.
Andrew: Oh. Wow. And there was one point there, though, where it seemed like it wasn’t going to work out.
Evan: Not with Trip Advisor.
Andrew: It was with someone else.
Evan: Yeah. And again, I’m careful because I’m not sure how much I, I definitely can’t share specifics, but there was definitely a low point in the whole thing. The startup rollercoaster is definitely, it’s definitely apt to call it a rollercoaster. And I’d say the most extreme of the ups-and- downs was, you go through a lot of these things where you, you constantly have prospects, in one way or another, whatever you’re looking for, whether it’s investors or business partners or whatever, there’s always this, kind of, set of prospects. And there’s always this sense, at least there was always a sense for us, and I think this is a pretty common thing, that even if you raise money you’re always scrambling, you’re always a few months away from running out of money. Which also does a great job of creating and maintaining that sense of urgency that we were talking about earlier. And so we were kind of, we went through a very rapid up-and-down where we still had a few months of runway left, we knew that we were going to have to do something, but we weren’t scrambling yet, and we started talking to acquirers, and thought we had something on the table, and thought we had even other options. We basically went from having multiple options and kind of being on top of the world, and thinking this is going to be awesome, to oh my God. Everything just fizzled. [laughs]
We went through that cycle really, really fast. And I think we’ve been, this was actually before we talked to Trip Advisor, but it was, we’d been in the process of getting in touch with them, too, and I had a, you know, there’s a lot of soul- searching that happens in the course of those ups- and-downs. I think in that first wave we hadn’t definitively decided to sell the company. We were kind of starting to explore it, and then after the opportunities – we were simultaneously exploring selling and raising more money, and even raising more money, it was a potential strategic investor; there was, do we raise, the amounts, even, that we were raising, it was all these different apps. This is in May-ish, April-May of 2012. We’d just launched a new product; we were starting to get to see some business, and had identified an actual business model, and we were suddenly at this huge crossroads. Like, do we sell, do we raise more, do we pursue this business model, if we do raise, do we raise, is it just another year, or are we raising a large amount, are we ready for that? And what was getting lost was, kind of, what do we actually want here? [laughs] Which is easy to do, because you’re so in the mode of making something work, that what you actually want and set out to do can, kind of, get…
Andrew: I’ve been there. Yeah. I get so carried away that I forget what I was, what I really want, anyway.
Evan: Yep. And it was through, I really credit, largely credit a close friend of ours, who’s a fellow entrepreneur, and who has, that’s why you thought I was talking about my shrink. [laughs] Although, I credit him, too, to be fair, but we had a really good talk and just stayed on Governor’s Island with her, and her, now, fiancée. She’s got a degree in positive psychology, so she’s, but she’s not the annoying type, she’s, like, the upwardly positive, but also tells it like it is. And we were telling her all these different possibilities, and I forget where we were in this exact up-and-down at the time, and she said, “Well, it sounds like you just don’t want to do that anymore.”
Andrew: You’d rather continue with the company.
Evan: Continue raising another round, trying to, kind of, pivot and build out something new, and it was a hard decision because we finally were actually beginning to see some actual revenue in a sustainable way. It was, just a few days before that, for the very first time, I had built my first financial model that was real [laughs], that wasn’t completely pulled out of thin air, and had had some numbers based on real revenue. Yeah, it was aggressive, but it was achievable. That was a good feeling, too, and I think that was starting to be what we actually want in our, you know, to take back-burner. I told her about that, and that’s what she was looking at and saying, “Well, just because you can and it’s another way for it, doesn’t mean that’s what you want.” It was really eye-opening, and we said Yeah! I think we’re ready to sell this. We’ve got… we don’t want to lose momentum entirely. We’re still a great brand people like and admire. And we’ve got, hopefully, some prospects left, so let’s go full throttle and sell the business. But it was also in that… so it was that conversation, and also kind of the experience of that last up and down, of really being just a few months away…
Again, and we’ve been there before, but this was kind of the third time around of being just a few months away from having to make something work financially, and having just had a couple of other things fizzle. But for the first time I really kind of internalized failure as a possibility. I still won’t tell you that I embraced it. I didn’t think that… I wouldn’t have bet on… I wouldn’t have bet against myself. But it was the first time I actually admitted this might not work out, that we could actually fizzle. We could be like many others who were at it for a couple of years and made some money and it doesn’t work out. And we might not find a buyer; we might actually lose people’s money; and it’s been a great experience, but experience might be all we walk away with. I think it was really having that… I knew it intellectually before that, but it was through that experience that it was like that actually could happen. And I think from that moment, so which is the combination of that up and down and this discussion with Stella, that the remaining three co-founders really became fully aligned and said “let’s not have that happen.”
Andrew: And that’s what made you decided “we’re going to sell”?
Evan: It was very [??] because we still had… there were always other options. We had kind of started raising more money, we had some commitments already, so we were already on that upswing again of okay that didn’t work out, let’s make something else work. But it was… once we realized that we have to admit defeat was possible so let’s get in alignment about a really clear strategy for an exit.
Andrew: So, let me see if I understand you, Evan. What you’re saying is: someone was considering buying you; that fell through. You were on a path where your money was going to run out so, like any other funded company, you had to start raising your next round. As you were doing that Stella made you realize maybe this thing isn’t going to work out and, even if it does and you raise all this money, maybe you just didn’t want to keep doing this. And with both of those realizations in mind you said “let’s really go after this.” While most people might say companies aren’t sold, you’ve got to sit back and wait for you to be bought out, you realize “no, I can make this happen.” You had a friend in Reggie who worked at Expedia and had an introduction for you and that’s what led to the sale of the business. Okay.
Evan: The actual first discussion with Trip fortuitously just happened to be a few days after that realization. But I think because we had, all of us not just me, had gone through this whole process, we were…we were just ready. We were completely, unabashedly ready not just to sell but to sell to Trip Advisor.
Andrew: Do you remember the day that you sold to Trip Advisor? Do you remember signing the term sheet?
Andrew: What was that like?
Evan: I think that was the biggest kind of victorious moment of the whole thing. Because you would think that the closing would be, but by that… by the closing it’s kind of very anti-climactic. You go through this whole process… it’s kind of similar to getting a job versus starting a job. And starting is exciting too, but the real victory is getting that offer and saying we want this, they want this. We’ve signed it; we’ve agreed. And it’s not binding yet, but both parties are saying let’s move forward. We got the term sheet, we negotiated some, and then went really smoothly through signing. Then we had seven weeks of legal hell. I don’t have anything to compare it to and I don’t think it was atypical, it was just not fun. And so by the time we got through that, and you have to get through that too in order to actually close the deal. So it was certainly a victory on actual closing, but by that time we were so worn out that we never had a proper full team celebration.
Andrew: Cool. Alright, let me do a quick plug and then I want to ask you an important question. The plug is for Mixergy Premium. As most people know, all these interviews are free when we post them, but they go to Premium members afterwards unless, of course, Evan, if you want, you’re always welcome to embed it on your site and have it be free forever. People who’ve signed up for Mixergy Premium have told me it’s kind of like being in Silicon Valley no matter where they happen to be. They listen to it on their commutes, they listen to it at home, and they sometimes listen to it while they work, and they feel like they’ve got a connection to what’s going on in the tech community, and they are a part of it no matter where they are in the world. I never understood that Evan which is why I’ve never said that to anyone in these interviews because I thought, “It doesn’t feel right. I don’t get that”, even though that’s what people kept telling me that’s why they were listening.
Then I moved to San Francisco, and I do realize that I go out for a run, and when I’m stretching after a run I end up meeting someone who’s in the tech community, and we talk about work, or I go out to a bar with my wife, and we have a conversation, and maybe someone else ends up joining in and telling us about what happened at work or how they sold their company. We were having a conversation like you and I had, and now I get it. These kinds of conversations that I moved here for I’ve actually had on Mixergy for years, and I probably didn’t even need to move here for that. I understand why now people sign up to Mixergy Premium, to get these kinds of conversations.
If you’re not here, and you’re looking for more stories like this to get an understanding of what’s going on behind the scenes at companies that are very similar to yours, if you’re listening, just go to mixergypremium.com, sign up, and I’ve got over 800 interviews for you to watch, be a part of and listen to those entrepreneurs tell you how they built their companies, where they struggled and often talk about things they’ve never talked about before. It’s all at mixergypremium.com, and I hope you join.
Evan, to ask you this important question, I want to go and bring over sheets that I can see here, but I’ve go to go around my desk to get them, so here’s the thing. Yesterday, Olivia and I came in at 10:00 and didn’t end until 8:00 p.m. We just talked, and I’ve got sheets on this, to our audience about the inner chatter that they have. That’s why I brought it up with you. Things like, I’m looking here, and I see one person who says, he didn’t send out invoices because he thought they’re going to look at these invoices and says his work stinks, or I shouldn’t be paying that much, they might think about it, and so he just didn’t send out invoices for weeks and weeks and weeks, and it just kept going on and on. Why? Because of the chatter. Was it true? No. They agreed to this work, they agreed to pay it, and they wanted his invoice. His mental chatter told him lies.
What I want to know from you is, and maybe we could do this as a separate program, but would you be willing to talk about your inner chatter for these entrepreneurs who said, “Talk to experienced entrepreneurs about what’s going on in their heads” because they want to know how they can overcome it or how they could deal with it?
Evan: Yeah, absolutely. We can talk about it now. I have more time if you want.
Andrew: I want to make it into a separate program. I’ll do a closing here, and I’ll do a separate piece just on this, because I want someone who says, “Hey, you know what? I don’t relate to this other stuff,” to still listen to this because it’s so important.
Evan: Cool. Yes. Now I get what you were talking about with inner chatter in general.
Andrew: Let’s not get into it now. What I’m going to say quickly is how can people who want to connect with you connect with you after this interview to say thank you for doing this or to say on the down-low, “Hey, I want to sell my company Evan. I don’t know where to go. Here’s how big we are, here’s what we’re thinking. Would you advise me on this?” How can they connect with you.
Evan: Just email me. Probably the best address right now is the living breathing one, which is at Original Consulting Company. I still use it as a name to advise and take side projects here and there.
Andrew: What the URL for that?
Evan: It’s evan.schneyer, and I’m sure wherever this is published will have my name. It’s firstname.lastname@example.org.
Evan: I just had a lengthy call with a friend, actually an ex-intern, who’s starting her own venture, and she shared some of that inner chatter, and we talked for an hour and a half last night, and it’s really fun for me, too.
Andrew: I found the same thing. I found myself actually, when I started talking about it, like a weight was lifted off my shoulders. They were telling me their stories, and I realized, “Hey, wait, I didn’t send Scott Walker of Walker Corporate Law his invoice for months, and then I had to apologize to him when he paid because I didn’t do it because I had the same chatter as this guy.
I’m going to say goodbye now, and we’re going to record this session, and I would like to, even before the official editor edits this and gets it up on the site, I would like to sound our conversation to the people who are part of this these private conversations with me, because I think they deserve someone else talk about what’s going on so they know they’re not the only ones and I’m not the only one.
Evan: Moral support but there’s also the tangible advise that we had some friends along the way, but we were pretty much first timers, and there were a lot of things in here that we spent a lot of time and energy learning that some you have to go through yourself but some it is helpful to talk to someone who’s been there.
Andrew: I want that mental chatter. All right, thank you all. Thank you Evan for doing this interview. Thank you all for being a part of it. Evan and I are going to have a short conversation about inner chatter, and for all the people who participated in that one-on-one session with me to talk about what’s going on in their heads, I’m going to send this to you; my conversation with Evan.
Thank you all for being a part of it. Bye.
Hey guys, it’s Andrew again just to tell you that you shouldn’t go looking for that video. I talked to Evan, and it turns out the topic that he and I were going to discuss about inner chatter had to do with a friend, and I want these conversations to be open, and if there’s someone else involved in it the way that Evan’s friend was in his chatter, it’s just not going to be appropriate for our take.
The topic that’s important to me, inner chatter, negative chatter, positive chatter, but I want to do it right, and even though Evan is willing to help out, and I appreciate that he is, I want to protect him just like I would protect you and all these people who are a part of these private conversations that I’ve had.
We’ll find someone else. For Evan, thanks so much for doing the session, and thank you all for being a part of it. Once again, bye guys.
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