My encounter with this year’s Webby award-winner for best travel application began, unexpectedly, when I was shooting my documentary talk show, BYOD. I was at the Fast Company lounge at SXSW, interviewing the director of a film about medical marijuana, when in walks a man-sized chipmunk to disrupt my show! It turned out to be Reddit co-founder, Steve Huffman, sweating it – literally – for his new startup, Hipmunk. First I thought I was high. However, as he lingered behind me, sort of shuffling back and forth, I came to and got past the hysterical irony (considering the theme of my show) and kindly got him off set. As I interviewed Steve afterwards, I thought to myself, “What does travel have to do with a chipmunk?” (A question for which there seems to be no good answer.)
I later reflected on how incredible it is that the guy behind Reddit feels the need to dress up in a 60-pound costume suit, swimming in his own sweat at soaring temperatures, like a hungry startup entrepreneur meets a Disneyland entry-level character hire. Yet, he seemed like he was having the time of his life, and as passionate about creating the most forward-thinking travel site as he was about birthing the “front page of the Internet.” I wanted to understand what was so special about Hipmunk. A few months later, I plowed into their offices in San Francisco, formerly the HQ of the infamous JustinTV, and returned the disruption to their nest, by way of a full film crew. Here is the result.
When Alexis Ohanian and Steve Huffman founded reddit, their stated goal was to “make the world suck less.” After being acquired by Conde Nast, Huffman stayed on to run the company for another three years and became disenchanted. He took a few years off and was contacted by Adam Goldstein (they first met at Food Camp in 2005 when Adam was only 16), who had just wrapped up college and was looking to do his first startup.
By that time, Steve was prepared to get back in the game: “Adam called me and was basically like ‘I wanna do a startup this summer.’ And I was like ‘okay, yeah, me too, I’m ready to get back in it.’ And he was like ‘I wanna do this travel thing.’ And I was like ‘no…”
Huffman was reluctant about a travel idea due the the crowded and competitive field, but many startups are founded by entrepreneurs who like each other and decide they want to do something cool together. I have found time and again: the team comes first – the idea comes next.
Goldstein agrees, “I think the first step is just finding someone that you can communicate openly with…there’s so many startups that fall apart because there’s this simmering passive aggression, people disagree about the right direction or the right motivation. Once you’ve solved that problem, everything else is a lot easier.”
But even in the tech world, if you’ve turned your first startup into Internet gold and made great profit for VC’s, the chances at funding are far-improved. While Hipmunk has raised $20 million to date, it doesn’t mean, however, that the founders can apply the same formula to the next company and nail it off the bat that second time around. In this week’s ATD episode in our Pivot series, we sit down with Hipmunk co-founders Goldstein and Huffman to discover how they grappled with getting their travel platform off the ground.
For you readers who don’t want to sit back and enjoy our fancy video (which we highly recommend), here’s how they found their way:
Pivot #1: No Bookings – Huffman and Goldstein had a simple vision – make flight search easier. What they never imagined when they began was that they wouldn’t take direct bookings. After surveying the competition in the market, they realized that they had no business model if they went head-to-head with cut-rate online search engines like Orbitz, Priceline, Expedia and others, so they decided to shift their focus to metasearch.
Pivot #2: Hotel Search – “When we started we used to joke, one day we’ll do hotels, we really care about flights,” says Huffman, but after realizing that hotels don’t perpetually go out of business and were more friendly to their platform, Hipmunk pivoted to building a better a search engine to include traveler’s accommodations.
Pivot #3: Sort By Experience – Hipmunk learned that to stand out in the crowded field of travel, they had to take search to the next level. The cutest and most innovative function by far is to sort flights by “agony,” where they incorporate not only price, but also duration, and the number of stops. Similarly on the hotel side, you can search for “ecstasy”, a combination of rate, amenities, and Yelp ratings, not to mention a “heat map’” which points you toward the neighborhoods with the coolest restaurants, bars, and hangouts.
Pivot #4: “Suckage” to “Agony” – A pivot can come at any time – at the beginning of the process, or right at launch as Huffman and Goldstein discovered. They were all set to call their descriptive search function, “suckage,” but the day before their launch, the two co-founders got cold feet. As they scrambled for the thesaurus, Huffman zeroed in on the word “agony,” and he knew it was right: “The skies opened, that is the perfect feeling you have when you are shopping online for plane tickets.”