Launching Hipmunk

Here's an excerpt from my book, Without Their Permission, about Hipmunk, which feels particularly relevant given the news of its acquisition by Concur last week.

Hipmunk Takes the Agony out of Online Travel Search

"It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them." -- Steve Jobs

“Adam really wants to call it Suckage, but that won’t fly,” Steve explains to me as we’re discussing the default sort option for our soon-to-launch travel search engine. It’s about halfway through August in 2010, and I’ve only been on the team a week. I’m sleeping on Steve’s sofa while we work in the living room of our friend and hipmunk co-founder and CEO, Adam Goldstein. The idea for the search engine is simple enough: make sure people get the best flight for their dollar, maximizing suck reduction (a scientific term) by ranking flight search results based on criteria beyond price alone, such as number of stops and flight duration. We’re days away from launch, and Steve is browsing through an online thesaurus for various synonyms for pain when he comes across it: agony. 

Agony. We’ll take the agony out of online travel search. 

Words couldn’t express how delighted I was. Adam somewhat randomly picked the name of the site after his girlfriend wisely suggested choosing a misspelling of a cute animal (perfect for an Alexis mascot!), and the name hipmunk (chipmunk without the c) was available at auction for a low price. Though I’d have protested, it could’ve ended up being called BouncePounce, but the concept of “agony”—and taking it out of  travel—was so awesome I don’t think Adam or Steve even realized it at the time. We’d stumbled onto the perfect word for branding our delightful alternative to everything in the travel search market. So while Steve built the ultimate product and Adam hustled all the deals that would let us take off, I’d take advantage of every opportunity to build the hipmunk brand. 

But first, let’s go back a couple of months. Steve first told me about the idea in May via e-mail: 

Basically, we’re doing travel search. . . . It’s not too glamorous, but it’s a huge market and the big players really suck.

Steve never was a salesman, but he certainly could get to the point.

In San Francisco, I got an early demo of the  then-unnamed travel search website. It was a rather unexciting list of search results, just like any other travel search engine you’ve ever used, except this one didn’t have any polish. I wasn’t too impressed. But Steve said they’d been noodling on some different ways to present the data that were going to be infinitely more  user- friendly. I trusted him, but I went back to Brooklyn thinking he and Adam were a long way from that minimum viable product (or as the cool kids say, “MVP”). 

In my mind, searching for flights was already a solved problem. It worked well enough to allow me to sit at my laptop and, if I had enough tabs open, not bother my dad about finding me a good flight to San Francisco. But Adam knew it could be so much better. You see, Adam realized he had a problem booking flights back in college. He ended up memorizing airport codes from AAL to ZRH because the MIT debate team competed all over the globe, and Adam had the unenviable job of booking flights for everyone. He absolutely hated it. It was too hard running all those searches, in all those open tabs of his browser, while deciphering hundreds of search results that confounded him with codeshares and tight connections (or ludicrous layovers). 

If finding a good flight is this hard for an MIT graduate, what about the rest of us? At first, however, Adam had a hard time persuading other people that it could be any different. This is a common problem for entrepreneurs who try to solve problems people don’t realize they have. It’s not  until you present most  people—even me—with a better alternative that they realize how bad things used to be. That’s why it’s important for the founders of any Internet company to build something so damn useful that everyone wonders how they ever lived without it. 

So after Adam graduated, he came to Steve to talk him out of early retirement. Steve, however, was significantly less enthusiastic when he heard the pitch. “I totally agreed that it was a nice company to start because it was close to people’s wallets,” he told me. “But I hated travel. It’s an industry that’s so not startup friendly.”

Soon, however, Steve realized that this hostile market was the perfect reason to try disrupting it with smart innovation— because it was so starved of quality solutions. “No one was thinking about what consumers really want,” Steve said, and soon he and Adam got to work on revolutionizing travel search. 

They applied to Y Combinator and didn’t have any trouble getting accepted, given Steve’s history. Several people have asked me why Steve would do the program a second time around, giving up a chunk of equity again, despite having more experience, connections, and even personal wealth than the first time. But as I tell them—Steve is not a dumbass. He wouldn’t do it if he didn’t think it was worth it. So there he was going through Y Combinator again, the baby-faced graybeard in the room for those weekly dinners (you’ll learn more about this in chapter 5). Another month later I found myself back on the sofa in Steve’s apartment, and he had something new to show me.

Aha! Here was the invention I didn’t realize I couldn’t live without until I saw it. It was beautiful. All the search results in a beautiful visual layout that looked something like train schedules I remembered from European backpacking  trips—and all on one page! No more scrolling through pages of results. You could easily compare flights—the duplicates were automatically hidden, along with flights no human would want to take. Oh, and just because opening multiple browser tabs was a nuisance, Steve and Adam had baked the tabs into the website. You could instantly open a new tab and compare itineraries within seconds and in one window. It was awesome, and it made sense. That’s why you build. Don’t tell me a story, show it to me. 

We had a little less than a week to get ready for the launch, but we still had a long way to go. We didn’t even have a name. Or a cute mascot. An adorable rodent was part of the plan with a name like hipmunk, since we could tell people “chipmunk without the c,” as though that had anything to do with travel search. Admittedly, the first time I heard the name, I thought it was a cool guy with a shaved head in saffron robes. Just to be safe, we also own hipmonk.com but have no plans to expand our business into taking the agony out of tonsure. 

I got to work on the branding. Fun fact: I was looking for font inspiration and grabbed the Redskins font (or at least a very similar font called Pythagoras, as in the brilliant Greek mathematician—he struck me as someone who’d have enjoyed hipmunk). It looked great in lowercase, and to this day it’s the font of hipmunk.

By that time, I’d also put together the first sketches of the hipmunk himself. I was really proud of my  pear- shaped chipmunk. He had buckteeth, sported a fetching aviator scarf and goggles, and pretended to fly by holding his arms outstretched, like wings in a child’s imagination. I sent the first version to my girlfriend, who said it looked like a bear with buckteeth. At least I got the buckteeth right. Please don’t go sharing this story around—I’ve got a reputation to uphold. 

Whenever I’m working on a design, whether it’s a brand or a user experience, I always rely on a small council of trusted friends to turn a fresh eye on the project and give me candid feedback. This has only gotten more valuable as I’ve gotten more successful, given that success seems to naturally have an inverse relationship with the amount of constructive criticism one receives. Just say no to  yes- men. I’m terrified of faltering, so these people are my motivation as much as they’re my inspiration. 

It still needed a slight tilt to give it that perfect touch of mirth and motion. I knew it was done when Steve’s wife walked into the room, saw my monitor, and her immediate reaction was an audible “Aww!”

When I sent the final version to my dad, he told me he liked it but said, “I liked the goggles and scarf better the first time, when I saw it on Rocky the Flying Squirrel.” 

Right. Thanks, Dad. I vaguely remember catching reruns of that cartoon as a child. The similarity was  unintentional—it came from my subconscious—but it just goes to show that we’re all standing on the shoulders of giants (or giant rodents). 

How to Win Deals and Influence Industry Titans

Totally unlike reddit, hipmunk has zero user-generated content; the value of the site comes from how we display the content provided by airlines and hotels. Back then, we just needed flight information (remember, minimum viable product), but we couldn’t just scrape the data off airlines’ websites (scraping is essentially sending software to “read” and copy content from other websites). Most important, we wanted to get paid every time someone bought a flight that we helped him or her find on hipmunk. 

This was a great lesson: as the saying goes, we wanted to be “near our users’ wallets.” We were far from it with reddit, which made its money primarily through advertising, but we were totally there from launch day at hipmunk, thanks to some incredible hustle from Adam. 

We weren’t taking off unless we had airfares from providers. The data alone was invaluable because it’d make the site functional, but a business deal would also generate revenue from launch day — hipmunk would get a percentage of every ticket booked through us. Every single one of the fares on hipmunk (or on any of our competitors’ sites) is the result of negotiation with a carrier or OTA (online travel agency). 

Those negotiations may take months, or even years, and we simply didn’t have that kind of time. If we were to launch within the Y Combinator time frame (more on this in chapter 5), we had less than three months to build and launch. 

We needed someone to bite, because it would validate our business and help close other potential partners. Social proof in business development is not unlike fundraising for your company (also see chapter 5). It’s a dreadful catch-22 in which no one wants to do business with you unless you’ve already got someone doing business with you. It’s similar to the challenge Steve and I had when we launched reddit with only the two of us as users while trying to encourage a community to form, which is more easily accomplished by making up fake user names than by hiring actors who pretend to be past business relationships. The way to break this particular cycle is with pure hustle, which is just what Adam did. 

It started innocently enough, with phone calls and e-mails. Adam was polite and to the point, but no one responded. When he didn’t get what he wanted, Adam didn’t wait for anyone’s permission. He just got on a plane. No meeting  planned— he just got on a plane from SFO to ORD. He landed in Chicago and stopped by the offices of Orbitz (one of our OTA business development targets), announcing that he had some spare time to meet for a quick cup of coffee. Eventually, someone agreed, and armed with a laptop, he did a quick demo to show off what he and Steve had built. That hustle is what got us the pivotal first deal that let us launch hipmunk as planned. Then, because we had social proof, we took advantage of the same herd mentality that had previously worked against us. We may have been a tiny startup in San Francisco, but what mattered was we had a product that clients (or at least a client) wanted. 

This particular deal was quite fortuitous, as Adam would discover, because we were now presenting a wide range of fare data from scores of airlines. We could approach each of these airlines with an offer to do a deal directly with  them— we’d get a higher commission, and the airline would still be paying less than what they paid Orbitz. Everyone would be happy (well, maybe not Orbitz, but that’s to be determined). So Adam started working his way down the list of domestic airlines, then foreign, then domestic hotels, then foreign, et cetera. Right down the list. And it all started with a plane ride and a cup of coffee. 

An important coffee with Paul Graham changed our lives in chapter 2. There’s another pivotal cup of joe in chapter 5. If nothing else, I hope this book convinces you to go out and drink more coffee.

All Adam’s debate training paid off in the boardrooms of airline and OTA executives. Once he finally got in the door—and he did some impressive things to get there, like scheduling last- minute flights and dropping notes to employees saying that he’d be in town for just a hot minute—he finally got to decision makers at some of the country’s biggest airlines and OTAs. 

Granted, connected investors and networking can help tremendously, but don’t count on it. We have some awesome investors and advisers at hipmunk, but when it came to landing United Airlines, Adam came up empty-handed. So he went back to e-mail. Since we’d launched, we’d gotten a fabulous response from the online community and quickly became darlings of the early adopter crowd. This helped us get press, which encouraged more people to try hipmunk, which they inevitably talked about on social media, which helped us get more press, and the cycle continued. Soon Adam felt like he had enough wind at his back to try a cold e-mail to the United CEO, Jeff Smisek. 

I’ll dig into this more in chapter 5, but note the length and content of the e-mail Adam sent to Jeff: 

Hey. We can lower your distribution costs. Let me know who to talk to.

Adam got a response in fifteen minutes. It contained an introduction to a senior exec, and it all rolled smoothly until a deal was done and hipmunk was partnered with United Airlines, at the time the world’s largest airline.

The deal still took about a year to close, but its origin was that direct e-mail Adam had the audacity to send to the CEO of United Airlines. Hipmunk is a great example of the value of persistence, because travel is such a turbulent industry. One has to be tenacious, because there are always layoffs, mergers, promotions, chaos. The people you build a relationship with could be at another airline or out of the industry before the ink dries. 

But it worked. And knowing this is possible for the ever-changing travel industry gives me hope for almost every other industry. 

On our side we had Adam Goldstein, the MIT whiz kid (damn, I must have said that to every single reporter I pitched hipmunk to) who memorized airport codes and simply would not take no for an answer; an ingenious and beautiful user interface; and an  aww-inspiring mascot. But we would’ve been hosed without partnerships. The first one, like your first first down, is the hardest to get, but once you get it, it gives you the confidence and momentum to get more. 

I can only imagine how many secretaries Adam sweet-talked. And that reminds me— bring chocolates, because winning over the people on the front lines makes a difference. Take care of the people who can take care of you. This tactic has never disappointed me; it’s only pleasantly surprised me.

Sick to His Stomach on Launch Day

Of course, Steve had already launched a website once before with reddit, but that was when no one was looking. Along with all the advantages that actual experience grants us, we lose the naïveté and blind audacity that being a novice affords us. When you’re a pair of nobodies launching a “social news website” in Medford, Massachusetts, no one (except maybe your mom) has high expectations for you. 

You could fail a thousand times and no one would know, so why are you hesitating to launch? 

Back in 2010, Steve Huffman was already well known as a top developer in the industry, and, as you know from chapter 2, reddit was (and continues to be) a great success, thanks to his work. Would his sophomore effort be a slump? 

That morning, Steve told me he wanted to puke. 

Fortunately, launch didn’t disappoint. What a difference just five years had made. Whereas it took me months to generate any kind of attention for reddit from mainstream media, CNN reached out to us within twenty-four hours of hipmunk’s launch. The launch was spectacular; Steve did not vomit.