Friday, April, 15th, 2011 News
“When I think about building a company I think: team first, customers second, profit third,” KAYAK co-founder and chief technology officer Paul English said to a crowd of Tufts entrepreneurs on April 12, 2011. English, the featured speaker of the inaugural Alan Shapiro Entrepreneurial Lecture Series, brought the same high energy and wit that helped him form his company to his talk.
Established in memory of Alan Shapiro, the lecture series aims to bring guests to Tufts to share their entrepreneurial stories. The Shapiro family welcomed attendees and spoke of Alan’s entrepreneurial spirit. In introducing English, Felice Shapiro, also a Tufts Entrepreneurial Leadership faculty member, illustrated his dedication and focus: “He will drop his kids off at school in the morning, fly to California that day for a meeting, and take the red-eye back so he can take the kids to school the next morning.” English demonstrates that commitment in every aspect of one’s life makes for successful ventures.
For his first Tufts lecture, he discussed the techniques he has employed in developing KAYAK, one of the leading travel search engines on the web. The company started when English’s co-founder, Steve Hafner, left Orbitz—a Chicago based travel website—to start a company on the east coast. At the time, English worked for Greylock Venture Capital as an entrepreneur in residence. He was introduced to Hafner, by chance. And, according to English, after a few drinks they were in business together.
“That just shows how reckless we are as entrepreneurs,” English said. “I think one of the criteria in being an entrepreneur is to be reckless and to make mistakes. If you’re not comfortable with making mistakes, you’re not an entrepreneur.”
English claims that he felt the first twinges of entrepreneurship when haggling for useless items at garage sales with his father. He recalled that, years later, after selling one of his first start-ups, he had a conversation with his father. “When I told him the amount my company sold for, he was taken aback,” English said. “‘How did you negotiate that much,’ my dad asked. And I replied ‘Dad, it’s the same thing as buying a used air-conditioner. You just add a couple zeroes at the end.'”
Besides the garage sale adrenaline rushes, English remembers being bitten by the entrepreneurship bug during a meeting with Interleaf sales force. “I tried to explain web-publishing to the sales force and they started laughing at me,” English said. “They said, ‘you look like a nice guy, get a clue. Nobody is going to pay for that.’ I realized then that a large, already successful company can’t take risks, and I wanted to.”
However, for English, business is not all about negotiation and risk taking. He prides himself on maintaining the energetic work environment that is more typical of a start-up than a 7-year-old company. “If any of you visit the [KAYAK] office, you’d think we were a few months old because it’s kind of crazy,” English said. “It’s hectic. There are footballs being thrown around. People scream at each other, but I think we have healthy arguments.”
Despite the familial bickering, KAYAK takes care of its team foremost. “On the team-first hiring religion—I’m really serious about that. The moments at KAYAK when I almost self-destruct is when I’m in the middle of interviewing someone and the red phone rings [this is a symbolic phone English had installed in the office to ensure his staff took care of customers first and foremost.] Its like… I do not know what to do. I cannot disengage with the person I’m trying to recruit but a customer needs help.”
For English, the struggle between maintaining team cohesion and providing excellent customer service is even physically taxing. “In the office you will see me jumping over desks to get to the red phone,” English said. “I want to learn and I want to set the tone for the office.”
KAYAK’s goal is to provide a travel search experience that will leave the user in awe. To that end, KAYAK releases an updated web-version every Thursday morning and a new mobile platform every 3-4 weeks.
“Every time we get a little better—a little bit simpler, a little bit faster,” English said. “We don’t contend that we have a perfect site, but we joke that KAYAK sucks less than other travel sites.” Although KAYAK customers have eight different methods to give suggestions to the company, English maintains that customer insight is not always implemented to solve a perceived problem. “We don’t let our customer design our product,” English said. “We don’t let them prioritize when we should build features because if they were good designers, they’d work at KAYAK.”
English’s company reached breakeven after only two years in business, but KAYAK still had some ups and downs on its path to profitability. “Our inherent conflict was that hotels and airlines wouldn’t pay to use KAYAK unless there were enough users and users wouldn’t use KAYAK unless there were a lot of hotels and airlines.”
After more than a year of fighting the cycle, English and his partner were faced with a wall of opposition. These are the times that English says an entrepreneur has to create a network effect where there is more value for buyers in the system when there are more sellers in the system. They put all their efforts into creative value for airlines and hotels looking to buy into KAYAK. “I think good entrepreneurs are crafty, creative, innovative and you find a path,” English said. “We found a path.”
After a lengthy fight for permission to show airfares of airlines—for free—KAYAK began moving considerable customer traffic. “Once we proved we could get consumers by building a better product, then airlines and hotels depended on us.” This level of persistence is what distinguishes KAYAK from other web-based travel sites.
“Our biggest competitors are ourselves—and habit,” English said. “I think familiarity is an enemy of ours. We need to figure out how not to be 20 percent better but 200 percent better so that people will switch to our search engine.”
Despite his time consuming position at KAYAK, English still makes time to work in entrepreneurial, philanthropic ventures. He founded a non-profit/for-profit hybrid called Join Africa, which, with local African for-profit Telco’s, aims to blanket all of Africa with free or low-cost Wi-Fi. “It’s a gift for me to be able to work with people from other cultures and countries,” English said. “Non-profits are still entrepreneurial. The most challenging new non-profit I’m working with is in Burundi where we are building a hospital from scratch.”
As far as advice for a potential entrepreneur goes, English said that triumph is about self-improvement. “One thing you can do is pick something that’s a little bit hard that your friends and family will say, ‘you’re crazy, you can’t get that done’ and just crush it. Get it perfect. And then move on to something harder. It’s about stretching goals and gaining confidence each time you have success.”