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KAYAK

Sometimes venture capital doesn’t wait for ideas to walk in the door. Sometimes it sends them out the door.

One afternoon in late 2003, General Catalyst co-founder Joel Cutler introduced ex-Orbitz CEO Steve Hafner to software wizard Paul English. He then sent them to a nearby pub to discuss an idea for disrupting the online travel industry. The two men had come to General Catalyst’s Boston-area offices for different reasons, but they left with a shared destiny: KAYAK.

Fear no failure

Hafner and English were not afraid to take on Expedia, Travelocity and other online travel agencies (OTAs), despite their lavish websites and ad budgets. Cutler focused their courage with a firm challenge. “When you take on entrenched competitors,” he says, “you have to be ten or twenty times better, and bring a platform or technology shift no one is expecting.”

KAYAK’s paradigm shift was to funnel qualified online purchasers directly to travel providers rather than reselling their wares. That quickly won over travel providers. The “10X” factor was offering more choices and greater ease of use than the online travel industry had ever seen. That delighted customers and won lavish praise from the media.

If you brand it they will come

With their first $5 million in funding from General Catalyst and their own series funding, Hafner and English made a daring choice: to spend a six-figure sum on a brand study instead of technology development. “Most consumers who visited OTAs would leave and go to a provider website to do the actual booking,” Hafner explains. “We found out why, and built a brand that would keep customers on our site – and keep them coming back.”

English relentlessly recruited the best engineers he could find, and led them to make KAYAK so frictionless that customers would never want to leave. He also required his engineers to answer customer service calls. “Our mantra was ‘there are no stupid customers,’” English recalls. “When engineers heard the same complaint from two or three customers, they would decide to fix it forever.”

Sharpen the blade

During twists and turns on the start-up journey, the founders would turn to Cutler and his fellow Managing Director Larry Bohn. Their usual advice: aim higher. For example, when an off-shore engineering subsidiary could not deliver code that matched KAYAK’s best, the founders shut it down despite a substantial loss.

“When we reached 5 million customers a month, Joel wanted to know how we were going to reach 100 million, six months ahead of plan,” Hafner recalls. “It was inspiring and terrifying.”

After taking KAYAK public in 2012 and selling it to Priceline soon afterward, the founders are at it again with a new venture called Blade. With English as CEO and Hafner on the board, Blade is collaborating with General Catalyst to attack massive B2C markets dominated by big competitors. “Some entrepreneurs look at markets where consumers are already paying billions of dollars for existing solutions, and go look somewhere else,” says English. “At Blade, that’s when we start getting excited.”


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