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Kayak Milestone: Creating Room in a Crowd

Congratulations to Kayak founders Paul English and Steve Hafner who today announced an agreement to sell Kayak to Priceline for about $1.8 billion.

Sometimes it’s never too late to join a crowded market. Just ask Paul English and Steve Hafner, who today announced an agreement to sell Kayak to Priceline for about $1.8 billion.

Today, Kayak’s promise of ‘One and Done’ is well known as befits a company that fielded 600 million travel queries in the first half of 2012 and whose mobile app has been downloaded nearly 17 million times.

However, the world looked different in 2004 when Paul and Steve decided to start a company in an industry teeming with competitors such as Expedia, Orbitz, Hotwire, Priceline, Travelocity, and plenty of others. These sites, plus thousands of hotel and airline sites, which all furnished their own confusing and biased results, is what fueled the frustration that gave Kayak a chance. It’s hard to remember but before Kayak it could take thirty minutes to book a flight or reserve a room. At the outset Steve and Paul were a match of contrasts. The former being steeped in the wily sales and marketing habits of the travel industry – having helped start Orbitz. The latter coming with a spectacular reputation as a gifted programmer having – among other things – served as Intuit’s technology leader.

Steve and Paul have always emphasized doing a lot with a little. The company’s leitmotif was to present rich results simply, intuitively and at lightning speed. Staffing at Kayak has always been tilted towards engineering and even today, when the company has an annual sales rate of more than $300M, it only has 185 employees. Kayak has become a wonderful example of the extraordinary amplification power that springs from thoughtful software, systems and networking architecture. One small example: Kayak was the first travel site to adopt Rich Internet Architecture (RIA) to allow for lightning fast, real-time filtering of hundreds of results.

Kayak also broke new ground in marketing. When natural growth on the internet started to slow, the management team bravely decided to take the plunge with large-scale television and brand advertising – and the carefully designed, highly calculated and meticulously monitored campaigns bore fruit. Steve and Paul’s decision to wean themselves from relying on traffic from Google and make Kayak a ‘bookmarked destination’ was also not for the faint of heart. It too paid off.

Steve and Paul have had their share of close encounters of the worst kind. There was the industry meltdown of 2008. There was the mimicry of Kayak by a slew of powerful competitors – including Bing. There was Google’s acquisition of ITA and subsequent launch of its own travel search service. It has never been as easy as today’s news might suggest.

Throughout the past eight years Steve and Paul and the entire team have been fixated on the quality of Kayak’s product. When it made sense they were open-minded enough to embrace others – as evinced by their purchase of several companies including Swoodoo and Checkfelix in Europe and SideStep in the U.S. But nothing has ever been more important than their insistence on continual refinements, tweaks and improvements – no matter how miniscule – to Kayak.

Most new entrants to established markets don’t make it. Dozens of travel sites have fallen by the wayside. But there are always opportunities. Cisco, Google, and Square – to pick just three examples – all launched into highly crowded markets while naysayers chortled.

These companies, like Kayak, had something for which customers yearned. For the creative, for the underdog, for the imaginative, for the artful – Paul and Steve have shown that there is always room in a crowd.

Here’s to the underdog!

Two men stand with arms around each other's shoulders
Paul English and Steve Hafner