A Product Market Fit Show | Startup Podcast for Founders
00:34:44 · Chris Slowe
[00:34:44] S0: Yeah, I think that Hipmunk's real differentiator was its flight product where we really started. We wanted to provide a way to solve our own problem first which was, it's just a pain to figure out which flight to take. I have a couple of very simple requirements most of the time for looking for a flight, even to this day. I travel a lot now and I miss Hipmunk's UI. We showed flights as a bunch of Gantt charts effectively, like here's a time bar that shows you when the flight is and you can go through and you can basically say like, "I want to leave after 9:00 in the morning and I want to arrive before this time. Show me everything that fits that and they're like, oh look, this one has a really stupid eight hour layover. Kick that out." We created a simple sort called agony, which was you could start by lowest agony and we give you effectively direct flights and flights that had reasonable layovers. Reasonable layovers is what you would expect. 30 minute layover, that's not a real layover because the flight's going to probably be you have to run between terminals, as opposed to, yeah, about two hours about the sweet spot. We built out a quick little bit of mass that showed that with an ICUI. The product really was the UI. It was quickly being able to get to a flight that's reasonable and be able to pick your return path, be able to break down by price, just all the things you'd expect in a product with a very simple visual aesthetic.
00:36:00 · Pablo Srugo, Chris Slowe
[00:36:00] S1: Did you and Steve have an aura at that point coming out of Reddit? Was it easier to hire, easy to fundraise the way that it would be now if you had a Reddit exit? [00:36:11] S0: I think it definitely helped. I mean, what actually did help there too was Hipmunk was also an YC company. Getting back into YC was also easier having already done it once. Part of doing startups is doing startups or doing startups well is you have to be able to get your knocks at some point. Already having had a startup behind your belt and an acquisition behind your belt helps a lot. I think also the other things that came up were like, yeah, we had to exist as architects, set a pretty decent sized product with a decent user base. Therefore, we were pretty good engineers at that point and we knew web development really well. If anything, the learning curve for Hipmunk was that was the time when app stores really starting to take off and so we had to start learning how different the requirements are of dealing with the Play Store and with the App Store on iOS. That was a new muscle, but it wasn't a difficult thing to hire for. It was difficult to do well at that point in history. [00:37:04] S1: At that point, I mean like you said, Reddit, you had to do no marketing, it was all word of mouth this time. Did you get into paid ads or what do you remember? What was your big acquisition channel?
00:37:13 · Chris Slowe, Pablo Srugo
[00:37:13] S0: Some of the early hires we had to do at Hipmunk that never even came to mind at Reddit, we had to hire a BD lead extremely early. That was because that was entirely to make deals with airlines and hotels and larger companies just required attention and it required somebody who had some experience doing BD as a profession. Marketing was also extremely early. I remember actually even at the time back in 2010, 2011, we hired our first social media manager, which having just been at Reddit for so long, the idea of a person whose job it is to manage social media, what the hell was this? How is that a job? Also another thing that came up around that year 2010, 2011 was also the first time I heard the word data scientist. I'm like, data scientist? You mean that has a name now? You just dig through the logs and you get the answer. I didn't know that was a full-time job. The earliest part of the team, the first 12 employees give or take, included at least two people working on BD and at least one person doing marketing and the rest of it was mostly software engineers but there was a customer service element as well where we actually had to have – we were dealing with money and the side effect dealing with money is you have to pay to have a CS team around to answer questions because the last thing you want to do is have some person stuck in limbo with their money. [00:38:30] S1: With Hipmunk, did you guys get to product market fit, would you say?
00:38:30 · Pablo Srugo, Chris Slowe
[00:38:30] S1: With Hipmunk, did you guys get to product market fit, would you say? [00:38:33] S0: What we learned most with Hipmunk was we definitely solved a set of user problems really well and we had some really rampant support, users who really loved using the product. I think what we learned though was economies of scale are a bitch. Having a small product like Hipmunk meant that we couldn't take advantage of just the bulk discounts you start getting when you have volume. Originally we went into it with a bunch of disdain for the large players, because it's like look at how crappy their product is. Yeah, their product is crappy but they're booking a billion dollars in revenue. You can afford a lot of crappiness if you can actually get that much lead gen, because you can spend a ton of money on marketing to get more users. I mean, you can buy a Super Bowl ad and be completely reasonable. [00:39:15] S1: Talking about flights, this is different, but always most flights customer service, when you're in it's just terrible. Sometimes I talk to people about this and I'm like the problem is when it comes down to it, I'm cheap as shit and I'm going to take the cheapest flight that gets me fastest and I don't care if they – they might have yelled at me when I was on the plane but if it's the cheapest flight that gets me fastest, I'm going again.
00:39:15 · Pablo Srugo, Chris Slowe
[00:39:15] S1: Talking about flights, this is different, but always most flights customer service, when you're in it's just terrible. Sometimes I talk to people about this and I'm like the problem is when it comes down to it, I'm cheap as shit and I'm going to take the cheapest flight that gets me fastest and I don't care if they – they might have yelled at me when I was on the plane but if it's the cheapest flight that gets me fastest, I'm going again. [00:39:40] S0: That's the thing too is the flight is the means to the end. You're on the flight because you have to be and you don't have a lot of choice. It's like a temporary purgatory before you're doing the thing you actually want to do. No one takes a flight because they're like, "Oh yeah, I want to spend six hours in this metal tube with a bunch of humanity." It's like, no, you do it because you're going to go to fricking Maui and you have to get in the plane to get to Maui, which is also why we found that it's straight -- that's actually why we chose agony as our sort because everyone hates – there's very few people who are like, oh, I love flying. Even people who have -- at this point in my life, I have 1K status, which as we all know isn't a good thing. It just means I fly enough that I actually got status. It's like the mark of the beast. It's like, oh, I'm sorry, you have 1K. I remember I was in a plane at one point recently and the guy behind me hit his 3 million mile mark, and everyone around him was like, congrats, whoa. It's like, are you okay? [00:40:42] S1: It's like, are you okay, dude?
00:40:42 · Pablo Srugo, Chris Slowe
[00:40:42] S1: It's like, are you okay, dude? [00:40:44] S0: He wasn't old. He was younger than I was. I was like, "Oh man, you've spent a lot of time in planes." [00:40:49] S1: That's rough . Yeah, that's rough. [00:40:50] S0: It's like that George Clooney movie from 20 years ago. He was up in the air and it was like he realized he spent his entire life on planes. Yeah. [00:40:58] S1: No, good. Walk me through, did you guys end up selling that? I'm interested obviously in the transition back in Reddit. Did you end up selling Hipmunk or how do you come back to Reddit? How does that happen?