Hipmunk Closes Hyper-Competitive Angel Round, Sans The Usual Suspects

http://techcrunch.com/2010/10/05/hipmunk-closes-hyper-competitive-angel-round-sans-the-usual-suspects/

by icey • 16 years ago

48 42 16 years ago

Hipmunk is going places. Travel is one of the most user-hostile consumer spaces around. All they have to do is stick to their guns, continue evolving their product in a direction that puts the user first and they'll be on their way to printing money. Once you use Hipmunk, every other travel site looks like a stupid, ad-soaked bully with their constant upsells and bundles.

gonehome• 16 years ago

I agree, the site is sharp and has a lot of potential places to expand to (with seemingly no other good competition). I think it could be big.

SriniK• 16 years ago

I am big fan of hipmunk as well. However as a product point of view I am afraid other folks(kayak/bing-travel) can easily copy/tweak their front end to match. I couldn't find stickiness in their business model.

danilocampos5• 16 years ago

They could, but they'll be playing catch-up. Hipmunk has the merit of, pro-actively, knowing the value of user focus. If they stick with that theme, there are innumerable places in the travel purchase experience that can be polished and made less miserable. You can copy ideas after the fact, but not the active brains that drive them. The brains are Hipmunk's greatest asset.

chris_l• 16 years ago

That's what I thought too. But then again, if they had the people to get that interface right, why haven't they done so before? The idea is not so far out, they simply don't compromise of ease and simplicity... like all good products.

LanceJones2• 16 years ago

Hipmunk funding may also be a clue to the 3 big online travel aggregators that they need to provide better search UI. I agree that the front end is not difficult to copy.

If even one of the Big 3 rolls this out, Hipmunk will be challenged to pull traffic... because their improved UI will be where the existing travel visitors are searching already.

timcederman5• 16 years ago

Ad-soaked bully? Like who?

I'm still a fan of Adioso.com's UI (another YC alum), and the TripAdvisor/Bing/Kayak experiences, from memory, are fairly subtle with their advertising.

blhack2• 16 years ago

You're right about this. Kayk et al aren't saturated with ads, but they don't feel nearly as...something as hipmunk.

Clean? Maybe? Shiny? I don't know but every time I've shown the site to any of my friends or coworkers they remark that it's pretty.

Hipmunk vs Kayak or bing is the difference between a cheap casio watch and a nice, heavy, automatic winding watch with a pretty window on the back of the dial. They both tell the time, they both sit on your wrist, but the latter just...feels nicer.

danilocampos5• 16 years ago

Like the incumbent travel sites that everyone's mom uses: Travelocity, Orbitz, Expedia, Hotwire, Priceline.

http://blog.danilocampos.com/wp-content/uploads/2010/10/Hipm...

Here's Travelocity, for example.

Bing's flight search isn't bad, in that it's minimalist, but they're not doing anything terribly exciting beyond the Farecast action they acquired.

TripAdvisor can die in a fire. I'm never, ever using any of their products again, thanks to the constant (user-hostile!) "book a flight to this place right now damn you!" pop-ups they used to do on the browser and, worse, on the iPhone. They would try to get me to book a flight to a place where I already was, searching for things to do or places to stay.

It's just asinine, jackass behavior and representative of everything that's wrong with online travel sites.

jojopotato• 16 years ago

Travel is a much more difficult business than it appears on the outset, it requires not just user-friendliness, but the business savvy to get the big players to provide you the information so that you can be user friendly.

It's not that the large travel companies don't know they're user hostile, they're just trying to squeeze every last dime from the consumer they can.

fookyong• 16 years ago

just to bring a little pragmatism to the conversation...

we have zero metrics on Hipmunk other than a warm-fuzzy feeling that it's "nice".

until there is some kind of study or publicising of figures proving that Hipmunks approach sells more airline tickets than the big players' noisy "hard sell / up sell" approach, patting Hipmunk on the back at this point is just conjecture.

the cynic in me says that it's relatively easy to boil a concept down to a graceful, user-friendly experience like this. it's an MVP-style 10-week challenge. the difficult part is extracting the maximum revenue from every customer in order to turn the MVP into a viable business, or a public company a la Expedia. that's the 10-year challenge. somewhere along the way, thousands of choices will have to be made as to where the slider should fall between these two product strategies - "User-focused" or "Revenue-focused".

my guess is that as Hipmunk matures, there will be no escaping pushing that lever towards the latter.

unexpected• 16 years ago

Congrats to hipmunk! I will say that I've become an instant convert, and everyone I have showed the site to has LOVED it.

Good luck - this is a tough space, but hopefully you can succeed!

vegashacker2• 16 years ago

It surprised me to see Sam Altman on this list. Where does that money come from? Maybe Loopt is very profitable and he takes a big salary? Or maybe he had cash before Loopt?

timcederman5• 16 years ago

I have seen a few YC folks, currently running their own successful company (Loopt is one example, HeyZap is another) investing in new YC companies. I'm also interested in the rationale.

leelin• 16 years ago

Most angel investors need to decide whether to put up the money based on a few one-hour pitches and what they read in the press. Those are pretty bad sources of information if the biggest challenge of early-stage investing is judging the founders, because the founder is in "pitch mode."

YC alums in a position to invest can interact with the founders for months in very social and relaxed settings as peers. That's orders of magnitude more data than what you get in normal angel investing.

vegashacker2• 16 years ago

I agree Sam may be in an especially good position to make guesses about the future of companies, but that doesn't explain where the investment money comes from.

badgerface• 16 years ago

It might be Sequoia's money? I know Drew from Dropbox has a similar relationship with Sequoia.

That would be interesting given that Sequoia is an investor in Kayak as well.

dchs• 16 years ago

How would that work?

jfarmer2• 16 years ago

Sam is probably an accredited investor due to the value of his Loopt stock. Their last round was valued at something like $500MM.

From there he can invest whatever he wants -- $1k, $10k, $100k, etc. -- assuming the entrepreneurs agree.

johnrob• 16 years ago

Proven team + big market = competitive round of funding.

Interestingly, it seems like they went with a lot of investors with experience as a founder.

thafman2• 16 years ago

The team are proven entrepreneurs, but it's not like other travel start-ups like Kayak and Tripit where the founders all have proven domain expertise, Steve and Adam are hardly travel industry veterans.

spez• 16 years ago

> Steve and Adam are hardly travel industry veterans.

Not for long!

scorpion032• 16 years ago

Hipmunk has Paul Buchheit, Sam Altman, Ron Conaway, @aplusk as investors, Steve as a founder and @kn0thing as a marketing head.

Has a ton of revenue already, Doesn't really need more capital - Steve has enough from the Reddit sale.

Enough said.

icey• 16 years ago

Hipmunk already has a ton of revenue? Source?

thafman2• 16 years ago

Affiliate booking revenue

Hipmunk Closes Hyper-Competitive Angel Round, Sans The Usual Suspects

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