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Hipmunk Closes Hyper-Competitive Angel Round, Sans The Usual Suspects
- danilocampos 16y agoHipmunk 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.
- fossuser 16y agoI 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 16y agoI 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.
- danilocampos 16y agoThey 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.
- timcederman 16y agoWhat makes you think the other sites don't know the value of user focus? I am not sure that the aggregator experience is as miserable as you make out.
- chris_l 16y agoThat'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.
- LanceJones 16y agoWeb design does not evolve that way. It evolves in fits and starts. In other words, someone does something new and other quickly follow. Half of the Web looks like either 37signals or Mint. :-)
- LanceJones 16y agoHipmunk 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.
- timcederman 16y agoAd-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.
- blhack 16y agoYou'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.
- danilocampos 16y agoThoughtful. I think what you're grasping for is thoughtful. Hipmunk is very v1, but nonetheless you can tell how much thought has gone into the presentation of flight data. The agony sort, for example, is so blindingly obvious once you see it in practice, but no one bothered to give it any thought until now. Simplicity is actually really hard. They got it to work.
- Psyonic 16y agoIf that's all hipmunk has going for it (shiny?) than I wouldn't bet on them. Nasty interfaces often win (i.e. craigslist). The guys who started kayak are ex-orbitz people, so they've been around awhile and have data on what works. Don't get me wrong, I'm rooting for hipmunk. I would love to see them succeed. But they need more than shiny.
- blhack 16y ago>Don't get me wrong, I'm rooting for hipmunk. I would love to see them succeed. But they need more than shiny. I'm not just talking about the interface, I'm talking about the experience overall.
- 16y ago
- jojopotato 16y agoTravel 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 16y agojust 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 16y agoCongrats 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!
- vegashacker 16y agoIt 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?
- timcederman 16y agoI 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 16y agoMost 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.
- vegashacker 16y agoI 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.
- Psyonic 16y agoAlso, to be an accredited investor, don't you need a net worth of like $1 million? So having 50k lying around doesn't cut it. Although there might be exceptions to that rule... I'm definitely no expert on the subject.
- asmithmd1 16y agoHere are the rules for being an accredited investor: http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm "income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year" And it is not like you have to submit to an audit to the company before sending them a check -- all you have to do is sign something that says you are accredited. That way you will have a harder time suing the company claiming you were mis-led or whatever.
- johnrob 16y agoProven team + big market = competitive round of funding. Interestingly, it seems like they went with a lot of investors with experience as a founder.
- thafman 16y agoThe 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.
- scorpion032 16y agoHipmunk 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 16y agoHipmunk already has a ton of revenue? Source?
- thafman 16y agoAffiliate booking revenue
- ld50 16y agook... i'll play along. what revenue? where are the customers? how much are they paying to acquire them? how much affiliate revenue do they actually receive per transaction? how do they retain customers? how are they planning to overcome the non-existent barriers to entry in that space? scorpion032's comment: "Steve has enough from the Reddit sale." is dead on. think about it.. these guys could self-fund the project without breaking a sweat and yet they still sold 20 point equity stake. why? --diversifying risk or pr, really. either steve realizes hipmunk's a longshot and isn't quite sure that he and his co-founder's street cred will actually play out in terms of long-term customer acquisitions and retention so he's cashing out now while the handful of early adopters (their "e-following") will still look like an aggressive growth curve), or he's trying to get some free press. basically. edit: i say "longshot" in the sense that i feel it's unlikely that their competitors will do nothing to adapt to any serious hipmunk rise... so unless their competitors are clueless-- which i doubt they are-- and unless they develop some sort of non-replicable competitive advantage-- which i dont see happening-- i think they'll have a hell of a time gaining any ground.