[00:00:00]
Steve: We kind of had six months or so of life left runway before that was going to be it. We had a great business model. We thought we got some funding for it. We launched it. It just didn't work at all. Welcome to the Logan Bartlett show. On this episode, what you're going to hear is a conversation with Steve Kaufer, co founder and former CEO of Tripadvisor.
We talk about Steve's journey as the co founder of Tripadvisor, how he enabled their early success, scaling the business into the public markets, as well as the operating lessons he learned along the way. You should always be taking 10 or 20 percent of your available priority choices and putting it in something that has no benefit right now but could be super important to you in three years.
We also talk about his new venture, Give Freely, in which he's funding with his own money a company that enables non profit success on the internet. I want to get 50 million users using give freely. I get 50 million users. That's a billion dollars a year going to charity, way bigger philanthropic impact than anything I could ever do personally.
Really fun conversation? that you'll hear. with Steve. now
Logan: So Tripadvisor, and you're also on the board of Glassdoor, uh, I was at Battery Ventures, and we were investors in Glassdoor. And so I, I was familiar with the ire that having a, uh, UGC site can draw off from individuals. We were sort of talking about it before we got going, but can you, can you speak to how you managed that and people being, I mean, I assume hotels and Restaurants as you guys got into that, they were not thrilled at different points in time with Tripadvisor and UGC ratings and all
Steve: at different points in time with Tripadvisor and TV and all that.
Uh, travel agents didn't like us. Hotels didn't like us. Restaurants didn't like us. All the people who all of a sudden woke up and said, Oh my gosh, random strangers on the internet can now review me, and there's nothing I can do about it.
Steve: And
Steve: of course, we, we viewed that as [00:02:00] a fabulous aspect of the internet.
All of a sudden, it wasn't pure marketing dollars that would dictate the success of, uh, of an establishment, but how much actual customers love them. And we were very clear from day one, anybody could write a review, but we also had the ability for owners to respond to reviews. So they could tell their side of the story.
And I mean, there's a whole nother episode on. Difficult. It was to get owners to actually appreciate the fact that they could respond because a lot of them didn't want to do it at all.
Logan: Well, just because that was, uh, acknowledging or enabling
It
Steve: was giving more airtime to the complaint and like survey after survey, we ran said. Consumers love getting both sides of the story. And if someone unfortunately had a bad experience at a hotel or restaurant or didn't like what they ate or a rude waiter or something for the establishment to come and say, Hey, I'm sorry for your experience.
Obviously that doesn't happen all the time. We were not even sure who it was. Please come back and give us a try. Well, as normal consumers, I'm like, Hey, that's a nice response. I'm more willing to give that, uh, uh, establishment another shot.
Logan: any anecdotes along the way of, uh, particularly animated individuals or things that, You remember, I mean, was there a website dedicated to you specifically from upset people at one point? Or what was the, what was the most, uh, politicized you got in all of
Steve: Oh, there was certainly a few folks that had it out for me because I was the face of, of Tripadvisor. I, and there's a, uh, a period of time when, It was ill advised for me to go to Thailand because there was an episode of a reviewer who got thrown in jail because of something that they had written, and we had to work very [00:04:00] hard to get them out of jail.
You can understand, we didn't like anyone, and in the U. S. it's really not an issue, you can write anything you want, but In other countries like Thailand, you couldn't say, and this hotelier was very well connected and got the police to throw this poor guy in, in jail. Uh, so we had to intervene and help get him out.
Uh, fortunately, as the story goes, he wasn't, uh, he was an expat living in, in Thailand, and as soon as he got his passport back, he fled the country, which was great, because it meant that, uh, uh, we could put our, uh, Uh, what we called a, a badge on the hotel, which talked about how the hotel was doing things to influence the reviews.
And if any establishment got that badge, that was not good for business because, hey, users wanted to be able to trust the reviews. And if a hotel was either submitting reviews on their own, which we caught a fair number of them. Uh, or doing things to, uh, to hit their guests over the head. Uh, one hotel even had a clause in the thing that you sign when you check in saying, I will not write a bad review about this establishment. Hey, well, when we found out about that, we called up the hotel to make sure that they knew they couldn't do that.
Steve: What
Logan: did you learn about the, um, psychology of people that leave reviews? I've had different points in time, had debates with, uh, my portfolio companies, respective portfolio companies, others about Glassdoor, which you were on the board of for a long time. And how. Oh, it only leads to either propaganda from, you know, by influence of the existing employees being mandated to say good things or the, the ire of people that were fired for other reasons.
And so there was noise no matter which way you looked in it. But I, I assume you have a more nuanced take about the [00:06:00] extremes of people willing to leave positive
Steve: When we first started the company, it was really around professional reviews, aggregating the guidebooks and the newspaper articles. The professional reviewers that knew what to look for had a broad range. And we added user comments as, I won't call it an afterthought, but an extra thing to supplement.
Because those would likely be a little more recent, perhaps. Uh, then we watched the behavior on the site, and our users of the site wanted to see those individual comments more than they wanted to read the more professional reviews. We switched things around, added the button, hey, you know, write your own review, and, and that obviously took off.
What we found when we were trying to figure out how to get more and more reviews, because with a million restaurants and million hotels, it's a lot to review. I, nobody really wanted, it's super obvious in hindsight, nobody wanted to help Tripadvisor. It's like, nobody wanted to help Glassdoor. Users wanted to help their fellow travelers.
At Glassdoor, like employer, employees wanted to help other folks figure out what was good and not so good about, about the company that they were working at. So in travel, we were concerned originally, Hey, who's going to take the time to write a review other than the people that had a horrible experience.
And we were very pleased to be wrong on that one. And the average review rating tended to be like 4. 2 out of 5, 4. 3, something like that. So like people love telling their happy stories. As an engineer by training, I'm well aware of the selection bias where the people who go to Tripadvisor to figure out where they want to stay aren't picking the two and three bubble hotels.
They're picking the nice ones. So they're obviously going to have [00:08:00] a nicer time. So they're going to come back and leave, presumably a more positive review than average. Uh, that's great because that's, that was the whole purpose of the site.
Logan: In the psychology of people leaving those positive reviews, was it, what did you find about that? Was it just predicated on helping your fellow traveler and there's something inherent to human nature of wanting to help anonymous strangers on the internet or did it end up being some social clout thing that they got to become the review person that people look to?
Steve: I mean, we had, we had seen Foursquare, you were mayor of your whatever, Uh, no, we never really tapped into that at Tripadvisor. We did do badges and points so that you could look more authoritative on the site. Because if I leave a review and it says, you know, Steve Koffer, one review or whatever my screen name would be, two reviews or three, of course I feel better when it says 65 contributions instead of two.
And when Tripadvisor gives me the Senior restaurant connoisseur badge. Hey, I get that email and it's a smile on my face. I don't go over and tell my wife or anything, but it's an acknowledgement that I've given back. And one of the other things Tripadvisor has always done is like, and you've helped 62 people in Boston this past month because your reviews were read by them.
I'm like. That feels good. So it's, it's a little tap on the, uh, on the, on the shoulder every so often saying, thanks, you've helped other people travel and, you know, the psychology of, I can be helpful. I'm thanked for it. I'm appreciated. Someone valued my opinion. Those are all things that are common in human [00:10:00] nature.
Logan: this new world of, uh, I guess, uh, fragmentation and polarization and all of that within society. And then now we have artificial intelligence popping up that can generate content on demand in a near infinite way. How do you think about the role that, that brands or. Sites like Tripadvisor, Glassdoor, Yelp play in this new paradigm.
Steve: if it's a brand that has trust associate or builds trust, I think it's going to be even more important. So absolutely. I'm playing around a lot with different AI tools and it can generate good recommendations, uh, which is very helpful. It can summarize things beautifully, very helpful, and it can lead you astray in innumerable different ways.
And as a user, I don't know that I can really tell the difference. And so the brand that has the answer, because you have professional authors writing about it, you've got a massive amount of UGC to deliver a good wisdom of the crowds. Those are going to be the ones that I think people will turn to for the.
Tasks that require an opinion. AI may be awesome and be like, hey, is there a flight to Boston between 2 and 3 p. m. in the afternoon leaving out of Miami?
Steve: You
Steve: don't need Tripadvisor or frankly any travel site for that. AI should be able to answer that perfectly, exactly, and accurately. If it doesn't today, it will tomorrow. What's the right hotel to stay at? Where should I dine with my family of four looking for Italian food? There are summaries out there and AI can generate a good explanation, but am I gonna trust Google for that? I don't think so. Versus Uh, where, where it's an important [00:12:00] decision, I don't think so, versus a brand that's putting their name behind that recommendation, be it a Tripadvisor, anyone in the restaurant category,
Logan: you worry about the delivery of those answers without the citations, just kind of the black box ness of this AI and the answers we currently get? And there's certainly things like perplexity or whatever that can cite back to original sources. But do you worry about it from an end user standpoint of just them giving you blind recommendations and not all the nuance associated
with this
Steve: to the question you just pointed at is like, Where is the trust and I will trust Google for facts and schedules and when they show me stuff and I'll trust when they point me to the right Wikipedia entry I'm looking for, but when it comes to opinionated things, like maybe it'll be good enough such that when they cite it.
Tripadvisor and Yelp and OpenTable for this recommendation. And I click through and check and it delivers on those expectations three out of three times, maybe then I'll do
it
right now. It, it, it doesn't. Whereas if I keep saying Tripadvisor, but it's the same for Yelp or OpenTable, if they take the information on their site and summarize it, well, I believe what those authors are saying on those sites.
So I will naturally believe the summary that those companies produce because I don't want to read 50 reviews. Nobody does. Well, very few people
Logan: I'm sure there's some out there. I guess obviously you're not still running Tripadvisor, but as you, if, if, if, If you were running a UGC site recently, we saw reddit license data to open AI for their training models. Do you think [00:14:00] that's business decision for companies that have all this data is to help power some of these AI companies?
Or are you risking too much? Just intermediation? Obviously, you guys had your career. Uh, or everyone in the UGC world had different battles with Google over the years around this stuff. How would you think about that thought tree of partnering versus not?
Steve: There has to be a good value exchange. No one company, even a Reddit or Quora or is gonna stop the training of those models to become very, very good and better and better every year. So if I were to advise the Tripadvisor, Reddits, etc. I'm like, make sure you're getting enough money that you can then spend on differentiating yourself and something that Google Isn't able to do, or an open AI model isn't able to do.
In order to maintain your, like, why do people want to go to you instead of somewhere else?
Logan: You gave a, uh, graduation speech recently. I guess, how does one get invited to give a graduation speech?
You
Steve: I've only done one.
Logan: were invited to do it and uh, how much time did they give you to, to plan in advance?
Steve: I, oh, I think they, you know, I was probably 10th on the desired list, whatever. But I, uh, a friend had recommended my name. I, and I thought about, Oh, this is going to be a lot of work, but it falls in for me. It fell, fell into the, I've never done that before.
And I always like to say yes, at least once to something I've never done before. So I said, okay, I've given lots of speeches, but never a graduation type. So I said, yes, I, and it was several months in advance. I wouldn't say that I started working on it several months in advance, but I got it done in [00:16:00] time and
Logan: you, knew it was coming. And, and so you went through six different points that I think they're mostly operating related points, but they draw on broader experiences and, uh, espousing advice for the, for the, the people that were, uh, the, the, uh, alumnus, I guess, in the crowd, the recent in there, I'd love to go through those points and, uh, maybe why you found them to be impactful in your life and like what, uh, The impetus was to put those, uh, those six on.
So I think the first one was speed wins. If you can maybe elaborate on like why, why that's been an important thing for you, for you, uh, in your career.
Steve: sure. I look, I, I started a company right out of college. I, yeah, it was called sent on software is kind of the entrepreneurial and we grew it. It was modestly successful. Until it wasn't and I'm, I always like to think of myself as someone that wants to keep learning, keep learning. And so as Tripadvisor started to grow, uh, you know, the third company along the way, uh, I thought to myself, all right, well, What are some of the important lessons from Centerline, uh, and one of which was very clearly stay small, nimble, fast.
Well, shit, as you're scaling a company, staying small, that doesn't work. But there's nothing inherently you like about being small. What you like is being able to be fast. And so, uh, and every entrepreneur longs for that. And everyone tells you as your company gets bigger, it slows down. And I'm like, I'm a contrarian.
Like, well, why does that have to be? What are the things I can do to keep it going as fast as it can? So I put a sign on the door, kind of scribbled on a piece of paper that said, Speed wins because. I wanted to keep it short [00:18:00] and sweet and it's not obvious in sense, it's obvious what it means, but I'm like, well, elaborate and I put on this, my door of my office because I wanted everyone that I was going to be meeting with.
To see that and be reminded of it as I, as they kind of walk in for whatever meeting I'm having,
Logan: different than
Steve: that's a little bit different than your corporate values that are maybe written up in a poster on the wall that people see and they notice, but they walk by and they don't think about it. To me, I had the opportunity of.
Everyone's sitting outside my office waiting to come in. Everyone coming in, they see, you know, two of the points in the speech. One was Speedwinds saying, like, we want to make decisions quickly. Obviously, you know, disagree and commit, that's, you know, super common. Uh, but we never want to find ourselves having debated something to death or we're going to have a meeting to figure out how we're going to decide.
It's like, no, just, just get it done. We make mistakes and. I didn't talk about that in, uh, in the graduation speech, but I was very risk tolerant as a CEO. I'm like, We need to be making some mistakes. Otherwise, we're just not pushing ourselves hard
enough
Logan: And that speed element actually save Tripadvisor from a revenue standpoint,
Steve: Oh yeah.
Logan: wasn't it the, you had to come up with a business model and, and, uh, it was like the fifth idea that actually worked along the
Steve: We had a great business model. We thought we got some funding for it. We launched it. It just didn't work at all. It was a B2B model. And then when it became super apparent that that wasn't going to happen, we kind of had six months or so of life left runway before that was going to be it. So I'm like, Core business model didn't work.
What are we going to do next? And the story I share in the speech is [00:20:00] I
Logan: We
Steve: our best as a team to come up with literally a half a dozen different things. And if we had only been able to do the first thing, the highest priority on that list at the time,
Logan: it's not
Steve: didn't work. And if we'd only been able to do the first two, because they each took two or three months to build, there wouldn't be a Tripadvisor today, or at least not the one I had started because it would have all gone under the fact that it was the fourth item or fifth item that we had tried.
That was the one that actually worked. And so. Obviously, we hadn't prioritized it as the first, even with all of our knowledge on the topic. Speed, the fact that we were able to implement so many of these, was the reason we made it.
In tactics I mean it's a shot clock on decisions Hey we have to come Friday Pooling maybe a decision or whatever kind
Logan: A shot clock on decisions, hey we have to come up with a decision by Friday and whatever the ruling majority decision or whatever we, we kind of land on by then is the right one.
Steve: I, there are sometimes I, I use that there's sometimes where I'm, I, I love my engineering background where I'm just like, I'm timeboxing this. We're not going to go build.
Logan: deliver, like,
Steve: all the research says our customers really want. We're going to build the best we can deliver in the next three weeks. Like, if you can't deliver it in three weeks, we're not doing it.
So, it's a time box and out it goes. Huge, not always, clearly not always, but usually when you time box something, you force the team to like, Back then it was, it was just us. I'm like, okay, we're taking a whole bunch of shortcuts. We're going to have to, if, if any of these things actually work, we're going to have to rewrite it because it's just thrown together, which was absolutely the right [00:22:00] answer because the first three didn't work.
So we could throw out that code, the fourth one, or if it was the fifth one that worked and we did rewrite it, but it saved the company we got it done so quickly. And, you know, a lot of folks coming from more established companies will be like, Really? You authorize spending a month writing something that if it worked, you knew it was going to throw, you knew you were going to throw it away?
And I'm like, Absolutely. Otherwise, it would have taken three months to figure it out. And I would rather rewrite it once you know it works, then spend the extra time to build something that's much nicer that at the end of the day your customers don't buy into.
Logan: did. The next one you had in there was, if it's worth doing, it's worth doing. And I think I know the point there. I guess my version that I occasionally use is you can't manage to what you don't measure. Uh, but I'm curious how the manifestation of that for you and what the principle sort of speaks to I
Steve: Yeah, no, it's, it's, it's a great example and you can always find something that you, you can't measure, but you know you need to do, but for almost everything, like what's your success metric? How are you going to track it? So that, you know, whether at the end of the day it worked or not, I mean, I remember a story where we were building some feature and the, you know, product manager.
Uh, you know, at the end of the day, hoorah, like, great, it worked. We got this many people using the feature. And I was looking, I'm like, wow, I'm sitting here thinking that is a total failure. We just had very different aspects of success and that person was measuring something different than what I was measuring.
It often, uh, or the, where it comes down to an interesting conversation is, uh, Uh, it [00:24:00] was, you know, public relations, PR. Of course you want to do some PR.
Steve: How
Steve: How much? Well, how do you measure it? And I had this debate with the PR team. Uh, and like, you measure in terms of, you know, hits in, uh, on social media or, or, uh, or the newspapers.
And I'm like, so you're telling me, page 16, one paragraph of the business section of a newspaper that no one reads anymore? I'm like, so you're telling me, page 16, one paragraph of the business section of a newspaper that no one reads anymore? is just as valuable as a front page article? Like, well, how specific do you want us to be? Don't give me this circulation number for a page 16 paragraph mention. It's, you're making it up.
Logan: story
Steve: You get me a cover story on something? I'll be more interested in that. So choosing what you're going to measure from a CEO perspective,
Logan: like
Steve: there's always a capital allocation, whether it's true dollars or headcount, whatever, and you need to know where you're going to make your next investment, even in the best days at Tripadvisor, we didn't have infinite resources.
So I want to know what we should double down on and do more of. And what we should cut back because they didn't hit the overall, is it driving the business? And so when you're not measuring some of those things, because they're just good for the business, how do you know it's working? Hey, we're, we're looking to cut down our, uh, our, uh, hold time on customer support. Okay, that's a good goal, everyone wants it. Are you looking to make a 5 percent improvement? Taking the whole time down from 2 minutes to a minute 50? Guess what? I don't care that much.
Logan: Success
Steve: Is that your success metric? Or are you looking to cut it in half? I do care. Not between 15 seconds and 8 seconds. But between three minutes and a minute and a half, I probably do care.
So put it out there, measure [00:26:00] whether you're tracking to it, and then, you know, whether to keep going at it or
Not
Logan: When there's ambiguity around, um, the early days of a project and its success, and you're, no one's exactly sure what that button is worth or, you know, how to set the goals around that. Do you just come up with something and then refine over time as you sort of learn more? Or how, how do you operate in the ambiguity when it's harder to set KPIs around something?
If
Steve: well, I, I mean, I immediately started to think of kind of like. A B testing and like, all right, it's an e commerce site. You want to generate more revenue? Do you put this thing up here? Do you change the button colors? Funnel, you know, all sorts of everyone has a ton of ideas. Here's what, you know, like strong advice you should definitely do.
Uh, you, you put, you, you ask your product managers if, if that's who's making the, the call to put what the success metric looks like in the actual product spec. And if the success metric is, we hope to improve conversion call bullshit on that. Improve conversion by what? By a 10th of a percent. That's a yawn by 5%.
That might be super important to your business. Now, it's a guess, nobody knows, but if you set your goal at 5 percent and you said, all right, I'm going to fund those because that can really make a difference, and they don't meet the success metric, and your product manager gets a reputation of like, oh yeah, they promise the world and they never actually deliver good stuff, then, hey, that product manager is going to self correct and deliver better expectations, and if it's a 1 percent goal on the next one, well, hey, somebody else's idea that they're putting their name against a 3 percent benefit is going to win in the priority [00:28:00] list. And so at the end of the day, who's more accurate? And hey, if you're aiming for 3 percent and you got half a percent, you can't claim success. We still shipped it because half a percent was better than nothing. But you got to the top spot on the priority list because you promised three. That's actually, uh, didn't do as good as hoped, and we're going to keep that in mind when evaluating the next thing you're bringing forward.
Logan: Embracing change was one which I think I understand, particularly in this new world of, uh, it feels like. Things are changing faster than ever in society. Uh, one of the others was, uh, don't be afraid of hard work, uh, which I think whenever we talk about hard work, um, it, uh, it tends to, I guess hard work started to be something that is, um, The terminology is a little, uh, politicized or people tend to get a little upset about what hard work means and, uh, how do you think about hard work and the advice you give to people that are early in their career about what working hard should look like?
Is it, is it seven to 11 every day or is it something different in terms of the metric that, that, that people should strive for to attempt to be successful?
Steve: should
strive for? Lots of paths to success, including the best one of all pure luck. And you stumble into something and you didn't work hard and you didn't really deserve it, but Oh my goodness, you've, you've landed in enriches or whatever your definition of success is. I'm just a believer in like the more you can do all stages of your life to improve your odds. The more likely it is that you're going to have whatever you're looking for. So when it comes to [00:30:00] career growth, if that's an objective, which it is for most people, if you literally tell yourself, I'm going to practice getting shit done when I'm sitting at my desk, I'm not going to be the guy that's more distracted.
I'm going to focus. I'm going to work hard. I'm going to concentrate. To the best of my abilities and get better at it. I'm going to go into the zone if, if, uh, if, if you like that terminology, I, and then maybe, and I'm going to work 10 percent longer than anyone else, which like if you're working an eight hour day, all right, is that a nine hour day?
Like not a huge stretch, 10 percent more focused, 10 percent longer hours, not a big compromise and a work life balance there. I'm now 20 percent plus better than the person I'm sitting next to. So I am going to have a 20 percent better chance at whatever that next career step is and like I pick 10 and 10, you could pick 20.
Logan: 20
Oh I
Steve: I'd tell everyone like there's 24 hours in a day. You get a good night's sleep, and everyone should. Sleep for eight of it. Gonna eat for a little bit. Go to the gym, do something, you know, hang out with friends. Uh, great. Now, you've still got a lot of extra time. It is totally up to you by choice. Do I want to, uh, educate my brain?
Do I want to be curious about something new? Do I want to learn something new? I'm like, YouTube is an amazing teaching vehicle for anything you could possibly want. Do I want to read books? Do I want to, uh, or to pick on my, my [00:32:00] favorite thing. Like, do I want to sit back and watch another episode of some TV show? Which, uh, At the plus side might keep you up to speed and chatting with friends about what's going on on whatever show. I, everyone deserves to chill and relax and that's fine. But honestly, if you're spending three hours or even two hours a day watching television, that's time that you've chosen to do that.
And you could be furthering your chances at, uh, at success, whether success is meeting the right person. Cause you're spending more time looking for the person or business success or a career change or in anything. So.
Logan: It's all
Steve: It's all choices. And I, I like to remind people,
Logan: it
Steve: uh, as, as I think I said in the speech, uh, uh, the harder you work, the luckier you get.
Steve: Who's the golfer that,
Logan: the better
Steve: Gary Player
Steve: Yeah, that's right.
Yeah I so
Logan: Luckier, the harder I work at or, um, one of the things that I heard is that you, uh, you, you keep a, uh, document that, that, uh, espouses what your beliefs are, working style, do's, don'ts, all of, all of that stuff, I guess. Um, I'm curious how that came to be, uh, and how people use it. I'm told that you can actually comment or maybe.
People can come in and read it. So what has that done, um, for you and building trust with your employees and helping them understand your working style?
and
Steve: I, I got to that rather, rather late, uh, uh, a very good friend, Luke Levesque had introduced it to me as kind of a blueprint for kind of who he was and he shared it with his team.
He used to work for me a trip. Uh, he's now gone off to do lots of great stuff. I, and it's just an acknowledgement that. [00:34:00] Every individual is different, and this is the blueprint, in your own words, of like, who you are, what are the things that make you really happy, uh, generally, professionally, what are the things that drive you nuts, after you've worked with someone for three or four years, yeah, you don't need the document, you already know that.
But it's a great, it's a great way to explain what, uh, uh, uh, excellent ways to interact. And so in my document, I'm like, don't ask me to make a big decision, even if it's an obvious one right away. I just like, I don't like the pressure. I want to sleep on it. My real estate team had done a lot of work to figure out where we need to like, and they presented me like, okay, so here's the lease we're recommending you to sign.
There was 0. 0 chance I was going to, uh, say no. I was unlikely to even ask an intelligent question. It's just not my forte. I totally trusted the team, but they're like, and we're hoping to get a signature today. I'm like, whoa, no, this is a multi million dollar decision. I need to sleep on it. Totally stupid, right?
I'm not going to learn anything by sleeping on it. And so I mention it purely as a personality quirk. They get it to me a day earlier and they say, hey, so hopefully you can have your decision by tomorrow. I'm happy. They're happy. And it all goes smoothly. If you didn't read the blueprint, you wouldn't have, have noticed that.
I hate it when people. And I think most people do wait till the end to deliver some bad news. No, tell me about the problem upfront. Maybe I can help solve it. I flip side. Hey, if you share a problem with me again, if you're a vice president and you're sharing that you've got, uh, a challenging team member or something in return, I [00:36:00] promise not to.
Ask you in our next one on one, Hey, did you solve that
already
Like, no, I want to get a relationship where you can come to me and I can help with something without there being a negative consequence to sharing that you were. In this case, vulnerable. In this particular situation,
Logan: Leadership, I think, can be innate in some ways. I don't know if you agree with that, but, uh, I've found that people can have qualities naturally that sort of, uh, come come along with what we would call leadership. But I think management is only a learned principle. know if you agree
with it
Um, you had mentioned management wasn't your, uh, your favorite thing initially, but you've obviously had to manage.
Thousands, tens of thousands of people over the years. What have you learned about managing in general that you would impart to a, uh, founder, entrepreneur, you know, someone growing in their career, trying to figure out how management
Steve: someone growing in
Logan: is
what
Steve: career trying to figure out how to manage their time.
Steve: you
Logan: That's
Steve: That's not the way the world works. You hire a bunch of different people that have very different motivations for being there, different learning styles, different ways they ask for or receive criticism, uh, uh, uh, stronger egos, quieter egos, just different personalities.
And my biggest mistake really early on was, again, assuming they were all like me, biggest advice I would give to somebody, uh, learning how to manage. Uh, find one or two people in your current company who have a reputation for being a great [00:38:00] manager and ask them, what do they do? Hey, you got a great reputation as a manager here.
I want to be a great manager. What do you do? Uh, how do you have a hard conversation? Um, like learn, uh, uh, uh, learn from the stories of others before you start. committing all the egregious sins that most new managers do. Second, I get a couple of book recommendations. Some of it is blindingly obvious if you take the time to actually, uh, read and study the topic.
Boggles my mind that I could graduate from a good school and never having to take a class in, like, personal psychology. Uh, what motivates people? Why do they want to do? How helpful would that be to your personal life, your friendships, your business colleagues, your career ladders? Super useful. No, you know, I, I studied, I had a mute, good music class, an art class, a computer science class, a math class, like, yeah, that's way less useful than learning how to interact with people.
So.
Logan: So
Steve: If, as
Logan: I,
Steve: again, I have an engineering background, so if you're going up the engineering management route, uh, read a book, study from friends, watch those around you, watch how the, the good ones do a good job and learn from the bad ones that are causing a problem. I listen, sometimes you'll end up knowing both sides of the story, uh, the manager's viewpoint in the, in the employee's viewpoint.
Uh, and think, Hey, how, how might I have handled this situation differently if I were the manager or I were the employee?
Logan: for
Steve: get to think about this [00:40:00] case study for free. You don't even have to live it, but through the eyes of your friend, uh, uh, you, you get a try.
Logan: Any plan or anything that stands out
Steve: I it, uh, high output management is the one that I typically will recommend to people within that Um
Steve: what what culture getting set within a company Obviously
Logan: I think culture is a set of, I don't know if this is the right definition, but a shared value system that a organization kind of imparts and maybe it's what people do when you're not in the room or something. How do you think about setting a culture, you have a new company and you wanted to set a culture for Give Freely as well, like how did you go about doing that in a prescriptive way versus what was implicit to it?
Steve: Yeah, I find it's best to be as explicit as you can about what you value as, as a company, like every company, like, Hey, we value communication and transparency, or at least I haven't found one that doesn't say that, but do you live it? Is that how the weekly meetings go? At a, you know, if really we're, we're, we're tiny,
Logan: But
Steve: like every single person in the company kind of knows what I'm doing each week because I share it at the weekly team meetings. They don't need to know it per se, like we're a small company. I'd love everyone's input into anything. I don't, uh, and like I try to explain. Everyone should come with or can come with a viewpoint,
share
it.
Logan: It's
Steve: If you hold an opinion strongly, say the opinion strongly.
Logan: benefit to
Steve: Know when you're the decision maker and when you're [00:42:00] not. And if you're the decision maker, it's not whoever yells the loudest, it's what you think the right thing to do is.
Put a strong, healthy discussion or debate. And both trip and the company before that. And this one, like very respectful company. We don't scream at each other. It's just not the culture. I, I, I choose to set, and we're just not going to tolerate anything that we view as, uh, unethical, overtly political. Hey, when this benefits you, but not the company.
No, like, you'll get a very direct conversation from me. About, Hey, this isn't what we're looking for here at this company. And at the end of the day, I'm always looking to reward in talking about setting the culture to reward with public praise, the folks that are doing what is best for the company's interests.
Trading open head count is an excellent example when, Hey, times are tough. And like the headcount in the plan and the market team says, Hey, I'd rather use this open head to go hire another engineer to build that because that's going to be more valuable to achieve our marketing objective.
Steve: Great
Steve: Love to see that and I want to like publicly reward it and encourage it,
Logan: There's, there's, uh, This Silicon Valley ethos that I think Y Combinator has done a really good job espousing, um, that is basically kind of the shipping, the minimum viable product, iterating quickly on it, getting feedback from customers. I get the feeling that in reading some of the stuff you, you both at Trip and now, uh, give freely kind of, uh, agree with that.
I'm wondering about the tradeoffs and were there times at which. You were more measured [00:44:00] in your approach rather than putting something out in the wild and getting it, you know, to the MVP state in, in iterating on it,
Steve: I, yeah. So I'll, I'll give you two examples. Uh. Paul Graham actually invited me in to give a little, kind of a short luncheon speech to one of the earliest Y Combinator classes on this concept of 404 testing. And 404 refers to the HTML error code when a page isn't found. And it was, it was, and is an awesome way to test whether a consumer on your website wants whatever it is you're, you have a call to action for.
So in Tripadvisor's example, it was, uh, would you like a weekend getaway guide? Free. And do you build it? Or do you put a button on the homepage that says sign up for a free weekend getaway guide and see how many people click it. And if you click the button, it went to a four, a four, sorry, this page is missing right now, which scares the bejesus out of any marketeers.
So you put that on your homepage. I'm like, Yeah, for, you know, depending on the stage of the company for an hour so I can see how many people click it so I can get in a real life estimation and that happened to be a great example because 10 friends that I asked, would they want to sign up for it? They all said, yes, of course, and we actually put that button on the homepage and nobody was interested.
Logan: And
Steve: Whoa, were my friends lying to me? No, I don't, I mean, friends will lie to me all the time about various stuff, but not generally about something like that. But the user coming to the Tripadvisor homepage didn't want a newsletter. They wanted to go research their trip to a specific location that was in their mind.
So I'm like.
Logan: mind. So
Steve: Anything else was in the way. And so that [00:46:00] feature didn't work. That was a fabulous a B test because we didn't have to build a big product to then find out that even though users said they were interested, they weren't flip side, fast forward 20 years. And we built, uh, uh, uh, a subscription based travel product.
Uh, you subscribe for 100 bucks a year and you get great discounts and other perks. And, like, we were appealing to Tripadvisor's massive audience, and the set of whom that would be traveling enough such that a single trip would pay for the subscription, and then they'd get the savings for the rest of the year.
Logan: for the
Steve: Relatively simple product, conceptually super logical payback period, like not even in doubt. I, a big product to build,
Steve: out
Steve: not something that I could figure out a way to AB test.
Logan: a D.
Steve: And so, Hey, we invested in building this and it did not work out the way we had hoped.
Logan: way we
had
Steve: Hindsight lesson, hey, when you can't figure out how to do a, an MVP, a quick test,
Steve: be
Steve: really careful, especially if your company is of, of decent size where that opportunity cost is going to be high, that you've researched enough of the psychology involved in our case on the hotelier side, as well as the consumer side
Logan: to
Steve: to walk people down the journey.
And that killed me because it meant, oh. That means we can't start building it yet. We have to go slower. But my lesson in hindsight, still learning that I was in my 50s at that point. It's like there are times when I, you'll save yourself a lot of heartache if you actually go [00:48:00] slower.
Logan: how do you set a culture of adaptability within, uh, an organization at different points in time? You, I think, at Tripadvisor saw. Uh, different existential threats or considerations coming down, and this isn't 9 11 or COVID necessarily the the unexpected one, certainly, but the I think I think link traffic at one point and trying to build more direct relationship to customers was one that you really needed to uh, Pivot the company's mindset or make it more, um, concerned about the threat that you were seeing that maybe wasn't yet showing up in the metrics.
Um, maybe can you speak to that specific example? And then also, how do you instill a culture and a willingness to adapt within a company
Steve: every
Steve: entrepreneur is, is formed or runs their life based upon the scars they experienced in their previous lives. And one of the scars on my back is a company that had a, a good, it was a software tools product and we just, we weren't always looking, even in our most successful days, we weren't always looking for what that next move would be.
And so in the, in the theme of, Hey, I'm never going to repeat the same mistake twice, I was always hyper aware of like, how am I investing for, for that future and Tripadvisor what we had a lot of traffic coming in through search. How are we going to wean ourselves off of that dependency? That was one constant threat because.
Google can and did change the search game all the time. I Google entered into the hotel. We call it the hotel meta business. You can search for a hotel, you can get pricing like, Oh yeah, that's a lot of what people do on Tripadvisor and [00:50:00] they took a lot of traffic that otherwise would get to Tripadvisor and, and that hurt along the way.
Steve: Okay.
Steve: Well, if Google's coming in and playing in your space. What are we going to do differently? So again, at various points, there were key moments where absolutely had to rev the company up for a change, which is surprisingly hard to do when the company is very successful at that moment in time, because it's been like, why should we change?
Like record profits every quarter. This is going great. And as CEO, it's kind of your job in my book to always be paranoid and to try to think of where you need to be in that three to five year, and at least make some bets that could get you there. So I had like in my tenure, I, I made a number of different bets, a couple worked out really, really well, thank goodness.
And a handful didn't. I. A number of small bets were complete disasters, but Hey, there's small bets. And that's kind of living up to the, like, yeah, if we're not taking enough risks of utter failure, as we did in some of our acquisitions and we weren't trying hard enough, but you know, we, we bought an attractions company at a relatively low price invested in a lot, and it's a huge part of Tripadvisor's
Steve: advisors
Steve: value now.
Cause. We saw, uh, threats coming back then and we knew we need to do something. And we thought that that was a great plan. So that one worked out vacation rentals less. So as a, as a counterpoint,
Logan: you think about hiring individuals into an organization, I guess, are there certain characteristics you're trying to tease out? Are there, are there non starter things that you definitely would never hire someone if it [00:52:00] comes out in an interview that might be counterintuitive?
Steve: the non starters are when they're talking about, you know, I, I, uh, a couple of techniques, uh, I try to use. And certainly to any company. Starting, I would urge the founders to continue to directly interview every finalist until you get to several hundred people, and a lot of founders are nervous about being accused of micromanagement or not delegating, which is generally a fair thing to be concerned about, but never delegate that, that last step in the hiring process.
I, I, so. You know, hiring traits I look for, uh, if someone is telling a story about what they worked on, uh, I might ask, hey, tell me about a really hard project and why was it hard? And I'm going to like weave in, is it hard because the other people weren't cooperating? Was it hard because it was just a hard technical problem?
Is it, and I'm listening for, are they blaming other people? Are they empathetic to what other people have to go through? Is there teamwork involved
Steve: Is it
Steve: hard just from a solo perspective? Was it really hard? Cause they had to work one Saturday. Ooh, that's kind of a red flag. If they view that as the hardest product they've ever project they've ever worked on.
Yeah, I just, I have a different definition of, of hardware that can often tell me, are they a team player? It can tell me, are they ever taking responsibility for why something became difficult? Uh, and again, it can tell me kind of their definition of hard personality traits, I look for people [00:54:00] near as I can find in an interview setting.
That look back and say, could things have gone better? And so I'll often ask, Hey, tell me about a project that you're really happy with that kind of viewed it as successful. And they go into something that they've practiced during the interview, the pre interview process, because everyone likes to talk about, uh, their successes.
And they say, all right, well, given that was clearly a win, have you, like, If you had to do it all over again, would you do it exactly the same? Or would there be anything that could actually have gone a little bit better? Ooh, that'll sometimes catch people off guard. And I can see kind of by the pause, uh, they've never thought about it.
I'm like, okay, I'm looking for people that whether the project worked or didn't are always in the mind of self improvement. Hey. I was running this, it, we're working on this, it worked, yeah, I wish I had done, blah, blah, blah. Not because I want people to get down on themselves or always strive for perfection, but if you go through life learning on your past experiences of how you can do things better, you're going to do something a little bit, you won't make the same mistake, you'll do something a little bit better.
You see a couple of themes coming out here. I, and then I love curiosity. I love the, like, Hey, uh, if I were interviewing someone today, you played with any of the AI chatbots agents. If I'm talking to a software engineer and the answer is, uh, no, like I, I just don't understand it. And I probably don't want to work with that in
Logan: Hmm.
Steve: because they're exhibiting something that is so, the fit is [00:56:00] not there with my personality.
Like I'm looking for people who would like. Oh, I don't know. I'll figure it out. I don't want them to be too distracted on the job, mind you, but, like, they're always interested in learning what's coming next, and especially at a startup, uh, as I'm sure most of your guests have, have, uh, iterated on, you can't really predict what's going to be and you need people who are adaptable, and I, I can't, I don't know a good question for adaptability.
I do know good questions for curiosity.
Logan: on, the point of adaptability, we referenced this earlier, but there were two, I guess, major milestones when running Tripadvisor milestones is probably the wrong terminology, but catastrophic events.
One was most recently. COVID, uh, and, and the pandemic. And before that nine, nine 11, both of which I think uniquely impacted travel, obviously they uniquely impacted society, but as a derivative travel was certainly impacted as well. What, what have you learned about managing through crisis or managing people's expectations as these jolts happen to, um, to, to, to society, but then the business specifically.
Potential
Steve: was not yet successful when 9 11 hit, we're like, Oh shit, like, it was difficult enough to build a pipeline of potential partners.
Now is like, Hey, the potential partners were hoping they were going to stay in business. It was pretty traumatic. So I,
Logan: let's
Steve: you know, don't start a startup unless you're willing to fail. And it sure looked like we were going to fail then. So, you know, we brought the team together and said, Hey, looking for ideas, let's try to think as broadly as we can, because we don't have a lot of time left.
Brutally honest, we're all going to be [00:58:00] out of a job in about six months unless we can figure out something. What should we try? There was no panic. It was like the very realism, but these were people that we were already struggling as a company. I knew a bunch of the people.
Logan: And so
uh,
there was less of
a
Steve: was less of a communication
Logan: forward 20
Steve: forward 20 years, Tripadvisor had been profitable every quarter since shortly after 9 11. Uh, and then, uh, COVID hit and boom, revenue plummets immediately. Uh, and everyone knows something's coming. you remember, we didn't know how long the pandemic was gonna last. We didn't know how bad it was going to be.
Uh, whether travel would ever recover. And so, uh,
Logan: know
money,
Steve: we were in a financial situation where there wasn't panic, you had to go borrow some money. Okay. But the banking system was wide open. We had a terrific CFO was able to
Logan: became like okay
Steve: put a check mark next to the, can I hit payroll? Uh, and so then it became like, okay, we can't run business as usual.
I. Our industry is suffering. So how can we help them travel shifted domestically pretty quickly? That was a modest change for us. We were already very, very global company. I layoffs were coming that if you were to ask me the hardest moment of trip advisor, that would certainly, you know, announcing a layoff, I over zoom is, is, or the impact of a layoff, uh, not a pleasant, not a pleasant experience.
The items I would impart upon other CEOs is the standard, like, be [01:00:00] transparent. Folks can know, like, I couldn't say, hey, this layoff and there's never going to be another one. That's not true. I can't say. All I can say is, hey, know, we've cut deep so that if things progress the way we expect, we won't have to do another layoff. Okay. That's not exactly the comfort everyone wants to hear. But it is the truth, and of the day, that's how I want everyone at the company to behave, so I have to model, model that behavior, in addition to just being the right thing to do. Uh, empathy, how do you help people that are affected find other jobs?
Uh, uh, and then, yeah, we held weekly, for a while at least, it was like weekly, regular, uh, Zooms with the company, trying to stay in touch, trying to help people move for, you know, Tripadvisor's IT department, fabulous. Kind of like we were set up to run remotely. We didn't have supply chain issues like so many other companies had to struggle through.
So I, uh, so we survived. And once survival was, uh, not assured because we didn't know how things were going to end, but once the basics were taken care of, The exec team got to think about, Hey, nobody's going to be looking at our financial results for the next year or two. Okay. It's, you know, what's the bright side of this?
What can, what can we do differently? And we had a chance to kind of reinvent where we were going to choose to invest without the quarterly financial pressure. Uh, we had, uh, we had to deliver enough revenue to stay alive, to meet our numbers, but we weren't going to be judged as a company. So we just [01:02:00] wanted to, uh, Go think about how we want it to look as a company post pandemic.
And we, we really did change a strategic plan to emerge looking different.
Steve: So So,
Logan: uh, backing all the way up from Los Angeles, originally Hollywood, is it Hollywood or,
Steve: I was born in Hollywood, technically.
Logan: and you were the, your father was a lawyer
Steve: That's right.
Logan: and. One of the interesting things I heard is that he would actually make you flip positions if you held, if you held one, uh, he would make you argue the other side. Can you speak to that?
Do I, do I have that correct?
Steve: Uh, pretty close. It was a fun game. We played, he was a trial lawyer. So he would, you know, debating and arguing in front of a judge was, uh, he was very good at it. And so we'd have, you know, I call it typical conversations at, at dinner, uh, or, or it might be an issue of the day. And I take a position and whether he agreed with my position on it or not, he would argue the other side, uh, and he was very good at it.
So he would usually, or always back me into a corner where even though I kind of know I'm right. He's just. He's just nailed me and I got to say, uh, uh, switch and then, because I didn't know how to get myself out of this. I was in high school at the time and I, I, he would, then I would get to say, and now what do you say in his tone?
And he would then have to argue himself out of the position he had just put me into. And it was just a. It was a fun game and it was a great learning experience for me to see how a good lawyer could kind of twist and, and push you into a corner and therefore how on the receiving end, how do you stick to the things that you know are [01:04:00] true?
How do you not get distracted by other things? And, you know, I'm sometimes asked in like, and is that just a fun story or kind of, did it help me later in life? And, uh, Pushing someone into a corner and debating with them is a terrible way to run a business or a personal relationship.
Steve: Persuading
Steve: somebody to what you think is the right idea by enabling them to see where you're coming from, enabling them to see a different perspective, or even pulling out of them a piece that, They had almost agreed to him.
Like, Hey, just as you were talking about, like there is a point, blah, blah, blah. So it makes them feel like it's their own. So from that hard debating, in a sense, I learned how not to persuade people in a company to do something, but to take the, the, the other side.
Logan: So, you, so you ended up at Harvard and you were one of the first, uh, classes of CS grads. Is that right?
Steve: Thank God I was a math major. And, uh, Uh, they opened up the computer science major, my senior year, getting me out of a third year of differential calculus and into the computer stuff that I was doing and enjoying
Logan: So that was the first year you could actually graduate with a major. Okay. So, and, and was it obvious at the time how the job prospects for a CS grad and the opportunities that would present itself, or was it still sort of nebulous?
Steve: no, it was pretty my CS grads were off working at tech companies.
Steve: Uh,
Steve: software so embedded in so many things at that point that it was a great career. And I had enjoyed like woodshop back in high school, creating stuff. Uh, [01:06:00] and yeah, now I'm just typing, but in my mind I was still creating a software program.
And unlike that English paper, which was a very subjective grade, Hey, the computer was telling me whether my program worked or not. I kind of liked the definitive nature of it's right. Or it's not in software,
Logan: yeah, And so then right after that, you started Centerline? Did you, did you have any other job or did you end up being an entrepreneur right out of the gates?
Steve: it was the accidental entrepreneur. So it, it was a senior class project to build, called the interpreter the C programming language, uh, which was a fun project at the time, but it turns out like, Hey, other professional software engineers wanted to use it because. You could experiment quick, you could prototype, you could find errors in this tough language called C.
Uh, and so we ended up building a company around it. Started off as Saber Software and then became Centerline Software. Uh, and that grew to, you know, uh, 150 people, 20 million in revenue. And, you know, product won awards and I was running engineering for most of that. Uh, terrible engineering manager, as I say.
But, uh, it was a, it was a lot of fun.
Logan: And so, so that was a roughly 15 year run. What, what, um, you, you mentioned being nimble and some of the mistakes or not, not being paranoid about what was going on in the market, I guess.
Could that company have become like, what's the maybe modern equivalent or what was the contemporary equivalent? Had you, uh, executed on it? Um, the way that maybe had hoped.
Steve: Yeah, I mean, uh, uh, it was in a good market. At the time we started, it's called C and C programming on Unix workstations, we missed a move to develop tools that were helpful for [01:08:00] engineers in client server environments, and then we completely missed the move to, uh, to Java new programming language. And, like, Uh, or, or testing tools, which was another venue that we had considered. And what that experience taught me, cause we were always doubling down on like, Oh, but we just need to fix the next bug. We just need the next version, the new piece of software to come out without really paying close attention to how the market was shifting outside.
And, uh, uh, and I,
Logan: I,
Steve: I, I settled on the phrase. I,
Logan: invest
Steve: I.
Steve: Uh, invest in change when things are going well. And I, when things weren't going well at centerline on the, I'm kind of on the way down as revenue was declining, change was forced upon us and it was not pretty. We could have been a lot more efficient when we were growing, but you know, who cared we were growing.
No change, get more efficient every quarter because you can, not because you need to.
Logan: to.
Steve: in that new, uh, uh, that new Java programming tool at the expense of what your business is running on, because you should always be taking 10 or 20 percent of your,
Logan: your
Steve: uh, of your available priority choices and putting it in something that has no benefit right now, but could be super important to you in three years.
And sometimes those will fail and you need to mentally be willing to accept that. Uh, but
Logan: that
Steve: absolutely critical. And there would still be a centerline software if we had done that successfully and we didn't. And I was in charge enough, uh, to, to bear real responsibility for the failure of that
Logan: that. the rate ratio, 10 to [01:10:00] 20 percent? And how do you, how do you, uh, uh, make that resource allocation? Do those end up being kind of skunkworks teams that are off to the side? Or how do you think
Steve: I love the skunkworks
Steve: Works
Steve: possibility. It's very hard. I found at least at Tripadvisor at scale, hard to do skunkworks. There's just so many. Mechanical things going against you. I'm not a fan of the 10 percent of everyone's time gets to do something because. I just haven't seen the cases where that's delivered anything hackathon days.
Hey, they're fun for an engineer. I've just rarely seen the benefits from them. So, hey, if you want to innovate, go set aside a team or focus led by someone that really cares about just that thing. They don't have any other responsibilities and then give them some, I'll call it CEO love. The attention that says from the CEO that this project, even though it's into the future is deserving of the CEO's time.
So therefore everyone else who may not give a hoot about the project kind of has to say, all right, well, we'll help you if you need this. And. Because they know the CEO is going to ask about it if the answer comes back zero. And then the other way is through acquisition. Uh, often way easier for a company at scale to acquire their way.
And it could be a five person company because you get five people that really care about it. Could be 50 or 50 people or obviously could be way bigger.
Logan: Hmm. And so then that business was sold. Where did it end up being? Uh,
Steve: to
Steve: a company called Compuware at a sale price. And I went along for a transition, but they knew, and I knew that that was not going [01:12:00] to be a longterm.
Logan: So how'd you go from the world of B2B dev tools into UGC
Steve: uh UGC
Logan: consumer internet? I realize the business model originally was meant to be B2B, but what was the kernel of insight that you had
Steve: I
love software development. I love the tool space, but I had now done it for 15 some odd years. I'm like, great. My focus going forward was anything other than software development tools world's my. Oyster canvas, whatever you want to call it, uh, to experiment. I went around thinking of different ideas in this one.
I, you know, came up along the way. I actually didn't think it was that good of an idea when, when I first heard it. I, I, but when I was finally ready to do something different and kind of leave the, leave the job and start something, This and the, this at its core was the internet is here. It's going to be awesome for getting real information about where you want to go.
What you're going to do there. Where are you going to eat? Where are you going to stay? Like travel massive category. Uh,
Steve: and
Steve: people were still using travel agents that were like, even the best ones were super limited in. In what they knew, and everyone kind of knew that was going to be disintermediated.
People were going to go booking direct on Expedia or similar sites, and then they would need advice on where to go. And UGC was existed, but was far from proven. Uh, and so we're like, Hey, we should be able to do this.
Steve: Uh
Steve: And, you know, we originally described the company as a vertical search engine for travel because I, uh, Google or Alta Vista at the time, it [01:14:00] could turn up a ton of hits for a particular term, but they weren't helpful in planning a trip.
uh,
Logan: acquired the business very successful. You only raised 4. 8 million or something like that.
Steve: Uh,
Steve: yeah, four point something.
Logan: Four point something. And it sold for 200 million plus the IAC. What were the inputs at that point in time? Obviously traffic was, I assume growing quite quickly.
Uh, but the
Steve: traffic was, great. It was, and it was almost all free search traffic. We weren't buying much traffic at that point. But we had a site that covered hotels in the U.
S. and I think we were in Europe at that point. Uh, and restaurants. and attractions. And so if you typed in the name of a hotel or an attraction, a restaurant, odds are high we were on the first page. And because the other travel sites often were behind, I'll call it a database firewall, you know, they weren't visible to search engines, we were often beating out the hotel's own website or Expedia.
That was not part of the search engine at the time, other than their homepage. So we got a lot of free traffic. And guess what? If you were searching on the name of a hotel, you as a consumer were thinking of staying there. Or you had already decided to stay there and you wanted to know whether it was available and how much.
A lot of those people typed in the name of the hotel. Landed on Tripadvisor, got to read some reviews, and said, wow, I don't want to stay here. And look, we present you with a bunch of other options. Or, this is perfect for me. It's got the gym I'm looking for. I like these pictures. And what's the next thing that a [01:16:00] user in that situation wants to know?
Steve: Is
Steve: it available? And how much is it? And we had a link that said check prices and availability on Expedia. And if you are on the page and you want to stay there, of course, you click that link. So the key thing I'm trying to convey is it wasn't advertising to Expedia. It was advertising because they were paying us for that click.
But to the consumer, it's what they wanted to do next. That became a beautiful flywheel. More traffic, And Expedia wasn't, this didn't come out of their brand marketing budget. This came out of their performance marketing budget, which meant
Logan: meant
Steve: they were paying me a dollar for the click. They were making two bucks and they would do that all day long. So our challenge at that point just became, Hey, how do we put more things on the site? How do we get more reviews? How do we get more traffic? How do we get a few more clients? We didn't even, lots of hotel chains, but we didn't need a hundred thousand clients.
Logan: created most
Steve: 10 created most of our revenue. And that was a very profitable business because I just didn't need a lot of people to run it.
And so it's not that we were afraid of spending money, but we didn't need to. And so we were like a 50 plus percent margin business in the really early days with tons of room to grow in a trillion dollar industry. And then the question came like, okay, If someone offers you 200 cash and you're a, you know, 30 person business having been there in business for four years, uh, you hang on for the multiple billion or you sell at that point and with all the benefit of hindsight, sure would have hung on.
But I would tell my younger self with all the risks and variables, [01:18:00] like Great time to sell. That, that's a lot, a lot of money.
Logan: And so, you stayed on, uh, though through that journey, I guess, what did you learn? I mean, I, I hold IAC and, uh, Barry Diller and that whole organization, what they've been able to do in optimizing. businesses and different brands within, uh, that holds co and spinning them out and all that. Was there anything that you take away from that period of time of being under that parent umbrella that's particularly insightful at an operating level?
Steve: I,
Steve: yeah, and I tried to model it later as Tripadvisor bought other companies. I, I truly expected to stay a full year after we were bought. Uh, that was important to me reputation wise. I'd want to hand this off, uh, in a smooth way, but being part of a big company, operating at big company speeds,
it's
just not my DNA.
And more power to it if, if, if you like that. But I would go off and start something new.
Logan: And
Steve: that's
Steve: exactly what I thought. I see like that big company, they own ton of other stuff and we would get absorbed and we would be told to do five year plans and I'd live in spreadsheets and talk to investors.
I'm like, not, not, not my D my idea of, of a fun time. I, and to my. Absolute delight. Uh, IAC ran us with, uh, you guys are doing great. We don't want to F it up.
Logan: we
Have
Steve: at it. In our very first quarter under IAC, we missed our numbers. And I'm like, oh shit, it's, you know, going to come. And sure enough, IAC sent a senior exec to come visit us.
We explained what happened and why, and [01:20:00] okay, thanks for the info.
Steve: Nice
Steve: lady, she went back, and we continued to run the company, and obviously things worked out fine. It was a, uh, it was a blip, but all credit to IAC, to Barry Diller, to Dara Khosrowshahi, who was CFO of IAC the time and had championed the deal.
For just leaving us alone, recognizing a good thing. And absolutely always there when I had some questions, I remember visiting New York and I got the briefing from the finance person in charge of us. And I was expecting 30 pages of what I could and couldn't do. One side of an eight and a half by 11 piece of paper saying things like.
Yeah, you can't sign a lease for more than 10 million. You can't, none of these things I would ever have considered doing on my own without seeking some sort of approval. So I'm like, I think I'm going to like it
Logan: it here.
Steve: And then I see Spunis out as part of the Expedia business. There were a few other CEOs I reported to there, but they were this big transaction business.
They were kind of told to leave us alone. I got to be part of a quarterly session kind of absorbing, they were a big client of ours, and absorbing some of the, uh, other nuances of the travel space that I didn't understand. So it was great education for me. And again, keep doing what you're doing, Steve.
Expedia came and said, look, we'd like put all of our reviews on our site. And I said, no, that, that wouldn't work out very well for me. They said, please. And I said, no. And that was the end of the conversation. So we were able to run as a separate company. And if you want to hang on to a founder or founding team and you don't need a lot of integration because we didn't, that's a great way to let a business thrive.
Logan: So, I mean, it sounds great at a [01:22:00] personal level, the shared fabric or, uh, like what's enabled the success of that model that, that Dara and, you know, Barry, I guess, really spearheaded for so long. Is there. Is there anything unique, uh, to, there's certainly a type of business they acquire, but were there a set of operating principles outside of that, that card that you got, or was there some expertise or hand holding around, I don't know, performance advertising or things that they uniquely leaned into to try to help.
Steve: No, I got the invitation, the frequent invitation. There's anything we can help you with.
Let
us
know. I Uh, like, and like, we did have some, some specific chats with some folks that, that were helpful, no doubt, but like nothing really significant. And likewise, Hey, we gave them some tutorials on doing SEO because we kind of knew that better than Expedia in the day. And they, they listened sometimes.
Uh,
Logan: sometimes.
Steve: so I work because there wasn't a lot that needed to be integrated. We integrated the finance packages and tax, like sure, which just has no Uh, you know, but I didn't need to go to anyone at Expedia to get approval to buy anything. So I was still in charge of Tripadvisor and again, that worked out very well for them.
And so the fast forward to 2011 when we spun out, I had to like, okay, I have to go build a, uh, a tax department. I had to find a CFO. Uh, I had to do a couple of things, uh, you know, health and benefits that we hadn't done. But the rest of the company didn't really notice the in the investors. [01:24:00] Oh, now that you're not part of Expedia anymore, what are you going to be able to do differently?
I'm like, sorry to disappoint you folks, but it's, you're not going to see any changes because I've had a lot of flexibility in the past.
Logan: the order operations were Tripadvisor acquired by IAC within the Expedia group or got combined
with
Steve: see I, which, you know, houses a lot of different And so we were for the first year, we were part of, uh, media and local services. We were with, uh, Interval vacations and Evite and some other, uh, the, uh, service magic, I think it was
Logan: Okay. Got
it
Steve: And then a year later, Diller and others decided we're going to spin out all of our travel assets into a travel company called Expedia Inc.
And that was hotels. com and Tripadvisor and everything
Logan: And so then 2005 to 2011, you're a subsidiary of that group, a public company. And then 2011, you spin out as your own standalone public business. Got it. And so, so you stayed on and did that through 2021?
Steve: uh, through
Logan: Got it. What, um, Cool. Impetus to, uh, move on to something different. How'd you reach the decision that it was time you've been at it in different ways for 22 ish years, but
well
Steve: So, uh, I, you know, I, I, I certainly wasn't, I'd always thought that I'd have like at least one more startup in me. And I've been saying that for better part of, 22 years. And I'm like, obviously I enjoy the job. I'm not going anywhere. I'm not under any pressure to go anywhere. Company has its ups and downs along the way, but that's life as a public company [01:26:00] CEO.
I, and then, uh, I, and then I'm approaching my 60th birthday and I'm thinking, you know, it often takes 10 years to build a company. I. And I might not get it right the first time. So I might need a little extra time. Don't know, darn it. If I'm ever going to actually do this, I better get my act in gear. I announced it in 2021, took a little while to find my successor.
But it was basically me saying,
Logan: I'm
Steve: I, I've, I'm very proud of my impact in travel, built a great company, somebody else can run it now. It certainly didn't need me for the past decade. It didn't need me. I, and I want to go think about a different, interesting challenge. And I literally left. I announced I didn't know what I was going to do by the time I left, which was about nine months later.
I still didn't know what I wanted to do. And I was busy, like I'm a very operational guy. I was busy running the company until I left. And then like, Ooh, woke up the next morning and I had nothing to do. And I probably took a week vacation. And then I thought, all right,
I,
got a whiteboard in my home office.
What am I going to put on it for ideas?
Steve: and
Logan: And how did you end up landing on Give Freely?
Steve: I had told myself. I really want to come up with a half a dozen, ideally 10 different ideas that all would be exciting, interesting. I could see myself doing I, and I think I got to six or seven, I couldn't make it all the way to 10. And then I'm like, all right, let's be a little bit logical about this.
Cause you're about to invest a good chunk of your life or another 10 years into something. Let's be deliberate. [01:28:00] Which ones are fun ideas, but don't have a business model, which ones are defensible, which ones you like absolutely passionately believe in, but that's going to be
Steve: a
Steve: real tough nut to crack in the competitive landscape.
I.
Logan: I,
had
Steve: so I had a, uh, you know, uh, uh, an idea of like, I want to be able to ask questions in English to my database of record at my company and get great answers without having to go through an analysis. There's a bunch of AI tools. That are starting to do that well. And that's clearly the wave coming and yeah, maybe snowflake or someone or the big companies will own it.
I don't know, but love the concept. There's some really fun stuff coming with, uh, uh, augmented reality and the technology and the glasses that I, I just believe in would be a lot of fun to work but the idea that kept capturing my imagination in my, like. When I'm working out in the morning, in my shower time, I'm thinking, Oh, that would be fun to solve. That would be great. Impact would be this Give Freely, which is basically a, a mashup of Amazon Smile, the program where Amazon gave a half a percent of whatever you bought to the charity of the user's choice, combined with a product like Honey, where You're getting, uh, the tool is automatically finding you discounts.
And so with GiveFreely, we've kind of mashed it together so that you install a browser extension.
Logan: finding you
Steve: Uh, we're finding you savings on coupons that are out there at over 000 stores and every time you buy something, whether you find a coupon [01:30:00] or not, at one of those stores, the affiliate fee that gets paid to give freely by the store for facilitating that transaction, I turn around and give 100 percent of that the charity that the user specified when they signed up, just like Amazon smile.
Logan: Amazon
Steve: Amazon smile closed their program, not because it wasn't successful. They were doing 100 million a year in charitable donations, but for other reasons, we can speculate why I, but for me, this was like, Hey, I want to get million users using give freely. I get 50 million users that are donating or That are generating affiliate commissions, buying stuff that you'd otherwise buy at a rate of call it 20 bucks a year, 50 million times 25, that's a billion dollars a year going to charity year in year out
Steve: That's as
Steve: they say real money.
that would be a way bigger philanthropic impact than anything I could ever do personally, obviously. I, but when I think of a combination of like. Intellectually challenging. I don't, I don't know how to do that. I know how to build the product, but getting that level of distribution, Hey, that's a work in progress.
But the reward is, uh, uh, it's pretty fun. I be happy to have that on my, think it was Warren Buffett that said, uh, uh, decide what you want written on your tombstone and then live your life to do that. I'm like, And I like Tripadvisor that deserves a footnote, but if really, if that's the biggest thing on my tombstone, I'm happy
Logan: want to do. Yeah, and I get a
Steve: funded because I, because I can, and I don't need the pressure for, uh, or, or I don't need the responsibility on the investor side.
And I don't want to [01:32:00] generate any profit ever. So we built the product. We, uh, released it last October, mobile version coming, uh, uh, next month, and I. Uh, and we already have the network of the 15, 000 stores. So I excited to be in a small company, super nimble. We have an idea we can go implement it. I'm looking for distribution right now.
So great. I post on my social media accounts. I'm now up to 10 followers on, uh, on Tik TOK, I think. So I'm like. This is not my forte.
Logan: we can teach you how to do the dances
Steve: I
need to go figure out how to like tap into what we believe, you know, influencers, perfect product for social media, influencers who give a shit about something besides whatever they're famous for.
And then the people that are following those influencers, be it on Instagram or Twitch or wherever, like folks that have a following, for them to be able to say to their audience, Hey, all you folks shop online. Here's a way that you can support your favorite charity or mine, which is ABC for free, saving you some money along the way, download you freely, costs you nothing.
You don't have to use it. You don't even have to remember it exists because it's a browser extension. When you're actually on the store and you put something in your shopping cart and we have a coupon for that store, or we just have a, uh, an agreement with the store for the donation. We deliver a little pop up that says, Hey, 2.
6 percent of your, uh, of your purchase. But my, uh, my, my cute story here is like, I'm living and breathing this as an entrepreneur, right? And so. I am, uh, I'm printing out a document. I need somebody else to sign it. Like my printer notifies me it's low [01:34:00] on ink. I have shit. Okay. Got to go get some more ink.
Why can't I do all this electronically standard complaint? I go to staples. com. I go put some ink in my printer. Boom! The Give Freely pop up appears saying, Hey, do you want 2. 6 going to the MS Society? My favorite charity.
Steve: I
Steve: I'm like, this is cool. I was not even thinking about it. Of course I hit yes. Now I just generated, albeit a small, but I generated donation 50 million people doing that.
That's a shitload of money. So that's distribution option. Kind of one social media influencers,
Logan: open topic
Steve: maybe bragging a bit about how they're good people and how you can help them or you can help your favorite charity. And It's, it's good to be philanthropic and the influencer is literally not asking their follower to take out their wallet and credit card
and pay it
I, the other is businesses. I give freely is currently offering a donation to whatever charity that user is picking just for installing it. No purchase necessary. they say, this is my cost of customer acquisition. And I'm out there talking to the businesses saying. Would you like to reward your customers for anything?
Reward for a purchase, reward for a review, reward for downloading an app, anything. Reward for registering, reward for signing up for the newsletter. Because this reward, a 10 contribution to the charity of your choice, isn't something that can be, you know, it's not subject to fraud. No one's going to say, Oh my God, I'm going to write, I'm going to make a thousand new accounts because I get 10 each and then fraudsters are out there doing that.
But no one's going to do it to get 10 to a charity. So [01:36:00] here's a nice way to either incentivize Hey, leave us a review and we'll make a 10 donation, download our app and we'll make a 10 donation. We being the company that wants to download. It freely funds it, so it's a neutral P& L, it's kind of no cost to the, to the business.
And then I think, and imagine if Ticketmaster were to do that. A lot of transactions. Wayfair, they're down the street in Boston. A lot of transactions and for them to get more downloads, obviously in their interest to have more reviews on their shopping, to be able to, uh, thank their users a surprise and delight.
Thanks for shopping away fair. We're nice guys. Here's 10 bucks to favorite charity, your choice, or if they have a charity, they like the homeless shelter. Great. Happy to designate that. And then, uh, users too busy and doesn't want to. Uh, claim the donation. It's fine. No harm. If they do, it's like three clicks to download it.
You pick your charity, I send the donation, company or me sends the thank you, and like, so hey, to, to, to this audience, to everywhere I go, if you have a site that has a bunch of traffic and you want to say thank you or incent behavior, Uh, you know, come give me a call I'm a startup hustling for business.
Logan: Will you accept all 501c3s or all charitable organizations?
Do you end up putting your finger on the scale of what types of donations you can give to?
Steve: Great question. I, we go off of the IRS database and a separate California database of allowed cherries, which is up to like 1. 3 million now. And so the only finger on the scale that I've put on at this point is [01:38:00] is there's a set of charities that, uh, uh, things that should never be approved charities because they're essentially hate groups in disguise.
And so there's one or two lists out there. Southern Poverty Law Center, I think, has the one that we use of like, You can straight face support these folks and we just apply that list.
Logan: You're not doing any manual selection of it. you're cross checking some, uh, lists around it. Well, it's a, it's a very cool and noble, uh, service. And hopefully, uh, how, how many months into it are you now?
Steve: I, we launched last October and as I say, the mobile version starts next month. So we're excited about that. Definitely need that for the social media audience there.
Steve: Yeah
Logan: Sounds like people should, should sign up. Well,
Steve: should be something that, you know, I, I'm hoping I can gamify it a bit with some sort of team activity, because you are all looking to support a particular charity.
I mean, the number of people that participate in walkathons or rides or whatever, huge number. Uh, and again, to my perhaps too logical brain on it is like, it's just a win all around. The charity is happy about it. Users happy about. Giving money. It doesn't cost them anything more. The store is happy to pay because they're helping to close a transaction.
So it's coming out of their profit. It's not a pure media spend for them. So it's a win, win, win. And now I just need 50 million more users.
Logan: uh, you're on your way. Well, thanks for doing this.
Steve: Oh, my pleasure. Thanks
Logan: This is fun.
Steve: Thank
Logan: you for joining this episode of the Logan Bartlett show with co founder and former CEO of Tripadvisor, Steve Kaufner. If you enjoyed this discussion, we'd love for you to share with anyone else that you think might find it interesting as well as subscribe on whatever podcast platform you're listening on.
We look forward to seeing you next week with another great [01:40:00] guest on the Logan Bartlett show. Have a great weekend, everyone.