The founder of Hotwire explains how building a marketplace that sold discounted travel by hiding brand details until after purchase taught him that team decisions matter more than product features. Those lessons shaped his later work at Zillow.
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So what do you think some of your key learnings were from Hotwire? And maybe how did this shape how you thought about starting Zillow?
Biggest learnings were, I mean, it's a cliché, but like, you know, it's all about the team. So like, I think there's still sort of this myth of the brilliant software engineer that's like sitting in a dark room coding by themselves. Like, that's not real life. That's not startups. Every success, every failure is about the group of people. So Recruit, retain, motivate great people, connect them to a mission, and then great people properly motivated build great products that attract audience to generate revenue, profit, and market cap. So it all starts with the people and making sure that you have the right people on the bus at the right time is something that I learned at Hotwire. And then I took to Zillow and elsewhere because there's just a lot of inertia at companies where people show up every day because they worked at the company yesterday. And so of course they're going to be there today. That's not necessarily what a company needs, especially one going through crisis or one going through a scaling period or just any period of volatility up or down. And so being really intentional about, you know, who's on the bus at different points in time and how do you motivate them and how do you maintain a sense of mission through those challenging times? That was the biggest learning from the Hotwire experience. I guess if there were a second one, it would also be, you know, and this is obviously a marketplace conversation in a marketplace group, but, You know, these two-sided marketplace businesses are all about trying to solve a problem for both sides. So what Hotwire did really well was we solved the problem for travelers that were looking for great discounts, but we most importantly solved the problem for the suppliers, the airlines, hotels, and rental car companies that were trying to sell distressed inventory, perishable inventory, right? A hotel room is totally perishable. An airline ticket is totally perishable. The minute the plane takes off, that ticket was worthless. So they can't have You know, low occupancy just crushes travel suppliers. And so we created this product of selling distressed inventory behind a brand shield, or what they call in the travel industry an opaque, or a product with opacity, which means that you don't know the name of the hotel, you don't know the name of the airline, you don't know if it's a nonstop or one-stop, you don't know the departure time until after you buy it. And that was a really valuable product for airline, hotel, rental car suppliers. And it solved a really important business challenge they have. It's really like an outlet mall. It's like a digital outlet mall. The reason that outlet malls exist is it lets clothing brands sell distressed inventory without diluting the brand, without trading down their core customer who's willing to walk into Rodeo Drive and pay full price or go to Neiman Marcus and pay full price. But they have to sell their excess inventory. So they do it through outlet malls. So this is an online outlet mall and solving that problem for those suppliers was really valuable. And the That allowed us to create a great product experience for consumers.
