Pod Insights How I Built This with Guy Raz KAYAK: Paul English (2021) About this episode Paul English is a perpetual founder. Since high school, he's started 3 philanthropies and 8 companies—ranging from e-commerce, to gaming, to GetHuman, a site that helps users access human customer support. His best-known venture is probably KAYAK, a travel website launched in 2004 over two gin-and-tonics with co-founder Steve Hafner. Using a simple interface, KAYAK specialized in search; and it made partners out of potential rivals like Orbitz and Expedia by charging them a fee to send users to their sites. Eventually KAYAK became one of the most-searched "K" words on Google, and in 2012, it sold to Priceline for $1.8 billion. A few years later, Paul started yet another company, Lola.com—and says he plans to launch many more.
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0:00 Guy Raz? We get support from US Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems.
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5:16 Guy Raz? Hey, it's Guy here. So it's summer and I'm on vacation. And maybe you're traveling right now as well. And if you are, you might have booked your plane ticket or hotel on the website created by today's guest, Paul English. Paul built the travel website Kayak and lots of other companies as well. He is the ultimate serial entrepreneur. So stick around because at the end of the show, I'll have a quick update about what he's been up to since this episode first ran back in 2021. OK, here's the show.
5:52 Speaker 01 We hired a top brand agency in New York City named Wolf Olens. The branding project was led by a woman named Carol Costello. Ultimately, her team came up with a list of about 100 names. And Kayak was actually our second choice.
6:06 Guy Raz? All right, so you've bought Kayak. And did anybody get on there initially and say, where are the kayaks? Like, where's your kayak gear? Like, what are you doing?
6:17 Speaker 01 We literally got hate mail from
6:19 Guy Raz? Kayakers.
6:20 Speaker 01 From kayakers, yeah. Who said this was terrible that we took this over. And this is like a blight on the internet, you know, that someone would take over their precious hobby
6:28 Guy Raz? Yeah.
6:29 Speaker 01 and use it for something dirty, like a travel site.
6:38 Guy Raz? Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
6:49 Guy Raz? I'm Guy Raz, and on the show today, how a totally chance meeting in a Boston restaurant led Paul English to launch his fifth business, Kayak, and how he and his partner grew it into a popular travel site, then sold it for nearly $2 billion.
7:12 Guy Raz? Starting a business is full of pain and frustration. No matter which path you take, there will always be an obstacle, something trying to prevent you from solving the problem. And then, a new problem will crop up: a supplier who can't fill your order until after Christmas; a letter from a state or local agency that hasn't received your permit application, even though you filed it months ago; a distributor who forgot to put your product on the store shelves. All of these things, and many more, are usually reliable sources of high blood pressure. But there's a certain type of person who thrives on these challenges, someone who
7:53 Guy Raz? is almost addicted to the stresses of starting again, and again, and again. And that person is a serial entrepreneur. For them, the money side of business is almost an afterthought. It's the process side that makes them feel alive. And we've seen that on this show in entrepreneurs like Richard Branson, and Mark Cuban, and Marcia Kilgore, founders who, every two or three years, pretty much have to start a new business to stay fulfilled and energized. And all of this goes for Paul English as well, the co-founder of the travel website Kayak, and seven other companies, plus three philanthropic organizations, and several other side projects.
8:37 Guy Raz? Back in 2004, when Paul launched Kayak along with Steve Hafner, he had already founded or co-founded at least four successful companies. And yes, the concept behind Kayak, a clean and simple search engine for plane tickets and later hotels and car rentals, all of that was appealing to Paul at the time. But as you'll hear, what really appealed to him was the sheer joy of looking at another empty whiteboard and filling it with the building blocks of yet another brand, which, eight years after launch, wound up selling to Priceline for $1.8 billion. And you might think that somebody with the incredible drive and instincts to build
9:21 Guy Raz? eight companies might come from an entrepreneurial background. But no, not really. Paul grew up in a working-class family in an Irish Catholic and Italian neighborhood south of Boston. There were seven kids in his family, and they all shared a cramped three-bedroom house.
9:39 Speaker 01 Yeah, the brothers, the four boys, slept in the attic, which had no heat and no air conditioning. I mean, the worst part of it was we had one bathroom with nine people.
9:49 Guy Raz? Wow.
9:49 Speaker 01 And so we each had a 15-minute slot, starting at like 5:00 AM or something. And if you missed your slot, you'd be going to high school smelly. So that was, that was tough, getting up at 5:30 AM or whatever the time was. But it was fine. Like, we didn't know anything different. And I never felt like my house was crowded. It's just that it is what it was, and that's how we grew up.
10:12 Guy Raz? What was your, what did your dad do for a living?
10:15 Speaker 01 My dad was a pipe fitter. He worked at the same company for 49 years. And he really ran the household. And probably all of us were like just a little bit afraid of him. Maybe probably more so Dan and I than the others. My brother Dan and I were the ones who acted out probably more than the others.
10:30 Guy Raz? Was he physically imposing?
10:32 Speaker 01 It's interesting. I have this one story about my dad. He wasn't like a huge guy. He was probably six feet tall, probably a little bit thin, as I remember. And there's this one scene where I'd gotten in a fight with someone, a kid down the street, and his father came over to our house and banged on the door. I remember him, bang, bang, bang. And my father opens the door and there's this huge guy and he said, "Your son beat up my son and blah, blah, blah, blah." And my father put his finger on the guy's chest and said, "Don't you ever bang on my door again." And somehow, the way my father communicated to people, this guy melted. And I remember watching my dad do that and saying, "How does he do that?" My dad had really good influence
11:16 Speaker 01 and skills. He was very charismatic and very confident.
11:19 Guy Raz? Um, your, your mom, I guess, was, was a teacher and a social worker, but um, from what I read, she spent like the first 10 years of your life actually sick. Um, I mean, do you remember being aware of that and, and cognizant of her being ill?
11:36 Speaker 01 Yeah, my mom had an illness called myosinogravis, which is a debilitating muscle disorder. And she spent much of the first 10 years of my life in bed. But my mom had a miraculous recovery back when I was about 10, that she was healed by a Catholic faith healer. And my mother was very religious. I'm not. If anything, I might consider myself Buddhist because I read a lot of Buddhism and I'm very interested in following a few Buddhist teachers. But I'm not sure that this priest healed her or her belief in the priest healed her.
12:15 Guy Raz? Yeah.
12:15 Speaker 01 And I think there is this magical thing that can happen when someone really, really believes something, they can will it to happen and they can will their brain to rewire. And something happened to my mom that day and she started healing. It wasn't a night and day switch, but she started fighting the disease. And my mom even started jogging back before jogging was a thing.
12:37 Guy Raz? Yeah.
12:37 Speaker 01 She started playing tennis. She became very strong beginning of her life. So I think the doctors told her she could never get rid of the disease, but somehow she fought it and it seemed like she won.
12:50 Guy Raz? That's amazing. What do you remember about your parents' marriage? What, what was it like?
12:55 Speaker 01 It was difficult during the seventies and eighties at the end of their lives. My father ended up passing away in two thousand and three, so it's been almost twenty years since both my parents passed away. But I'll tell you kind of a funny scene. Literally on my mother's deathbed with her seven children around her. This is kind of a sad thing to hear, but ended up well. She looked around the room at each one of us. And I can't believe she said this, but she said, "All my life, I knew my marriage to your father was a mistake. However, I look around the room, I look at each one of you." And then she paused and she looked at each one of us.
13:40 Speaker 01 And she said, "I can see what each one of you got from him and what you got from me. And I know now that my marriage was very successful." Wow. Yeah. They were very different people. My mom was an intellect. She grew up in a very difficult childhood. And my dad was kind of happy-go-lucky. He didn't go to college. He was very charming. He was a good storyteller. But they were very, very different. The last, after my dad retired, I think they actually had a lot of nice times together. Did you go to mass every Sunday? Did your mom? We did. We sure did. Did she make you go? She made us go. Were you an altar boy? I was. Which my teachers, my teachers didn't believe me. After, many times I'd get, you know, set up to go to detention after school because
14:24 Speaker 01 I was a bit of a wise guy in school. I was bored and I would get in trouble. And many times they'd say, "Have to go to detention." I said, "I can't. I'm an altar boy. I have to go to church." And they wouldn't believe me. Yeah, the classroom was not a good place for me. I guess today you would say I had ADHD, maybe? I'm not quite sure. But I'm still amazed. I think about if there was an anthropologist from another culture who beamed down. You know, to my schools in Boston, or really any school, and saw that they kept thirty kids in desks for eight hours. It just seems inhuman. Like, who came up with this idea? To make kids sit in a chair at a desk for eight hours? It just seems crazy.
15:03 Guy Raz? Yeah.
15:04 Speaker 01 And I couldn't do it. I struggled with that. I did like performing intellectually, and so I worked really hard at music and science, things like that. But my grades were terrible.
15:16 Guy Raz? But clearly, I mean, you were very intelligent because you wound up going to Boston Latin. And for people who don't know, I think it's like the oldest high school in the US. And there was an exam, or may still be, to get into it. And from what I've read about you, you had like one of the highest admission scores to Boston Latin out of thousands of kids who took the test.
15:39 Speaker 01 Yeah, the way I looked at it was, I tested well. I felt like I had this trick that in classes, I was fast on exams and I could guess things really quickly. But I don't know, I guess I would say I had a lot of diverse interests as a student. I won prizes in art and science and music and math. And I was a very competitive kid, growing up with all those siblings in one house. I think it makes you both collaborative, but also competitive.
16:09 Guy Raz? Yeah, because you're competing for your parents' attention.
16:12 Speaker 01 Yeah, that's probably, I mean, I don't know if I was thinking about that explicitly as a kid, but that's probably true.
16:18 Guy Raz? I mean, this is the late seventies, early eighties. Do you remember when you first got exposure to a computer? Because I'm assuming you couldn't afford to have one at home.
16:29 Speaker 01 Well, to my surprise, and the surprise of my siblings, one year, my mother went out and bought a computer called a Commodore Vic 20. I think it was three hundred dollars, which is a horrendous amount of money back then. And we were shocked that she would spend that money on the computer. And I still don't know why she bought it. When she, she must have seen it ad somewhere and thought, this could be a good way to entertain the kids. And I kind of selfishly took it over. And I learned everything I could. I learned how to code. I wrote software. I wrote a video game. And that, to me, taught me like, whoa, this way to make money programming. And that was pretty cool.
17:08 Guy Raz? And I guess it was around this time that you actually built a A video game, which would become like your very first company, I guess.
17:17 Speaker 01 Yeah, I am. So I called my little company Speed Games. It's funny to call it a company because I don't think I was incorporated. But the game that I sold was called Cupid. And it operated maybe a little bit like a Pac-Man, but there was a player that would race across the field. Cupid's arrows would shoot and you had to avoid the arrows. And then my most proud thing about the game was I designed all the music and sound effects and all the graphics. And I really put a lot of energy into what happened when Cupid's arrow would hit you, like what happened to your shape, what the sound effect was.
17:52 Guy Raz? So this game that you wrote, Cupid, you you managed to get the attention of a, I guess, a company called GBA, which you sold a license to to them or something like that?
18:05 Speaker 01 Yeah, the deal was it was $25,000 upfront and then a dollar revenue per game cartridge, which sounds really great, especially for a teenager. The bad news is I licensed the game to them and they immediately went out of business. And then the question is, why didn't I then go contact every other game publisher to try to find someone else to license it? But like a lot of things, I would jump from thing to thing and I felt like I had mastered the game. And then I was on to something else. So I wasn't really motivated by money. The money was very cool as a teenager, getting a big check. But I went on to the next thing.
18:39 Guy Raz? Did they pay you? I mean, they went under. Did you get all the 25?
18:42 Speaker 01 They paid me. No, they paid me 5,000 upfront, but then they immediately went out of business. They never even sent me the rest of the 25,000. So all I really made out of it was 5,000.
18:53 Guy Raz? Which in 1982.
18:55 Speaker 01 1980 or whatever. There was a lot of money.
18:57 Guy Raz? Yeah, it's a ton of money, especially for a high school kid. My God. So for college, you you end up going to the University of Massachusetts in Boston. And I guess it became pretty clear while you were there that you were going to pursue a career in computers, probably as a programmer or something like that. Because you really, I think, while you were in college, you already started to do some freelance work for like the sort of the nascent computer industry that started to grow in and around in the Boston area in the early 80s.
19:27 Speaker 01 I don't remember how I got my first job, but. I worked mostly full time during college. It took me five years to get my bachelor's degree and another two years to get my masters. But I did everything from, I worked for a mini computer company called Data General in an operations research group. I worked for the US Air Force writing software for spy planes. That was super cool. I worked for a medical device company writing device driver software for blood machines. So I really tried to change it up and learn about different industries while I was studying for my undergraduate degree.
20:02 Guy Raz? Man. In the midst of, of sort of the early part of your career, because I know one of the first things you did when you, when you had your degrees from UMass was you went to go work for a company called Interleaf, which I want to ask you about in a sec, but you got married really young, like 25, 26?
20:19 Speaker 01 Yeah. And Jean and I met at age 18 as freshmen at UMass Boston and remarried at age 25.
20:27 Guy Raz? And had kids a couple of years in and?
20:30 Speaker 01 We had two kids. Yeah, I have a son and a daughter. My daughter's Nicole, my son is Michael, and they both live in Boston and they're super close to both their parents. I'm divorced now for 15 years, but I'm very friendly with my ex. We live close to each other. We're still very supportive of each other and we're both pretty close to the kids.
20:49 Guy Raz? All right. So you really, one of the first professional long-term jobs you had was with a company called Interleaf. And I guess they were like an early content management software company and you were a program there and you, you, you must have done pretty well because they eventually promoted you to a management role, right?
21:08 Speaker 01 Yeah, I started as a programmer and I loved programming. I worked a million hours a week. I worked weekends. I worked late at night. I was there early in the morning. I just became obsessed with programming. But it's true that after a couple or a few years, they talked me into management, which I was really perplexed by and didn't like at first. I ran engineering there at one point and then my last year there, I actually ran product management and marketing, which is kind of a crazy story. The company lost a lot of money one quarter and the board fired the CEO and appointed myself and another executive as an office of the president. We had to go recruit another CEO. So we recruited this guy to come in as CEO.
21:48 Speaker 01 And on his first day, he said to me, okay, we have 12 VPs, which is double what we should have for a company of this size. So I'm going to fire half the VPs tomorrow. I want you to run engineering and the business units, because I was running engineering at the time, or I can have you run marketing. I said, I don't know anything about marketing. He said, congratulations, you're VP of marketing. And I mean, props to this guy for shaking it up. And I didn't really know what marketing was, but I figured, okay, we had a direct sales force. I wanted to learn how to sell software, because if I could design it and I could learn how people sold it, then maybe I could figure out what marketing was. And it was a really fun job for me.
22:26 Guy Raz? This is a really heady time in Boston tech. I mean, I mean, DEC, Digital Equipment, I think it's called, was one of the hottest and would become one of the hottest computer companies in the country. And there are a lot of software companies that don't exist anymore, including Interleaf, right? I mean, I don't think Interleaf is around anymore, is it?
22:45 Speaker 01 It's not. It sold very successfully. I think it was a billion dollar exit to a company called BroadVision, which was really hot during the beginning of the internet, or the beginning of the web, I should say.
22:57 Guy Raz? Did you have any, any stock options that you had?
23:00 Speaker 01 I did, I did. I made, I made my first million when I was, I have to do the math, but I think I was 29 years old.
23:08 Guy Raz? Wow.
23:09 Speaker 01 But I remember after I had vested half my options, which is a million dollars, I then got convinced by a very gregarious recruiter in Boston to leave my big fancy job at Interleaf to go work for some unknown internet company. So I walked away from half of my options and then worked really hard at this crazy startup that imploded a year later. And so I learned quickly how startups shouldn't run.
23:33 Guy Raz? This is called NetCentric, I think, right?
23:35 Speaker 01 Exactly. Yeah, we built software back then, this is back in like 1996, maybe, 1996, 1997.
23:45 Speaker 01 There's something called a point of presence, which is where all the internet companies connected users to the internet. It routed all the traffic from dial-up modems to connect to other servers and businesses. And we built software for these point of presence, so you could route faxes through the internet and the beginnings of doing phone calls over the internet.
24:05 Guy Raz? All right. So you go and work for this company called NetCentric, a startup, which wasn't going to be, you weren't going to stay there long. But I guess while you were there, you either met or you hired two guys who would eventually become pivotal to your, the rest of your career. A guy named Bill O'Donnell, one guy named Paul Schwenk. Did you, you hired them as engineers. Did you meet them there?
24:27 Speaker 01 I actually met them at Interleaf. And Bill O'Donnell, a Billow, as we called him, and Paul Schwenk, or Schwenk, as we called him, turned out to be incredibly instrumental in my career. I've been incredibly lucky to work with those guys for decades. So when I went to NetCentric, I hired them as engineers. And then there's another guy that I hired that I had not met before, named Jeff Rago, who also turned to be instrumental to my career. Really, those three guys. And a lot of being successful in tech is luck.
24:57 Guy Raz? Right.
24:58 Speaker 01 And a lot of it is picking the right people to work with. And I felt lucky that I met these guys early on, and we developed a close friendship. And we worked together across several companies over decades. And they helped all of my companies be very successful.
25:13 Guy Raz? So here's, I think, kind of an interesting thing that was going on, right? On the surface, you were very successful. You had been promoted to an executive position at the previous company. You're, you know, at a hot startup. And I think around this time, in your late twenties, you presumably went to go see a doctor, a psychiatrist, because you were suffering from things that maybe you couldn't fully understand, depression and anxiety and sleeplessness. And also, is that right? I mean, is that, what was going on in your, in your life?
25:52 Speaker 01 Yeah. So age 25 was a big year for me. In one month, I had four big life changes. So I got my master's degree. I started a new job. I got married, and I bought a house. And I was working really hard, full-time, while I was going to grad school at night, and then switched to a different company. And I was alternating between extreme depression and panic attacks where I couldn't leave my bedroom. And I remember just begging the sun to come out and just kept looking at the windowsill for the first signs of light. And somehow, when the sun came out, it would calm me down a little bit. But I would go between these depressive episodes,
26:35 Speaker 01 which lasted weeks or longer, and then manic episodes where I couldn't sleep. And the mania, a hypomania, allowed me to be creative. But I also, things would move so fast for me that I became detached from other people.
26:54 Guy Raz? Yeah.
26:54 Speaker 01 Like, I was very irritable. And I had this perception, which I learned later was just grandiosity, with it, everyone became too slow for me. But it just felt like I was separating from people at work, in my marriage, with my friends. I had trouble communicating with other people.
27:13 Guy Raz? I mean, a lot of young people first experience some types of mental illness in their twenties. There's some reason why. Maybe it's a combination of where you are in life and where your, how your brain is developing, and just this kind of perfect storm of things happening. How did you get to a point where you, where you said, I've got to go see a doctor?
27:37 Speaker 01 I didn't really know what a psychiatrist was, but I knew I needed to see someone who could help balance me. And I went to see a psychiatrist at Newton Wellesley Hospital. They had diagnosed me as bipolar. I had never heard of bipolar before. But it made me feel good, because I thought, okay, if there's a name for it, maybe someone knows how to fix it. So, and they put me on lithium. And I remember, I felt, this is great, if something can balance me out a little bit. But I was also afraid of the drugs, because I thought it would cut into my creativity.
28:13 Guy Raz? And did it?
28:14 Speaker 01 Well, put it this way, when I started taking lithium, one of my managers at Interleaf, a guy I was very close to, pulled me aside one day and said, "Is everything okay for you?" I said, "Yeah." He said, "You seem like you're not yourself recently, like you don't have your energy." And I stopped taking the drugs after he said that because I thought, "This is terrible. I can't lose my energy. I can't lose my creativity." But then I went through cycles for years of taking the drugs, not taking the drugs. It took me probably another 15 years of on drugs, off drugs, on drugs, off drugs, until I found something that worked well for me.
28:56 Speaker 01 And I have not had a depressive, like a full-on depressive episode in 20 years now. So I'm hoping, knock on wood, that I've licked that with the meds and with other, with meditation and therapies, help me with that.
29:11 Guy Raz? All right, so I think you're in your mid-30s and you were at this internet startup, NetCentric, and I think you stayed there for, what, like a year or even maybe even less than that?
29:24 Speaker 01 Yeah, my, it's funny, my memory of my departure was that I was fired. Years, 20 years after that, I met the founder, the CEO again. His name is Sean O'Sullivan. He's a wonderful guy. Went on to become a very successful investor. And we had breakfast after not seeing each other for 20 years. And we talked about the fact that we had this fight and that I left. I don't remember the final words that happened, but we laughed over a big disagreement. I was hiring engineers at ridiculously low salaries. Like, he really had this religion. He developed this cult of all of us were very cheap. We spent very little money on computers and office and everything else. We were cheap as we possibly could. The salaries were cheap. And we're all going to become millionaires on stock.
30:09 Speaker 01 Meanwhile, the friends of my engineer colleagues were all making big money at other companies. And so we had this agreement that the first time we shipped a server and we got revenue from a major network partner, we would increase the salary of the engineers. I remember I had a printed-out spreadsheet with their existing salary, their new salary. I had the CFO literally sign it because I wanted evidence that these were approved. And then I told the engineers, "You're getting a raise." And Sean and I got a huge fight over it. His memory was that I quit. My memory is that he fired me. And I ended up leaving the company because of it.
30:44 Guy Raz? When we come back in just a moment, how Paul founded and then sold his first major company. And then, how a chance meeting and a couple of gin and tonics led him to an even bigger business: kayak. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one.
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33:36 Guy Raz? netsuite.com/built.
33:46 Guy Raz? Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 1998, and Paul English has just left his job at a tech startup, and he decides to launch his own business, Boston Light Software. It's kind of an early version of Shopify, helping e-commerce companies set up their own websites. But of course, to do that, Paul has to find some money.
34:11 Speaker 01 I spent my savings. I remember I was dipping into my 401K at one point, and two of my friends put in a little bit of money. But we were a little company. We had 15 employees. And it included my three star engineers, Bill O'Donnell, Paul Schwank, Jeff Rago, and also my friend Jim Geza and Carl Berry. That was sort of the core group that built Boston Light. And back then, this was early, early days in e-commerce. I mean, Amazon existed, and there were some big sites. But you know, your average store down the street didn't have a website yet.
34:47 Guy Raz? E-commerce, it would still be another decade before it really started to take off. This is 98, and this is right before the dot-com crash. What was, I mean, were people like just racing to put up e-commerce sites?
35:03 Speaker 01 Mostly, but didn't get it. We did a lot of individual selling where I literally went store to store. And people looked at us like we were crazy people. Like, why would a little bookstore create their own website? It shouldn't make sense to them. It's like, that's not for us. That's for big companies. Little companies don't have websites. And we learned that, I think it's 70% of small businesses in the US, a service-based business is not product-based. And so then we did this pivot. We said, okay, instead of just focusing on selling products, we should focus on selling services and doing online invoicing and online payments. So even like your plumber could send you an email with the bill and you could pay that from the email securely. So we built that.
35:45 Guy Raz? I mean, I think within a year of launching Boston Light Software, you got an offer and then were acquired by Intuit. I mean, that's, that's really fast.
35:57 Speaker 01 Yeah, I mean, the, the big tech companies all had a voracious appetite for internet because the big companies saw what was happening. The internet was going to take over everything. Desktop software is going to die. And they all wanted to do business with us, which I thought, this is great. Then what it turned out is the more time we spent with them, they actually all wanted to acquire us. They just wanted the talent. They wanted the engineers. And I made the decision to go with Intuit because I liked the culture. I liked the values. I just thought it was a good group of people and I'm glad I went there.
36:28 Guy Raz? Yeah, I mean, you sold, they bought it for $33.5 million.
36:33 Speaker 01 Yeah.
36:33 Guy Raz? A year, about a year after you launched it, which you basically signed a contract presumably and worked there for a couple of years and became a manager leading up to. And were you, what kind of, I mean, at this point, you'd already had some management experience in your previous jobs. You weren't very successful at it at Interleaf, as you admitted. So presumably you were starting to get a little better at it.
36:58 Speaker 01 Yeah, I was reading books about it. It's funny, I don't read business books anymore. I rarely read business books because this is gonna sound like a funny thing to say for someone who's created a lot of companies is, I don't actually like business.
37:12 Guy Raz? Yeah.
37:12 Speaker 01 I mean, to me, creating a company is just the vehicle where you can get a bunch of really fun people together and design products.
37:19 Guy Raz? Do something creative.
37:21 Speaker 01 Yeah, so it's just the business side of it, it's just a way I can get creative people together. The business just happens to be the way to do it.
37:28 Guy Raz? So when you sold to Intuit, which I think most people know is the people behind TurboTax, right?
37:35 Speaker 01 Yep.
37:36 Guy Raz? And QuickBooks. Yeah, QuickBooks. When you made that sale, right? I mean, look, this is 99, so you're, I don't know, almost 40, right? Years old, late 30s.
37:50 Speaker 01 Late 30s, yeah.
37:52 Guy Raz? And you walked away with eight or 10 million bucks. I mean, there's taxes and all kinds of things. I have to assume it changed your life in some way.
38:02 Speaker 01 It did. It was actually uncomfortable for me to have that money. I actually originally, I had a part-time co-founder, Carl, and the way we originally set up the company was I had two thirds, he had a third, and then we started giving stock out to all the engineers. So I think on paper originally I would have made 20 million, but when we didn't, we didn't expect to sell it that soon. When we sold it that soon, I felt bad the engineers didn't make enough money, so Carl and I canceled half our stock and just gave it to the engineers. So instead of making 20 million, I only made 10 million. But then I also wanted to figure out how to give away the money because it almost felt unsafe for me to have all that money in the bank. I thought it might disappear one night. So I started giving money away,
38:44 Speaker 01 and that began a journey where I spent a lot of hours a week on philanthropy, starting in my late 30s.
38:54 Guy Raz? While you were still with Intuit, because I know you stayed there till around 2002, I heard a crazy story that you were supposed to be on Flight 11, the flight from Boston to LA that ended up... Crash into the World Trade Center on September 11, 2001, but you had rebooked on a different flight that was cheaper.
39:15 Speaker 01 Yeah, I don't tell that story often because I know people that actually died that day and I just had, you know, maybe I would have gotten on the wrong flight. I think Flight 11 was, if I remember correctly, it was $1,400, $1,800 and it was a corporate travel department that intuit had to book flights, so it wasn't my money. But I grew up frugal and so I didn't want to spend that much of the company's money. So I found a flight through Manchester, New Hampshire that was $343 and had to lay over, but I felt proud that I saved the company money, so I switched to that flight. The interesting thing is when I put my son to bed that night, and my son was five years old, my mother had died just a few months prior. And as kids say the most amazing things, like just as they're falling asleep, and my
39:59 Speaker 01 son said, he used to call my mother Mimi, he said, "Mimi took care of Dad to make sure he didn't get on the wrong plane today." And then he fell asleep.
40:10 Guy Raz? Wow.
40:11 Speaker 01 Yeah.
40:12 Guy Raz? And he had no idea, would he?
40:19 Speaker 01 No, no.
40:20 Guy Raz? Wow. It's, it's so crazy how things happen like that. It really makes you think about things like fate and why certain things happen to certain people.
40:34 Speaker 01 Yeah. Hopefully, what people come away with is to realize just the whole concept of impermanence. And there's something actually beautiful about acknowledging impermanence. It actually frees you and it frees you to live in the present moment. So hopefully, I'm fully present today because none of us know what our future is.
40:58 Guy Raz? Yeah.
41:01 Guy Raz? So I guess in the period after that, I mean, you were juggling a bunch of different things. You were working with your brother on a company that he had founded and you were doing some work advising nonprofits. But also, I think your dad's health was deteriorating and you started to spend a lot of time looking after him, right?
41:25 Speaker 01 I think the main thing during those years was my mom had died in 2001 and literally on her deathbed as she was saying bye to each of us, the thing she said to me was, "Keep up the good work and take care of your father." The "keep up the good work," actually, I read as, "I'm not done yet." Like, "I haven't won over," my parents said, "I need to keep working." And then she said, "Take care of your dad." And my dad had Alzheimer's, early stage Alzheimer's at that point. And when mom died, I started spending a lot of time with my dad and then ultimately left into it to, as his condition worsened, and became his primary caretaker for about a year, a year and a half. And I would feed him three times a day, bring him to all his doctor's appointments, try to entertain him.
42:10 Speaker 01 And that was my main occupation during those years.
42:13 Guy Raz? Wow. I think it was around 2003 that when you joined the VC firm Greylock Partners as their entrepreneur in residence. And presumably, when you were doing that, you were looking around for your next big idea. And I guess this is when you meet this guy named Steve Hafner, who we'll get to in a sec about who he is. But first, how did you meet Steve?
42:41 Speaker 01 One of my mentors from Interleaf is a guy named Larry Bond, and he's a partner at General Catalyst in Harvard Square.
42:54 Speaker 01 And he had reached out to me to ask me to go look at a company for him. So I went to Cambridge to meet with a startup. And then, as I was leaving, one of the other partners there had seen me and said, what are you doing here? I said, I'm looking at a company with Larry. And he said, there's a guy here I want you to meet. His name is Steve Hafner. He's one of the founders of Orbitz, and he wants to start a new company. Would you meet with him?
43:18 Guy Raz? Orbitz was a travel website, is a travel website, that he had started?
43:23 Speaker 01 He was one of the co-founders of Orbitz. He ran marketing there.
43:26 Guy Raz? That was a pretty big, big website. Did you know Orbitz?
43:29 Speaker 01 Yeah, back in 2000, this was the end of 2003 at this point. And the big travel websites back then was Expedia, Orbitz, Travelocity, and Priceline. Those are the big four.
43:40 Guy Raz? So you knew what Orbitz was?
43:41 Speaker 01 I did.
43:41 Guy Raz? And presumably like, oh, yeah, I'd love to meet the guy.
43:44 Speaker 01 Yeah. And Steve had an idea. He was leaving Orbitz after four years. And he was frustrated with Orbitz. And he had an idea of a different way to do travel, but he was looking for a CTO, a Chief Technical Officer. And this other partner at General Catalyst thought, I don't know, Paul's a good tech guy, maybe Paul and Steve can go work together. So the partner introduced us. Steve and I went downstairs to Legal Seafoods at Harvard Square for lunch. I think we each had a couple of gin and tonics, maybe, maybe no food. And he gave me the pitch. And he basically said, I want to create a search engine for travel, a search engine that has the stuff from everyone else's website. And I said, I think that's a brilliant idea. And we talked about it. He gave me his thoughts. I gave him some feedback.
44:29 Speaker 01 We went back and forth.
44:31 Guy Raz? Wait, just to be clear, because Orbitz at the time and Expedia, they were selling tickets on their site presumably only with partners, partner airlines?
44:38 Speaker 01 Correct. Like, they didn't have JetBlue at that point, for example. They didn't have all the content. They had a limited set of hotels, a limited set of airlines. And Steve said, why don't we create a website that you can't buy anything? All it does is search, but it searches everyone.
44:53 Guy Raz? Everything. Okay, I got you. Southwest, JetBlue, whoever, right?
44:56 Speaker 01 Yeah.
44:57 Guy Raz? Right. And there was nothing like that out there?
45:01 Speaker 01 Not at the time. There were kind of simultaneous with the creation of our company. There was maybe four or five other companies being created at about the same time who had a similar idea. So it was not a novel idea, the idea of saying, Google's a search engine. Why is their search engine just for travel? There were a few people thinking about that.
45:23 Guy Raz? Yeah.
45:23 Speaker 01 But the funny thing about the meeting was, I said, I like the idea. I, he said, he's looking for a CTO. I said, I'll find someone for you. I run a group in Boston called Boston CTO. It's like 20 chief technical officers. And I said, what are you paying? He said, 4% and a buck 50, like $150,000 a year.
45:39 Guy Raz? And 4% equity.
45:40 Speaker 01 4% equity. I said, that sounds great. I definitely can find someone for that. He said, why don't you do it? And I left and I said, no, I just sold my last company to Intuit. Um, I want to create my own company again. He said, what would it take to have you join me as co-founder? I said, at a minimum 50/50, just kind of joking.
45:58 Guy Raz? Yeah.
45:59 Speaker 01 And he put his hand across the table. He said, done. And I thought, whoa, I like how bold this guy is.
46:04 Guy Raz? He went from 4% equity to 50/50?
46:07 Speaker 01 Yeah.
46:07 Guy Raz? And, and just like that?
46:09 Speaker 01 And a handshake. Yeah.
46:10 Guy Raz? A handshake.
46:10 Speaker 01 Yeah.
46:11 Guy Raz? But he didn't even know you.
46:13 Speaker 01 Steve and I, we each have a lot of weaknesses, but I will say probably the superpower that Steve and I have is we're really, really fast reads of people. And I could tell quickly that this guy was crazy bright and I liked how impulsive he was. And I thought, this guy's an entrepreneur. He's a natural born entrepreneur.
46:35 Guy Raz? It sounds like the gin and tonics talking.
46:37 Speaker 01 Yeah, it might've been.
46:41 Guy Raz? What, what was it? I mean, this was not in your wheelhouse, a travel website, a consumer product. Yeah.
46:45 Speaker 01 Not at all.
46:46 Guy Raz? Uh, but it appealed to you. Something about it appealed to you.
46:50 Speaker 01 Yeah. I mean, I, so I, first of all, I love travel. I think I traveled about 100,000 miles a year pre-pandemic. And the idea that I could be in charge of designing a new travel site and have ideas about how travel, actually what it should look like on the webpage, that was incredibly fun to me.
47:07 Guy Raz? So when you agreed to do this, presumably the first step was you had to raise money.
47:13 Speaker 01 Well, interestingly, Steve and I went upstairs after having a couple, a couple of drinks.
47:19 Guy Raz? Back up to General Catalyst.
47:20 Speaker 01 That's right. Yeah. And the partner, Joel Cutler, said to Steve, how did it go?
47:27 Speaker 01 And Steve said, well, the good news is Paul's my 50/50 partner and we're each throwing a million dollars in tomorrow, which he neglected to mention that to me at the lunch. And then he said, the bad news is I'm tearing up that term sheet because I'm worth a lot more now that I have a CTO. And he was just, I think he was joking a little bit, but anyway, General Catalyst put in 5 million, Steve put in a million, I put in a million, and then we started Kayak. And the middle thing we did, immediate thing we did was start recruiting.
47:57 Guy Raz? Right, sorry. So you raised some, you raised some money, a little bit from you, a little bit from Steve, some General Catalyst. And do you dip into your team, those guys, Bill O'Donnell, Paul Schwank, Jeff Rago, those guys at Jim Giza who worked with you at your previous companies?
48:13 Speaker 01 Yeah, so those are the first four phone calls I placed was to those four guys.
48:18 Guy Raz? And they all said yes?
48:19 Speaker 01 They all said yes. And the interesting thing, I'll tell you about my negotiations with Bill O. So he was an architect at Intuit because he, again, he and I worked together for decades. So he was at Boston Light, we sold to Intuit, he became an architect at Intuit. I'm guessing by memory, he was probably making 400K a year at Intuit. And I recruited him, I said, I'm starting the company, I want you to come work with me. And he said, what's a company? I said, travel. And he said, how much will you pay me? I said, I'll pay you 100K plus 2% of the company.
48:52 Guy Raz? Yeah.
48:53 Speaker 01 And I remember thinking, is he really going to go for this 100K thing? Because he's probably making 400K. He said, I'd love to work with you, and I have three questions. What do you, what's the company doing, travel? How much you pay me? 100K and 2, and then 2%. And the third question was, where's the company located? I was fearing I was about to lose him on the salary issue, so I said, you pick the location. So he chose the first office. It turned out to be a very good financial decision for him to get 2% of Kayak.
49:18 Guy Raz? And the office was in Concord, Massachusetts, right?
49:21 Speaker 01 The original office for the first year was in Maynard, Massachusetts, which I was not happy about.
49:27 Guy Raz? And meantime, Steve Hafner was going to work out of Norwalk, Connecticut? Is that, is that right?
49:32 Speaker 01 Exactly.
49:33 Guy Raz? Is that where he lived?
49:34 Speaker 01 He lived, yes. And we had the tech team. In Maine, then Concord, Mass. for many, many years where Kayak still has an office. So tech was up here, just outside of Boston, and the commercial team was in Connecticut.
49:46 Guy Raz? How come you guys split it up? In 2004, it wasn't like today. There wasn't Slack and Zoom and all this stuff like that. That's, that's distributed remote workplace in 2004.
49:56 Speaker 01 Yeah, I mean, Steve and I both had made money before and I wasn't gonna move. He wasn't gonna move. So we said, let's try it. And it worked out really well.
50:06 Guy Raz? All right. So you guys have these two offices and you've got some working capital. What did you want your role to be? I mean, obviously you know how to, you know, to build these things. You know, to code, you know, to run engineers. But what about design? Were you focused on the actual user experience?
50:25 Speaker 01 Yeah, I mean, going back to Interleaf, most of my work at Interleaf was on the user interface. And that's what my obsession was. And even going back to my first program I'd ever written, the video game back when I was in high school, I focused on the user experience. I've always been interested in that. And so for the travel company, I wanted to build something that was unlike any other travel website. I wanted something that was cleaner and simpler and faster. The first day Steve and I met in Cambridge, I went home that night. I spent probably 10 minutes on Expedia, just to see what the market leader looked like, to remind myself. And I thought, this is not going to be hard to beat this. Because to me, Expedia was epileptic seizure inducing. I mean, it was really terrible.
51:10 Speaker 01 There was so much animation and graphics and so much stuff going on the website. I thought, we can build something dramatically simpler than this.
51:16 Guy Raz? And, but by the way, the name Kayak, what's up with that name? How did, it's just a weird name for a travel website.
51:24 Speaker 01 We hired a top brand agency in New York City named Wolf Olens. And the project, the branding project was led by a woman named Cara Costello. And Steve and I met with her weekly over maybe a six week process. What's the brand identity? What do we want people to think about when they hear the name of the company? What's life going to be like before our product? And then after people use our product? Spend a lot of time talking about those things. Ultimately, her team came up with a list of about 100 names. And we narrowed it down to five. The reason I liked Kayak was I liked the letter K. It's a very valuable letter in branding. I liked that it was a palindrome spelled the same backwards and forwards. I liked that it was only five letters and it meant like freedom. It's just like a great word.
52:08 Speaker 01 And it's very difficult in branding to take a word which means one thing and change it to mean something else. But if you're successful and you own that word, it's incredibly valuable.
52:21 Guy Raz? What were some of the other names you thought of?
52:23 Speaker 01 I'll go in reverse order. Number five was Hive.
52:27 Guy Raz? Not a bad name, like a hive where you go and get the tickets and get all your stuff?
52:32 Speaker 01 The bad thing about it was the bee sting.
52:33 Guy Raz? Oh, yeah. Yeah. You don't get stung in that hive because then your whole vacation's ruined.
52:37 Speaker 01 Yeah. Number four was Rice because it's ubiquitous, global, and simple. Number three was Cake because who doesn't like cake?
52:46 Guy Raz? I like cake, but not for my travel. I don't want cake on my travel.
52:50 Speaker 01 Number two was Kayak.
52:51 Guy Raz? Okay.
52:52 Speaker 01 And the first name, the one we really wanted, which we tried to buy and we could not buy the domain name, was Lola.
52:59 Guy Raz? Huh. Huh. Which would come back to, um, which would come back to be part of your life later on.
53:06 Speaker 01 Yes.
53:07 Guy Raz? All right. So you bought Kayak and did anybody like get on there initially and say, where are the kayaks? Like, where's your kayak gear? Like, what are you doing?
53:18 Speaker 01 We literally got hate mail from
53:21 Guy Raz? Kayakers.
53:22 Speaker 01 Yeah, from kayakers, yeah. Who said this was terrible that we took this over. And this is like a blight on the internet, you know, that someone would take over their precious hobby.
53:30 Guy Raz? Yeah.
53:31 Speaker 01 And use it for something dirty like a travel site.
53:33 Guy Raz? When we come back in just a moment, how Paul found out that the much resented name for his new business was becoming one of the more popular search terms on the internet. Stay with us. I'm Guy Raz and you're listening to How I Built This.
53:59 Guy Raz? Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2004, and Paul and Steve have just come up with $7 million, a small team of engineers, and a name for their new travel website, Kayak. And it isn't long before they put their first product out into the world.
54:19 Speaker 01 So, believe it or not, we released the first beta, which is limited software that we don't promote yet. But we had a functioning flight search on Cinco de Mayo 2004.
54:32 Guy Raz? And this was just for friends and family to test out?
54:34 Speaker 01 Yes.
54:36 Guy Raz? And how long before you made that public?
54:40 Speaker 01 We made it public, I believe, in October of 2004.
54:43 Guy Raz? All right, now, you guys had some working capital because you got investment money. But you were like a nobody among giants, like Priceline, Expedia, Orbitz. How are you going to even get the word out about Kayak?
54:59 Speaker 01 Well, what I used to say on early days of Kayak is, every company in the world only has 10, 10 smartest people. So Expedia, only 10 of them are the 10 smartest. And even though we're much smaller, we have our 10 smartest people, they have their 10 smartest people, I think my team can out-design them. And we were just, you know, it was a little bit of arrogance. Hopefully, we had some humility as well. Like, we knew we were small, we knew that no one heard of us. But Steve and I were both very aggressive recruiters, and we thought, we can recruit a really extraordinary first 10-person team.
55:37 Guy Raz? Well, the business model was going to be different because Expedia, you know, they would get a commission on the ticket sales. Your model was for every referral you made where a person booked a ticket, that company or site or hotel would send you a commission, 50 cents, a dollar.
55:52 Speaker 01 Exactly.
55:53 Guy Raz? But how do you, didn't you have to manually, like, make those? Because if it was a search engine for the entire travel industry, did you have to individually call JetBlue and Delta and American and Hilton and Hyatt? Really?
56:07 Speaker 01 Yeah. It took us probably two years to get those deals. So originally, Kayak had no revenue. And also, we were scraping these websites without their permission. It's one of these things, sort of, ask for forgiveness, not permission. We're just moving as fast as we possibly could. So we just scraped websites. It took us about a year, year and a half till the software felt really good. And then we started growing rapidly.
56:32 Guy Raz? How did you grow rapidly?
56:34 Speaker 01 Just from word of mouth. I mean, believe it or not, in the early years of Kayak, it cost us about a dollar on average to buy someone to come to our website from us spending money on Google AdWords or other websites. We made on average 20 cents per user, so we were losing 80 cents a transaction in large numbers. We were losing a lot of money very quickly. But if you build a really amazing website and you paid to have them come here, will they remember this word kayak? And the next time they'll buy travel, will they go directly to kayak.com without having to go to Google first?
57:07 Guy Raz? Yeah.
57:08 Speaker 01 And it worked and people told their friends about it. And so it got to the point where 70% of the traffic on kayak was self-directed, meaning someone typed kayak.com in their browser. And as soon as that traffic grew from 0%, 10% to 20% to 30% to 40% and more, then the economics started working.
57:28 Guy Raz? So basically, you would take the data, presumably, like you would take the data of people booking through kayak and go to the deltas, the Americans, the Hilton Hotels, the Marriott's and say, "Look, we can show you how people are already going to your site through kayak."
57:44 Speaker 01 Exactly.
57:44 Guy Raz? And that's how you would convince them to say, "Okay, fine, we'll pay you 50 cents or a dollar for every time that happens."
57:50 Speaker 01 Yeah. And for the airlines, originally kayak was flight only. We didn't have anything except for flight, no hotels, no cars. And we did manage to get a really good deal with Orbitz early on. Steve, again, was one of the founders there. He was friends with the CEO. We were able to negotiate with Orbitz to say, "When you see a result from American Airlines, we give people the option to click here to go to A.com to buy it, or click here to go to Orbitz to buy it," and Orbitz would pay us. We basically said, "We're a little company. We're a new business model. We're search only. You, Orbitz, should participate on this. We'll give you an exclusive. You're their only agency we're going to let on our site." And maybe we're little, maybe we're going to grow fast, but you should get in on day
58:31 Speaker 01 one as the e-commerce behind Kayak, which they did. The nice thing is, we then called American Airlines. We said, we're selling your flights all day long, but we're selling them through Orbitz. Wouldn't you rather us sell them through AA.com? And we used Orbitz as a stalking horse to get all the airlines to pay us directly, so we could send people directly to the airline sites.
58:53 Guy Raz? Wow. Did you see Orbitz as a competitor?
58:56 Speaker 01 Well, they were different flavors than us. They were a merchant, but we used to say, search with us, book with them. We didn't have customer support. If your plane was late, call the airline, don't call us. We were just, we were literally just a thin search engine. We used on the backend, another search engine called ITA Software, which later became Google Flights. And my friends at ITA used to make fun of Kayak. They said, Kayak is a joke. It just sits on everyone else's technology and all Kayak is, is a thin UI layer. And my response to that was, exactly.
59:29 Guy Raz? You were the user interface on, you were basically like a skin on top of a really sophisticated technology.
59:37 Speaker 01 Yes.
59:38 Guy Raz? That somebody else built.
59:39 Speaker 01 But that's where I wanted to be. I wanted to be the front end. And I thought that's where the innovation needed to happen.
59:46 Guy Raz? I mean, that's, that's brilliant. So you didn't actually need to have a massive staff?
59:50 Speaker 01 No.
59:51 Guy Raz? How many people by 2006, 2007 were working at Kayak?
59:56 Speaker 01 I think by the time things started growing, we were maybe 50 or 60 people. The best people, like in terms of quantitative people stat at Kayak, is when we took it public 2012, we only had 200 employees, which is pretty small for a public company, and we had 300 million in revenue. So it was one and a half million per employee.
1:00:17 Guy Raz? Wow.
1:00:17 Speaker 01 We were crazy profitable and fast growing.
1:00:20 Guy Raz? Because you were so lean.
1:00:22 Speaker 01 Very, very lean.
1:00:23 Guy Raz? All right. So I guess three years in, three and a half years in, December 2007, you raised a big fundraise, $200 million. Sequoia leads that round, Sequoia Capital. And that means you can really get, you can now like do things like acquire other companies and... You know, launch a big advertising campaign. When did you feel like you were now a player in this space? Was it, was it around the time you raised that money, that 200 million?
1:00:53 Speaker 01 It was before that. I mean, there were several milestones for us. The day, the number we looked at, that I looked at most carefully is what percentage of our traffic was self-directed? And as that number started growing, my confidence started growing because I said, if people come back to us, that they remember our name, they tell their friends about us, things are working. One of the biggest milestones in the history of Kayak is when you went to Google and you typed the letter K.
1:01:18 Guy Raz? Yeah.
1:01:18 Speaker 01 The first word that came up was kayak. I thought that was cool.
1:01:23 Guy Raz? Wow. What about your, what about your mental health? Were you, how are you doing at that time?
1:01:30 Speaker 01 I think I, at that point, I had pretty much controlled the depression. So I had little to no depression during Kayak, but the manic episodes continued. I would go through waves of sleeping very little. I always have a sketchbook with colored pencils. And sometimes I'd wake up at 4:00 AM and I'd draw pictures of what I wanted Kayak to look like, like for a new feature. And I would email them to our head designer, Lincoln Jackson. And then we'd get a meeting. And so I remember once, we took a drawing that I did at 3:00 or 4:00 AM. We had a meeting with myself, Lincoln, and Jeff Rago, who was our lead developer.
1:02:14 Speaker 01 And then Lincoln cranked out a Photoshop version of what I did, but he pretty much ignored my drawing. He did something completely different, but it was inspired by my drawing. And then Jeff wrote the code and Jeff ignored Lincoln's Photoshop and did something that he thought was even better. And we just had this relationship of really rapid iteration where we'd each contribute ideas. And I remember during that time period, I felt completely manic. Things are moving very, very rapidly.
1:02:39 Guy Raz? I read there was a, there was sort of a joke that used to go around that you would send a lot of emails, like, hey, I have an idea, because you're just an ideas machine. And, or, hey, why don't you try this? And there was a joke among some of the team who were loyal to you, but, but there was a joke that they would ignore your emails. And because they, they, you would just forget about it over time. And that when you found out about it, actually initially it hurt your feelings.
1:03:06 Speaker 01 It did. I'm probably guilty of sending too much email, particularly when I'm in my creative or hypomanic states.
1:03:16 Guy Raz? Yeah, yeah.
1:03:17 Speaker 01 I can be prolific on email. I mean, I can send hundreds of emails a day. And so my team was always like, whoa, it's like, we can't handle all these different things. Like, try this, try this, try this. And so sometimes there was this private joke that we're not going to do something unless Paul asks us to do it twice. Unless the next day, he still wants to do that thing. And I've heard this criticism of other entrepreneurs as well. So I don't think I'm unique in that.
1:03:40 Guy Raz? Yeah.
1:03:40 Speaker 01 And that that I always want to push forward in multiple ideas. But I was both amused by it when I heard this, but also a little bit sad.
1:03:47 Guy Raz? Yeah, because basically it confirms that you are an ideas machine. You're a little bit manic. And that's with that comes a lot of ideas and a prolific outpouring of ideas. But if every single idea was acted upon, it would be chaos.
1:04:01 Speaker 01 Yeah, I think so. And I think it's fine for someone to have like nine terrible ideas, as long as the 10th one is really big. Failure is okay. We built a lot of technology at Cog that we threw away. We pursued some ideas, which turned out to be stupid ideas that we worked really hard at them. No one used it. We threw it away. So that happened many times at Kayak.
1:04:25 Guy Raz? You know, what's so interesting is that this insight that you had, because I think you previous companies that you had started, I would, and correct me if I'm wrong, but I think that the backend technology was probably more complex than than it was for Kayak. That actually your insight was, look, the technology is out there. We don't have to make it better. We just have to make the user experience better.
1:04:47 Speaker 01 That's right. It's interesting. When we created the company, Steve and I both thought if we make it big, the way people are going to know us is we're going to have all the content on one website. That's what we're going to be known for. It's not actually what we became known for. The way people talked about Kayak wasn't that, oh, that's the site that has all the content, which we were hoping they would say. But what they did say was, oh, yeah, that's a site that's really fast.
1:05:12 Guy Raz? Yes.
1:05:12 Speaker 01 Oh, that's a site that's really clean. So I like that.
1:05:15 Guy Raz? Because that's where you invested your money.
1:05:17 Speaker 01 Yeah. And it was a huge investment. Becoming fast is not easy. Becoming simple is not easy. Scott Cook at Intuit used to say, it's very easy to build complicated software. And what he means is to build something simple takes years.
1:05:32 Guy Raz? Yeah, I mean, you are a backend programmer who essentially built a brand. You weren't building a new technology, you were building a brand.
1:05:42 Speaker 01 Yeah, when I think of the first 10 years of Kayak, I think there were three things. Those three things came together, really good user experience, really good brand, and really good commercial partnerships.
1:05:52 Guy Raz? Yeah. In July of 2012, Kayak went public.
1:05:57 Guy Raz? I think it raised $1.27 billion on the NASDAQ.
1:06:03 Guy Raz? The day it went public. And by the end of that year,
1:06:09 Guy Raz? it was announced that Priceline would acquire Kayak for $1.8 billion, which basically Kayak would be under Priceline's umbrella. I think the trading name is bookings.com or something, or bookings.
1:06:22 Speaker 01 Yeah, Booking Holdings.
1:06:23 Guy Raz? Bookings Holdings. So, you know, Priceline buys out Kayak. And by the time, I think it, all was said and done, the value of Kayak was at 2.1 billion or something. In the book that Tracy Kidder wrote about your life, there's a scene where, you know, the news breaks inside of Kayak's headquarters. People are so excited, somebody's passing around a bottle of $500 Scotch, because everyone's like, we got all this, all this money. And you're sitting there at your, like, cubicle, at your desk, just like, quiet.
1:06:56 Guy Raz? I don't know. What was going on in your head?
1:06:59 Speaker 01 It was a little overwhelming. I mean, my first thought was always how happy I was for the team. We had 200 employees, over half of them became millionaires that day. It was great to see them celebrate the IPO, it was great to see them celebrate the acquisition. It was really an exciting time for people. As far as the fame that came along with it, that gave me anxiety. I'm an introvert by nature. I do not like being center of attention. There's certain advantages to it, like it helps me raise money, it helps me hire people, but I'm a little bit uncomfortable with it. And when we started getting a lot of press after the IPO and after the... Acquisition, I started getting a lot of incoming requests and
1:07:43 Guy Raz? Requests for
1:07:44 Speaker 01 For money, I mean, I had
1:07:46 Guy Raz? Philanthropy, right? Yeah, right.
1:07:47 Speaker 01 Not just philanthropy. I had someone show up my house who asked me to pay her mortgage. A lot of people asked me to invest in their business, a lot of nonprofits. I hit me up and it was overwhelming because it's tough for me to say no. I've had to learn to say no simply because I cannot afford to write checks to all the nonprofits. So email me every day because I want to have a focus area. But just the amount of money that I made in the sale was a little overwhelming. And I kind of had this instinct of getting rid of it, like giving all of it away immediately, which I'm glad I didn't do that because I've been able to be more thoughtful about my giving over the years. And I've now started three nonprofits that are all doing well. So that's been really meaningful to me and hopefully we've helped a lot of people.
1:08:32 Speaker 01 But I definitely have never become really comfortable with the money part of it.
1:08:39 Guy Raz? You basically in your mind, sounds like you knew that you were not going to continue to work for Priceline.
1:08:45 Speaker 01 I mean, the main thing I wanted there, it was unlike when I sold my little e-commerce company to Intuit. I wanted to work it into it. I wanted to build careers for myself and people and learn skills.
1:08:56 Guy Raz? Yeah.
1:08:56 Speaker 01 But when I sold Kayak to Priceline, I felt like I had a very senior team at Kayak. I literally felt like they could run it without me. They didn't need me as much anymore. And I think I spent a year with Priceline transitioning and getting everyone set up for success. So I felt very good about it on the day that I left that they were in a really, really good position. And Kayak continued to thrive.
1:09:23 Guy Raz? I read that, that you, that the CEO of Priceline was not happy when you told him that you were leaving.
1:09:29 Speaker 01 He was not happy.
1:09:30 Guy Raz? Right. Cause they were buying you too.
1:09:31 Speaker 01 Yeah.
1:09:32 Guy Raz? They were buying your brain.
1:09:33 Speaker 01 Yeah. I don't know what to say about that. He, um, part of it was probably the wealth thing. I wanted to be in the shadows after that. I didn't want to be public face at that point of this, you know, this guy with all this money. I wanted to hide for a little bit.
1:09:47 Guy Raz? Also, I mean, this was the longest you'd worked on one business, 2004, 2012, right?
1:09:51 Speaker 01 Yeah, 10 years. It was, it was a total of 10 years, 2014, yeah.
1:09:56 Guy Raz? We, we will not have time in the course of this episode to get to all the businesses you've done because that, that would take a multi-part episodes, like several multi-part episodes. But there is one I want to touch on, which is in the middle of Kayak, you launched a new company, co-founded a new company called Get Human, which is still around, I think. It's a database of customer service information. So like, if you want to find a human at customer service rep, you could find their phone number, uh, the best time to call.
1:10:24 Speaker 01 Yeah.
1:10:25 Guy Raz? And first of all, as somebody who does multiple things also, um, I have a lot of appreciation for that, but it causes tension sometimes. And I have to imagine that it caused tension. There were people who were like, you know, Paul, like, we need you here, or like, focus on this, or maybe Steve was like, hey, you know, I mean, did it cause tension at times?
1:10:46 Speaker 01 I mean, Get Human became wildly popular. I created it in 2006.
1:10:52 Guy Raz? Yeah.
1:10:53 Speaker 01 And we got massive media the first year.
1:10:58 Guy Raz? Yeah.
1:10:58 Speaker 01 I got covered on every national network and magazine and et cetera. And sometimes I'd want to come in to a photo shoot or an interview. I tried to schedule all of those to not happen at Kayak Office. I was embarrassed about this side project. It's not that I hid it. I just didn't want to see people be working on it. However, I don't think anyone would ever say that I was a slacker at Kayak because I pushed really hard on design and engineering and performance. But yeah, I did have a couple of side projects.
1:11:29 Guy Raz? Do you still own it?
1:11:31 Speaker 01 Get Human, yes. It's a very, it's a small company. They're very profitable, run by two of my friends in Boston, Christian Allen and Jeff Welby, and it's, it's an amazing company.
1:11:40 Guy Raz? Wow. How does it make money?
1:11:43 Speaker 01 Through advertising.
1:11:46 Guy Raz? Wow, all right. So you do that in the meantime. Then you step down from Kayak and you start to do some teaching at MIT and RISD and a few other places, Harvard Business School. I can't get into everything you've done because you've done so many things. But one of the things you then created in 2015 was Lola. You went and bought that site.
1:12:08 Speaker 01 Yes.
1:12:08 Guy Raz? This is a travel concierge app.
1:12:11 Speaker 01 Exactly.
1:12:12 Guy Raz? Wasn't there like a non-compete when Priceline bought it? That wouldn't allow you to get into the travel business again?
1:12:18 Speaker 01 My non-compete ended, it was an 18-month non-compete. It ended on July 14, 2015. I incorporated Lola on July 15, 2015.
1:12:28 Guy Raz? Nice.
1:12:29 Speaker 01 It's a little crazy, but I'm running three nonprofits. And then I have two other small startups that I run on the weekends.
1:12:36 Guy Raz? You have got a nonprofit called King Boston that focuses on like celebrating the work of Dr. King and his wife, Coretta Scott King, right in Boston. You do a lot of work in Haiti.
1:12:47 Speaker 01 Yep.
1:12:48 Guy Raz? I mean, how many more businesses do you have in you?
1:12:51 Speaker 01 I think for the rest of my life, rather than doing a VC-backed company, I think what I might do is just have fun with these creative outputs and try to crank out like two to three or four companies a year. Because the most fun for me in starting companies is like day one. But it's all a matter of you have to have the discipline to say no because it could be like too much stuff to work on. And you have to just be very choosy about the stuff you do work on.
1:13:20 Guy Raz? Yeah.
1:13:20 Speaker 01 So like I have an incredible assistant, Eliza. And we color code my calendar. Everything is one of four colors. And every Monday and Friday, we look at my calendar two weeks in advance. And we make sure there's a balance. So purple is Lola, which is, that's the brand color for Lola. And that's mostly Monday, Friday, nine to five. Yellow is nonprofit work, which is about eight hours a week. Green is self-improvement, which is going to the gym or going to therapy or going to my Buddhist class, which I do on Thursday nights. And then blue is everything else, sort of friends and family. And if I have a balance of those four colors, life feels really good to me.
1:13:58 Guy Raz? When you think about all the things you've achieved, right, and the financial success, but really more importantly, the just the innovations that you've been part of and the people that you've been able to work with and the teams you've been able to empower, how much of that do you attribute to your intelligence and hard work? And how much do you chuck up to luck?
1:14:19 Speaker 01 I don't like to think of myself as intelligent. I will admit to being creative. I think my success leads to maybe three things. I do think work ethic is a part of it, the fragility and effort. I think the creativity is a part of it. And then the third thing, which is probably the biggest thing, is I love recruiting and I love being amazed by other creative people. And I put a lot of effort into that. So with each of my companies and organizations, they thrive only if I'm able to attract really great people to work on them.
1:14:53 Guy Raz? And where do you put luck on that scale?
1:14:56 Speaker 01 Kayak was tremendous luck. I mean, it started with luck. I mean, just by chance, I happened to be in that office when Steve was there. And then luck along the way of hiring certain people to really transform the company.
1:15:10 Speaker 01 I don't know, maybe it's maybe it's those four things, 25% each.
1:15:16 Guy Raz? One more thing I want to ask you about, Paul, before I let you go. You have been an Uber driver. Like, you signed up to be an Uber driver in your Tesla in Boston, right?
1:15:27 Speaker 01 Yes.
1:15:27 Guy Raz? Tell me the Uber story. Why did you want to be an Uber driver?
1:15:30 Speaker 01 So the first reason I signed up was at Lola, we have 24/7 customer support. But at the end of every interaction in the Lola app, when you've talked with one of our service people, you get to rate them, like, on a scale of one to five, how well is the service they did for you. But before I inflicted that upon our customer service people, I wanted to show that, okay, I'm happy to get rated. I want to see what it feels like to get rated. Being an Uber driver was the easiest way to do that because you get real time feedback. In the driver app, you get feedback every day about how your rating is.
1:16:01 Guy Raz? Did any drunk kids ever barf in your Tesla?
1:16:04 Speaker 01 Thank God, no. I had a rule that when I would drive at night, as soon as I got the first drunk, I would stop driving. I didn't want to take that risk.
1:16:13 Guy Raz? Yeah, you know, on a good Uber night, what are you pulling in?
1:16:18 Speaker 01 Um, I think usually it's about $50 is what I make, just going out for a couple hours.
1:16:24 Guy Raz? It's not bad.
1:16:25 Speaker 01 I think my biggest night, I made $100.
1:16:27 Guy Raz? Nice.
1:16:30 Guy Raz? That's Paul English, occasional Uber driver and founder or co-founder of, among other things, Kayak, Lola.com, Moonbeam Intermute, Get Human, Speed Games, Boston Light Software, and the online Chinese chess site, Xiangqi. Since we first published this episode back in 2021, as you can probably imagine, a lot has changed for Paul. Actually, not long after this episode first came out, Lola.com, the travel site that Paul launched after Kayak, was acquired by Capital One and the site shut down. But then, a couple of years later, Paul co-founded a new company using the Lola name. This time, it's a dating app that matches people based on their availability to meet up in real life,
1:17:14 Guy Raz? cutting out the online chit chat and getting to the in-person date faster. Lola Dating just launched in Boston in May of 2024 with plans to expand to more cities soon.
1:17:30 Guy Raz? Thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. And please don't forget to sign up for my free newsletter at guyraz.com. I promise to make it worth your time. This episode was produced by Farah Safari and Diba Motasham with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Chris Messini, J.C. Howard, Casey Herman, Alex Chung, Catherine Seifer, Sam Paulson, Kerry Thompson, John Isabella, Carla Estevez, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.
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