NB This post was republished on Tnooz on 15 Sep 2011.

Being located 17 hours ahead of Silicon Valley often has you lagging behind on the big news.  On waking this morning at home in Melbourne, the inbox and Twitters were abuzz.  Google had launched a flight search product.   

As the "other" YC-funded travel search startup, people just wanted to be sure we'd heard the news.   Most were just interested in our thoughts.  At least one feared for our future.

Over at HackerNews, once you waded past the protracted debate over Google's evilness, several commenters asserted with certainty that this would spell death for travel startups like Hipmunk.  The news had one anonymous travel startup founder throwing himself out the proverbial window.

When Google first announced its intention to acquire ITA Software in July 2010, we at Adioso thought it was a huge deal that would materially influence our prospects.   But today, on the day that Google has finally launched its flight search product to the world, we couldn't be less fazed by it, and we think every other travel search startup should feel the same way.

Let's try and cut through the hyperbole. What is Google Flight Search? It's just a flight search tool, that is integrated the Google search engine. Nothing more, nothing less. It has some cool features, and no doubt it will have many more cool features in the future, some which may be truly disruptive to the travel industry.

But as a startup, to believe Google Flight Search destroys your own prospects is to believe that being Google is all it takes to own 100% of the travel search market.  It is also to believe that once Google has taken ownership of the market, it will be the unassailable leader for any type of travel search, effectively for all of eternity.

I doubt those beliefs are correct.

One of the Y Combinator mantras is "Startups don't get killed by competitors, they commit suicide".  In YC folklore, the only company ever to have been killed by a competitor was Kiko, a calendar app, that died shortly after Google Calendar launched [1].  

You can see how that would would have happened.  A calendar app is a relatively generic product, and being good enough and tightly integrated with Gmail might have been sufficient to effectively kill the rest of the market.  For Kiko to have innovated enough to overcome Google's natural advantage would probably have meant becoming something quite different from a simple calendar app.  They could have done that, but they decided to do Justin.tv instead.  

You don't get anything much less generic than travel search.  Well before the internet, there were endless different ways in which people planned and booked travel.  And whilst the internet has spawned a handful of dominant players like Expedia, Priceline, Orbitz and Kayak, there are thousands of other online travel search and booking tools, many with very large, happy audiences.

The travel industry is one of the biggest of all the world's industries.  It's hard to imagine an industry with a consumer-base as vast and diverse.  Yet tastes and preferences in travel search tools aren’t just diverse accross geographic and demographic segments, but even within quite narrow ones.  

As Y Combinator-backed travel search companies, Adioso and Hipmunk have a significant intersect between our initial target demographics: YC founders and fanboys if none else.  Yet even among people in this rather homogeneous segment, you'll get wildly differing views on which company has a better travel search product.  

Some adore Hipmunk, some hate it.  Some are excited by Adioso - its potential or its reality - and some don't understand why anyone would ever want it. Some think we both suck and just carry on using Kayak.  And some love each one at different times, depending on the type of travel and the certainty of their plans. So, even within the one brain, there's often great diversity in tastes and requirements in travel search products, depending on the context.

It was discovering this that made me realise we didn't need to worry too much about competition.  Adioso was never a search tool to win largely-satisfied customers away from other established players.  It was a product we built for ourselves, which then found an audience of people who agreed with our ideas on the way travel search should work.  Similarly, Hipmunk is a search tool for people who agree with Adam and Steve about they way travel search should work.   Some of those people will be the same, and some won’t.  For both of us, our success relies on finding enough people who share our views.  The beautiful thing about travel is that each of these niches can still be vast and lucrative.

When we heard about Hipmunk, we naively worried they'd copy our ideas and use our secrets to beat us in the race to win over the market for, well, I guess any new travel search product [2].  Of course as soon as we saw their product we realised it was nothing like ours and was built to serve very different needs.  

Now, if I ever worry that Hipmunk might move into our product space, I just remind myself that they're far too busy just being Hipmunk to think about being Adioso.  For every feature of ours they'd add, they'd become less of what they set out to be themselves.

And now I think the same about Google.  Google is building the sort of travel search product that Google would build, and it will be liked by the sorts of people who will agree with Google on the way travel search should work.  They'll probably add features conceived by Adioso, Hipmunk and any number of other travel search companies.  

But they can't do everything. They can't please all of the people all of the time.  More so than in just about any other industry, they can't do it in travel search.

I'm not underestimating how significant and disruptive this will be for the industry.  And I'm not oblivious to the implications for those who depend on Google paid or organic search for traffic, or on ITA for airline data. 

But in the scheme of things, these issues matter little for startups.  Building a great travel search company is really hard, not because of anything that Google does, but because building a great company is really hard.

At Adioso, we're just getting on with building a great company.

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In November 2008, Fenn and I had one of the more momentous experiences of our lives.  After six years working together on various startup ideas from in our home town of Melbourne, Australia, we were selected for an interview with Y Combinator in Mountain View, California.  Here’s how we got through it.

The Preparation

After allowing ourselves a couple of days to come to terms with the surprise of our interview invitation, we set about preparing.  As we already had a working product, we didn’t need to spend much time on our demo.  From YC’s interview preparation guide, the most important points seemed to be that we should have a good idea of how we’d make money, and find someone to help us practice our interview skills.

As complete outsiders to Y Combinator and Silicon Valley, practicing with YC alumni or experienced operators in the Valley didn’t seem to be an option.  We didn’t even really have any friends or associates we felt would be capable of asking the right questions in the right way.  But we did know of a prominent Melbourne-based web startup founder and blogger called Steve Sammartino.  We’d never met Steve, but he seemed like the sort of guy who’d be willing to help, so I dropped him an email and he was good enough to reply quickly and make himself available to help us out at only a few days’ notice.

In the days leading up to our meeting, we thought and talked through our product, market, and business model enough to be confident in our ideas, but the task of being able to convey it convincingly to potential investors still lay before us.  Steve turned out to be the perfect person to help.  Being more of a business guy than a hacker, and being oblivious to Y Combinator and Paul Graham’s essays, it took a thorough explanation of our business approach and concept for him to be convinced, particularly with respect to our revenue model.  But after a three-hour discussion that started as simulated interview/interrogation and ended in relaxed camaraderie, he commented that he was particularly impressed with our passion and determination. The comment I most remember from Steve that evening was “You guys sound great when you’re not trying to pitch”. This gave us a huge confidence boost.

Three days later, Fenn and I set off on our 18-hour journey to California feeling as though we were as well prepared as we could be.  We arrived in San Francisco about 48 hours before the interview, and spent most of the remaining time trying to rest and relax, with a few sessions grilling each other with whatever questions we could imagine might be asked.

The Interview

We’d chosen a late-afternooon interview slot, selected to allow ample time to get there and minimal time sweating over the outcome.  Arriving at the YC office over  two hours before our appointed time, we were greeted by Loopt-founder Sam Altman and directed to the big orange room where we joined several other nervous aspirants.  We chatted a little with candidates and alumni, then Fenn and I took a wander around the surrounding streets to give each other a few more final practice questions before returning to the office to await our appointment.  I was nervous as hell but I knew we’d done all we could to prepare.

Jessica emerged to welcome us with her effervescent charm, expressing amazement that we’d flown half way around the world for a 10-minute interview and promising to try to give us an extra couple of minutes for our trouble, before introducing us to the rest of the crew: Paul, Trevor and Robert.

Paul opened proceedings and cut to the chase: our market is already very crowded, although most of the players suck; how are we different from the many established competitors?  Suddenly, finally, our show was on the road.  This was a pleasing, if slightly unexpected opening; we didn’t even need to explain what we were doing or why, just how we’re better than the incumbents.  I opened up with a response and was going quite well until things hit a snag. Mid-explanation, Paul pulled me up with his first challenge, saying “surely your competitors can do that”.  I replied that they couldn’t but he refused to believe it, and with Robert now furiously typing away at his laptop to check out my story, my confidence started to waver; I was convinced of our superiority over our competitors on several fronts, but I hadn’t checked them all for this specific feature.  Just as I started to panic, Fenn came to the rescue, pointing out that although it may seem as though our competitors have this functionality, for some crucial technical and implementation reasons where our product excels, the others are all abysmally deficient.  Our story checked out, and the panel was satisfied.

As we proceeded to explain how our site worked, we suggested turning to the demo and the YC team agreed.  So far I’d thought I was the nervous one of the two of us, but as Fenn drove the demo I could see he was shaking enough to make it a little hard to control the mouse.  But he kept it together and got through the demo in style. The team seemed satisfied.

To be honest I can’t recall many details of what happened next.  What I do remember is that it never felt like the intense grilling I’d been expecting from reading other founders’ stories. That’s not to say it was ever cordial or casual, but I never felt like we were under a blowtorch. The question of how we’d make money was never explicitly asked, but discussions inevitably led to our ideas of the business model.  I’d barely begun to exalt my grandiose plans when Trevor said “OK so you’d be building a more efficient market for flights”.  Um, yeah, that’s it. They got it.  From that moment I relaxed and was able to enjoy the remaining few minutes chatting about everything from our insights into the industry to the immigration minefield that lay ahead should we be successful.

After what seemed like about 3 minutes, Jessica announced we’d been going for 17, so the interview was wrapped up and we made our exit.

The Aftermath

We walked back towards downtown Mountain View, talking a little but mainly just thinking to ourselves, trying to make sense of the whole experience.  As my composure returned, I stopped, looked at Fenn and said “You know what?  I think we went really well”.  He replied “I think we did too” and we gave each other a brief manly hug. We weren’t confident of getting funded; we’ve learned from many setbacks never to be overconfident.  But I felt as though we’d done everything in our power, and that if we were unsuccessful, it wouldn’t have been because we were badly prepared or because we’d sucked in the interview.  Whatever happened, we could feel proud of how far we’d come and be optimistic for the future.

We headed for St Stephen’s Green Irish Pub in Castro Street, and ordered what has become our requisite opening combo for momentous occasions: a single-malt Scotch, neat, and a pint of beer.  We’d barely got through the Scotch when Fenn’s phone rang.  Thanks to shoddily implemented international roaming, Paul Graham’s call from the YC office less than 2 miles away was being routed to Australia and back, so the words “We’d like to fund you” were difficult to decipher, but audible nonetheless.

Another manly hug and a few drinks later, we were back on the Caltrain to San Francisco for a quiet dinner and our most relaxing night’s sleep in a couple of weeks.

The Lesson

Given this experience, I’d advise candidates that more than anything else, you must (a) intimately know your market and competitors and (b) convey your determination.

I went into the interview confident I knew exactly how and why we could beat our competitors, but in the heat of the moment I wasn’t able to articulate it convincingly.  Given my time over, that’s the main thing I’d work on.

As for determination, that’s harder.  On this point Fenn and I possibly had a natural advantage.  Our long-time friendship and persistence in business, along with the effort and expense of travelling across the Pacific Ocean for a 10-minute hearing probably gave us a head start.  I’d think hard about how dedicated you are to your business and how you’re going to make that evident to your interviewers.

Make sure you think and talk about your idea so much that you understand it so intimately and can visualise it so vividly that you get really excited at the thought of it succeeding.  Talk to as many people as you can, and learn what you have to say and how you have to say it to get people excited at the thought of how much better the world will be once your product exists.

Once you’re in that zone, it won’t matter whether YC funds you, you’ll set about working on your startup anyway, and with enough determination and persistence, you’ll be sure to build a great company.

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