Steve Hafner on 20 years at Kayak: “The innovation is not over but”

It has been 20 years since Steve Hafner and Paul English co-founded Kayak, and twenty years later it is exhausting to say which is extra outstanding: How a lot journey has modified since
2004 – or that Hafner remains to be championing innovation as the corporate’s one and solely CEO.

In a far-ranging dialog from the cabin of his boat in Miami Seashore, Hafner spoke of how an itinerant childhood formed his worldview; his pleasure for the potential of synthetic intelligence and bringing the identical insights and innovation to enterprise
journey as Kayak did for customers; the keys to preserving a startup tradition even at an organization that might be sufficiently old to vote; and why not even a journey govt as gifted as his good friend and former associate has succeeded in making a “Kayak killer.”

If there’s one takeaway from the 18-minute dialog, it is this: Hafner is not accomplished. Requested what he hopes the following 20 years brings, for himself and for Kayak,
he stated, “I am hopeful that they carry as a lot innovation as the primary 20, if no more so.”

Watch the total dialog under or scroll all the way down to learn an edited model of the trade with time stamps or hearken to the audio-only model in
PhocusWire’s In Phocus podcast.

We’re talking as Kayak marks 20 years of enterprise. Serious about how a lot journey has modified over these twenty years makes it appear even longer — and Kayak is accountable for lots of that change. As you prefer to say, innovation is in Kayak’s DNA. So inform
us, with all that’s totally different about journey at this time, what stands out essentially the most to you, each for good and for dangerous?

(0:58) I can really feel these 20 years. Twenty years is a very long time, however yeah, Kayak was based to be modern, to be the upstart within the class. And it has been a extremely enjoyable trip, and the innovation is not over but.

We have seen the primary migration from offline bookings to on-line web sites after which from on-line web sites to cell apps … and now we have this new know-how referred to as AI. I believe we’re one of many first websites to leap on that, and I believe it’ll be
an extremely transformative know-how for the class.

I believe there’s much more cool stuff coming by way of talking to clever brokers to do all the pieces you wish to do and, hopefully, having the ability to get [through] the airport with facial recognition, etcetera, and never having to scrounge for paper
or boarding passes, even when it’s in your cellular phone. There’s much more stuff to come back.

I don’t suppose it’s a stretch to say you had been fated to be in journey. I imply, you had been born in Peru and lived in additional international locations as a toddler than most Individuals see in a lifetime. I’ve heard you discuss how the world could be a greater place if extra individuals
might dwell in numerous international locations. Are you able to elaborate on that?

(2:34) On the time I used to be rising up, I didn’t recognize that transferring round lots was truly going to form my profession and my worldview, nevertheless it did.

And now I believe much more of us would profit from seeing the world as a result of there’s loads of other ways to … downside resolve on the earth, and no nation and no a part of any nation’s obtained an incredible deal with or monopoly on good concepts. So if you transfer
round lots it makes you a greater particular person, and it makes you a greater world citizen. And I believe it makes you extra empathetic and extra open to different methods of doing this.

So ending up in journey, for me, was nice as a result of not solely did I like to make use of the product lots, so I had options for among the friction factors I noticed, but additionally it helps me be ok with serving to individuals get round to different locations and develop the worldviews.

We had been talking of innovation being in Kayak’s DNA. I do know you are taking satisfaction in Kayak rapidly adapting to new applied sciences. What’s the supply for that ethos?

(3:49) I believe everybody at Kayak — we have about 970 individuals right here on the firm now — basically, we’re … all very curious individuals. We’re all dissatisfied with the established order, and we’re all keen to try new applied sciences and new developments
and say, ‘How can we configure them to make Kayak companies higher?’ Lots of people say that is a startup tradition. I am not so certain as a result of we’re not a startup anymore. I believe it is some corporations have that esprit de corps and people sorts of insights
and curious individuals, and others do not. And we have been blessed to have them.

With regard to a few of these improvements, in March Kayak unveiled a picture recognition device that may supply worth comparisons from a screenshot
of a flight itinerary from any website. It’s a cool device. I’m questioning: How are customers responding?

(5:02) They’re utilizing it. I imply, it is early days, proper? But it surely was once that to make use of a journey website, you’d need to go to the journey website, work together with the search type, submit a question after which get the outcomes again. Now with AI you’ll be able to truly use your
cellphone … and if you happen to can simply take a snapshot of a journey website outcomes [page] and even write down an itinerary on a bit of paper and take an image of that, ship it to Kayak and we’ll offer you outcomes. And never solely that, however you’ll be able to arrange fare alerts
proper from the response we get.

An increasing number of, what cell telephones are enabling and what AI is enabling is individuals having the ability to do stuff asynchronously, which means you do not have to … go to a journey company and see an individual to make a reserving. Then we moved it offline. Then you definitely needed to go
to a web site. Now you’ll be able to truly use images. It’s superior. I believe the following step is utilizing voice. … With AI, I believe that suggestions loop goes to make it so significantly better, so you’ll be able to truly simply discuss and get a end result set again.

Kayak for Enterprise is one other latest innovation. You talked with us about that some on the Phocuswright Convention in November if you shared that Tripadvisor was amongst your new shoppers. What’s the most recent on Kayak for Enterprise?

(6:46) Look, we have been on the client aspect at Kayak for 20 years. We have been on the enterprise aspect now for under three years. And the identical insights and innovation we delivered to the buyer aspect, we’re bringing to the enterprise aspect, and we’re doing that
in partnership with two different nice corporations. One is Blockskye, who’s a know-how vendor, and the opposite is PwC …

And what we have designed there’s a product that goes direct to the airways and to sure OTAs for provide, for fare enhancements, would not require bank cards or bank card charges, would not require expense studies for the customers of that and is agnostic
by way of who touches the ticket and does the customer support. … So it has been a enjoyable trip up to now. We’re solely three years in, so we’ve obtained a methods to go.

Since you’re so huge on innovation, I’m curious: How would you characterize Kayak’s use of generative AI to your inner operations at this time versus a yr in the past? And what’s your prediction for the longer term concerning generative AI in journey?

(8:44) I believe it’ll be a recreation changer by way of [eliminating] the mundane work that so many people do. Our advertising and marketing staff, for instance, is utilizing GenAI to write down press releases, to write down copy, to generate pictures and movies. Our search engine optimization staff is doing
the identical. After we’re doing content material snippets for inns, we are able to use AI to write down related summaries for that. …

I believe all that work goes to make the standard of the output from the parents that we’ve at Kayak a lot, significantly better. I don’t suppose it’s going to interchange jobs, no less than at Kayak, as a result of we don’t have a giant customer support staff. If you’re on [a]
customer support staff, you higher get good at utilizing AI since you wish to be extra environment friendly, so that you don’t get changed.

The [metasearch] class is wholesome. One participant, Google, attracting the lion’s share of development. … However that doesn’t imply Kayak just isn’t wholesome. … We have at all times wished to be one of the best, and we nonetheless are one of the best.

Steve Hafner – Kayak

Between Google and loyalty packages and social media, it’s been powerful for metasearch websites to carry on to their former share of promoting income. What do you see as the longer term for metasearch?

(10:39) Yeah, it’s why I get this query lots, like metasearch has peaked or one thing like that. It hasn’t in any respect. Customers have this inherent need to cross store and journey. Why? As a result of costs are totally different, primarily based on the place you go, and choices
totally different. So you are not going to belief American Airways to point out you the bottom Delta fare. You recognize you are not going to belief Reserving.com to point out you all of the non-hotel lodging all through there. You wish to cross store, and metasearch websites
allow you to try this very simply.

The class could be very wholesome. One participant, Google, attracting the lion’s share of development, and that’s as a result of they’ve a extremely good product. And so they’re additionally greater up the meals chain. … However that doesn’t imply Kayak just isn’t wholesome. We even have by no means
meant to be the largest [metasearch] website. We have at all times wished to be one of the best, and we nonetheless are one of the best. … We prefer to say you snack on Google for journey costs, and also you guide by way of Kayak since you get higher outcomes. And I believe that is true.

If you happen to had been launching a startup at this time, what would it not be for? What’s most “ripe for disruption” in journey?

(12:38) Oh, gosh! There’s so many locations of friction nonetheless within the journey ecosystem. … I nonetheless suppose there’s room for brand new airways, for brand new resort chains. To make use of new know-how, new technique of buyer acquisition. I’d begin there.

I believe the 2 most revolutionary corporations within the final 15 years have been Airbnb and Uber within the journey house. … It simply [takes] an ideal alchemy to achieve success. You must have an incredible thought. You must have an incredible staff. You must be very properly
financed, and it’s a must to be fortunate. If you do not have all 4 of these issues, it’ll be troublesome.

I nonetheless suppose [at] Kayak we’ve all 4 of these issues. So I will stick to Kayak versus beginning up one other firm and going after one thing else. However hats off to these entrepreneurs who’re courageous sufficient to go accomplish that.

I discussed The Phocuswright Convention. That’s once we first heard in regards to the “Kayak killer.” When your Kayak co-founder Paul English joked on stage
whereas speaking up his newest enterprise, Deets, an app that gives suggestions primarily based on evaluations from a consumer’s associates. So I’ve obtained to ask, what’s your assessment of the Deets beta? You recognize, I’m
going to wish a headline for this story. …

(14:27) You recognize I like Paul English, and he is obtained a knack for producing headlines. I am hopeful that his Deets enterprise is a hit. I do not suppose it is any risk of being a Kayak killer. If Google could not kill us, Paul, English’s Deets is not going
to both.

Kayak founders Steve Hafner and Paul English at The Phocuswright Convention in November.

We began the dialog speaking about your 20 years at Kayak. It appears acceptable to finish on that notice. I gained’t ask in case you have any regrets – all of us do – however if you happen to might change one thing, what would it not be?

(15:10) Gosh. We had so many alternatives alongside the way in which to develop extra aggressively than we did. … I want we had gambled just a little bit extra. I additionally want that Google hadn’t outbid us for ITA Software program as a result of we had been so shut to purchasing them. However we misplaced
that one. It will have been a special world if we have been in a position to pull that caper off.

No Google Flights, proper?

(15:51) Oh, there would have been ‘Google Flights: Powered by Kayak’!

Now let’s flip that query round: What are you most pleased with over that point?

(16:07) I am most pleased with constructing a profitable firm and having loads of enjoyable alongside the way in which and dealing with gifted individuals. Not all people will get to expertise that success. Once more, it comes all the way down to these 4 elements: an incredible thought, nice staff, properly financed
after which luck. And the final one is definitely the toughest one to safe since you’ve obtained no management over it. So we’ve been very lucky to construct an incredible firm. … Quite a lot of our staff have gotten rich within the course of, and that’s very fulfilling
too.

Lastly, what’s subsequent – for you and for Kayak? What are the following 20 years going to deliver?

(16:51) I am hopeful that they carry as a lot innovation as the primary 20, if no more so. I hope the corporate stays curious and dissatisfied and modern. I hope our staff stays small and gifted as properly. I hope the [profit and loss statement] is nice,
and I hope we get fortunate. However most significantly, I simply need everybody to benefit from the trip, as a result of the primary 20 years had been simply wonderful.”