Transcript
This isn't your average business podcast, and he's not your average host. This is the James Altucher show on the Stansbury radio network. So I have Sam Schenk on the line. Sam, how are you doing? I'm good. And, Sam, you're Glad to be here. The you're the creator of one of my favorite apps, HotelTonight, where when I first started using it, it was like it was like God came down and saved the world for me. Because whenever I was in New York City late at night, I would say, okay. It's too late to go back upstate home. I'm just gonna go from hotel to hotel. There's gotta be a room open. And it would take me hours sometimes to find a room in a hotel. Like, you never know if, like, the president's in town. There's there's no rooms available. But HotelTonight is this app where I could just, like, essentially click a button, and there's a a hotel room available for me. That's awesome. Yeah. That that's the one of the key use cases, and that's one of the the reasons why we we built the app is that we thought that with mobile, with mobile becoming more prevalent, that what was the thing that we could bring to the world, for hotel booking that couldn't exist before? And that was that last last minute. We didn't have your computer anymore. And that's what we focused on initially and and really just built the best service possible for that that specific use case. So so I have a ton of questions about the app, but I wanna start off with your background. Like, you kind of, right before HotelTonight, you were doing a lot of stuff kind of in the online travel industry. But even before that, like, what's your secret origin story? I know you got an MBA that you're ashamed of. What's what's the story with that? Well, I think that that that that's not the early origin story, the sort of secret origin story is that I You came from the Moneta part time. Yeah. Exactly. I've got a I've got a weakness of crypt to Kryptonite. But I I started in, wanting to be a film director and, moved to from Virginia, where I grew up, to to Hollywood and worked on the movie Scream and was an assistant to Wes Craven. And I realized that, ultimately, I didn't wanna be a film director, but I like to like to create stuff, and I liked technology a lot more than I like the filmmaking industry. Well, why why didn't you want here. Why didn't you wanna be a film director? And I would imagine, you know, Wes Craven was probably a really interesting guy to learn from. Yeah. He was, and he's one of these the like, in Hollywood, there's a lot of, like, you know, pun intended bad actors, but there's, he is one of just the generally nice guys out there and, and was very helpful and supportive, and understanding on everything. You know, I I wanted to be I I guess I'm just sort of creative. I like to build things. I like to make things. Also just a huge, lover of films and and entertainment and and storytelling. So wanted to to see if I could do that myself, and that was sort of a the childhood dream that I I gave it a shot to for for a year and then, and then moved on to what ended up being a much better fit for me. Okay. But, again, like, the film industry sounds great. Like and you were you were an assistant to Wes Craven. You were at and and Scream was, like, the top movie of the year. What what made you what kind of turned you off to the whole thing? Yeah. You know, I I think a lot of it has to do with very few people actually ever get to direct movies. And I was looking around, and I saw guys that were, double my age that were doing glorified versions of my job. They were doing a lot of script reading and development. They still aspire to be a director. They're still working on their own screenplays and didn't ever have a chance to do that because not very egalitarian there in Hollywood. It's, only a couple hundred people get to actually, create create a film and direct a film every year. And it's not as much about merit as it is about, really just being the right place at the right time. And I didn't wanna bet my whole career and my whole life effectively on that, that luck of the draw. And instead, I wanted to get to a place where I could control my own destiny and felt that with with my first company, which was, TravelPost and also in the travel space as a hotel review site 10 years ago, I built that a lot single handedly, on the the coding side, on all the front end coding I did myself and got it launched for about $100,000. And that'd be very hard to do in the movie business because, of the cost associated with it and the fact that it's you have to go through the studio gatekeepers to have anyone ever see your movie. So you kinda wanted to you you you were the gatekeeper sort of put the statistics against you, and you figured you didn't wanna bet on those statistics because, like you say, there's probably a 1000000 people in LA who wanna be directors, and only a 100 people will have a successful career as a director or less. Yeah. Yeah. That too, ain't it? Did did Wes Craven give you any advice along these lines, or, like, what did you learn directly from him that you were able to apply later? Yeah. I think it was more about how he managed people and how he motivated people. You know, he's a very, very laid back guy. Leads through example. He never, showed his you know, never had a hot temper and but worked incredibly hard, and people just loved working for him. And he just he embodied this sort of, respectfulness for everyone around him and called everybody to up their game. And I I learned a lot about leadership by watching him, and, you know, not not not many people in Hollywood are like that. K. Can I ask what's a specific case where where you saw him exhibit this kind of benevolent leadership? You know, it was it was more what he didn't do. Right? So, I guess there was one moment where he we this was a big deal in the film where the cinematography, was was flawed on it, like, 2 days of of the shoot that they it was basically out of focus, which meant that we had to go back and, you know, reshoot those days, which costs, you know, 100 of 1,000 of dollars for every hour that everybody's working there. And, you know, he just said, you know what? It's out of focus. We're gonna have to make some changes and redo those. And I could tell that he was about to lose it, and he just walked out of the room. And, and he didn't get mad. It was just the facts. And, you know, we ended up getting a new cinematographer, making changes, but, the movie went on, and, and and he was, you know, he was able to keep his cool, which was incredibly hard given how angry I'm sure he must have been. You you know, just a coincidence. My, at the time in the mid nineties, I was making, websites for entertainment companies. And, I didn't do the website for Scream, but I did the website for Scream 2. No way. Just a little overlap. Tiny overlap. Small world. Alright. Well done. So so okay. So you moved on from Hollywood. And and by the way, the interesting lesson I get there is is that, when he was incredibly upset at something that's very frustrating, the key is to sort of understand that these things happen and to kind of swallow your emotions a little bit because these cycles are always gonna kind of happen. Yeah. And and I think that I'm sure he got very, upset or was very direct with the people that he was working with, or that that were, you know, responsible for this, but he didn't let that trickle out into getting mad at everybody else. Right. Which which was really you know, and it can be scary when you're like you have to reshoot some scenes, like, during the middle of it, and everybody can start worrying about their job. And he didn't he didn't bring that to the table. That was great. And and how did he feel about you leaving the industry? You know, he always knew that I was more interested I think he knew that I was more interested in technology than in filmmaking. And so he he was, you know, wishing me the best, and and we stayed in touch a little bit. And I was then, you know, I was incredible. I I I left before the movie was released, so we had no idea if it was gonna be a big hit or not. And then I I stayed in touch with them and and congratulated him because they ended up creating a $1,000,000,000 franchise. And, you know, he sort of reinvented this this whole portion of the genre. And it's, you know, he was he was like, hey. I'm I'm the luckiest guy in the world. I get to do what I love, and and other people love it too. And, so that was also cool to see. And that I think that, you know, the other learning for me is that was my first effectively, this first start up that I had been around that had success. I didn't have much to do with that success. I didn't, get to, you know, be around even for when the success happened. But I got to see that it was that a small group of people with a great idea with great execution can build something, really great that that, you know, impacts a lot of people, and that sort of carried with me in that that sense that, you know, a small group can do big things and that I wanted to do those big things too. And and what like, so so, obviously, there's there's a a small factor of of luck in the success of that franchise. But what what things not related to luck, do you think contributed, and and not related to his leadership skills contributed to the success of of essentially what you're you're saying is your first start up that you were involved in? Yeah. I think it's about execution. I mean, it was a really great script. There was a lot of people vying to buy the script, and then it was really well cast, and people were really passionate about it. And the details were there, and, Wes assembled a really great team from my friend, Lisa Beach, who does did the casting instead of Catsman to all the way down to, you know, the, you know, the producers and and then getting Drew to come and work for 1 week. She did very well financially as well as with her career for that one week of work and then the just the level of detail that everyone had there. So I think it all just came together. And and then there was yeah. I think a lot of people, that were on that movie, that that started you know, the Weinstein that saw the vision there, they really had a pulse on what the market wanted, which was they wanted to be scared. They wanted that that thrill and excitement, of being scared in a in a safe way, right, in a limited way. What does that mean? What does that mean, safe way? Well, I mean, in a movie theater. Right? So, like, they actually don't, but people don't wanna be really scared. Right. They they want to have these experiences, though, this endorphin rush of being thrilled and scared. It's like a roll riding a roller coaster. But they wanted something fresh and new that was more relevant. So I think that those guys had a really good good sense of what the culture needed, which is a real skill, and the Weinstein's have been able to do that over and over and over. And and then you went from there, and you spent some time, I guess, at X Sight and and at CNET, some of these kind of, like, you know, mid to late nineties, companies that were big and then flamed out to some extent? Yeah. Well, yeah, CNET's still kicking around and doing really well. And, you know, X Sight was certainly had its moment and then went away. But, then I worked at a company called Nextag, which was, maybe the second start up type company I worked for, which went on to be a $1,000,000,000, comparison shopping engine, that that became very successful. But it was the the sort of that portion of my career, that that 10 years was about, hey. I wanna start a business. I wanna start a business in technology. I'm not ready yet. I wanna meet a lot of people. I wanna learn a lot. I want a variety of experience. I did a lot of product work. I did a lot of business development and sales work, and and really just getting every skill I could, talking to everybody I could so that when I was ready to to start my own thing, that I'd be well prepared. How did you know that you're not that you weren't ready yet? Because I get a lot of emails from people, for instance. They they have an idea, and they're just they think they're just ready to go, and they don't realize that there are, like, lots of skills to succeed in a start up. It's not just the idea, and it's not even just the execution. Like, how did you know that that you weren't ready yet? You know, I think that it's I I've thought about this a lot, and and when I when people ask me this, I'd say that you're ready when it feels just uncomfortable enough that you can bear starting a company, because it's hard. It's, it's intimidating. It's it's gonna be a total grind. It's gonna be brutal. It's the hardest thing you'll ever do. So you gotta go in knowing that. And when you're ready for it, then go ahead and and do it, because the best way to learn about starting a business is to start a business. You can read everything. You can prepare yourself. For me, I wasn't I wasn't ready to to commit. I wasn't ready to to take that step until I was, until I was, you know, about 10 years ago when I did travel post. And then it was just barely sort of palatable, barely possible for me to do it. But I think that, you know, especially if people are early in their career and they wanna and they can get funding, or they're they're able financially to to afford to to start a company, there's not a lot of downside, in especially in this part of the world, and you're gonna learn a lot. You're gonna learn probably more about yourself than about starting a business. But it's it's it's something that when you do it earlier in your your career, there's you know, you don't have a mortgage. You don't have a family. You don't have all these responsibilities that come with age, and there's there's frankly just not a lot of downside to it. And it does if it's something you really wanna do and you're ready to do it, I I suggest people go for it. So so, talk about the first couple of businesses you started because everything sort of kind of, paved the way to HotelTonight, which is looking like it it's gonna be an incredibly successful business? I mean, it already is. Yeah. So the the first company I started was called TravelPost, and it actually started when I was at at business school, which was the key reason I went to business school was to use that as a platform for starting a company, which ended up being successful, as a, you know, as the the outcome of business school. And I also learned a lot while I was there and met a lot of people, that were very instrumental in in my career, both personal and as well as, professionally. But that business was originally a travel community sharing travel experiences, which ended up being a really lousy business. People were sharing travel experiences. There was just no money around that. The advertise it was, you know, the design of that would be advertising supported. You couldn't do, like, affiliate fees? Like, if someone had a travel experience to this hotel in Italy, you couldn't do some sort of, like, affiliate deal with that hotel, or there just wasn't enough people clicking? Yeah. No. We we tried. The thing is when people are coming in to look at other people's travel experiences, they're not necessarily in the travel booking mindset. So they'd say, oh, yeah. I like Bob's, you know, travel photos to Vienna, but I'm not interested in going to Vienna. And so we the affiliate fees ended up being about a dollar CPM, and we're making, you know, in the low 1,000 of dollars a week, on that business, which wasn't ever gonna get us to where we needed to go. So we ended pivot pivoting or broadening or re refocusing whatever that business towards hotel reviews and licensed some hotel reviews from a market research company and and, you know, focused on building a really great hotel database with really great photos and and reviews from people like you. So they were filterable by the the demographics of the the people that had written the review. So you can see, I don't wanna see reviews from everybody. I wanna see reviews from people like me. And it was it was very successful, from a price perspective and much more successful from a revenue perspective. It was, like, 50 times more monetization because when people were coming to the site, they said, hey. I wanna look at the reviews for the Atlantis and Bermuda, and that meant that they were very likely to end up going and booking the Atlantis and Bermuda. And we get those affiliate fees as you mentioned. So it's all about, not only Were you selling advertising? Sorry sorry to interrupt. I'm I'm a habitual interrupt. Go ahead. But were were you selling advertising also? Like, let's say, the Hotel Atlantis, would you were you advertising from scuba diving companies, or what what else were you doing to monetize? Yeah. I mean, we were, like, 5 people, and and I was doing sales as well, so we didn't have a direct sales team. And we weren't big enough to sell that. We didn't have enough inventory to sell those types of spots. We did use AdSense, and so we probably got some scuba diving stuff that would come in through AdSense. But what we sold directly was links off to to booking sites where they pay us either a a commission or they pay us a cost per click fee for the traffic we send them. And when when when you decided to pivot, was that, like, a hard moment that you were giving up on on one model and switching to another, or were you suddenly, like, super excited about this other model? Like, what led to the what were the emotions around the pivot? Yeah. You know, I was excited about it because I saw that it was, it it was commercially gonna be more viable, and then we also had a product hook and an angle that was different than TripAdvisor. So I was excited about about it from that same point. You know, I also had, you know, difficulty abandoning the the previous version. And in looking back on it, we probably should have just abandoned it completely, but instead, we sort of interweaved that business in with HotelTonight, and it created a you know, just slowed us down. So if I could do it over, I probably would have just not held on, you know, cut these emotional strings from the the previous business and move to the new one much more quickly. Because you you could see over time, you were gonna max out in the low 4 digits on revenues per week. Yeah. That there was and and that I felt sort of a a a guilt associated with, hey. People had come and trusted us with their travel experiences, and, you know, we need to continue to grow and maintain that business. What what we could have done is just maintain that business and, you know, let people know that we weren't gonna be investing in it as much going forward. But, but instead of, you know, integrating it with the hotel review portion of the business and instead of, you know, spending time enhancing that travel experiences portion, it didn't reinforce and didn't benefit the hotel reviews as much as we thought it did, and we should should have clipped it and or or segmented it out. Okay. So then what happened next? So you you, you ended up selling this business? Yeah. We got to we got to profitability, and about a 1000000 unique visitors, but it wasn't, we didn't have a lot of resources to invest in the business, and it was precarious profitability to say the least. We're very it was very SEO driven as a business, and things would happen where we get a lot of traffic where then we get hit by an algorithm change or we'd lose a lot of traffic, and then and they would come back. It was it's very businesses are stressful in general. Businesses that are SEO driven where, there's a black box that you don't really know what's going on are very, very stressful. So we we had precarious profitability. We had the opportunity to raise money or sell the business to a larger company called Side Step, and I advocated to the board to sell the business. I'm happy we did. And the the Side Step then gave us more resources to invest in the business and integrate that in with their comparison shopping engine, which Sidestep's sort of like KAYAK, of in in terms of the meta search for travel. We and then when I was at Sidestep, I worked there for about 15 months, and, sidestep was actually then sold to Kayak, during that time, which ended up being a a very good exit for everyone involved. So so so let me ask you this. So you marketed the hotel review data from a company. Why can't why couldn't anyone just or why couldn't that company have a hotel review site? Like, you didn't have anything really proprietary if you're licensing all this hotel review data. You know, we licensed it exclusively and gave them equity and travel post in return for that. So that was part of the deal, and and the deal was that we had the ability to do something with that data. We could build a website around it, and then we could also we knew SEO and knew how to drive traffic to it, and we knew that how to build the commercial relationships in order to monetize the data. I see. So so so they didn't have that ability. They they they couldn't make a website. They just had the data from somewhere. Yeah. They they're they offer you know, that business, they, did surveys on behalf of hotels, to like, after somebody checked out, they'd say, hey. You know, the hotel x y z would like to know how they did, and then they get review data from that. I see. And so and the hotels were fine with them licensing this data to you? Oh, yeah. Yeah. There was there was portions of the data that were definitely, like, owned by the hotels. There were other portions of the data that that the the market research firm did to provide a baseline for all their hotels, and that's the the portions that we used. So then after you left the company, you even got closer to the hotel business. You you started and became CEO of dealbase.com. So what what was that all about? Yeah. Dealbase, it was it was really inspired by a company called RetailMeNot, which was small at that time, now is a public and multibillion dollar company. And it was about bringing meaning to all the variety of travel deals that are out there and bringing them all into one place. That's email deals, private sales, special offers, hotel specific discounts that are offered just by the hotel, all the OTA discounts, online travel agency discounts, everything under the sun, AAA rates, bringing them all into one place where it would be very easy to say, I wanna go to the, you know, the the Zetta in San Francisco. What's the best way for me to buy that hotel? And that was the idea behind it, and we so we started working on that business and and basically got it to profitability. And then that's when started thinking about what's next for that business, which led to thinking about mobile, which led to thinking about HotelTonight. I see. So did that business kinda morph into HotelTonight? No. Yeah. That business is still stand alone, and we ended up thinking, that or HotelTonight started within that business, but then we spun it out and created a new entity as we realized that HotelTonight was just a much bigger opportunity, a very different opportunity. It was gonna need different capitalization. We didn't wanna just shut down deal base arbitrarily. We thought that there was the business is profitable and and actually, you know, makes a considerable amount of money, given how much it raised in terms of of EBITDA. So we didn't wanna sort of throw that away, and so that's why we segmented the businesses out. And it's interesting. It's actually being relaunched right now, and a guy named Clem, Basson, who was the, president of Hotwire, which is an Expedia company. He took over about a year ago as as CEO of DealBase, and that business, is being relaunched now as GoSeq, which and he's done a really phenomenal job as as CEO there. And and GoSeq is is almost like the the true, like, vision of deal base of, like, help me find the best offers and the and the best prices for a hotel. He's actually, you know, executed on it better than we initially did, and it's worth a look. It's it's gonna be I think he's gonna build a really big site and a really big brand out of this. It's just in beta now and and launching, officially launching in a few months. So so so this brings us to HotelTonight, and it sounds a little competitive with HotelTonight. Like, essentially, when I use HotelTonight, I'm looking for a hotel room tonight and a discount, or at least that's initially what I was looking for. Now you you've extended out. It could be a few days in advance. You know, you have 15,000 hotels. You're in 28 countries. But, you know, what when when you first started HotelTonight, how did you how did it work? Like, how did you get all the inventory from hotels so that at 5 PM, you knew all the empty hotel rooms like in New York City, for instance? Yeah. We, when we started, it was just 3 of us, and we had an idea for building something, as as we mentioned early on, better at the last minute for booking hotels. And we, and and really focused on that use case. And so I did the product. I did the marketing. We had a CTO that built the product and did all the engineering. And then our other cofounder, Jared, he did all the relationships with hotels. And we went around and signed up. It was we launched with 3 cities and only about 15 hotels total, and he went to some of the best hotels that, that were in these cities that were, these iconic really independent boutique hotels, places like the Ace in New York and, the, the joie de vie hotels out here in San Francisco and the Thompson Hotels and and the Roosevelt in LA. And he went in with with what remains, was and is a very strong sales pitch, which is, hey. We'd like to help you sell rooms that you're not gonna sell on your own because we're focusing on same day or now close in bookings. You know what your occupancy is going to be. You know that you're gonna have rooms that are empty. We can help you fill those. We're not competing for you months in advance, for those rooms. We think that you should sell those directly on your own website. But if you need help at the last minute with these unfilled rooms, we can help get those for you and get those filled for you. And so what would they do? They would then like, at 5 o'clock at night, their manager, part of his job would be to fax or email you a list of rooms that were open, or what what would happen then? Yeah. I mean, early on, we would just call them every day because we didn't have an interface for them. But then quickly, we built, what's called an extranet in the hotel industry where they log in, and it's the simplest thing in the world for selling hotels. It just says 2 pieces of information. How many rooms do you wanna sell, and what price do you wanna sell them for? And we, then they can change that anytime. It's all reflected in real time. And the best deals for that day, and and that very minute get the most visibility on HotelTonight. So if you, you know, really wanna move you know, you've got a 100 rooms to move. If you really wanna move those, provide a bigger discount, lower your price, you're gonna move up in the rankings, and the conversion rate of a lower price is much higher than a higher price. And, and so you just was this like a sales effort? Like, did I mean, you now deal with, like, 15,000 hotels. Like, did you were you calling are you calling hotels constantly to get more hotels on board? Yeah. Yeah. We've got a really great, and dedicated team here that, you know, keeps relationships going with our existing hotel inventory as well as adds, new hotels, and, you know, we're always seeing great hotels come on the market. We're always, you know, going back to the the hotels that we've wanted to work with for a long time and adding, you know, great new finds all the time. So we're, we're constantly doing that, and, you know, that said, it's gotten a lot easier as we've gotten larger. Hotels now come to us, and we also work with some of the bigger chains now like Starwood and and Hilton. And and then lastly, we we work with groups of hotels, so, you know, things like Kimpton or or places, ownership groups, people that that represent, a 100 different franchises will all work with us. Oh, that's great. So so so let me get the economics right. There were 3 of you. You built an app, which is relatively cheap initially to build, and you take, 10 to 15% fee, I guess, on on every hotel room booked. Were you profitable right away? No. We, we took, it took a long time for the business to to start working. I think that, on a relative basis, you know, it took, like, 2 weeks before we saw anybody book a hotel. So and then, and it took months for people to start booking en masse. Why did it take, like What's it Oh, go ahead. Yeah. No. It's it's a it's an we wanted that too. And it I think as we look back on it, it's it's an awareness. The distance between awareness and actual utilization in this business is is, isn't isn't not immediate. It's in the on the order of weeks or months. So, you know, I might hear about HotelTonight. I might check it out because it's a cool app. It's well designed. But I don't need a hotel right now. I I I don't need a hotel tonight. I'm gonna need a hotel on Friday night, and I'm excited about booking on Friday night, but I'm not gonna need one exactly right now. And so because of that, people they also wanted to check the app out. They wanted to look at the rates. They wanted to, kick the tires. They they wanted to make sure it was credible. So they wanted to to read more in the press about us and hear from friends that we've, that we've delivered a great room at a great price and that they they got treated well by the hotel. So it just it took some time. Was it was it better than, like like so I used to use, Expedia to find hotels, you know, tonight. Were did you did you offer any benefits over using Expedia? Yeah. We, so there's a lot of benefits over booking any other way. So it it boils down to saving time and saving money. I think all consumer products need to deliver on 1, ideally both. So for us on on saving money, we did and we maintain the lowest rates for our hotels. We guarantee it, for the the hotels the majority of hotels are providing discounts on HotelTonight. Those discounts are average, 15% over what you pay on a a large online travel agency. Oftentimes are in, much higher than that. And then, on the time saving side, we have the fastest way to book a hotel. We've had that since we launched. It's, 10 seconds. It's 3 taps and a swipe. You're out of the app and on with your night, and it's just incredibly incredibly easy to, to book these rooms, and and people like that. People like, you know, the the fact that we take all the the pain out of choosing a hotel. We've done the work for them. We've looked at 4 100, 500 hotels in a city. We've determined which ones are the best in terms of service, quality, location ratings, and then of those, which are offering the very best deals for that night. And that they can then, you know, book in confidence. Well, what's like what's like the worst moment you've had where, like, a customer just had a really bad experience at a hotel and it made you worried about the business? Was there any was there ever a moment like that? Yeah. We've we've had a few moments like that, and we knew that we were gonna have those moments, though. It's still like, you know, it it I get, you know, personally just, you know, you know, like, almost sick when when a customer has a bad experience. But we knew we're gonna have some of those situations. So what we did is we invested early on, in very, very good customer service to make sure that people we could turn somebody that had a bad experience into somebody that ended up being a loyal customer and and a fan and a promoter of HotelTonight. What's what's a what's a classic bad experience? You know, every once in a while, a hotel is oversold, and so somebody shows up at the hotel and then has to, get a taxi to a different hotel. And, you know, when you're when it's late and when you're expecting to stay at one hotel, it's no fun to have to stay in a different hotel. Yeah. That's awful. That's happened to me using Expedia, actually. So Yeah. You know, we we track it with, very closely, with our hotel partners. And if it happens too much, then we'll, or it happens repeatedly, we will stop working with that hotel. So so let me ask you this. Like, right now, I I so I live in New York, but right now, near Miami, and, I'm using Airbnb, and I'm paying $250. I'm in a house with a pool right on the lake. I've got 2 bedrooms, 3 bathrooms. There's, like, 3 living rooms in this house. And, again, I'm paying $250 a night. If I were to get a hotel in Miami, it would be, like, you know, 3, 4, $500 a night. What's what's happening in the industry now? Like like, is Airbnb gonna dominate? Because I pretty much only use Airbnb. And on a follow-up question, can you do Airbnb tonight? You know, we're so on the the last part, there's nothing that would prevent us from doing that. We're we're accommodations. We're very focused on working with our hotel partners now, but that doesn't mean that that's where we're we're gated. But, you know, we're, right now, we're we're definitely focused on the the more, you know, sort of traditional types of lodging. And that has to do with the logistics around the last minute booking and that, you know, when you show up at a at a hotel late at night, there's a front desk staff there. There's services to get you into your room really quickly. A lot of those logistics are are far more difficult, when you're dealing with a homestay, to be able to to make that transaction happen seamlessly. But Unless you make unless you make a front end interface where people can say, okay. I'm here. I'm ready. If someone wants to book tonight, then I'm I'm available. So they can kind of sign up on a day by day basis. Yeah. And I think that I think you'll see some of that happening. I think that it there's still a fair amount of friction on it. And, you know, if you look at the incidence rate of, you know, where there's where there's gonna be an issue, I think it's gonna be much higher even if you get those things in place. Because what if I, you know, forget that I'm home and then end up, you know, going out to the you know, to a bar and then somebody shows up and is ready to check-in? I'm sure that those will be all sorted out. I think that they're they're not insurmountable, but I think they're issues in the short term. But, hey, I think Airbnb is a wonderful business. I I think Brian and I have, you know, Telk on a regular basis, and we see the world in a very similar way in terms of where it's headed in terms of more human, more social, more authentic experiences. And we both are excited to to be, in you know, helping to shape that world, and make hospitality truly hospitable again. And so it's it's exciting. And and so we're we're much more cut from this lame same cloth than we are competitors. I I think that what's happening with Airbnb and and alternative lodging is great, and it's bringing more choice to to the world. It's bringing more choice to travelers. There's times when where you're staying is is great for people. There's other times when, you need something that that has the the services of a hotel that's in that part of a city, especially when you're talking about business traveler or if you're talking about, you know, leisure traveler. Leisure travel, and, I'm taking my family to Chicago this weekend, and we're gonna be staying, near a wedding, and we wanna be right on Michigan Avenue. And a homestay wouldn't have that same level of, of location of proximity, and it wouldn't have the same level of services either. It wouldn't have the restaurant on-site. It wouldn't have a gym. It wouldn't have a pool, and that's important for us for this trip. Not important for us for all trips, though. So so another idea is tying can you tie in, hotel tonight to my calendar? So you see, for instance, I'm traveling to Chicago in a week, and you start kind of pinging me with reminders like, oh, you know, here's the types of rooms and places, we could find for you, when you get to Chicago. And by the way, here's a car service that could pick you up at the airport, and we have a deal with them. Like, I I need car service tonight also, particularly when I land in in new cities. I like those ideas a lot. Those are great ideas. You should, come and do some product consulting for us. I'm happy to. I I the thing is I I don't really travel a lot, but when I travel, I I really like everything super convenient, and I don't like to use cash or credit cards ever. I like it to all be app driven. So so for instance, as soon as I get to the airport, I want somebody to meet me there, help me with my luggage, take me to a car, take me to the hotel. I don't wanna pay any cash or anything. Like, it's all in the app, like, all that I'm gonna tip, all this even tipping, like, the bellman at the hotel. I want it all taken care of. And I want to have it tied into my calendar so I don't even have think of it on the day of. Yeah. I, I like that vision and and yep. We'll, you know, let's stay in touch on on that, because it's definitely the the the vision of this, like, you know, on one end, it's about, you know, making travel more human, making travel more authentic. On the other end, it's making travel more seamless. And we started on more of the seamless dimension and then now adding this, you know, human and authenticity dimension, whereas Airbnb started on the the other side and it's coming to making travel more seamless and and making their experience more consistent. We have a very consistent experience right now. So I think we're we're attacking it. We're not gonna end up in in the same place, but I think there's a lot as you mentioned, there's a lot more we can do to make things more seamless, and and, you know, that would be, that would be interesting for us to work on. Well and then and then there's the question of, can can you go more general than hotels? Like, is there anything else I might need, tonight, that can be somehow acquired through your software? You know, like, for instance, well, obviously, Uber is kind of handling it with with car services, but maybe I need, I'm at a hotel. I need toothpaste. Or I'm in an Airbnb. I need toothpaste or deliveries or something like that. Like, have you thought about anything more generic than hotels or more general? Yeah. You know, we're we see just a lot more focus or a lot more, opportunity just in the hospitality and the lodging space, and that's where we're focused right now. But that doesn't mean that there's things around that that could be useful for, you know, maximizing your enjoyment of your your stay. So certainly something we're looking at. Like like, what if I need a meal tonight? Like, I'm at my home. I'm not even at a hotel. I just need, like, a hot meal in the next 20 minutes. And, I I hit a button on hotel tonight, and 20 minutes later, a hot vegetarian meal is delivered to me. Yeah. You know, I I think as long as we could do that better than anyone else that's working on that, then we would we would be interested in that. Otherwise, we'd love to partner with the best services out there that are doing it. Yeah. I guess there's there's SpoonRocket in San Franci there's a few play companies like food truck companies in San Francisco, but I don't really know anywhere else where there's where there's this going on. So well, you know, that's basically my questions on HotelTonight. What what's next for HotelTonight? What what are you planning on? We've been so we've got, a lot of things in the works. One of the the the big initiative for us towards the end of this year was moving from tonight only, to 7 days up to 7 days in advance, the same hotel tonight experience, the simple booking, the curated inventory. So you're always gonna get a great hotel, the great customer service if you have any questions or you wanna make, you have any you know, anything does go wrong or any changes need to be made, we're there for you. We're we're your advocate. So all of that with now a little bit more flexibility. People were saying, hey. We love hotel tonight, but sometimes they need a little more flexibility. Booking on Tuesday for my weekend getaway is still very spontaneous to me. It helped me do that. So that's been a really big win for us and opened us up to a lot more customers. So so on on the one hand, my my wife who's listening, she she just said thank you so much for that because she she was the one who who showed me HotelTonight, and it became a regular part of our lives. So that was great. But do you get pushback from the hotels? Because now you're starting to compete against their own sales a little bit a little bit more than you were before. Yeah. I I don't you know, we we worked really closely with our we have a hotel advisory board on this change, and, the bottom line is is that within a week, they start knowing what their occupancy is. They're selling right now on other channels, to begin with, and they're paying a much higher commission. We have the lowest commissions in the industry. They're paying a much higher commission to sell on these other channels. And so for us to give them an another way to sell this inventory, another, you know, they can work with another partner, they're not con they're not concentrating all of their distribution on just a few companies. They were very positive on it, and they really like our guests too. They like working with us. They like the ease of the the tools that we provide them and the systems we provide them. So there was no pushback from the hotels, and and they're, they've been really happy with the results. So you guys have raised $80,000,000 in in funding. Did you need that much? Like, what what do you do with 80,000,000? Yeah. So one of the big other areas of of investment for us is international expansion. And we brought on a guy that did international expansion for Airbnb, and he's been working for us for about 3 months building up the team, opening a bunch of offices, so opening, like, 4 more offices around the world, and we're gonna be making a lot of strides on international expansion. Expansion in in travel and travel the travel category in general does take a fairly large investment because you're talking about putting these systems in place and then, generating awareness for something people don't use every day. So there's a there's a a time period of of awareness building, before the, you know, the pattern of use starts kicking in. And that's what we're seeing in in other areas, and but and that's why we raised that money so that we could invest, invest in that growth. So so another thing I'm always intrigued by, obviously, you're you're building a great company. It's it's successful. You've raised a lot of money. If someone let's say an Airbnb comes to you and says, you know, hey, Sam. Here's $400,000,000. Can we buy you? Would you would you feel tempted to take it and just be, like, you know, rich beyond your wildest dreams, or do you do you wanna pursue this to the end? You know, I I, we've got big goals for HotelTonight, and and it's just a wonderful platform where we've got a great team. We've got lots of resources, wonderful investors. I've got, you know, great cofounders, and we've got, a really strong vision for where we wanna take it. And if you know, the other way I look at that is that if this all ended right now, what would I wanna do personally? And what I'd wanna do personally is get back to right where where I am right now with a with a product, with a team, with customer traction in a wonderful category that we're, shaking things up on. And so it would be, you know, it'd be sort of a disappointment to sell the business right now. And, and so we're just I don't really think about that too much. I just think about, you know, how do we execute? How do we grow a great business? How do we build a great culture and a great team? And how do we really just deliver on a great customer experience so that people are getting the best possible hotel at the best possible rate? Alright. Well well, Sam, thanks again so much for agreeing to come on the show, and, I really appreciate it. I'm I'm a big fan of the app and continue to use it. I'm also a fan of Airbnb as you could tell, so I can't wait until you have Airbnb tonight. But, I'll I'll wait for it. Alright. Alright. Well, thank you, and happy holidays. Yeah. You too. Thanks a lot, Sam. Bye. Thanks. Bye. For more from James, check out the James Altucher show on the Stansbury radio network atstansburyradio.com, and get yourself on the free insider's list today.
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