our burn rate was really pretty small. Everyone took salary cuts; we were paying
$18 a square foot for office space; we had really no expenses to speak of. We
were stretching the dollars, and even though it was Internet dot-com days, we
had never done anything remotely lavish.
So we’re approaching late 2001, and we noticed our demo site,
TripAdvisor.com, had started to get some traffic. Just people finding it. We tried
to be active in PR from day one, so we’d gotten some mentions in various press.
I’m not entirely sure...

And he didn’t really care much whether I was sending him qualified leads or
not. He only cared about whether the leads I sent were going to make reservations.
The way it works is, they give you a tracking code to put on the link. We
said, “It’s no work for you. Give me the tracking code; I’ll start to advertise
50,000 properties for you.” Which I did, and we ran it for a month for free for
them. Then, before the month was out, I gave them a call and said, “How’s it
...

to TripAdvisor.com, and we started expanding our client set beyond Expedia, to
hotels.com, Travelocity, and eventually Orbitz and others.
Livingston: Did you use the same strategy with other companies: “Try us out
for a month, and, if you feel like we’ve driven some true leads, you’ll continue
with us”?
Kaufer: Yes. Once other companies saw Expedia advertising, they sometimes
didn’t need a free test, but we might say, “Look, our leads are normally a dollar
a click, because they convert so well. But we’ll let you get started at a quarter.
And...

have taken a long time. I had a family to support, that sort of stuff. So we certainly
decided early on to go raise some money, and within the first year we had
raised $3 million or so—but a comparatively small amount of money.
There wasn’t anything obvious that we should spend money on, other than
hiring a lot of people, and I’m just a fundamental believer in small teams do
better than big teams. We were building a product, and if there were 5 people
and they were all within shouting distance of...

The notion that I take all of my time and energy, build up a business, and
then hand another company who is going to be a competitor the crown jewels
of the business—fundamentally the business, except for the people—after I
thought about it, that ended up making it a reasonably easy decision. “No. I’d
rather go out of business than take everything I’d worked for, for so long, and
hand it essentially for free to somebody else.”
In hindsight, we clearly made the right decision. But at the time it wasn’t
obvious, so...