For Hipmunk, it’s all about the users– and the UI

Online travel search has been one of the tech industry’s most crowded and cutthroat spaces since the launch of Expedia some 15 years ago. But the stiff competition didn’t stop Adam Goldstein, the CEO of San Francisco-based travel website startup Hipmunk, from throwing his hat in the ring.
So far, the bold move has paid off. Hipmunk has become a popular online destination for a devoted and growing base of users. The company has secured $5.2 million in venture capital from an impressive list of investors including Ignition Partners, Ron Conway, Paul Bucheit, and even Silicon Valley’s favorite Hollywood gate-crasher Ashton Kutcher.
A defining feature of Hipmunk is its user interface (UI) and the way it ranks search results based on a variety of factors such as price, layovers and overall travel time– a method meant to minimize a traveler’s overall “agony,” the company says. Most existing sites prioritize low prices above all else when it comes to ranking flight search results.
Hipmunk has been so successful in part because it’s so young, Adam Goldstein told me in a recent interview. According to him, Hipmunk’s UI is optimized for how users want to behave today, rather than for the technology limitations of the past. “The way that most existing sites sort travel information is easier from a technical standpoint. They’ve been doing it that way for 15 years,” he said. “It wouldn’t have been possible to build Hipmunk 15 years ago.” The website itself is written in Python, and its back end is built on Tornado, the open-source framework built by FriendFeed. Hipmunk’s super slick front end is comprised of “boatloads of Javascript,” Goldstein told me with some pride. “It’s kind of impressive that we pulled this off without any Flash.”
Indeed, it’s very clear that Hipmunk’s technical credibility is Goldstein’s top priority– which makes sense, considering the source. He began his own technical career early, authoring two books for O’Reilly while still in high school. He went on to launch a startup called BookTour while earning dual engineering degrees from the Massachusetts Institute of Technology.
Talking to Goldstein in person, it became clear to me why top-tier investors have taken bets on his company, even with its long-shot entry into a very competitive space. He represents what many investors have described to me as their holy grail– a highly technical engineer with product sense and good people skills. An added bonus is how he carries his capabilities in an approachable way, without the type of hubris often exhibited by talented business people and good engineers.
Those qualities, and the fact that Hipmunk had achieved profitability before taking on its first venture capital round, have enabled Goldstein to be choosy about who he partners with, and how Hipmunk grows. The company has only 10 employees, and has no plans to scale its staff up in any major way in the months ahead. Most of the $4.2 million in funding the company took on in January of year will stay in the bank for a while, he says. The company is no longer operating profitably, but Goldstein told me he’s fully confident that Hipmunk will be able to regain cash-positive operations without putting UI-interfering ads on the site. Currently, the company’s main source of revenue is collecting a commission on each flight or hotel booking it facilitates.
That’s an honorable strategy, but it’s not exactly unique. Other startups, such as Twitter and Facebook, began with zero-ad ambitions, only to change their tunes in response to growing investor pressure. Goldstein told me he’s aware of the paths of his predecessors, but he is determined to stay his own course.
“We’ve said very clearly to our investors that we don’t want to just flip this company around [in a sale to a larger company],” Goldstein said. “We want to do this in a way that respects our customers. That’s how we keep them.” Hipmunk has a lot of fans hoping that the company’s initial vision will continue to bear out. But as evidenced by many of Hipmunk’s travel site forebears, no one ever said it would be easy.