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It s perfectly fine if you knew that customer through a past life and that s how they got to be a customer. Maybe they ll be even more honest with you. If it means adding a new feature to your product, or whatever, to close that initial sale, and it s not on strategy, screw the strategy. Do it, collect the money, get the customer, and move forward. Then, as you re growing, sort of mid-stage, what I tried to foster here is an attitude of risk-taking, where all I want to know really is what s my downside scenario in terms of time and opportunity cost If I can try something offbeat, weird-sounding, and it takes a few weeks, and the downside is, in my case, I rip it out of the live website, or, if you re producing software, I rip it out of the piece of software, or I don t document the feature if I m producing a piece of hardware or whatever if the amount of time spent making a mistake is small, don t be afraid to make a lot of mistakes without a lot of time analyzing whether you should or shouldn t do it. On the Web, it s particularly easy to try something and get feedback. If it doesn t work, drop it. I ve come up with really interesting ideas that were utter and complete failures on the site, and I make fun of myself in company meetings when I talk about those. Then I look at each group and say, Hey, I m hoping every one of you in addition to all the successful ideas you ll come up with aren t afraid to come up with some resounding failures. You just want the failure to cost you a couple of weeks, a month or two it depends on the industry a small, fixed cost. It s the old adage: if we re not failing at something on a regular basis, we re just not trying hard enough.
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Livingston: Obviously your story ended wonderfully. You were acquired for
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around $200 million
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Kaufer: Yeah. I don t think of the story ending that way, but that s how the third chapter ended. Livingston: Sorry, I didn t mean it like that. But most startups do want to have
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a liquidity event. Would you have done anything differently before that, to get there
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Kaufer: No. With TripAdvisor, it all really did work out well. Certainly one of
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the keys to our success was being fanatical on the hiring side of things. I was almost going to answer, Well, I would have liked to have hired more top-notch folks throughout the company earlier. Because I m still in that position now I m still struggling to fill positions with the types of people that we want to hire. It s not something that we do very efficiently here. It takes us a long time to fill a req. When we do fill a req, we have a fantastic success rate. Many observers and people that have done due diligence on TripAdvisor over the years have commented on the caliber of individuals here. But if I ever start another company again, I d love to have as a founding or very early team member someone who was a trusted recruiter. Because the difference in almost any position between someone who does a good job and someone who does a great job might be 20 percent more in salary, but it s 100 or 200 percent more in throughput. If you
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can have enough people in the company that work twice as efficiently as the person sitting next to them, because they just know what to do, what not to spend time on . . . I mean everyone, they re more or less all working the same number of hours. It s rarely a work ethic issue. It s just, hey, you give this engineer a task, and it s just done right in half the time as the next person. That it s done right, that s the first important part; it s done quick; and there s just less communication if the teams are smaller, because everyone s getting twice as much done. Now how the heck do you fill a company with people like that in every single department Well, you tap out of your friends pretty quick; but absolutely, go hire your friends. As I advise other startups from time to time, if you find someone you like, pay what it takes to get them to come to your company in options or in salary, depending on the company s stage. But getting the right people especially in that first dozen is so much more important than getting the req filled. Unfortunately that slows down the hiring process a lot, which slows your growth a lot, which is how I circle back to say, In the next company, I d hope to have a recruiter on board within the first half a dozen people to help get the right next 12 people. Most recruiters don t work that way, don t think that way. Recruiters want to know, What requirements do you need in the job My answer is, I want passion. I want people that really care about doing a great job. It s just a different mindset. That s software, that s customer acquisition, that s branding, that s PR. It s really not in any one department. It s an attitude. And it makes a company a hell of a lot more interesting to work at. So in turn, it actually makes recruiting a little easier, because you come in, you meet the people, Man, you ve got a bunch of sharp people here. Yeah, that s right. And Expedia did a customer survey for us, and it came back that 98 percent of the people said they really enjoyed working with the other people here.
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Livingston: Does Barry Diller let you do your own thing, now that you ve been acquired How was the transition to being part of a larger organization Kaufer: IAC was a fantastic company to be acquired by, because they told us their history was, We acquire companies and we let them run stand-alone. So we came on board. I have to report finances up through IAC instead of my own five to seven person board. Other than that, we were really left on our own. Even when we had ups and downs in our numbers, we were left on our own. They were true to their word. And my hat s off to them, because you so often read about small, entrepreneurial companies like ours being acquired and it being a disaster, because founders leave, teams quit, an infrastructure process is put in place that doesn t fit. IAC said, Hey, you re running a business. Tell us what you re going to do, then do that. And let us know when you need help. That s what we ve done. Livingston: I noticed you don t have a receptionist.
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