E281: Sam Shank of Hotel Tonight – TWiST

watch

listen

about this episode

Click here to stream the audio version of this episode.

Join our mailing list and be the first to learn about upcoming guests!

Today on TWiST, we tackled the travel vertical with Sam Shank, co-founder of Hotel Tonight. If you need a place to crash ASAP, Hotel Tonight, has an app for that–and it’s the best friend of travelers and hoteliers alike.

1:08 Hey everyone. Welcome to This Week in Startups. We have Sam Shank with us of Hotel Tonight.
1:47 Thank you to all of the members of the TWiST backchannel. Go to twistlist.co to see what all of the excitement is about.
2:13 Thank you to our sponsor Mailchimp. It’s a great program for delivering mail.
6:01 Sam, you founded HotelTonight and previously founded SideStep. Which came first, SideStep or Kayak?
6:53 What did it mean to be VP of biz dev at SideStep?
7:19 Side deals can be transformative to a business, yeah?
7:30 People tend to confuse biz dev and sales, right?
8:12 Can you trust the hotel reviews you find online? Do you trust them personally?
9:02 How gamed are hotel reviews? How many of those reviews, on a percentage basis, are done by PR companies?
10:58 So tell me a little bit about HotelTonight.
11:19 So what do we see here (in the iPad app)?
12:07 So the service is, I don’t book ahead, but I trust that you’re going to have great deals when I arrive?
13:02 So it’s opportunistic? I don’t buy that completely.
13:46 I’m looking at HotelTonight very closely, and starting to say, I’m just going to go to a city and roll the dice and hope I get a deal. How many users fit that use case?
14:50 It’s a special trip so I want a special room. You’ll definitely have big island hotels available every night?
15:26 So there are only three options of hotels?
16:18 And you can only book a room after what time?
16:45 So if I come in at 3am I’m actually buying for the next day?
17:07 Is there a fear amongst hotels that you’re going to become the default place to get people hotels?
17:31 How did you alleviate that fear?
18:11 If you’re using an iPhone to buy, you’ve just selected yourself into a higher group? Are Android guests worth a little less?
18:57 Can they reject iPhone 3GS users?
19:04 How many rooms does a hotel put in every night?
19:34 If they say we have 25 rooms and all of a sudden they have zero, that’s ok?
19:46 So it’s AdWords for hotel rooms?
19:55 What makes one deal better than another?
20:40 Break for MailChimp ad. Teaser: I had a subpar experience but it actually made sense
21:14 Thanks to Squarespace, which just launched its v6 that works cross-platform. Twist listers get 10% off with code TWiST8.
24:54 So I was at a fancy dinner w/ VCs and I was supposed to go home. I called up Krute and asked him to book me room. Starwood is great — only 10K points for a room. I decided I wanted to try HotelTonight. Krute told me he found a great place. I went there and thought, this is not the hotel I would normally stay at at this point in my life. We paid $200 on the service. I had a very jawing experience. Great website & app but the room wasn’t a $200 hotel. I felt like I got ripped off and paid 2x as much for the hotel. What happened?
26:54 What do you call a solid hotel?
27:05 Basic would be the hotel I stayed in?
28:21 Do you have some sort of indicator that there’s surge pricing going on?
28:39 What’s the lesson there for you guys? You need to do a massive job communicating it?
29:39 What cities does this work best in?
30:29 Airbnb kind of championed taking photos of peoples places so they’re big and gorgeous. Do you hire freelance photographers? How much do you pay them?
31:34 And it’s actually what it looks like? What do you think of Oyster where they professionally review rooms?
32:08 How do they make money?
32:17 Everyone is starting a company around hotels these days. It seems that people stay away from airline booking. Why?
32:59 What’s the commission on something like that?
33:09 Sam: No money in airlines because of the power of the supplier. It’s a terrible business
33:26 So airlines need innovation but aren’t willing to pay for it?
34:54 You guys have been getting knocked off left and right. People have been stealing your idea, right? Does it make you angry to have so many copycats?
36:18 You’ve raised a warchest. You’ve done 3 rounds of funding in how many years?
36:31 So in 18 months you raised your angel, A, B and C?
37:14 You’re talking about a specific person at a firm, not just a firm. You’re not picking a firm as much as you’re picking a partner, yes?
37:38 So who did the A?
38:02 People talk about this board chemistry. Why is that important to you as a founder? Why is that such an issue for entrepreneurs?
38:45 And their role in that discussion is to help you frame the discussion and reach the best answer?
39:24 The egos might be large at times in the room since these are very successful people. You’ve got to manage 5 or 6 strong personalities in the room.
40:12 But you hear those stories of the ego in the room just tearing the founder apart?
40:33 You keep hearing of this “founder-first” trend. Founders getting control of their company post IPO. This is benefiting founders, isn’t it? The general idea used to be founders can be replaced and should be.
41:51 How does your MBA become a personal liability?
42:23 But people don’t want to work for an MBA? That’s fascinating.
43:47 Sam: Now partners are looking at the lifetime of a relationship with a founder.
45:51 There are VCs in the Valley where people say watch out for that one. Go on ahead and tell us which ones they are?
46:25 How ridiculous is the talent competition right now?
47:39 So if you’re valued at $150M, you can buy a company for $50M and get a few great developers?
48:58 Sam: The Ritz Carlton and other high-end hotels don’t do discounts.
49:28 The world is moving to value. If people can’t make more money, prices are going to have to come down for services.
50:05 So what’s next for the firm? What’s the challenge for you as an entrepreneur?
50:52 So you have to make a decision as a founder that you’re going to go long-term for the happiness of your team in making something that is exciting to build?
51:57 What kind of language do you have to use with a superstar employee when you are dead set against their idea?
54:06 Some say that if an iPad app doesn’t flip, it’s the sign that it’s not a quality app.
55:03 What about developing on Android?
55:33 Sam: We spend a lot more time debugging than building the features that consumers want.
56:19 We have to be on Android is our thinking because our customers and partners keep telling us that, but we don’t see the results.
57:49 Do you think Apple will make their own payments service?
58:48 Has HotelTonight ever been in a commercial yet? Ever put you in a keynote?
59:30 It’s a different business than Room 77.
59:50 Everyone follow @samshank on Twitter and everyone go download HotelTonight.
1:00:16 Thank you to Squarespace
1:00:25 You know, your sales people gave me a $50 credit!
1:00:50 I don’t think it’s a good approach when you’re working with an angel to send you a significant monetary gift. Don’t send your angel investors things that are expensive because then they’re going to feel guilty.
1:01:55 Any big successes we should know about?
1:03:10 Thanks everyone

Support This Week in Startups and independent media by joining the TWiST Producer Program at TwistList.co!

Want to support TWiST another way? Use bit.ly/twistamazon when you shop and a portion of your purchase will go toward helping keep independent media like TWiST on air!

Keep up with the latest from our sister company, LAUNCH:

FOLLOW ON TWITTER
Jason: @jason
Sam: @samshank
Hotel Tonight: @hoteltonight
Squarespace: @squarespace
MailChimp: @mailchimp

SPECIAL THANKS TO OUR PREFERRED PARTNER eMINUTES

Lawyers who focus on forming and maintaining corporations and LLCs. Check them out at eMinutes.com and @eminutes.

Special thanks to the members of the TWiST Backchannel Program!

Executive Producers

Producers

Associate Producers

  • Brad Pineau
  • Kat Ganesan
  • Nicholas Christian
  • Mau Frontier
  • Kyle Braatz
  • Serena Ehrlich
  • JD
  • Alex Lotoczko
  • James Kennedy
  • Benoit Curdy
  • Asher Nevins
  • Mike Kaltschnee
  • William Doom
  • David Lee
  • Jake Kerber
  • Sarp Coskun
  • Giuseppe Taibi
  • Tyrone Rubin
  • Keno Vigil
  • Paul Peters
  • Jamal Waring
  • Nick Ostroff
  • Alex Binkley
  • John MP Knox
  • Bryan McCormick
  • Marcos Trinidad
  • Allen Cordrey
  • Daniel Mich
  • Joshua Rosen
  • Grant Carlile
  • James Smith
  • Christopher Rill
  • Elliot Myhre
  • Nihon Giga
  • Nathan Gielis
  • Greg Meadows
  • Rick Cartwright
  • Jacques Struwig
  • Robert Ward
  • Adam Gering
  • Shelley Gaskin
  • Jim Shute

Supporters

  • Ryan Hoover
  • Michael Cranston
  • Josiah Thomas
  • João Fernandes
  • Petrus Theron
  • Michael Wild
  • Dale Emmons
  • Tim de Jardine
  • Alejandro Vasquez
  • Milan Babuskov
  • Chris Rowe
  • Nelson Melo
  • James Dawson
  • Toddy Mladenov
  • Daniel Torres
  • Chris Macke
  • Piotr Zuralski
  • Armand Konan
  • Brian Vogel
  • Paul D
  • Jennifer Sun
  • David Kolb
  • Sue Marrone
  • Eugene Granovksy
  • Will Blackton
  • Ryan Dodds
  • Brett Arp
  • Jason Cresswell
  • Edwin Orange
  • Daniel Bradley
  • Shawn Daniel
  • Priidu Kull
  • Patrick Desroches
  • Alex Lam
  • Paul Secor
  • Ryan Urabe
  • Madhu R.
  • Paul Ardeleanu
  • Ian Thomas
  • Manny Alarcon
  • Charlie Osmond
  • Christopher Smitley
  • Roshan H.
  • Barcy Cordrey
  • Matt Beaubien
  • Matthew Smith
  • Oscar Bueno
  • Tim Hoyt
  • Ian Gerstel
  • Taphon Maddison
  • John Bradley
  • Luigi Armogida
  • Dave Ferrara
  • Janus Lindau
  • Chris Mancil
  • TR Ludwig
  • Giles Thomas
  • Jason Cartwright
  • Michael Del Borrello
  • Joshua Rosen
  • David Karlberg
  • Marcus Schappi
  • Justin Furniss
  • Mike Hauck
  • Jess Bachman
  • Isaac Hill
  • Robert Haydock
  • Dan Sfera
  • Flaviu Simihaian
  • Kiko Cherman
  • Chandra Siva
  • Kasper Andkjaer
  • Zach Woodward
  • Chris Galasso
  • Chad Olsen
  • Michael Grabham
  • John Shiple
  • Gregory Hoffman
  • Chris Rickard
  • Eskil Steenberg
  • Jay Moran
  • Karim Sarkis
  • Michael Davidovich
  • Petru Marchidan
  • Sam Drzymala

 

more episodes