Drew Patterson ’06 has spent his fast-paced entrepreneurial career on the move. The 37-year-old travel industry veteran was part of the founding team of Kayak, a metasearch leader for flights and hotels in the United States that was bought by Priceline in 2013 for $1.8 billion, and cofounder of the luxury travel flash sales site Jetsetter before he founded Checkmate, an app that allows travelers to check into hotels on their smartphones. Last year Patterson became CEO of Room 77, a hotel search site launched in 2011. The startup, which he joined following its acquisition of Checkmate, has already raised more than $40 million from industry giants like Expedia and Concur that support early-stage innovators in the field. Patterson recently talked with about what it takes to launch, grow, and lead successful startups — and why Wyoming is his favorite vacation spot in the world.
You've worked at tech travel startups since they came on the scene. What attracted you to this niche area?
After college I followed a friend to Starwood Hotels and Resorts amidst the 1999–2000 Internet bubble. At the time, there was lots of interest in how technology was going to change travel and hotels, including selling hotel rooms online. While there, I got to know Steve Hafner, who cofounded Orbitz. He reached out with a plan for a travel search engine and asked me to be part of the team. I thought he was a smart guy with a good idea. That’s what led me to Kayak, which was an amazing journey. It was an incredibly dynamic, talented group of people. In our own limited domain, we changed the world and brought something new to the market.
After five years at Kayak, I got to know the investors behind Gilt Groupe. We started talking about flash sales and Gilt’s impact on fashion. This was in the midst of the recession, so hotels needed help generating demand. Also, it seemed clear that travel sites needed some personality. Travel e-mails and merchandising were functional but bland lists of deals and prices. I believe travel can be an emotional category — and a travel service should reflect that. That was the genesis of Jetsetter.
How is your newest company, Room 77, different from other hotel metasearch sites?
Room 77’s hotel search engine stands out by being more comprehensive and more relevant than other search sites. We include more sources of data — for example, we’re the only site to include prices directly from tens of thousands of hotels — and, as a result, we find lower prices.
Also, we start with the perspective that the hotel search problem has not been solved. Selecting a hotel is a subjective and personal decision. It’s challenging to identify what the right place is for any given trip. Search engines need to have more intelligence to answer this question. At Room 77, we anticipate what the traveler seeks and ask questions that let us make the right recommendation. If you search for New York City hotels on Room 77, for example, we’ll ask whether you want to stay near Lincoln Center or other geographic points of interest, or if there are certain types of hotels you're looking for.
Then we have the Checkmate product, which allows travelers to check into a hotel through their phone in advance of their arrival. So, like with an airline, you can complete the check-in process and start a dialogue with the hotel before you arrive. Our users know what time their rooms will be ready before they leave home, and when they arrive, there is a separate line that enables them to skip the wait at the front desk. Hotels also get better information about their guests’ needs and are able to merchandise room upgrades and other services.
It feels like the time is right for this kind of experience at a hotel. Already, thousands of hotel guests every day are using our service, and we are getting great reviews from both travelers and hotels.
What’s your advice for entrepreneurs launching companies and for those who are joining startups?
Go out and do it. You can spend a lot of time debating strategy and how you might go to market. Momentum solves a lot of problems, so find ways to generate and sustain progress. Your initial product will not be everything you want to bring to market; it may not even be your long-term business model. But if you can generate a positive trajectory, you can start to get buy-in and support, and that makes other opportunities possible. To get a venture off the ground, you really just have to start.
What did you learn at Kayak and Jetsetter that helped prepare you for your current role?
Ultimately the consumer is right. The consumer always wins. If you can come up with ways to create real passion, real delight on the part of the consumer, things will work out. Paul English, the other cofounder of Kayak, is a really thoughtful, visionary guy. He would always say that it’s not enough that consumers come away from the Kayak experience saying, ‘oh, that was great.’ It’s got to be like, ‘oh, that was so fucking awesome. I’m going to go out and tell 10 of my friends right now.’ That’s the level that you have to be playing for.
If you can make that happen, good things will come. When your product experience makes a consumer’s life better in a real way, then your marketing takes care of itself. Strategic relationships, partnerships, all those things will start to take care of themselves if you solve a consumer problem in a very profound way. But that’s a very difficult task.
What’s most important to keep in mind when pitching an idea to an investor?
The most important requirement is that you and your investors are aligned: that your goals and their goals are in sync. Inevitably, at some point, the business will face challenges; that’s the nature of starting a venture. What’s important is not the exciting moment when you cash a funding check but rather when you just lost an account — and now what? An entrepreneur needs to feel like his investor is a partner. Investor/entrepreneur alignment means having a common understanding of the timeline and risks associated with the project. For example, if an investor is late in their fund cycle, there may be pressure to reap profits and sell so the fund can improve its return. You don't want a situation like that to force an outcome in the business.
What’s the downside to being an entrepreneur?
It’s clearly stressful. Things may work out; they may not. It’s a roller coaster. The highs are higher, but the lows are lower. Managing your own emotional balance, especially when you are emotionally connected to the business, is a challenge.
But one of the payoffs is that when you work from a small base, small changes feel really significant. At first no one knows who you are. Then it feels really good when one person knows about you. The sixth person feels even better. You have the sense of watching an idea come to life.
Bringing something new to market is always threatening and disruptive to the status quo. It always gets resisted at the onset. What’s exciting is to go through that phase of reticence, then acknowledgment and acquiescence, then being embraced—where the market goes from, “this is a stupid idea, it'll never work,” to at least, “well, we’ll look into it,” to “oh, yes, that seemed like the right idea all along. We were behind it from the beginning.” To be a change agent is quite satisfying.
How did your background at Columbia prepare you to launch and grow companies?
Columbia helped formalize skills, frameworks, and thought processes that I didn’t appreciate or have before. I took a number of classes around entrepreneurship and finance in the MBA program. I was working at Kayak when I was at Columbia. It was valuable to do a bunch of stuff during the day that was very practical, very hands-on in a real business, and then have the time to be in a more academic setting and step back to think about the structure and framework to put it all together. I felt like it was a great connection between what went on in the classroom and what would happen in the marketplace.
What’s a favorite place you’ve traveled?
I had a great trip with some friends to the World Cup in Germany. I also took a trip once to Brazil and Argentina. But my favorite place is Jackson Hole, WY. That's where my wife and I got married. It’s spectacular. The views and mountains are incredible. The people are great — completely unpretentious; everyone’s really friendly.
Do you have any tips for travelers?
I think the best travel experiences are where you’re able to connect with locals in some way and have a real sense of flavor. If you have some connection to the people in the place you’re going, it always makes a difference. My wife and I typically travel with friends and try to take friends’ recommendations and advice. After college, I went backpacking through Europe for three months and visited friends who were working in a number of different cities there. Just spending a couple days with someone who actually lives there makes it such a different experience.