I first wrote about the company back in July 2000. The company was five months old. Dot-coms everywhere were hitting the wall. And TripAdvisor's strategy was to collect user-generated reviews of hotels and attractions, and then license the content to portals. (Remember portals?) Here's that piece, which ran in my "@large column" on July 3, 2000.
Thriftiness is in
Running a frugal Net start-up seems to be the trendy thing this summer. Langley Steinert and Steven Kaufer, chairman and CEO, respectively, of Needham's TripAdvisor, are two adherents of this lower-profile mode of building a Web business.
TripAdvisor, a search service that collects and organizes information about travel destinations from trusted authorities (like Fodor's) as well as typical Net users, has just 12 employees. And most are software developers working on the product.
"Our burn rate is extremely low," says Steinert, who is also a partner at Boston's OneLiberty Ventures. Trip Advisor raised $1.3 million in February (most of it from OneLiberty), and sources say TripAdvisor could stretch that sum past the company's fall launch and into the middle of next year. Just to be safe, Steiner and Kaufer are signing term sheets on an additional $2 million, which should be announced any day now. The theory: Raise it before you need it.
TripAdvisor also won't make the mistake of trying to create its own destination site and then spending gobs of money attracting visitors.
"We want to provide informational services in the same way that Sabre provides transactional services," Steinert explains, "through partners like America Online, Expedia, Yahoo, and Travelocity." Smart.
That strategy didn't work out, and TripAdvisor — on the verge of running out of money — eventually decided to focus on its own Web site. The company now runs the most popular collection of travel sites on the Web, including Cruise Critic, Flipkey, Seatguru, and the anchor property, TripAdvisor.com, which attract more than 40 million visitors a month.
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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