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STARTUP

The Not-So-Lean Web Start-up

It's five years old and just closed another round of funding for a total of $22 million. And it hasn't even launched yet.
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Hopper, a stealthy start-up that seeks to simplify travel planning, announced Wednesday that it raised $12 million in funding from OMERS Ventures, Brightspark Ventures, and Atlas Venture. This latest chunk brings total funding to $22 million.

That's hardly spare change, especially considering Hopper was founded in 2007 and hasn't even launched yet.

Wait, what?

Snubbing the Lean Start-up Approach

Hopper's expensive and lengthy runway to launching flies in the face of everything the lean start-up evangelists have been preaching to the start-up community. What about quickly bringing products to market while garnering important customer feedback? What happened to creating products customers love without huge amounts of funding or highly anticipated launches?

When Eric Ries, author of The Lean Startup, wrote a guest column for Inc. last year, he said entrepreneurs should build a minimum viable product to learn early on what customers want. A lo-fi product is an opportunity to learn what attributes they care about. And sometimes it's the lo-fi version of the product that they love, which means you wind up saving a lot of time and money not giving it the polish you thought it needed. "Imagine if Craig Newmark, in the early days of Craigslist, had refused to publish his humble e-mail newsletter because it lacked high design," Ries wrote, later honing in on the "lean" part of all this.

Clearly, Hopper is taking a different tack.

How Hopper Is Different

Not all Web start-up ideas are cheap and fast to build--nor should they be. In this case, Hopper claims it will transform the process of planning a trip by using big data and sophisticated algorithms to sift through travel information on the Web. Does that take five years and $22 million? That's a fair question, and one we won't know the answer to until Hopper actually launches.

Here's what CEO Frederic Lalonde, formerly a VP at Expedia, told TechCrunch about his company:

"When we started this, we didn't know we would become a 'big data' company. [T]hat word didn't even really exist. We were just coming at it from what we'd seen previously, which is that planning a trip--for all of the might of TripAdvisor, Expedia, and all these other travel companies--is tedious, frustrating, and it's actually pretty awful. The experience is broken, everything's fragmented, and you're jumping around from one website to another."

To fix that experience, Hopper has been aggregating travel data from around the Web. Check this: By the end of the year, it will have gathered more than a billion webpages that will play into its "structured catalog of everything that's not a flight or hotel."

It won't be a travel search engine but a discovery and recommendation engine, similar to how Pandora or Apple's Genius engine works but dealing with infinitely more data--such as anywhere anyone might want to go and the things they might do once they get there. Big data, indeed.

Travel Is Hot

One thing is certain, the timing is ripe for something new in travel, at least if Google's activity is any kind of foreshadowing. The advertising and search-engine giant has been on a buying spree in the travel space lately, picking up Zagat, ITA, and, just the other day, Frommer's.

As my colleague John McDermott points out in his story on Google's forays into travel, Internet market-research firm eMarketer predicts online travel sales will reach $119.2 billion this year, an 11% increase from 2011.

Certainly, once Hopper takes off its wraps late this year, plenty of people will be anxious to see if the long wait will have been worth it.

Last updated: Aug 16, 2012




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