Uptake CEO Yen Lee talks revenue plans, expansion plans and lessons learnt

Am on an interview roll here at BOOT HQ. To keep things going I thought it was time to catch up with Uptake CEO Yen Lee. Initially launched as Kango in 2007 with backing from Shasta Ventures Uptake is building a review meta-search business. They have a series of algorithms and search methodologies for collecting and analysing huge numbers of reviews for hotels and destinations (currently US only). They hit the news again in September last year having secured another round from Shasta just moments before the GFC entered our acronym dictionaries.

A year after the new round and four months after Kayak announced the expansion of Travelpost into review meta-search I wanted to find out from Yen how the company was going and what he thought about the market. Here is some of our exchange

BOOT: How is the business tracking?

Yen - four big milestones from the last twelve months:

1. 5,000 sites in the index;
2. Technology is working;
3. Raised the second round; and
4. Hit a million uniques in traffic.
   

BOOT: With 5,000 sites in the index and a significant traffic base is the focus now onto revenue, is the product ready?

Yen - want to increase the number of sites searched by 100-200 times. Beyond dramatically expanding the size of the index also want the display to be better customised based on consumer preferences.

Any other expansion plans? What about using ad networks to sell CPM campaigns for revenue raising

Yen - we are happy for now with the CPA model from click referral. Not under pressure to turn to ad networks and CPM. Areexploring expansion possibilities outside of English language but in no rush. Also to expand the product into destinations. Believes long term there is more money in destination activities than hotels. There is a third expansion plan but Yen would not share what is was.

BOOT: Has Kayak's Travelpost revamp left you worried? How about TripAdvisor?

Yen - would be flattering to think we are on radar of either of these companies [as a competitor]. Is convinced there is space for Uptake to take on both of them.

BOOT: Any worries about the fall in online advertising spend?

Yen - not really as not very close to it. Focused on CPA and lead generation revenue. While banner/brand spend is soft, performance based advertising continues to be very strong. Expects growth in CPA to be stronger than PPC as traffic is even more qualified than paid search.

BOOT: Now that you are through your early stages as a start-up what things have you learnt about launching a company and growing a business?

Yen - couple of things

1. There were some early staff members better suited to building prototypes and early products than for scaling the business. Learnt that it was OK to move people around and shed some people and move on;

2. Cash is king -"don't worry about dilution" and "if you have a choice don't spend a dollar"; and

3. Should have been more aggressive with the consumer experience part of the product. Were very aggressive on the search index and algorithms. Should have displayed the same aggression in building consumer experience and gotten to it three months earlier.

My Take on Uptake

I am not sure what it is about my most recent round of interviews with travel search and discovery sites. Like the others before him in this series Yen is sounding very confident and very relaxed. No furrowed brows and tough talk filled with reality checks and challenging growth plans. He has a comfort brought on from money in the bank and limited revenue pressure (or "lots of runway" as they say in the best Valley coffee houses). My guess is Uptake is actually more concerned about the Kayak move into review meta-search than they are letting on but Yen does have a product that is not only a year a ahead of Travelpost in functionality but most importantly a year ahead in terms of Google indexing. The meta-search model in reviews is not yet proven but the revenue model behind sending qualified leads to hotel companies and intermediaries is proven.

What do you think - is review meta-search a viable business? Can Uptake fight off product launches and marketing pushes from Kayak and TripAdvisor?

Kayak to take on UpTake (or is it the other way round)

Quick post, as I am running around today

Meta-search behemoth Kayak.com (poised to hit a billion searches in Q1 09) has announced that it is adding hotel review meta-search to its engine (care of HotelMarketing). Two interesting points caught my mind here:

1. Uptake.com (nee Kango) came to this model first and has raised money and profile to go after it. But Kayak clearly has traffic to burn; and

2. I interviewed Kayak's VP Communications Kellie Pelletier back in Jan last year after thier acqusition of Sidestep. At the time Sidestep had a lot of content assets (such as the now dead TripUp). Kellie made it clear to me that Kayak was not looking to pursue a content based strategy - rather would rely on their engineering lead to beat the OTAs and "regular" search companies. I am trying to decide if this move into meta-searching content is a change in strategy or not. On the one hand it is embracing content but on the other it is using engineering to collate and organise someone else's existing content.

Need to think about his more but Uptake - watch you back!

Uptake nee Kango raises series A of $3.95 led by Shasta Ventures

Quick news thanks to alarm:clock that review meta-search site UpTake (previously Kango) has closed a series A fund raising round of $3.95mm lead by Shasta Ventures. The number of destinations covered by UpTake is expanding fast and presumably the cash will accelerate this. More on them here and an interview with CEO Yen Lee here.

Kango becomse UpTake, Vailoma becomes TripSay - seems it is easier to buid a product that get a good URL these days

A new start up pattern is emerging overnight in the content space. First you form a team, then you get a little funding, put out a beta site and generate some buzz. Then, naturally, you change your name. Within days of each other we had news that community and guide content player Vailoma is now called TripSay (announcement) and content/review aggregaor Kango is now called UpTake (announcement). Could be a strong sign that finding a good URL and a name that means anything is now near impossible. That it is faster to get the product out than it is to secure the rights to or think up a decent URL. In Kango's case it is also because of the confusion they were experiencing with auction ad meta-tool Kaango.

A did a little piece here that involved these two players if you want some more background.

Content, content everywhere but who is getting the traffic

Content, content, content. Everywhere we look there is content. Back in August I posted that the next phase of online travel will involve consumers being bombarded with "too much information". Having mastered the art of booking travel online, consumers now found themselves overwhelmed with choice and information - looking for help. Recently I co-blog-erated with Alex Bainbridge on some rules for success for start-up content companies. With this background I was looking through my inbox at all of the different types of content companies that were writing to me. I found a spectrum of approaches to capturing long tail traffic with review and content sites.



Kango is targeting the tail through meta-search for review content. As per my Interview with founder Yen Lee here Kango have built a review meta-search business. Modifying business models of the meta-search booking sites like the combined Kayak/Sidestep, Kango has built an aggregation engine for reviews from a multitude of sites. It takes time to put together (hence the beta is only on two destinations - California and Hawaii) but Yen has been able to raise a lot of money and is working on balance between building search architecture and attracting content. UPDATE - Kango now called UpTake.


While Kango is looking to index content on a grand scale, I am constantly coming across or being approached by deeply targeted local content players. 71 miles covers weekend trips in a small part of Northern California. Volcanoetna.com covers - as the name implies - tours and travels around Sicily's famous Volcano Etna. While covering completely different parts of the world and travel experiences, Adam Rugel's 71 miles and Enrico Forte's Volcanoetna are at the longest point of the long tail - focused on detailed and informed content in a very specific location. The pluses for them is that the long tail loves targeted and specific. Nothing brings long tail traffic better than detailed, focused and informed content. The problem is scale - a highly targeted site can become the number one place for a specific piece of long tail traffic but you still need a minimum of traffic to generate advertiser interest. Rugel of 71miles admitted to me that traffic was not a problem but monetisation was proving difficult. Local advertisers who should have been interested didn't get it (online that is) and are spending their money in the local newspaper instead (my theory). Better to be part of a network - Rugel said.

So targeted brings the traffic but not the money. Want proof? Four years and GBP7.4 million pounds later and VisitScotland has shut its doors. Hotelmarketing.com has the story - but the short version is not enough traffic to justify and not able to monetise.



This is where Gawker Media's Gridskipper has an advantage of the hyper long tail sites. It has been around long enough and writes on enough material that it generates the long tail traffic. At the same time it has the network effect of the Gawker family (including Gizmodo, Lifehacker, Consumerist and the NSFW Fleshbot). UPDATE - Gridskipper no longer owned by Gawker.


Video is also playing a role in this race for content. Geobeats are trying to build a business around user gen travel videos. Players are racing into this space as well - driven by the phenomenon of youtube. Pixsy is in this space too (including a relationship with Lastminute). Both are following Travelistic (who I first covered here) who (as far as I know, tried to do it first). The advantage of video in this race is that video generates a greater engagement than a text site. They may generate less page views than text but good video sites keep people on the site longer and interested longer - all elements that advertisers love. As GigOM said "Page Views are dead, Engagement named as Heir".

The final style of player is the now ubiquitous social media, social networking and user generated player. There are a lot to chose from here in this post:

• Where Are You Now (WAYN) - the well funded (but not owned by AOL) travel social network. Millions of travellers talking to each other - telling people where they are, what they are doing and what they want to do. An advertisers paradise;
• Guidespot - targeting DIY local guides. Contributors generate traffic and "kudos" (maybe one day revenue sharing) from producing and publishing their own destination guides;
• Localguides.com (profiled here);
  
• The Sidestep (now Kayak) owned Travelpost - specialists in hotel review infrastructure and traffic. Sidestep bought it and Kayak doent seem to want it but the traffic is flowing; and
  
• Travelpod - started travel specific blogging and had the hottest Facebook widget (Traveller IQ test) for some time. Again - plenty of traffic off the back of a flood of interactive and interested consumers. Now part of the ever expanding TripAdvisor family.

New players are rushing into this space:

• Vailoma - still in beta- trying to build a community around content and guides UPDATE - Vailoma now called TripSay;
• SimpatiGo - leading with the "classic" map mashup around activity. Trying to drive search and "engagement" through map and neighbourhood based information and search.
  

As I said in one of my early posts - the difference between a online content company vs a retailer is that it is significantly easier to launch a content company (no need to build extensive supplier relationships) but it is harder to achieve and maintain scale. This means that content companies have to innovate sooner, faster and more often to keep the traffic flowing. So after an analysis of a dozen companies I feel even more certain that my four rules of success apply.

1. Content - lots of it
2. Index - a fantastic Google friendly index and expertise in search optimisation
3. Access methods - varying ways and means for consumers to access the content
4. Patience - time (and money) to wait for the traffic to build.

What do you think? Who have I missed?

501 not out

Time has passed and the posts keep flowing. Time for my "not out series" - a regular summary of the last 100 posts that I first started with 101 not out and continued with 201 , 301
and 401.

Just like the 401 update it has been deals, deals, deals that has dominated the last 100 BOOT rants:

• Wotif evenutally managed to by Travel.com.au/Lastminute.com.au despite a fight from Webjet and a cunning move from AOT. Followed up almost immediately buying Asia Web Direct;
• TripAdvisor launched a new version and continued its targeted site buying spree with HolidayWatchdog;
• TravelCLICK was sold to Genstar and the BOOT called it first;
• The Asian acquisition bonanza continued as Priceline returned to the market though an acquisition of Agoda, ;
• Sidestep disappeared in a flood of newly raised Kayak cash; and
  
• Venere bought Worldby.
  

Cash flowed into online travel:

• Fastbooking took Euro35mm;
  
• Worktopia grabbed $5mm;
  
• Bezurk got "an undisclosed sum" from News;
  

I spent some interesting times on the phone doing start up interviews with:

• Yen Lee of Kango;
  
• Gregg Brockway of TripIt;
  
• Martin Symes of Bezurk; and
• Kellie Pelletier of Kayak.

In the weird world of quirky news:

• bags fell from the sky;
  
• The president of Sri Lanka got bumped and was not happy about it;
  
• Man fired dog and bragged about it; and
  
• nobody, I repeat nobody is doing anything naughty naughty in the new Singapore Airlines double bed suites.

Oh and Qantas turned from being the flying Kangaroo to the thieving Rat.

But I saved my most angriest post for number 400 - the last in this seasons. When the new Australian government said they were doing me a favour by continuing to allow Qantas to over charge me on flights to America.

If you're still reading then I'm still writing.

Kango Sessions: Interview with with Kango CEO Yen Lee

Back in September I reported on the rumours of Kango having raised money to set up a company to "help family's plan travel through organisation tools, reviews and editorial content". Just before the end of the year we received confirmation that Kango had in fact raised a very respectable $4mm in series A funding from the web 2.0 loving Shasta Ventures (also backers of Techcrunch40 winner Mint, Turn and Flock).

We also saw the beta for Kango and found out it is meta-search product but from a different angle from what we have seen. In the past we had two types of meta-search:

1. the free form search players such as the now combined Kayak/Sidestep where the interface looked like an online travel agent but with the back end fulfilled through aggregated search; and
   
2. the advertising/deal hunter driven model such as Travelzoo and Cheapflights.
   

Kango's angle is to be the aggregator of content, reviews and travel information - not deals. Destination, hotel or activity searches on Kango produce a result that takes all of the unstructured data out there from web based sources (TripAdvisor, Travelpost, Expedia, Orbitz, Travelocity, etc) and combines it into a structure data result. In other words aiming to be a contextual summary of all of the editorial and user generated content relating to a travel term. Is a dramatic contrast to the manual page build approach of the high profile Mahalo.

I had a chance just before the end of 2007 to talk with Kango President and Founder Yen Lee about Kango, meta-search, raising money in online travel and how to deal with "too much information". Here are some of the themes and ideas from that conversation.

How did you come up with the idea?

Yen and his co-founders are search junkies. They love search, need search, trust search. Yen told me that the idea for Kango came from a desire to develop a targeted search product for a sector with lots of unstructured data, a sectoral ontology, vertical structural options and a need for subjectivity (ie editorial contribution). That is a sector with too much information - hence they naturally ended up in the travel sector.

What is the background of you and your founders?

Alongside Yen (ex-Yahoo), the other founders are Elliot Ng (ex-Necentives) and Gene McKenna (ex-Acxiom Digital and Bluedot Software). Experience in search, customer loyalty and product. More on the founders here.

How hard was the product to build? How much human intervention is needed to make the unstructured data structured?

The content is accessed through the same methodologies as general search - crawling sites and normalising/structuring the data. At the content access and search level they operate just like the traditional search market. It is at the display and refinement level that Yen claims Kango is different. Instead of relevance (and therefore ranking) being based on inbound links it comes from a number of weighted dimensions based on the link between keywords. For example "spa", "private", "hideaway" in hotel reviews are linked to searches for "Romantic". Similarly "kids club" etc is linked to "Family Friendly". The relevance and ranking comes from the quality of this semantic analysis, not inbound links.

Needs editorial input to provide the knowledge that links search terms to themes, destinations and activities. All about going after what Yen put as 10 billion travel related searches a year.

How hard was it to raise money? How are you going to make money?

Yen made the raising of $4mm sound easy. Says they were able to raise the money before they had a product - that is based on the team and idea only. This is an uncommon story in travel 2.0. As to making money - Yen and his team are hoping that by giving an meta-index to travel content will give Kango ownership of the long tail of travel search. From this the cash will flow from travel advertisers.

What do I think

Talking to Yen was like lifting the bonnet on a search engine and looking under the hood, seeing how the words, algorithms, spiders and links combine to generate the answers that Google and Yahoo churn out. The search knowledge of the Kango team is clear. Also the product looks good. Search and search refinement are easy - modelled more like an OTA than a search engine. The big challenge is that to build on the travel ontology and develop the semantics takes time and manual energy. This why the beta is limited to only two destinations. This is why they need a round of $4mm to fund the building of more destinations and product lines. This is a case where if they can get the product out right, the traffic will flow (easy) and the money will follow the traffic (even easier). Very impressive stuff.

Group/Travel organision sites on a (cash) roll: Dopplr

The money and VC interest in group and travel organisational tools is rolling in faster than I can type. We have touched recently on the latest for Groople, a round for Kango, Ex-Expedia staff pouring into TripHub and early on an interview with Travelgator. That latest to join this trend is the Helsinki based Dopplr who announced on their blog an angle round of funding from Martin Varsavsky (who also backed Ya.com including viajar.com), Joichi Ito (serial entrepreneur who's investments include Technorati and Last.fm), Reid Hoffman (the father or linkedin) and The Accelerator Group led by Saul Klein (former Skype senior exec).

Again we have a deep in private beta site so cannot tell you what they do but the description follows this trend we have been tracking around group travel and online organisational tools.

"Dopplr lets you, via an invitation system, share your future travel plans with a group of trusted fellow travellers whom you have chosen. It also reminds you of friends and colleagues who live in the cities you’re planning to visit. For example, Dopplr might tell you that three of your trusted friends and colleagues will be in Barcelona when you are there next."

Founding staff are Lisa Sounio, CEO; Matt Biddulph, CTO Matt Jones, design director; and Dan Gillmor, "founding traveller" (not sure what that means).

Not sure how to put my head around this trend yet. The growth of enhanced organisational and collaboration tools fit with my theory that we are moving into a period of online travel where consumers are confronted with too much information and need ways to digest, understand, share and manage it all. But I had anticipated that this collaboration would initially come out of the large scale social networks (MySpace, Facebook, Bebo etc) or out of tools from the large OTAs, not niche product specific providers because travel organisation would form part of a consumers general online social interaction or online travel purchasing behaviour. Now I begin to wonder if we are moving to world where these niche providers can either stand on their own or connect to social networks as applications or connect to the OTAs through distribution deals. A lot more to think about and track in this area. Would be interested in your thoughts.

Thanks to the new UK version of paidContenthere I first saw this story.

UPDATE - TechCrunch are also carrying the story and provide a screen shot of someone's page on the private beta and a link to an InviteShare page with (maybe) some invitations to the Dopplr private beta (login required).

UPDATE 2 - alarm:clock have brief little piece called TripLife vs. Dopplr vs. TripUp

And I thought group travel was a niche...

Alarm:clock is rumour spreading that stealth mode start up Kango has raised some money from venture firm NG Ventures (ie angle Elliott Ng). What caught my eye in this deal is that it builds on the story that is forming around niche/sector focus businesses and online group travel. Kango's pitch is to help family's plan travel through organisation tools, reviews and editorial content. Site is "almost alpha" (which means somewhere between static web pages and private beta) so impossible to judge but am now officially keeping a watch on co-ordination tool sites and see if they go on to prove my theory that we are entering into a phase of industry development where consumers need help dealing with "too much information".