SEAN: So talk a little bit about the backend. I mentioned today that you had this incredible hotel in Venice, another one in Mexico and the site looked amazing. You know, how do you guys go about finding these deals and what’s the process?

DREW: You know I think it has really to do with relationships and experience in the industry. I’ve been at this now for a decade. We have a team of folks who have similar backgrounds.  There’s a woman named [INAUDIBLE] that leads our team and she comes from Orbitz and before that National Leisure Group. We’ve got folks from AmEx, and Leading Hotels. So, yeah, it mostly turns on having been around the industry and having the taste and judgment and relationships to know where we want to focus. And, again, it speaks to the core of our model, which is about taste and judgment and editorial focus. And it requires some human who has experience, who has a perspective to put together those ideas.

SEAN: Yeah. So what’s, kind of, the end goal for JetSetter?

DREW: You know, at the moment we’re just focused on trying to keep up with growth, trying to see where this thing goes and just how big it can be.  It seems clear to me that consumers need help, especially around high-end vacations. Right? There’s an overwhelming amount of information. And service that has authority, that has taste, that has taste, that points then in the right direction, that’s willing to invest in their service, that stands behind the kinds of things that they sell, I think that puts us in a very different place than the vast majority of players in this category.  Expedia, Travelocity, Orbitz, all of them, Priceline, all have great businesses and [INAUDIBLE] but I think that when you think of the needs of the leisure consumer, particularly, the top-end, they’re not particularly well-served.  You know, if you look at all those sites, they all kind of look the same. It’s  a search forum, it’s if you’re looking for a flight, a hotel, a car, a cruise and tell me where and when you want to travel. And when it comes to vacation planning , vacation travel websites [INAUDIBLE] for most consumers.

SEAN: Does the high-end, typically, using a travel agent versus the mass market using the web.

[CROSSTALK]

DREW: I think there’s more presence of travel agents in our category than in other places.

SEAN: Yeah.

DREW: I think one of the realities is consumers between, call it 25 and 50 are just much more fluent, much more comfortable in an online environment than they would be , you know, looking for a travel agent  going inside and asking someone to look at a brochure [INAUDIBLE]  I think consumers [INAUDIBLE] think about decision-making and discovery and research.

SEAN: Yeah. So, JetSetter is a great name. Was it your first choice and was it hard to get?

DREW: You know, well once we hit upon it and found we could get the URL it fell on the right answer.  And [INAUDIBLE] brainstorm all the good ideas, and in this day and age getting url’s is always a challenge, but the stars kind of lined up.

SEAN: Who were the runners-up?

DREW: Uh, they were not as good as JetSetter.

SEAN: [laughs] Give us one, give us one good one…

DREW: Oh, God…

SEAN: What was the silliest one?

DREW: We played around with “Valise,” which is the French word for “luggage,” it had, sort of, a whole set of connotations that were unpleasant.

SEAN: Yeah, I had an online car site in 1999 and one of the names I came up with was “Sacarat,” which I don’t even know what it meant but somebody said, “It sounds like “Sack of Rats.” [laughs] I said, “Yeah, we’re going to check that one off.” [laughs] But it’s unusual to have such a great aspirational name…

DREW: Someone asked if Valise needed penicillin or something

SEAN: Oh, Geez… yeah that’s [INAUDIBLE]

DREW: I didn’t need it anymore anyway. [chuckles]

SEAN: So you have a team of, it looks like, 15 or 16 people already?

DREW: We’re up to 25.

SEAN: Wow! That’s incredible.  So you’re hiding a lot of them on your website. You only show selected people…[chuckles]

DREW: I think we’re focused on getting sales up. [INAUDIBLE]

SEAN: That’s great.  Are you sharing office space with Gilt.

DREW: Yep.

SEAN: Oh you are that’s great. So you’ve got another synergy-to-be [INAUDIBLE]

DREW: Exactly.

SEAN: And you guys are in Chelsea?

DREW: [INAUDIBLE] We’re at Park and 32nd now.

SEAN: Ok. You’re not far from… you’re a little above 14th street, the alley crossline. Right, you’re pretty close.

DREW: But it’s still walking distance [INAUDIBLE]

SEAN: Right. And you’ve got lots of great restaurants. And before at Kayak[.com] you were commuting to Connecticut.  Right? From Manhattan?

DREW: By that comparison, it’s the best.

SEAN: [laughs] Yeah. You don’t have to get on the train any more.  Just do the opposite commute, I think, of what most people normally do.

DREW: Yeah.

SEAN: So you got to stay in Manhattan, which is great.  So, looking out, you have a bunch of people watching this video who will want to come work for you, what kind of people in the next 12 months do you think you’ll need?

DREW: You know, I think the most important test is cultural fit. You know, people who are excited by and comfortable with a pretty entrepreneurial environment. I think we’re going to need some help in engineering, we’re going to need help in marketing, we’re going to need help in product development, [INAUDIBLE], but also the thing that’s most important to me is people who can get the team ethos and understand what we’re trying to get done and feel comfortable in that environment.

SEAN: Any sort of tips? Any big learnings, I guess? So it’s been about a year since you left Kayak[.com] and started developing this thing, right?

DREW: Mmm hmm.

SEAN: … and launched it? Any big learnings from being inside, you know, you worked in Kayak[.com] pretty early so you saw that ramp and that growth. Anything surprising  being in a different role?

DREW: Uh…

SEAN: …being in the lead role?

DREW: You always have new challenges in a new job. You know, I think It’s been gratifying, satisfying to be the CEO and, sort of,  try to point the organization in the right direction. Big surprises and learnings? Gosh.  I think the most rewarding piece is having a great team and enjoying the people you see every day. If you like being around them, you’re more likely to spend time with them, you’re more likely to be effective, you get better conversations, you get better answers.

SEAN: Have you had a really bad day in the last 12 months?

DREW: There have been some bad days.

SEAN: [chuckles] Anything you want to share?

DREW: No, probably not.

SEAN: [laughs] What was the best day in the last 12 months? Launching?

DREW: Launching, yeah, was a very good day. That was a very good day.

SEAN: How long were you developing before you launched?

DREW: Gosh. We, I mean,  I started working in April of last year. We did our first, kind of, alpha internal sales in August and then pushed it out at the end of October last year.

SEAN: That’s great. That’s fast. Agile development; you guys are doing, you know, sprints, sprints, sprints. That’s great.

DREW: Yeah [INAUDIBLE], the other piece is, you know, you don’t have to be right, you just have to be fast.

SEAN: [INADUIBLE] right?

DREW: Yep.

SEAN: So it’s great, thanks for coming. We’re excited to see the progress and it looks like you’re off to a really good start, being a nice addition to the New York Tech scene.

DREW: Hopefully we continue to grow [INAUDIBLE] and continue to flourish.

SEAN: Good. Thanks for coming.

[CROSSTALK]

SEAN: Cheers.

You can find part one of our interview here.

In Part 2 of 3, Drew talks about:
- the reinvention of ecommerce resulting from the explosion of new email commerce sites like Groupon, LivingSocial and Jetsetter.
- the synergies JetSetter is able to leverage from Gilt.com, from which JetSetter was spun.

SEAN: And I can’t help but think of Groupon, and obviously there’s some big differences, but how do you guys think about the sort of explosion, I guess, of those types that seem similar in a lot of ways.

DREW: I think at some high levels there are similarities, but I supposed the similarities are a part of this reinvention of e-commerce. And I think it’s interesting to look across the models and to see how people are thinking about e-commerce totally differently today than they have in the past, probably, decade. I don’t know that they’re all that similar. I think there are a lot of ways, there are a lot of critical ways in which what we do is different from what Groupon does, or what many of these kind of member-based triggered events. You know, I think, at least what we’ve tried to do is focus very specifically on the way consumers think about purchasing high-end, leisure vacations, and thought process, and the discovery process that goes on around that as opposed to something like Groupon which is, you know, in my estimation is very powerful for global services and things that are quite impulsive, but not necessarily well-suited to the category we play in.

SEAN: Sure, yeah. No, I was thinking more like the infrastructure of the model itself as opposed to the specifics. It’s like, you have, this small business that’s very local oriented, but this idea you have this one-day opportunity, you know, to act upon something. They, just almost like curate it, but to a less, much less extent. I agree.

DREW: Well, I mean, yeah, to that degree, to that extent I agree that there are similarities in that the idea of e-commerce players should be having a conversation with the consumer. That’s a different sort of frame of reference when people are thinking about e-commerce than, you know, Ebay, you know, Orbitz, Expedia, on down the line.  I mean, these sort of traditional e-commerce players, I think, didn’t really view themselves in dialogue, or having some kind of ongoing relationship with consumers.  It was much more purely transactional. I think, as you say, Groupon, JetSetter, Gilt, on down the line are much more about the relationship that they have with their members.

SEAN: Yeah. So, between, you know, besides the basic model being very similar and a spin-off from Gilt, what other synergies are you able to leverage? Are you able to float that user base in automatic?

DREW: You know, we will market some of our offers to the Gilt membership base so that’s one of the ways that they’ve helped us [coughs] excuse me… build an audience and gain scale pretty quickly.

SEAN: Yeah. So is the other main way from, sort of,  your background being…you were head of internet marketing at Kayak[.com], right? So it was all more about going out to the web and, you know, the search engines is that sort of, kind of, how you see finding people that you’re looking for? Is that what you have been doing?

DREW: I think we play a little bit of a different game, you know. In some of the same ways things like Kayak are very mass market and they’re very focused around, sort of, to find any customer at the right price. You know for us the audience that we’re going after is critically important. And one of the nice things about, sort of, the social aspects of our business is that you keep getting… the social graph, in a sense, ensures that you get customers that are like one another. Like, when I invite you I’m much more likely to get people who are like you. So we start from the same core audience of sophisticated, affluent, interesting consumer base.

SEAN: I see, I’m sure you guys see things like FaceBook as just another to… I’m sure somebody’s booking a great vacation on it to Venice, Italy, which was one of the sales today, and puts it on their FaceBook account. I’m sure all their friends are going, “Oh. That sounds really interesting.”

DREW: Yeah, absolutely. I think it’s interesting we’ve gotten really great dialogue on our FaceBook page where members are writing in with questions or asking for more information or suggesting things we might want to think about. So it’s become a pretty vibrant community, and I think there’s a way in which what we do is a very social experience and as you say, I invited many of my friends to become members and I say I want to hear where they’re going and share what I’m doing with them.

SEAN: So if you think about, I don’t know, now as compared to two to three years from now, what would your top three sources of users? Would it be referrals, social networks, and something else?

DREW: You know, one of the other things we’ve done is put together some partnerships that have been pretty powerful.  We have a relationship with Conde Nast Traveler, for example, where their publisher has put together some of the sales and one of the ideas that we had is we curate the sales. We, you know, introduce the travelers to things that might be interesting. They have contacted us about curating some of our sales and also introducing their readership to what we’re doing.  So partnerships like that where we’ve got strong, great affinity, where the voice and interests match up well is a good way for us to expand our audience.

You can find the transcript for the interview below the video:

In part of 1 of our interview, Drew talks about:

• where the idea for JetSetter came from
• how JetSetter is different from Priceline, TripAdvisor and Kayak.com, where Drew headed up online marketing for a number of years

Transcription:

SEAN: So we’re here with Drew Patterson, founder and CEO of JetSetter. So, Drew, thanks for coming.

DREW: Thanks for having me.

SEAN: So tell us a little bit about you and your background and, you know, how JetSetter came to be.

DREW: Sure, I created JetSetter having spent five years at Kayak.com, and before that spent a bit of time at Starwood Hotels. That kind of company is really born out of the success of the Gilt Groupe. Gilt, sort of, taking off last year and it was clear that this kind of ecommerce model had something to it and it’s particularly interesting for discretionary lifestyle businesses where taste and fashion sensibility is critical to the consumer.  And travel seemed like an extension consumer on Gilt by be interested in travel.

SEAN: And for someone who doesn’t know what Gilt is, it’s flash sales for consumer brands. Is that a good way to put it?

DREW: I would, uh, luxury brands…

SEAN: Luxury brands…

DREW: …better…

SEAN: …luxury brands, better than flashy brands. Consumer …

DREW: It’s not a NASCAR race.

SEAN: So what Gilt is.. you’re a member, after you’re a member you get an email everyday and it’s a limit to the things you’ll get an opportunity to purchase.. luxury brands for a period of time and in inventory, I guess.

DREW: Yeah, that’s right. The channel as a whole is a great marketing resource, that’s why they positioned it that way. It’s a way for consumers to discover or get access to things that they otherwise wouldn’t see.

SEAN: Yeah.

DREW: So in our case, we’ll have a mid-number of sales, typically 10-15 every week and we’ll have a finite amount of inventory. So off-road channels where you have practically unlimited access to whatever the products happen to be. We’ve got a finite amount of rooms, we’ve got a finite number of hotels that we’re selling or travel experiences that we’re selling.  The mass consumer you’re constantly exposed to new things. We spend a fair amount of time and energy and money in telling stories and helping to explain the uniqueness [INAUDIBLE] value for consumers is the discovering new things.  Of course there’s the ability to get access these things at prices that otherwise wouldn’t be available.

SEAN: Since, again, you were at Kayak for a really long time, I imagine you saw all kinds of really interesting travel opportunities, which, you know, it’s very perishable right.. so if a room doesn’t get filled that’s it, it’s off the market. I imagine there’s a lot of hunger on the other side for the luxury  travel market to fill these rooms. How about first class, you know, airlines? Does it work as well?

DREW: Definitely something we’ve looked at. You know air has its own complexities — totally different than other forms of travel. I think there’s two ways to look at the business that we’ve put together. One is, of course, you know we help suppliers liquidate inventory. Like, these homes are distressed that otherwise wouldn’t get sold. I think the second, more interesting way to think about what we’re doing is really the marketing channel. It helps in customer acquisition. You think about Priceline, for example. It’s a distribution channel.  Right?  And it’s a way for its top suppliers to get access to a different slice of the demand curve that they otherwise wouldn’t see. You can segment out the highly price-elastic customer who otherwise didn’t exist. What we’re doing, I think, is very different. What we’re doing is we’re introducing suppliers, and more than that, consumers to an experience that they haven’t, previously, seen before.  And so, we have heavily editorialized emails, we have very rich, photographic display. You know, spent a lot of money on primary research and making sure that we’re telling consumers a sort of true-to- life story and sort of helping them appreciate, whether it’s insider knowledge, or access, or experiences that they wouldn’t have otherwise seen.

SEAN: I think I like the way you said it. The contrast between Kayak which is, you know, breadth. You want to be able to discover everything in one place rather than look for it. JetSetter is contrasting in that you’re selective; hand-picking the partners with whom you want to create these opportunities. Right?

DREW: Yeah, absolutely. I think editorial or curatorial (that seems to be a word in favor these days) is a part of a lot of these new models. You know, and I think, what you’ve seen is, on the one hand, there’s so much information out there — Google, Kayak, TripAdvisor, Trulia, and a range of very powerful search engines that are premised on the idea that consumers know what they want and put together queries that help them discover that information.  And then you go to the other end of the spectrum – which is where we fall – is for certain kinds of lifestyle categories. What consumers want is a guide that also discovers things that are important, things that are new, things that they’re going to care about. In a sense, breaking the news in that category. I think as you look across categories, you’ll see JetSetter’s certainly in the travel space. You’ll also see things like Thrillist, UrbanDaddy, DailyCandy, TastingTable.  A range of these kinds of newsletters…DailyBeast, HuffingtonPost.. all sort of focused on giving you a very narrow set of things. A “short list,” in fact, that matters in that area.

Don’t miss part part 2, where Drew talks about

• the explosion of new email commerce sites like Groupon and how JetSetter is different
• what synergies JetSetter is able to leverage from Gilt.com, from which JetSetter was spun.