Genesis Fireside Chat with Jared Simon

Published in

Genesis

7 min readDec 19, 2020

Jared Simon is the cofounder of HotelTonight (acq. by Airbnb for $400M+) and an entrepreneur, startup investor & advisor, and Longhorn (B.A., UT Austin ‘96).

He was Genesis’ latest (and first virtual) fireside chat guest on December 1st, 2020, in a series that has featured top inventors, investors, and creators like Bob Metcalfe (Ethernet), Joe Lonsdale (Palantir, 8VC), Scott Kupor (a16z), and Gordon Daugherty (Capital Factory).

Below are some of the notes from our chat with Jared. You can also watch the full fireside on YouTube:
https://www.youtube.com/watch?v=9bGmC4kspdM&feature=youtu.be.

Getting Started: College to Entrepreneurship

At UT, Jared was a Plan II undergrad concentrating in philosophy
Didn’t know what he field was into, but when he started interviewing for the best entry jobs out of college, investment banking sounded like a fun place to learn in — and he joined First Boston IB (later, Credit Suisse).
After some years in that, he realized he didn’t want to be in corporate finance and wanted something more hands-on, exciting, and entrepreneurial.
He then went to Kellogg for an MBA, knowing he wanted to be in early stage technology
Graduated in the ‘02 meltdown and dot com crash. At this point, it was not a good time to get a safe/well-paying/management job, so out of necessity, you had to be creative. In comes the startup world.
In Chicago, Orbitz was just getting started, and he was able to join the hotel business product team

Early Stage, TurnHere, Being a Founder

For Jared, working at Orbitz was a “victim of its own success” because in the journey from 100s to 1000s of employees/revenue/etc, his role dramatically changed.
Early stage is about the creative energy — taking big risks because all new, nothing to lose, and forging new paths. When scaled, the role becomes a lot more about tweaking/optimizing/operating, which is super important, but not the entrepreneurialism he was interested in.
Moved West to Silicon Valley to attempt this early stage ecosystem (didn’t exist in Chicago at the time)
Back then, high demand for rich video content, but hard to access without paying massive fees. Helped build TurnHere, a marketplace between video producers + manage production/streaming process and businesses seeking video content.
At this point, had worked on other people’s ideas enough. Serendipity + actively meeting with potential cofounders led to the idea for HotelTonight

Building HotelTonight

When do you realize you’re doing something right (idea wise)?
There’s no such thing as an instant success. There’s no possible way to test any idea without real customers using it for real. Everything is about willingness to pay, which is determined by 1 thing: customers paying.

Product-led vision from the start. Idea in September, hard target of shipping a full product in December. Lean building, no money, no fake traction → build an online travel agency in 3 months.
Hard deadlines weren’t just self imposed. Back then, even App Store approval process was indefinite + had to be before Christmas break
Right after launch, there was a lot of buzz in tech press + word of mouth, but no bookings. But, it was working — customer engagement increased and then eventually people grew comfortable enough to book.

Building Marketplaces

Treat both sides as valued customers in an industry where most booking sites were treating hotels (supply side) as being a necessary evil

HotelTonight did the opposite. Hotels were given zero-cost, zero-friction, all-upside opportunities, to the point of a partnership contract that was 1-page, 14-sentences (and great to market with)
Most chicken-egg problems have one side that’s also chicken food. It is weighed more and attracts the other just a little more. In the hotel industry, that’s by and large bookings (actual travelers/customers)
Uber was the most relevant mobile marketplace then, so the paradigm shift of using the Internet on mobile was still catching on. Being in SF enabled a lot of early iteration and insight on this trend which translated into avoiding costly mistakes in execution.

VC Funding, Dealing with Investors

Because of startup experience, Jared and HT team were able to have serious conversations from Day 1 with VCs, but they had the discipline to set their own milestones (product launch) before actually taking money.
In this new, mobile-only space, investors were clueless metric-wise. So, Jared shared their own internal metrics of what success looked like, and when traction started happening it was a no brainer to say “hey we blew by these success metrics from 6 months ago, fund us”
The venture capital model is exponential, needle in haystack returns, where founders feels tremendous growth pressure from investors. This isn’t always compatible with founder priorities of building an economic, sustainable business.

How to navigate VC/advisor relationships and these sometimes misaligned perspectives?

Instead of asking investors “here is my problem what should I do” his approach was “here’s how I’m solving this problem (I’ve already made some decisions), do you have feedback on how to make it better ?”

Management operates the company, investors are there to advise. Most investors will take the keys to the kingdom (of operation); that doesn’t mean founders should give them.

Scaling HotelTonight

The last thing people wanted was another online travel agency. The novelty was 1) Mobile, 2) Hotel Treatment, 3)People Culture.
In their first year, every major bookings company started entering the space. But, the Innovator’s Dilemma was real; their apps were made with more money and more engineers, but were miles below competing.
Product is everything.
The secret to culture is hiring… it snowballs into the right product, customer, market, etc.

How do you screen for these right people?

Some blanket rules worked, like refusing to hire people from any other travel agencies, because the HotelTonight approach was so different they knew it would be hard to retrain existing attitudes towards supply side (hotels).
At EOD, there’s only so much “culture” you can dictate from top down. Growing too fast and then retrofitting a culture never works — must prioritize while building/hiring.
For a long time, every hire had to be unanimous in both approval and excitement. Unheard of with high talent competition, but powerful.

What People Get Wrong About B2B

Don’t confuse the strategic needs of the business at a 30,000-foot view with what products the business will buy and operate and interact with

Resonate with the person actually doing the job you are trying to improve

There is a person who goes to work every day, hoping for something interesting enough that enables a fulfilled work experience and a good life. Are you making something that makes this a reality? Is your B2B service making their day better?

Getting Acquired

Both companies were built across the street from each other in the Bay. Conversations happened for a while, and at the time of acquisition it was a matter of good timing and alignment.
Not all M&A is immediate and strategic. It can be organic, and often that may lead to better M&A success anyways.

Looking Ahead

Joined Curai as President for the past year to do something with social impact value (a career of solving good business challenges, but hadn’t yet scratched itch with broader social impact).
Curai = stellar team and astounding product. If the biggest medical problem is not enough doctors, how can you turbocharge the existing ones?
Left recently because he wanted to contribute at an even earlier stage, still in social impact (and now healthcare, because of new domain experience). Stay tuned for Jared’s next venture.

On Entrepreneurship & Advice to Students

Wanting to start a company is a good thing, but only if it’s paired with the unique identification of a need that you believe you must solve. Not a good idea to do entrepreneurship for its own sake

Don’t be a solution looking for a problem

Get involved with the various options of work and startups to be able to evaluate them. Learning fundamentals of strategy (business school and cases and consulting) is valuable, but no substitute for real world operations.

Get in the trenches

Best thing is to offer your services, or honestly your cheap time/labor, to ideas and missions you think are interesting
Learn how to think critically, and then apply that lens inwards.

If someone asks about your career path, forget about all of that. Do what you are passionate about right now. And if one day you wake up and that has changed, or iterated slightly, keep adjusting what you’re doing along with it. If you keep piecing together passions, you will end up somewhere amazing.

Genesis is UT Austin’s startup fund, created to unlock entrepreneurship in our 50,000+ students and in Austin, Texas. We host events like this fireside chat with equally interesting leaders frequently. We also fund early-stage, student startups with a $1.8M fund and a joint student-alumni investment team.

Stay in touch on Twitter (@utgenesis), our website (genesisut.com), and our newsletter, and Hook ‘Em!