When Tripping.com’s customer base wasn’t interested in buying what it planned to sell, the company had to find a new model — and let go of the past.
5 min read
Updated with podcast file on Feb. 19, 2018.
Introducing our new podcast, Problem Solvers with Jason Feifer, which features business owners and CEOs who went through a crippling business problem and came out the other side happy, wealthy, and growing. Feifer, Entrepreneur’s editor in chief, spotlights these stories so other business can avoid the same hardships. Listen below or click here to read more shownotes.
Ever visit a foreign city and wish you could hang with a local — someone to give you insider tips on the community and culture? Jen O’Neal and Jeff Manheimer were betting on it. “We wanted to build a social travel site, a place for cultural exchange,” says O’Neal. “If you’re in Paris or Prague or Shanghai, we’ll help you meet a local for a beer.”
Related: Need a Business Idea? Here are 55
They called the new social network Tripping.com and launched it at TechCrunch Disrupt in 2010. A month later, they had members in 150 countries. Joining was free; the company planned to make money as an affiliate for big travel sites — when a member booked flights, hotel rooms or rental cars, Tripping.com would get a cut. But that didn’t happen; there was no interest in booking flights, hotel rooms or rental cars.
The duo had stumbled upon a common business problem: Sometimes an idea is popular but just not monetizable. “We looked at our user base and realized that most of them were in their early 20s,” O’Neal says. “A lot were still students, with very small budgets. And they just weren’t in a place to buy. We couldn’t monetize our base.” In this situation, a company has two options. It can change its business model or switch businesses entirely.
To find a solution, O’Neal decided to host a team retreat. “We figured we’d spend a few days at Lake Tahoe, drink some beers and brainstorm.” Easier said than done. “We started looking at rental properties, and it was an insanely complicated process,” O’Neal says. Back in 2011, rentals couldn’t be booked online with a credit card; they instead involved countless emails and phone calls with the property owner, and a deposit via cash or check. “We also noticed the same properties on different rental sites at different prices. It was a hassle.”
They never did find a place to stay. Instead, they ended up in tents in Big Sur — and as they sat around the campfire complaining about the lack of fluffy beds and cozy linens, they stumbled upon their answer: Fix the vacation rental market. “This was a huge, global problem,” O’Neal says. “If we could aggregate all the rentals around the world onto a single platform, we’d really have something. We’ll show you every rental in Bali and when you find a place that you love, show you that it’s available on three different sites at three different prices, and you can book the cheapest one.”
They got to work building a metasearch engine (which required a new engineering team) and started convincing travel sites like HomeAway and TripAdvisor to sign on and share their listings. Meanwhile, they kept the social network they’d built alive. “We just weren’t ready to let go,” O’Neal says. But as the company invested more in its new direction, confusion reigned on the site. Old members had no use for the search engine, and potential search customers were turned off by the social network. It was time for a painful decision: The community was put to rest in 2012.
Soon the rental business took off. Tripping.com grew rapidly, signing on listing partners across the world as the $ 100 billion vacation-rentals market became one of the fastest-growing segments in travel. In 2016 alone, Tripping.com did $ 500 million in bookings.
And those early social network users that O’Neal and Manheimer so hated parting ways with? A few years later, they found their way back. “They now had jobs, were married, were trying to have kids,” O’Neal says. “They were in a place, financially, to utilize our service. And they finally became our customers.”
To hear more about the Tripping.com journey, tune into our latest episode of Problem Solvers.
Thanks to our sponsor:
Want to hear more great stories from entrepreneurs, founders, and creative thinkers? Check out the Proposify Biz Chat, hosted by Kyle Racki, co-founder and CEO of Proposify, the business proposal software platform that helps you close more deals, faster. Each week on the Proposify Biz Chat, Kyle interviews other business adventurers about how they’re switching things up, figuring things out, and making their businesses grow. You’ll learn about sales, marketing, growth, operations, entrepreneurship, innovation, and technology and you’ll get to know the people making things happen.