What makes Cheapflights tick?

February 12, 2007

0Coincidentally a few days after I posted about the new investment body Howzat Media, I happened to hear David Soskin, CEO of Cheapflights, talking at the recent AlwaysOn media conference in New York via a webcast.

According to the Cheapflights About page information:

Cheapflights is a travel price comparison website. Well, if we were in a bragging mood, we’d tell you we are the country’s leading travel price comparison website (and give you the stats to back it up). But, we’re a nice bunch of people and we don’t want to brag, we just want to help you find the best and cheapest flight we possibly can.

So what does David Soskin believe has made Cheapflights and its advertising policies successful? Here is the essence of his talk:

  • “We have been an innovator in the sector since 1996”
  • “Our market share has been booming in the US and doubled our share in a year”
  • “Our model is quite similar to TRAVELZOO except we focus on flights, whereas TRAVELZOO covers everything.”
  • “Search for the travel industry is very important because of its inherent long tail [lots of individuals who want to book flights I assume cg] – there is more to the travel industry than just Expedia.”
  • “Google is very much the market leader for providing leads to airlines, but there is a growing segment called vertical search. Do people come to vertical search? Yes, because for many people it provides a more satisfying user experience.”
  • “If you want to find a great deal from Boston to Los Angeles and you want to find a great price, Google doesn’t help you. You need to come to a site such as Cheapflights where we have selected the best flight operators and, using our own algorithms, sorted out the very best prices for a whole range of different dates.”
  • “The advertisers on vertical sites are gaining much exposure to would-be customers who are so much closer to a purchasing decision than those who come from a Google search. That’s the motivation for advertisers to appear on vertical sites.”
  • “Why are metrics and analysis important? Because there is a very long tail in travel. We display 200,000 city pairs, 800,000 flight offers daily and we have over 80 travel advertisers on our site.”
  • “We are the innovator in the sector, we invented the model in 1996 and introduced pay-to-click in the UK in 2000. We opened bidding for premium positions in 2002 and in 2003 launched the first multi-booking solution. In 2006 we debuted the Cheapflights partner portal where analytics are so very important. We have developed the first place on the Internet where travel operators could analyse the clicks they were getting on any particular route. They can see in real time where they are getting their clicks and adjust their advertising spend and prices they send us accordingly. So it’s a very powerful tool for the huge US travel business to market on-line.”

David finished with a touch of philosophy:

“Finally, we at Cheapflights follow the philosophy of possibly the richest man in the world, the founder of Ikea, Ingvar Kamprad. He says ‘Only while sleeping one makes no mistakes, the fear of making mistakes is the root of bureaucracy and the enemy of evolution.’ We constantly trial new things, some work some don’t, but we keep trying.”

 

Advertisements

Name that start-up – simple?

February 6, 2007

Back in December 2004, there was article in the US magazine Business 2.0 entitled The New Science of Naming. This excellent article talked about the history of the ways companies chose their company’s name and the current fashions that determined their approach.

The link above points to the text, but the most interesting part were the four graphics reproduced here on the left. (I hope I do not get into trouble reproducing them here but in amelioration, Business 2.0 really is an excellent magazine!)

In the early days of mass production, eponyms – companies or products named after the people who created them – used the comforting familiarity of personal names to evoke traditional ideals of quality and craftsmanship.
Industrial firms with long, descriptive names gradually embraced the shorthand acronyms used by customers and employees alike. Like New York Stock Exchange ticker symbols, these two- and three-letter names made companies seem larger than life.
Company names became abstract as the computer age got under way. Names often sought to imply high-tech precision, encouraging customers and investors to em­brace the future. Seldom-used let­ters like ‘X’ were believed to have extra potency.
Hooked on the idea of synergy,companies adopted meaning­less umbrella names that could accommodate expansion into multiple lines of business. Dur­ing the dotcom boom, the rush for online addresses pushed this logic to absurd extremes.

Following my earlier post, The Art of the Start by Guy Kawasaki that talks about company names, it’s interesting to ponder about what the appropriate strategy for naming companies should be in 2007. If you look through TechCrunch’s list of Web 2.0 company names, there are some really unmemorable ones! To quote the article:

Today’s style is to build corporate identity around words that have real meaning. Aucent’s transition to Rivet is a typical effort to eliminate the obfuscation of the Internet era; the preference now is to name things in the spirit of what they actually are. The new names are all about purity, clarity, and organicism. Rivet helps companies tag financial data, for example, so the name functions as an effective metaphor for what the firm actually does. Similarly, Silk (soy milk), Method (home products), Blackboard (school software), and Smartwater (beverages) are new names that are simple and make intuitive sense.

“There’s a trend toward meaning in words. When it comes down to evocative words va straightforward names, straightforward will win in testing every time,” says Jeff Lapatine, group director of naming and brand architecture at New York branding firm Siegel & Gale. That hardly comes as a surprise, of course. But why has it taken so long for this idea to catch on?

Here are a few things that come to my mind:

  • The name should be a domain name. This is very challenging as it seems to me that you can string any three words together and the name is already taken. Also, choosing a ‘simple’ name will enevitably cause problems when trying to find an untaken domain name.
  • The name should be a ‘xxx.com’ NOT a ‘xxx.net’ where ‘xxx.com’ is another company! This happens so often when a name is chosen first then someone decides to use WHOIS.
  • It should associated with what the company actually does i.e. the company does as it ‘says on the can’.
  • The name xxx should be spellable. If you can’t spell it intuitively then no one will be able to enter the URL into a browser.
  • The name should be pronouncable. If the name does not have a unique pronounciation, then everyone will say the name differently e.g. do you say Skype with a silent ‘e’ or do you say Skypeeee with the ‘e’ pronounced? It’s very confusing.
  • As Guy Kawasaki commented, if it can be used as a verb, or in a sentence that would be good.
  • If the name can also contains a call to action such as “You can ContactMeAnywhere at any time!” (They probably don’t say this – or do they?) so much the better.
  • Don’t use hyphenation to get round taken domain names.
  • Don’t choose a temporary name that you plan to change later – that’s just a cop out and will put in jeapardy all the early launch publicity you might receive.

I reckon that chosing a company name is one of the most difficult tasks facing a new company and the effort and arguments that can ensue during the process are to be seen to be believed.

Oh and lastly, please don’t spend thousands of dollars buying a name from a domain horder – start as you mean to go on by being frugal.