Rare in my experience of interviewing is the opportunity of speaking to a startup founder who hasn’t passed another promising career opportunity to pursue his passion. In the case of CheapAir‘s founder, Jeff Klee, the road to a career as an attorney was certain as he was accepted to UCLA School of Law just as he and his childhood friend began selling airline tickets at a discount to customers over the phone. Klee talked about the early days as a 20-year-old guiding CheapAir. They were unpredictable, although in its best moments, he described it as a euphoric experience fueling him to continue with his dream.
Looking back at it now, Klee’s open about where he could have approached things better, but he insists he’s certainly learned both personal and business specific lessons along the way that have transformed CheapAir into a tighter and more efficient machine.
It’s safe to say that two of the qualities that most inspire Klee, a strong work ethic and resilience when facing life’s most difficult moments, are qualities that he himself exhibits.
A proud new father, Klee took time to speak with Killerstartups about his experience as founder of CheapAir where he shared details about starting out, being too emotional, and the desire to visit South Africa:
Can you tell me about the early days of CheapAir?
The early days were both painful and exciting. At the very beginning it was just my partner and I, both 20-years-old, working out of a mostly empty 190 square foot office. We had one small window in the office and it looked out over a graveyard. All day we’d wait for the phone to ring, take turns answering, and try to sell a ticket to whoever was on the line. This was pre-internet and even pre-eTickets so if we actually sold something one of us would have to get into our car, drive 45 minutes downtown to pick up the ticket from the wholesaler we were working with, and then hurry to get back to the office before the customer came in.
During the down time – and there was plenty of it – I would bang away at my computer, programming an accounting and ticket tracking system. (Not that there was much to account for or track.) Over the years, that little program grew in scope and eventually became the core of our first consumer web site.
Was business consistent at that time?
There were a lot of ups and downs, back then. The long periods of no phone calls were agonizing, but a day with 4 or 5 sales was euphoric. It’s laughable when I think about it. Today, you can be 20-years-old and legitimately aspire to get funded in the first 2 months of your company and be a billionaire 2 years later. We set the bar a lot lower – we just wanted to get through the summer without having to deliver pizza again.
Did you get support from your family and friends for CheapAir early on?
We never asked for financial support. As far as other kind of support goes, I think it’s fair to say that in the beginning both family and friends were pretty skeptical, probably for good reason. To my parents, the decision to expand this from a part time not-really-that-serious venture to a full-time business came completely out of left field. I had spent the previous year studying for and taking the LSAT and then applying to law school. I had been accepted and was ready to go. Then, at the last minute I came to them and said, “I think I’m going to skip law school and stick with this business instead.”
At the time, most people who went into the travel business did so for free shrimp and free cruises – it was hardly a popular choice for the serious entrepreneur. “How the hell are you going to make money selling cheap airline tickets?” was a question I was asked repeatedly by family and friends. To their credit, though, once I made my final decision my parents were extremely supportive and became fantastic resources and sounding boards.
How did you handle the challenges early on with CheapAir?
In the early days, not great. When things got rough, I would turn inward, thinking I was the only one who could solve every problem. I had this me-against-the-world mindset and I had a tendency to not seek or accept help from anyone else. I still have those tendencies, frankly, but I’ve gotten a lot better about dealing with them. Tough challenges don’t scare me like they used to and these days I do a pretty good job of finding opportunities in them. Experience has taught me that what doesn’t kill you really does make you stronger.
I would now argue that constant, serious, even existential challenges are necessary to keep a company lean, productive, and focused on the right things.
Did you begin with funding or was CheapAir self funded?
We began with no funding at all. Literally. The first expense we had was a $19 classified ad, paid for by credit card, which generated enough money to pay for itself before the bill came due. To this day, every subsequent expense has been paid for out of revenue we’ve generated. We’ve never taken on any debt or raised any money through equity. I know that some would argue that my reluctance to take on debt has slowed our growth, and that’s probably true.
But I also think that, especially as a young business owner just starting out, the discipline that was forced upon me by our lack of capital helped me learn quickly how to control costs and spend wisely.
How many people were involved when CheapAir began and how many are there total now?
When we started, it was just two of us. Everyone always says don’t start a business with a friend, but I started mine with my best friend from elementary school who I had known since 3rd grade. That doesn’t always work, but it did for us – for a while. He stayed in the business for a few years, and then sold me his interest when he moved away to the East Coast. Although no longer business partners, we’re still close friends. Meanwhile, the company has grown and now has 67 employees.
What new elements are you planning on rolling out to improve your company?
We have a very ambitious agenda for the rest of 2012 and 2013. Although I think we’ve done a lot already to make buying an airline ticket a whole lot easier than it is on most other sites, the truth is it’s still more difficult and confusing than it ought to be. We’re working on a number of enhancements that we’re excited about. For one, we want to speed up the process by using natural language interpreters and voice recognition software to eliminate cumbersome search forms.
We also want to deliver relevant information to customers that they may not even think to ask for, like pointing out if they can save $50 by flying a day earlier than the date they inquired about. And we want to continue our efforts to make the consumer aware of the overall value of a flight, not just the bottom line price. We’re the only online travel agency right now that lets you easily see which flights have WiFi, live TV, and personal video monitors, and we want to move further in that direction.
We’re looking closely at the business travel space, too. Today’s booking tools for corporate travelers are shockingly cumbersome and built on assumptions that we think are dated. This is a segment of the market that is starving for some innovation, and we believe we have a lot to contribute.
So how do you see CheapAir five years from now?
I know everyone likes to talk about 5 year plans and 5 year timelines and I probably should have a good answer to this. But the truth is, things change so fast in this business (and, these days, every other business) that I have a hard time projecting out 5 months, much less 5 years.
Our history is such that we have had to fundamentally reinvent ourselves many times over. Our business model is completely different than it was when we started out and it will probably be completely different again in 5 years. I’m not as concerned with planning exactly what we want to be in five years, as I am with making sure that we steadily build up our team and our infrastructure so we can be even more nimble, more capable, and more innovative going forward.
I know that there will be times when we will need to pivot sharply, in response to a sudden change in the industry or the marketplace; and there will be times when a new opportunity presents itself that we need to pounce on.
I’m very open-minded to the idea that in the future our product, process, or business model might change radically. No matter what happens, I am pretty confident that there will always be pain points in the travel booking process and 5 years from now I expect to play a major role in providing solutions for those pain points. I just don’t know for sure what that looks like.
What lessons have you learned from running CheapAir on your own?
Don’t get too emotional.
I remember an incident in our first year in business where I was in a Bank of America branch and I had a big fight with the bank and I ended up so angry that I insisted they close my account. Unfazed, they complied and gave me a cashier’s check for the balance. I left the bank thinking, “Now what the hell am I going to do.” I eventually calmed down and, when I thought about it rationally, I said all banks suck, but B of A really does have the most locations and the most convenient ones near my home and office.
So I drove about 5 blocks down the street to the next B of A branch and opened another account.
I’ve wasted a lot of time and energy over the years when I’ve let my emotions get the best of me. In business, you won’t always agree with your customers, employees, vendors, or partners. But before letting a situation escalate, know that there is really something to gain by making your point or standing on principle.
Pick the battles that are worth fighting, and don’t let the ones that aren’t allow you to get sidetracked or distracted.
So what inspires you now?
Someone with a great work ethic. Someone who defies conventional thinking and succeeds. Someone who is dealt a really bad hand in life but overcomes those disadvantages. Someone who has the courage to think long-term and who stays the course despite short-term setbacks and short-sighted doubters.
Someone who achieves what others said couldn’t be done.
What does being successful mean to you and do you believe that you’ve achieved this?
This is always a tough question to answer. I’ve been told by some that I have missed my window and that holding a company for this long without selling is, by definition, a failure. I don’t buy that.
I have created a company that allows me to do something I love, create products that I believe in, and spend every day tackling stimulating problems with an incredibly smart group of people. I wake up genuinely excited to go to work. And it makes me a pretty good living.
At the same time, I know the company can go further. We can be bigger. We can sell more tickets and our site can have more monthly unique visitors. We can all make more money – myself and all of our employees. Our customer service is good, but it’s not perfect. We innovate now, but we should be able to do more, faster.
We make buying an airline ticket easier, but it’s still more difficult than it should be.
We do a lot of things right and I like to think we have raised the bar in our industry. But have we done anything truly transformational? Have we actually changed the game?
Some of these are just vanity goals, but others speak to the very essence of what we are trying to accomplish. So my answer would be no. I’m grateful for what I have and appreciate what we have done.
I don’t take any of it for granted. But there’s still a lot left to do.
What advice would you share with someone considering starting up their own business?
Hire people with character.
While conventional wisdom may have you focus on education and experience when building a team, over time integrity, work ethic, and passion will prove infinitely more valuable.
If you surround yourself with good, decent people, not only will your company come to reflect those same values, but work will be much more rewarding.
What about a favorite author, artist, or musician – Do you have any favorites?
I actually don’t. My wife sometimes wonders what planet I live on, given that if she brings up a song, a book, or a celebrity, I invariably have no idea what or who she’s talking about. When I read, it’s typically non-fiction; when I see movies, I’m usually bored unless it’s a low brow comedy.
And if you take me to an art gallery, I can pretty well promise that the “genius” in whatever it is they’re showing will allude me.
So how do you relax or unwind from all that needs to be done at CheapAir?
I have a ten-month-old daughter so nowadays I pretty much don’t. But that’s OK. As un-relaxing as my life has become since she was born, she’s the greatest thing that’s ever happened to me and I wouldn’t trade a minute of it. (Actually, there have been a few minutes or hours at 3am that I probably would trade.)
I do run a lot which, ironically, is the best way for me to relax. I go for an hour long run 5 days a week and that’s my best time to step back mentally and think about the bigger picture without being consumed in the typical chaos of the day.
Are you using any mobile apps that make things easier for you or your day to day at CheapAir?
Actually, no. Most of the apps on my phone are apps from my competitors, which I find pretty unimpressive.
Of course, that’s a little bit of armchair-quarterbacking because we’ve been embarrassingly slow to release our own app and until we do I have no right to criticize others.
We are working on something pretty exciting, though, and hopefully I’ll have more to say about that later this year.
If and when you have time for a vacation, where do you like to go and with whom?
I like to fashion myself as someone who takes adventurous trips like hiking through the Costa Rican jungle, mountain biking in Northern Thailand, or gorilla tracking in Uganda – and at one point I did do those things.
But these days if you just give me 3 days with my wife at a nice beach resort, I’ll be pretty happy. I’m also a huge Bronco fan who doesn’t live in Denver, so travelling to see them play is always a great trip.
What country would you like to visit that you’ve never been to and why?
At the top of my list is South Africa. My wife is South African and we still haven’t been there together. The people and places there are such a big part of who she is and I’m dying to experience it with her.
Besides, I hear from everyone who has been there that it’s one of the most beautiful places in the world (albeit a country with a lot of sad problems).
What trick or “life hack” have you learned that helps you balance your work with your personal life?
I don’t have any tricks and, truthfully, I don’t have any balance. My work and personal life are intertwined. Because I love what I do, and because it’s become such a part of who I am, it’s hard to tell exactly where “work” ends and “non-work” begins.
I’m definitely a workaholic. I get up early and I stay up late and no matter where I am, I’m probably at least checking email. But it works both ways. I may work a lot of Saturdays and Sundays, but if there’s a midweek day game at Dodger Stadium I’ll be there more often than not.
And I may be at the computer after midnight many nights a week, but I’ll also be late to the office pretty frequently, so I can have breakfast with my wife and daughter.
Add it all up and I still work more hours than most anyone I know. But I enjoy what I’m doing so that work is just another thing that makes life rewarding. I really don’t worry too much about whether that is balanced or unbalanced.