Paul English is a computer nerd with a surprisingly human approach to business.
A serial entrepreneur, he is probably best known as a co-founder of Kayak.com, a company that allows you to search for the best prices in airfares, hotels and cruises among multiple suppliers. He started it in 2004 and sold it less than a decade later to Priceline (PCLN) for $2.1 billion. Yes, that is a “b.”
Earlier, in 1998 he set up Boston Light, one of the first companies that created Web pages for corporations, and sold that for $40 million, less than a year in.
And, in 2003, he co-founded Gethuman, a website that originally provided a list of supposedly secret phone numbers that allowed people to avoid Muzak and connect directly with live customer service reps. It was recently relaunched with an option to hire a human to take care of the problem for you.
Though different, there are several philosophical elements that tie all his diverse businesses together: generosity to his employees and a workplace that welcomes feedback, as well as a concern for customer satisfaction that goes beyond the norm.
Tracy Kidder, the Pulitzer Prize-winning author of “The Soul of a New Machine,” spent three years with English researching his new biography of the businessman, “A Truck Full of Money.”
In a telephone interview with IBD, he discusses one of the reasons English engenders loyalty from fickle programmers who follow him from business to business:
“He’s been very successful and very generous. He maxed out all his credit cards to start Boston Light, but when he sells it English distributes half his $16 million share of the proceeds among his employees.”
That $8 million he gave away was enough to prompt one recipient to ask if he was a communist. No, not a communist, “I’m not just interested in maximizing money for myself,” English said in a telephone interview with IBD.
A Work Ethic From Early On
The sixth of seven children, he grew up in a three-bedroom house in Boston and attended the city’s prestigious Latin School.
He was so conscientious that one night he didn’t feel well enough to drive to his teenage cashier job at a Medi Mart. So he took a cab that cost him more than he earned that day.
“I think it’s about work ethic,” English said. “I got it from my dad who was a pipe fitter. I was always fascinated by the way he would talk about his job. And when I started working, that became part of my identity.”
That identity wasn’t just about rewarding workers financially, but providing a good environment for them. For example, at the time, the Silicon Valley ethos was to work all night. But English didn’t buy into that.
“I saw it as destructive to people’s outside lives,” he said. “When you hire people right out of school, there isn’t a line between work and play. Work is play on your first job. It’s where you meet friends and lovers.
“But when you get older that longer workday can be destructive to a family. So when we started Kayak in 2004, I was already 40 years old and decided I didn’t want to work late at night. So we introduced a culture of work hard and play hard, but once the (business) day was over, go home.”
But the kind of programmers whom English hired could almost certainly make as much money and their own hours elsewhere. But he offered something extra, Kidder notes: His enthusiasm.
English says, “I think they (potential employees he interviews) can feel the excitement I have. Even more than the excitement for the idea, I think people can feel from me my excitement at building the ultimate team. I will do whatever it takes to get talented, fun people to join the team. My focus is more on the team than it is on the business.”
Detailed Approach
Building a team means paying attention to even the tiniest of details, down to what Kidder calls “feng shui seating arrangements, not putting too many loud engineers together.” Or too many annoying ones.
“A percentage of the job is being a psychologist, worrying about interpersonal relationships — trying to perfect team dynamics,” Kidder said. “A lot of us have to deal with people who are annoying or worse.”
English says that when he can, he will move people around the office. “I don’t do it randomly,” English said. “What I’m trying to do is spread the energy around the room.”
When he can’t, he will let people go.
He once said that he fires about one in three people he’s hired, a statement he now regrets because it has “been so taken out of context.”
“There was one brief period where I let go probably 30% of the people I hired,” English said, “but overall I think I let go one out of 20.
“It’s important. If someone is not working out well, and you can’t correct it, you have to. Otherwise how can I live up to my promise that this is the best job you’ll ever have?”
English admits that he is “someone who has a million things going on and I’m guilty of being attracted to shiny new objects.” As a result, sometimes it’s difficult to know which of his instructions are important and which are just shiny new things. So the thinking became: If English sends you an email, ignore it unless he specifically asks about it again.
“I have to admit I was mad when I first heard that. But then I quickly realized it was a good thing. It meant they weren’t afraid of me.”
Periodically he’d bring a stuffed elephant into meetings — the cliche elephant in the room — hoping it would induce shy engineers to speak up to colleagues and him.
Not that he was a fan of meetings. He hung a clicker — the kind used by anyone keeping track of numbers — outside the main conference room to remind employees that he preferred meetings of no more than three people.
And if a meeting went on too long, he’d stick his head in and suggest that whatever the problem was, it could have been solved in half the time.
English was not just concerned with the relationship between his employees but, also, with the relationship between his employees and customers. For example, he put up a large screen in the Kayak office that flashed the number of people who had used the app for a search.
(The company earned 75 cents every time it referred a customer to an airline and $2 for a hotel — plus more if the customer actually booked something.)
The idea, he said, was that he wanted his programmers to watch the numbers flash by — and flash by they did, up to as many as 1.2 billion searches in 2012 — and understand that each number represented a customer using a program they developed and maintained.
Winning Customers Over
He went further, developing a scheme he called “Empath,” as in empathy. Every coder was required to answer some angry customer email. All the programmers had to spend time answering the “red phone,” the customer complaint line listed on the website.
He told his people, “An angry customer is a passionate customer. And if you win them over you have a passionate advocate.”
More to the point, hearing what customers were upset about directly made it easier for programmers to come up with solutions.
“I wanted them to have compassion for the customers,” English told IBD. “The first year, support was only by email and I did most of it because I could type fast. At one point, three customers in a row wrote about a problem they had, and I had this epiphany. They should be talking directly to the programmers who are going to fix the issue.”
English is on the faculty of MIT, where he teaches entrepreneurship. A large measure of the philosophy that he teaches is that “you have to become hyperaware of the problem and lock focus on that problem.”
“A lot of good inventors fall in love with solutions, and spend years of work on solutions, only to have the business fail,” English said. “That’s because they lost sight of the problems that got them started in the first place.
“People say I’m this great creative genius, but what I’m really good at is figuring out problems and then hiring people who can come up with millions of ways to solve it.”
English’s Keys
Founded multiple successful software companies.
Overcame: Reluctance to move from simple coder to manager.
Lesson: Forced into promotion, he had to learn not to micromanage.
“I had to assume (the coders) would steer (the project) to conclusion. That’s when I learned you have to trust people.”
Deal Man Unhappy Customers 