On a recent visit to the Buuteeq offices in Seattle’s lower Queen Anne neighborhood, Forest Key is looking the part of startup founder. Tanned and relaxed, Key is wearing shorts and a green Mexican soccer jersey as he leads me on a tour of the company’s orange-themed office.
But don’t let the laid-back appearance fool you.
Two months after selling Buuteeq to Priceline, Key and the rest of the crew are charging forward with a plan to integrate with Priceline’s Booking.com unit, providing a slate of online marketing tools that small and medium-sized hotels can use to attract new business.
Aligning with Booking.com will provide immediate scale, allowing the company’s tools to be rolled out to thousands of hotel properties, a proposition that would have taken years without the support of an online travel giant.
“We all get out of bed in the morning because we’re excited about delivering innovation to customers and we can do that to more customers,” said Key of the acquisition. “Scale is a pretty sexy thing, basically.”
Key isn’t saying how much Priceline paid for Buuteeq, and he declined to comment on our previous report that the 150-person company was sold for between $125 million and $140 million.
That would be a pretty nice outcome for the Buuteeq team. But, as Key sees it, the company really is still in the early innings, with plans to ramp up hiring in the Seattle area, where Booking.com already has a large and growing presence. “In some way, this was our first chapter,” he says.
Here’s more from our interview with Key.
GeekWire: Why did you want to sell the company?
Forest Key: “We didn’t approach the market saying we wanted to sell…. We were looking at continuing to layer on innovation and expanding our engineering team and we were ready for that next phase of growth.”
GeekWire: Did you consider more venture financing?
Forest Key: “We looked at raising capital and went off and talked to the Valley and some other investors and had really good conversations, including opportunities to continue to fund the business and to grow through venture. But, at the same time, we had some really interesting conversations in the form of Priceline, which is where we wanted to be eventually.”
GeekWire: Why Priceline?
Forest Key: “The dream was to build a business that could someday fit in with the world’s best travel company. And Priceline is a company that I had always admired as a consumer. And when I started the business, it was kind of like my dream to someday become part of that company, literally. When we started talking with them and it looked like visions aligned, timing was good, it was like: ‘You know what, this is the right thing to do.’ Great outcome for all of our investors, for our employees, and most importantly to me and for our founders was to really deliver what we set out to build to the market at an amazing scale, a global scale.
This is the way that — as a technologist — I can achieve my goal of massive global impact on the category. Selfishly, as a product guy, it’s a dream come true. I’m super excited. And, of course, the product team along with me and then, by extension, you know the sales and customer success because really ultimately we all get out of bed in the morning because we’re excited about delivering innovation to customers and we can do that to more customers. Scale is a pretty sexy thing, basically.”
GeekWire: So Buuteeq will report into Booking.com. Can you just talk a little bit more about how you see your tools being utilized within that unit?
Forest Key: “Booking.com is the world’s largest accommodation provider as a business that offers consumers a service, which is to book hotels or accommodations. As part of the evolving capabilities that that business has, offering services to the suppliers — to the hotels and the other accommodation providers in a B2B model — is a stated strategy… The Buuteeq product as you know it is brand marketing, demand generation, a CMS, SEO, booking engines, tools to manage a property’s brand. Providing those as part of a hotel marketing services team that is part of Booking.com, we think will bring some really interesting innovation to the category, something that no one has really done before.”
GeekWire: Could you just talk briefly about the growth in Seattle and what’s planned here moving forward?
Forest Key: “All of our innovation team — our engineering, designers, developers are here. 150 globally. And about half of that in Seattle, about 80 in Seattle. We’ve since continued to hire and are very aggressively hiring designers, developers, product managers, you know all the product organization as the core function here as well as some related functions around marketing, sales, and customer service. But most of our growth in terms of headcount is overseas in terms of customer service and sales. And, in Seattle, it’s innovation. So this is the innovation center for our effort.”
GeekWire: How many employees do you think you’ll be growing to here if it’s at 80 roughly now?
Forest Key: “Well in Seattle just on the product side we’d like to add at least 25 heads in the next year so we’re kind of more than doubling the size of the product team in Seattle.”
GeekWire: Why did you decide not to take another round and try to scale up more?
Forest Key: “There’s kind of three constituents; our shareholders, our employees, and our customers. And we just did the math on both a quantitative dollar value kind of perspective, but also on an emotional value. And across the board, for everyone involved, it was a better choice to work at the world’s biggest and best travel company, with the resources and the ability to apply our innovation and technology in our current product — but also future products and things that we want to do — to apply it through that global reach that that organization has. Shareholders are thrilled, employees are thrilled… And the product team is just delirious with joy because of the opportunity to accelerate and to have that innovation reach the market faster.
GeekWire: You came out of Microsoft and that culture, what’s been the biggest lesson learned or thing that you’ve taken away from building your own company, growing it to the point that you’ve now been able to sell it? Any tips or tricks or thoughts on how you were able to do that?
Forest Key: “I feel very blessed by the ecosystem in Seattle in the form of there was a lot of support for me in the angel community, in the form of Madrona in the venture community, in the form of Concur from the strategic investor community, so really as you know I grew up in Palo Alto, some of my co-founders are from Palo Alto, a lot of our senior staff is from Palo Alto, so we have kind of Valley DNA but found tremendous success, you know Microsoft kind of moved us all to the region, we developed our careers a bit through Microsoft, and learned a lot from our enterprise experience there about product and global scale and delivery.
I think Microsoft was a very good training ground to prepare us to then build a business in Seattle, where we had tremendous support as I said from the different investment constituencies, mentors, people like Geoff Entress who worked with us very closely, some of the former aQuantive guys, Mike Galgon on our board, tremendous nurturing that was required because nothing that we did previously in our careers prepared us for either hospitality or SaaS.
The truth is, I understood SaaS intellectually from looking at Salesforce or other SaaS businesses, but not operationally. And I understood travel experientially because I had travelled, but I’d never ever worked in hospitality, so we really were kind of clueless coming in.
There is an ecosystem here to support you that can lead you to success, and I feel like we’re very blessed.
I don’t think that’s something you can achieve in all markets of the world. I personally tried that a little bit in Chile when I started the business, and it was not possible to do in Chile. Chile is not yet capable of supporting all those pieces in a way that would make for viable businesses, and I don’t think there’s a lot of places in the rest of the world besides Seattle and California where you could do this. I think even New York and Austin are a lot harder to achieve this kind of thing.”
GeekWire: I remember you saying something about how culture will trump product every time. That always kind of stuck with me as you guys were building Buuteeq. So is that still your philosophy and belief?
Forest Key: “I would say that culture solves a lot of problems, mass problems that otherwise would be catastrophic. And cultural values — such as a commitment to trying things, failing and then fixing them right as opposed to trying to get everything right the first time — that’s a culture where nothing gets done.
And that, you know, you can fuck up the execution. But if you have a culture that allows you to make mistakes and try new things then you can afford to make huge mistakes and still succeed.
Ultimately, you do have to come up with the right product, fit it in the right customer segment and in the right marketing, but to get there there can be a lot of failure along the way. The other thing I would add to that, though, is that good product solves a lot of problems too.
Ultimately, if you’re building really compelling technology, even if its having a hard time scaling or finding a market, which ultimately gets you know, Zulily type scale as an independent or Tableau, you know, those guys uncorked both amazing product and an amazing ability to deliver to the market. You know, Buuteeq didn’t get to that phase. We were working on that phase, and decided to, instead of doing that as an independent company, to go in house as an acquisition.
But having amazing technology gets you a shot at that. I’ve met with a couple of other entrepreneurs who are just in the early-stage in the last week and told them: ‘Look, make sure you’ve got the culture right because you’ve got to get that at the very beginning, and make sure you’re building killer product.’ Because if you’re doing those two things, a lot of things work themselves out in the wash overtime. Because ultimately technology is important and in some ways rules.
GeekWire: Any final thoughts?
Forest Key: “I think we are in this transition phase as a company, where our team is absorbing the opportunity and figuring out how to sequence our next steps. It’s an exciting intellectual moment because we have so much opportunity and we can’t wait to kind of apply our ideas to the opportunity and kind of emerge down the road.
I look forward to coming into the market with some of these new ideas in place because within Buuteeq it’s just getting started. In some way, this was our first chapter.
But it’s not the end. It’s just the beginning like this next chapter is an interesting one where we start to have massive market impact and everyone’s super excited about that.”
GeekWire editorial intern Isabella Gutierrez contributed to this report, assisting in the transcription.
