Not Investment Advice 221: Booking: $170B+ A/B Testing Machine & How a $5000 Vegas Bet Saved FedEx
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Jun 25, 2025 Dive into the fascinating world of Booking.com as the hosts explore its transformation into a $170 billion powerhouse through innovative A/B testing techniques. Discover how FedEx was saved by a daring $5,000 Vegas bet from founder Fred Smith. The episode also reflects on the evolution of online travel booking and the powerful role AI is playing in shaping the industry's future. With a blend of insightful anecdotes and sharp humor, the discussion reveals the delicate balance of luck and strategy in business.
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Agency Model Drives Conversions
- Booking's agency model with free cancellations enables far higher conversion rates than Expedia's merchant model.
- This approach justifies heavy Google ad spend due to better customer acquisition efficiency.
Pioneering Attribution Models
- Booking pioneered sophisticated multi-touch attribution to measure long customer booking journeys.
- This enabled cohesive marketing decisions beyond last-click models, setting them apart from competitors.
Culture Overrules Hierarchy
- Build a culture where data and A/B test results trump the highest paid person's opinion (HIPPO).
- Enable every employee to run A/B tests with clear hypotheses quickly to foster innovation.
