William Shatner and PriceLine.com

i dont talk about it much, but i was in a fraternity in college, Sigma Phi.  It was overall a great experience actually.  It was an eclectic collection of pretty extraordinary individuals.  In my sophomore year i shared a suite with a guy named Jay Walker.

Jay was an consummate wheeler dealer type of character.  It was his junior year when we lived together and he had already published a book called 1000 Ways to Win Monopoly and was in he Guinness World Record Book for most simultaneous games played.

1000 ways to win monopoly

Jay had also founded 80 different clubs at Cornell (having discovered it was free to register and found clubs) which referred to by the university as the “Crazy 80? and included the “Trouble with Tribbles Club” and the most popular “Go Back to Bed Club”.  Many of these clubs never met, but they did briefly pad Jay’s dynamic resume.

Jay always had better things to do than go to class.  During the year we lived together he started the Ithaca Times newspaper an made a fairly serous run at it for a year.  In the same year he ran the Oliphant speakers program, that brought celebrities to campus to speak.  The fraternity had a fancy guest bedroom in it where the speakers stayed while on campus.

It was that year i would meet these curious popular characters.  Artist LeRoy Neiman visited and somehow managed to loose a lit cigar in a couch and no one could recover it.   Prolific science fiction author Isaac Azimov despite being recognized as an early feminist infuriated the Cornell audience by talking about how women did not want the Equal Right Amendment because a majority of them voted against it.

Curiously Azimov feared flying

Curiously Azimov feared flying

Walker also brought William Shatner to speak at Cornell.  This was in 1978 and Captain Kirk had already stopped flying the starship Enterprise for almost a decade.  My recollection of Shatner is pretty limited.  There was a very well attended dinner that he spoke briefly at in the fraternity house. Shatner had trained as a Shakespearean actor and it was clear his prominent role in Star Trek had prevented him from returning to his first love because of type casting.

After college Jay would have a rocky career in business.  He still had $150K debt from the Ithaca Times newspaper folding.  He started a company which sold interactive glass sculptures which emitted light and sold in the Sharper Image catalog.  But in 1986 this company folded $5.3 million in the red.  He started another company which teamed up with TWA airlines to sell discount air travel coupons, but was sued by TWA which settled out of court and this venture folded in 1988.

After some success in other areas Jay founded Walker Digital in 1995 modeled after Thomas Edison’s lab in Menlo Park.  In 1998 after spending $2,5 million Walker Digital was granted a patent for buyer driven pricing.  This was the first time the US patent office had given a patent for a business model.  And priceline.com was born.

New Yorker Cover with interview with Jay Walker

New Yorker Cover with interview with Jay Walker

Priceline created a way for airlines to make some money on the sale of empty airline seats without cutting their own prices.  Customers would bid what they were willing to pay for  flight on a specific day to a specific location, but the time of day, the carrier they flew on and the route was determined without their approval.  They had to buy the ticket (if it met their price point) without this information.

At first things were hard, only 7% of the bid prices for airline tickets were successful, meaning most customers walked away frustrated.  And Priceline was subsidizing the price of tickets to the tune of about $30 each.  Desperate Walker reached out to Shatner and paid him to have a drink together at a fancy NYC establishment.  Shatner was so impressed with Walkers business plan that he signed on to do advertizements for Priceline in exchange for $500K in stock.

In 1999 Priceline went public and Walkers share of the company was worth $5.2 billion dollars.  Shatner profited, on paper, handsomely as well.  But 2000 was the year of the dot com crash and Walker was forced to sell most of his interest in Priceline to investors from Hong Kong and resigned from the company.  In October of 2000, Steven Levy of Newsweek would call my old roommate “the poster boy for the dot com train wreck”

But Jay will be back, he knows how to play the game.

TED talk by Jay Walker on English Mania