Today I had the pleasure of interviewing Rolf Schrömgens, the Co-Founder of trivago who served as managing director and CEO of the company until December 2019. Prior to founding trivago, Mr. Schrömgens was founder and VP at ciao.com, a consumer review website, from 1999 to 2001. Mr. Schrömgens holds a diploma in management from Leipzig Graduate School of Management (HHL). He currently holds a position on the trivago Supervisory Board.
Thank you so much for joining us Rolf! Can you tell us the story about what brought you to this specific career path?
Ifounded my first company in 1999, during my last semester in university and during the first big internet craze. We did one financing round after the other and raised 20 Million in the first 6 months. As a result, my own share diluted more and more and at the end I didn’t have much freedom to make decisions or influence the culture of the company.
So, I left thinking everything will be better when I start something new — which was totally wrong. I started another company that failed. Then I started my Ph.D. but failed at that, too.
I took over the family business, a small restaurant near Dusseldorf, until my father told me to leave. I was more or less broke and desperately needed an idea. That was the situation when I started trivago.
Can you share one of the major challenges you encountered when first leading the company? What lesson did you learn from that?
In the early days of trivago, we as founders wanted to maintain control, so we did not take much outside investor money. We were jumping on every opportunity to create revenue, but that diluted a great deal of our resources. We were going in many different directions at the same time. Not that they weren’t great opportunities, but they were not the most effective for us.
So, the biggest learning for me was to really focus all your resources on something where you really can make a difference. Don’t be so driven by creating something profitable too early and then become very opportunistic.
What are some of the factors that you believe led to your eventual success?
We created the mission statement for trivago around 2008 to nail down what we wanted to focus on over the next decade and beyond — and we have the same mission today. The lesson is it’s important to focus on the unique value you offer to users and stay focused on it. Don’t become distracted. It takes more courage to say no to opportunities that don’t fit with your mission than to say yes. That doesn’t mean we have remained static. We always keep our eyes on what the users need and watch our competition to see how they adapt to changing needs. It’s critical that we continually question our strategy and try to poke holes in it. In other words, avoid believing your own hype.
What are your “5 Things I Wish Someone Told Me Before I Became CEO”?
- Ego is the enemy of learning. We have always been a data-driven company. We were successful while we were creating very uninspiring TV spots. They were not beautiful at all, but we were successful. Then a lot of my friends started saying, “trivago has a nice website, but your TV spots are really awful. Can’t you do something more engaging, something cooler?” After a couple of years, I gave in and decided to do something cool. I ran into an ego trap there because we ended up with a cool TV spot that was not successful at all. I refocused the whole organization on this new topic, but at the end I had to go back to everyone and say it was a big mistake.
- Success is only fun when you can share it. Whether you are selling parts of a company or you launch an IPO, however you become financially independent for yourself, you will get to a point where it’s not so interesting to make even more money. But what’s really interesting is thinking about how people who started the company with you can participate. That can really motivate you. If I started a company again, I would definitely let people participate quite early and grant more shares to more people, because that would make a difference for me personally.
- Appeal to your employees’ purpose. Most companies are built around the idea that people do not want to work, so leaders have to come up with something to make them work. Make their pay dependent on their output and create lots of KPIs that measure output, because people generally have no interest in creating something meaningful. Most of the economy is built on this thesis because that’s how business is supposed to work. But this creates little machines that feel unaccountable. I believe in the opposite. I believe people are interested in creating something meaningful, that we want to strive for something positive and have a purpose. That requires different ways of interacting and motivating people. And it can be way more successful.
- Make everyone self-responsible in a way that they look at the company as if it were their own. That’s why I am a big advocate of giving shares to people and letting them participate in the success of the company. But I am not a big fan of variable compensation. I don’t believe that people do something just because of the money, at least not when it comes to knowledge work. When it’s a straightforward task, you can directly relate output and money. But when it’s about creative work, which I think most of the people here at trivago are doing, I don’t think that works anymore.
- This is something I learned from Barry Diller, chairman of our parent, Expedia Group. Diversity is about creating business value. I always thought it was more about fairness or being politically correct, but I misunderstood. A very important criteria of a successful team is diversity. You can only create the best team if you have a diverse team in many different dimensions: culturally diverse, gender diversity and so on. You will only get the best solution if you get different perspectives.
What advice would you give to your colleagues to help them to thrive and not “burn out”?
For me, burnout does not come from working hard. I could burn out in situations where I feel powerless, where I feel I don’t have an impact or influence. I could also burn out when I must spend time with something that is not interesting for me. So, it’s really important that I pick topics I am passionate about — and I know that’s also best for managing those topics.
I constantly tell all our employees to pick topics that they are passionate about because they will be so much more effective and create much more value. Even if they lose value in direction, they win value through output, because people are just so much better when they are passionate about something.
That’s why we create small autonomous units within the company. This way we can better avoid dependencies when somebody says, “I would love to do A, but I can’t do A because of whatever reason. So I have to do B.” Small autonomous units have more flexibility and are more agile. It’s dangerous and unhealthy for both people and the company to create dependencies. Personal health and success of the company are very closely related.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
It’s hard for me to pick one person. I’m always learning, and I learn from many people. I’m always listening, trying to understand people and taking in information. So I can’t pick just one person.
I also think each of us has to go our own way. I don’t want to pick anyone as a role model, and I don’t want anyone to pick me as their role model. We all have our good sides and our bad sides. Picking a person to idolize creates a very strong bias and is not very reflective, in my opinion. Ultimately, you have to find your own solutions.
What are some of the goals you still have and are working to accomplish, both personally and professionally?
For our company, it would be amazing to create a completely agile, intrinsically motivated organization, as large as we are, in which our individual productivity is comparable to that of a small startup. It’s incredible how high the productivity level is at startups with three, five or 10 people and what they can create. But when you become a larger organization, that productivity usually plummets. It’s something all large organizations struggle with. Getting closer to a productivity solution would be fantastic to achieve.
I also think it would be really cool for us to create an application that can find the best place for people to stay based on their passion. It’s so important because most people only get two weeks of holiday every year. They should spend it somewhere they love and where they can get the most for their money, too.
For me personally, I would love to get into what I call confident-flow status more often. Where I’m not torn by either my extreme motivation or my shadows. Where I don’t rise high on my success or sink low when I’m not successful. I want to be in a continuous flow of value creation as part of a greater community. That’s what I’m striving for: a state of contentment from being in that flow.
What do you hope to leave as your lasting legacy?
I would love to be remembered for the fact that many people who worked at trivago moved on, created their own companies and spread the philosophy that they learned here into other successful companies. I’d like there to be Wikipedia articles about some of the great people who worked here rather than about me. These articles would say they built upon our philosophy and created a way more successful company than trivago. I would love to see that.
You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!
I would create an application that would match people’s true passion with opportunities to follow it. It could be a job, a volunteer opportunity and so on. Unfortunately, I don’t think many people can follow their true passion. We would have a much more productive, healthier, happier society if we were better at matching people’s true passion with the right opportunities.