Should Hopper prioritize expanding its flight price prediction accuracy or focus on growing its hotel booking inventory to increase overall user engagement?

Introduction

The trade-off between expanding Hopper's flight price prediction accuracy and growing its hotel booking inventory presents a critical decision point for increasing overall user engagement. This scenario involves balancing the enhancement of a core feature against diversifying the product offering. I'll analyze this trade-off by examining the product ecosystem, potential impacts, key metrics, and experimental approaches to inform a strategic recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on Hopper's business model, I'm thinking revenue might be primarily driven by commissions. Could you confirm how Hopper's revenue model is structured between flights and hotels?

Why it matters: Helps prioritize which area to focus on for immediate revenue impact Expected answer: Higher commission rates on hotels, but larger volume from flights Impact on approach: Would influence whether to prioritize expanding the higher-margin product or improving the core offering

• Considering user behavior, I'm assuming there's a significant overlap between flight and hotel bookers. What percentage of users book both flights and hotels through Hopper?

Why it matters: Indicates potential for cross-selling and overall engagement increase Expected answer: 30-40% of users book both Impact on approach: High overlap would suggest focusing on improving the entire travel booking experience rather than just one aspect

• Looking at technical feasibility, I'm curious about the current accuracy of flight predictions. What's the current accuracy rate, and what's the potential for improvement?

Why it matters: Determines the potential impact of focusing on prediction accuracy Expected answer: Current accuracy around 80%, with potential to reach 90% Impact on approach: Small potential improvement might suggest focusing on hotel inventory instead

• Regarding resource allocation, I'm wondering about the team structure. How are the flight prediction and hotel inventory teams currently resourced?

Why it matters: Helps understand the feasibility of scaling either initiative Expected answer: Larger team on flight predictions, smaller team on hotel inventory Impact on approach: Might suggest focusing on hotel inventory to balance resources and capabilities

• Considering market dynamics, I'm thinking about seasonality. How does user engagement vary between flight and hotel bookings throughout the year?

Why it matters: Helps identify potential timing for focusing on each area Expected answer: Higher flight engagement in Q2/Q3, higher hotel engagement in Q4/Q1 Impact on approach: Could suggest a seasonal strategy, alternating focus based on peak booking periods