Skift Q&A: Hospitality Investor Lee Pillsbury on 100 Years of Industry Disruption

Skift Take
If anyone could predict what's in the pipeline for the hospitality industry, it'd be Lee Pillsbury. But the pace of innovation today means that his venture fund is also in search mode to find what the next Hilton or Expedia will be.
There are hundreds, if not thousands, of startup founders that would pay for the insights that Lee Pillsbury, co-founder and CEO of Thayer Lodging Group and advisor at Thayer Ventures, has accumulated over the years.
After his company joined the top five percent of hotel investment firms, Pillsbury worked with the principals of Quest Hospitality Ventures to launch Thayer Ventures. It has since invested in travel companies including Hipmunk, TripBam, Duetto, and Liftopia.
Pillsbury says he built a venture capital fund focused on the travel industry due to the founders' industry knowledge, the vast opportunities present in the enormous global sector, and the fund's ability to help portfolio companies succeed.
Skift spoke with Pillsbury at the Revenue Strategy Summit in New York City last month. Pillsbury talked about what he looks for in a startup, why he's not worried about Airbnb, and how hotels could likely be the next industry that Apple disrupts.
Skift: Let's start with Thayer Ventures. Why did you start a venture capital fund focused on the travel industry as opposed to a general fund?
Lee Pillsbury: The Kauffman Foundation came out with a study last year that suggested venture capitalists have done very poorly over the past decade and that it's been an unsuccessful investment strategy. Travel, as a class, has not been a good investment or a good place for institutional investors to be.
We think that's driven by three problems with venture: One is underwriting a new idea. In a complicated value chain like the travel industry, an idea might appear to be a good one, but when you really understand the business you recognize that it's not.
A great example is the check-in kiosk that is so successful in airports and a complete failure in hotels. It's obvious to a hotel investor why that wouldn't work and wouldn't be appealing to guests, but a Silicon Valley capitalist might logically think, "If it works in the airport, we'll put it in the hotel lounge." Some venture capitalists thought that and lost a lot of money. So, the first reason for a