Terry Jones, founder of Travelocity, is still surfing the Web for inspiration, innovation and even love.

Innovation is more important than ever as the country emerges from the "great recession," says 61-year-old Terry Jones, founder of Travelocity.com and chairman of Kayak.com.

"A lot of people confuse innovation with invention. According to Wikipedia, invention is the art of creating something new. Innovation is taking a good idea and putting it to work," he says.

That's exactly what Jones did when he created a web site through which consumers could check airfares, a first in the world of the Internet that was still in its infancy. His brainchild went on to become Travelocity, a national brand with more than 40 million members, 1,200 employees, and $5 billion in travel bookings at the time he left. Today, the company is even bigger.

Inside Operator

He calls himself an "intrapreneur," as he started Travelocity in 1996 as a department inside multi-billion dollar Sabre Holdings, part of American Airlines. Intrapreneurs face different challenges than entrepreneurs, he explains. Competitors are as likely to be internal as external. In this world, who you report to can be as important as building a brand is to the entrepreneur.

"Usually new ideas are like a little flame on a candle. They're kind of easy to blow out," he says. Fortunately for Jones, that didn't happen in his department. Instead, the flame of innovation was ignited and he created his own culture to foster it.

"It was more like baseball than the Olympics," he explains. "My employees had a lot of chances at bat. Think about it: Great baseball players strike out 70 percent of the time, but with the Olympics, you only get one chance every four years. I created a culture where you could experiment, where I allowed failure. I tried to be their coach. A coach doesn't just throw people off a team. He trains them to be better and welds them into a good team."

Jones has since evolved from coaching his own department to coaching the employees of other companies; he is a sought-after speaker who makes about 30 speeches a year focusing on innovation and leadership. He is also a managing principal of Essential Ideas, a consultancy he co-founded to help companies in their transition to the digital economy. He serves on the board of directors of EarthLink; Rearden Commerce; and Smart Destinations; is chairman of Kayak.com; and is a special venture partner with General Catalyst Partners.

One of the lessons Jones tries to impart is that successful companies use the web as a tool to help form digital relationships. Zappos, the popular online shoe retailer, does this particularly well and Jones often shares an anecdote about the company during speaking engagements: "I recently got an e-mail from Zappos stating that they were no longer going to carry a pair of shoes I bought in the past. They had two pairs left in my size and wanted to know if I would like to buy them."

Another company Jones thinks highly of is Amazon. "They send you recommendations of new books you may like based on your past purchases. That's how you make money," he says. "You turn what could have been a one-time transaction into a long term relationship."

A Virtual Family

The Internet has been a powerful force in the entire Jones family. His son, 28-year-old Ben Sawtell-Jones, created a video game during high school with contemporaries in the United States, Europe, and Canada—all 15- to 18-years-old,—by using a chat room and Internet messaging. They never met in person. Their game, "Day of Defeat" was sold for $300,000. Today, he works for Sony in game design.

His 26-year-old daughter, Vanessa Sawtell-Jones, is also involved in digital initiatives; the former voice major is now a virtuoso travel agent.

In an unexpected turn, the Internet even impacted his love life. Divorced and living in the tourist community of Incline Village, NV, Jones was having trouble meeting people so he gave Match.com a try. "I met this wonderful woman, Ginny, and fell in love," he says.

Today, Ginny helps others searching for love to write profiles for Match.com.

Although Jones is a master of virtual communication, he is also a proponent of face-to-face meetings. "Today, meetings are more important than ever. You can't get people going in the same direction, unless you get them together. You can't manage that with e-mail."

He believes this to be the case for both customers and all levels of employees. At Travelocity, Jones had a phone booth installed in the hallway where employees could listen to live conversations between consumers and the help desk. Every employee in the company had to listen to at least two conversations a month. At staff meetings, employees would discuss the conversations and explore how the company could be improved so people didn't have to call for help.

These days, Jones' greatest thrill is "being engaged and helping others be successful." Born blind in one eye doesn't stop him from being a voracious reader. He also takes college courses in his car via his iPod and most recently studied the Roman Empire. "I'm always trying to learn from the past but, at the same time, am keeping up with the future."

Originally published Dec. 1, 2009

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