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Nov 15, 2019
Ariel Cohen, co-founder and CEO TripActions is only four years old, but the company isdefinitely playing in the big leagues, valued at more than $4 billion on morethan $450 million in funding in the last 18 months and making moves to take onthe legacy travel management companies. Born in Israel, Cohen attended graduate school at Northwestern University and worked at HP before launching his first startup, StreamOnce, in 2012 with his TripActions co-founder Ilan Twig. Thinking back to 2015, what inspired you and co-founder IlanTwig to create a new solution for business travel? Ilan and I were road warriors ourselves back when we foundedour first company, StreamOnce (acquired by Jive Software). We were bothtraveling so much, and it dawned on us that there had to be a way to make theentire business travel experience better, smoother and less stressful for thetraveler. There was one particular instance that sticks out in my mind as beingan inspiration for starting TripActions. I was traveling like crazy, takingmultiple business trips, one after the other. On one international businesstrip, I had just gotten off a long flight in a country where I didn't speak thelanguage. I caught sight of myself in the mirror and could barely recognize myown face. I finally made it to the hotel late at night and jetlagged, only tofind that my hotel room had been cancelled. This isn’t a unique story for the road warrior. Ilan hasmany similar business travel-gone-wrong stories himself. Like many others, wehad become accustomed to the status quo and the hopelessness of using the samecorporate travel tools we had always used because there was nothing betteravailable. We set out to change that. We saw the large opportunity to make thelives of travelers easier and better, starting first with the technology theyuse. In solving for the pain points of the traveler, we also believed we couldsolve the pain points of the enterprise, and give finance, procurement, humanresources and travel program leaders a better option than the status quo. Company https://tripactions.com/ Originally the TripActions concept was to provide not only betterservice for travel managers and business travelers but also to reward thosetravelers for choosing cost-effective hotels and flights. Why did you shiftaway from that focus on incentives? At TripActions, we’re always thinking about putting ourusers first - all of them, all the time, so we’re continuously optimizing fortheir experience. Incentives have always been a part of the TripActionsexperience; by giving travelers extra incentive to spend company money as ifit’s their own they end up selecting options that best suit their needs whilealso saving their company money. It’s a win for the company, and a win for thetraveler. We found that incentives for hotels were more compelling to travelersthan rewards for flight savings. The reality is that there is much moreequilibrium pricing in air than hotels and so less wild swings. And travelerstend to book flights based on a mix of the availability of direct routes,departure and arrival times, and preference of airline, with much less flexibilitythan with hotel bookings where there are more options available. As a result,we focused our TripActions rewards on hotels. However, incentives are only a part of our overall offering -we like to think bigger when it comes to delivering the best possible travelexperience. We’ve mapped out the “40 steps of business travel” from when youfind out you have to book a flight to when you land back home safely after asuccessful trip. We focus on applying artificial intelligence and machinelearning to personalize the booking experience and make it as fast and easy aspossible (our travelers only take, on average, six minutes to book a tripversus an industry average of 60 minutes), offer unrivaled inventory offlights, trains, cars and lodging, and finally – support the traveler at everystep of the way with proactive, global 24/7, 365 days a year live human support. TripActions has had exponential growth in the last 18months. You raised a Series B round of $51 million in March 2018, a C round of$154 million in November and D round of $250 million in June 2019 . The company’svaluation is now $4 billion. How are you growing so fast? There are multiple reasons that have led to 5Xyear-over-year growth. First, there is a huge addressable market – a $1.4trillion industry that’s been starved for innovation. We also have greatproduct-market fit; companies and their travelers have been looking for asolution that addresses their needs. Most of the platforms are from the lastcentury, and for those that are more recent, our customers who have switchedfrom them tell us that they haven’t seen any innovation in their platforms inyears. We saw an opportunity to offer a far better experience for users - allof them, all the time - from the traveler to the executive assistant supporting travelers, tothe finance, procurement, HR and travel program leaders. We’ve also focused on creating a win-win-win for not onlycompanies and their travelers, but also for our supplier partners. The space isevolving rapidly, and airlines are now offering differentiated, unique experiencesthat hadn’t been properly presented in those legacy systems. The Phocuswright Conference is for three days - here's your daily bulletin for the other 362! Subscribe to the PhocusWire newsletter below Submit We werefirst-to-market with the Next Generation Storefront (NGS), offering oursupplier partners the platform to showcase their offerings, while giving ourtravelers the most modern shopping experience available today. This is all to say that there is certainly momentum in thespace, and thanks to our partners, customers and travelers who entrust us,we’re leading the path to innovation. We now have more than 800 employees in nineoffices around the world serving more than 2,000 customers of all sizes andindustries. Those customers trust us to manage more than $1.3 billion in travelbudget annually. Does it potentially become more difficult to move quicklyand innovate as the company gets bigger? It’s in our DNA to grow and move quickly, to embody amission-driven, nimble and ever-learning culture. Innovation, speed and growth are at the heartof everything we do. We always put the user first, and our product roadmap isequally driven by customer feedback and our own vision. We are laser-focused onthis idea of moving fast while delighting our users. What are you hearing from your investors? Our investors saw a lot of the same opportunities we sawwhen starting TripActions - a huge, growing industry plagued by outdatedtechnologies and legacy players who have consistently failed to address theneeds of both enterprises and their travelers. They are also aligned with ourstrategy to disrupt through innovation by focusing on the traveler first. They agree that business travel should be used as astrategic lever for growth and culture, and that broken travel solutions arehurting business. Our investors are aligned with our perspective that takingcare of traveling employees is key to running a successful business and thattaking care of your travelers and saving the company money aren’t at odds witheach other. A few weeks ago you announced TripActions Consulting , whichadds hands-on, custom assistance to your enterprise solutions. This seems to beanother move into direct competition with the large, legacy travel managementcompanies. Tell us about that strategy. As a result of new technologies, the supplier landscape isexperiencing a fundamental shift. Newly minted shopping experiences andchannels, including the industry’s NGS and NDC, offer suppliers exciting waysto market their differentiated offerings to travelers - mimicking, in manyways, how travelers book leisure travel. These emerging channels ultimatelycreate a highly dynamic, complex market that’s constantly shifting. Whereaslegacy supplier sourcing tactics were static, organizations must now incorporatethe latest and greatest into their company policy to deliver best-in-classcorporate travel programs. Top these new delivery models of supplier options with anexponentially more tech-savvy user base, and the main pain point forenterprises becomes creating a nimble travel program that’s quickly adaptable,scalable and user-friendly. To help solve for this, TripActions Consulting is focusingon streamlining three key areas for customers: Incorporating the latest in supplier technologies and marketpricing. We are overcoming the challenges of legacy supplier sourcing byapplying the latest shopping experiences in-market, while leveraging our latestinnovations in machine learning and data analytics. We are helping to negotiate supplier agreements: Securingunique air, lodging and car inventory for customers (by innovating legacysourcing processes) to deliver full value offerings and new benefits totravelers without compromising spend targets. We are also at the table helping our customers build travelprograms - being a true partner - helping them scale an effective global travelmanagement program by providing a white-glove, always-on engagement model forsharing the latest market expertise, analytics and insights so clients cantake advantage of dynamic changes and incorporate them more readily into theirtravel programs. I spoke to representatives from American Express GlobalBusiness Travel, FCM Travel Solutions and CWT earlier this month and all ofthem say they have been investing in innovation and focusing ontraveler-centered solutions for a long time. What is your reaction to that? It certainly seems out of sync with what customers say to uswhen they switch to TripActions. Like industry-leading apps we use in ourpersonal lives including Lyft, Netflix and Venmo, as well as those we use inour professional lives like DocuSign, Zoom and Okta, once you’ve experienced abetter way than the status quo, you never want to go back to the old way. They also say a primary point of differentiation betweentheir services and the ones provided by startups such as TripActions is theirfocus on human-powered assistance and using technology such as artificialintelligence to make those agents smarter and more efficient. How important areagents to the services TripActions provides and how do you see that evolving inthe future? I would say the primary point of differentiation is thatTripActions is focused on the end-to-end experience of all users, includingtravelers, executive assistants supporting travelers and finance, procurementand HR leaders, to deliver the best experience in business travel. By focusingon the user, we solve the pain points of the business. Others in the industryoften just focus on the business and miss the user completely, which results ina platform users don’t actually use, which means the business doesn’t get thevisibility they need into their travel spend. ...once you’ve experienced a better way than the status quo, you never want to go back to the old way. Ariel Cohen - TripActions Share this quote With regards to AI and machine learning, we use them tocomplement our human support services, not replace them. We’ve applied AI andmachine learning to the booking process. Machine learning personalizes thechoices presented to the traveler, taking into consideration their loyaltyprograms and preferences, and it keeps learning over time based on what theuser books. As a result, users select from the top 10 results returned 90% ofthe time, and the top result returned in a TripActions search 60% of the time.By presenting relevant, personalized results, users are able to book a trip insix minutes on average versus the typical 60 minute industry average. Theultimate goal is to make booking that much easier, and faster, for the travelersuch that they love using the platform. And when a traveler faces a challenge, like a missedconnection or a delay, we have a support team of live human agents whoproactively re-accommodate travelers. And when travelers need us, our supportagents are available 24/7 365 by chat, email and phone, responding on averagein less than 60 seconds. Simply put, we certainly use machine learning toenhance and optimize the entire travel booking experience, though we stillbelieve the magic is in the empathy of the human touch. As a result, we consistently see anunprecedented 93% traveler satisfaction. Nowadays, with improvements in digital tools for booking,expense management and even risk management, isn’t it easier than ever for acompany to manage travel on its own, without the need for TripActions or anyother TMC? That may be the case for legacy players and other newersolutions with limited capabilities, but organizations of every size, industryand geography find value in TripActions. From providing a best-in-classexperience for their employees, to helping organizations save up to 34% onlodging alone, to helping organizations fulfill their duty of care commitmentsvia our live traveler map, there’s much more to TripActions than a traditionalor legacy corporate travel booking tool. Without a well-managed travel program, finance executivesand travel managers risk losing track of spend. With an effective travelprogram and platform that travelers love, companies enjoy high levels ofadoption, and therefore increased spend visibility and savings opportunities.The ultimate benefit is that they can use TripActions to turn travel into astrategic lever for culture and growth. What are the biggest challenges TripActions is currentlyfacing? One of the reasons Ilan and I started TripActions is becausewe wanted to create an amazing place to work with an incredible culture. We aresuper proud of our culture and have been recognized and awarded for it. One ofthe challenges of being in a stage of hyper growth is maintaining that cultureas we scale. I mentioned earlier that one of our core values is alwaysputting the user first, and when you are putting the user first you are alsoalways trying to be better. This results in a constant push on the company andevery single team member to think “how could I have done this better?” It's achallenge to always be learning, improving and never standing still, but youneed to challenge yourself to grow. If we talk again a year from now, what do you expect to betelling us about TripActions at that point? I hope to tell you that TripActions has fast become thedefault for corporate travel. What do you know about the travel industry now that youdidn’t know before launching TripActions? We have learned a lot. One of our key learnings is that theecosystem is very important. Understanding the needs of suppliers, travelersand customers is key, especially as their needs evolve over time. Prior to creating TripActions, you and Ilan created and soldanother startup, StreamOnce. So with two successful ventures under your belt,what advice do you have for entrepreneurs that are just getting started? We have learned so much from founding both StreamOnce andTripActions, and we continue to learn as TripActions grows and evolves. Threeparticular takeaways stick out in my mind: It’s important to be mission driven and crucial to hiremission-driven people aligned with your culture and values. To this end, know your core values and stay true to yourvision. You need to trust your vision in order for others to. Build and grow a culture you believe in. We are very proudof the culture we have built at TripActions and know that continuing to fosterit is essential to our continued success and growth. And finally, what do you like to do in your free time? What free time? Believe it or not, I love to travel. I believe that visitingnew places around the world offers an amazing opportunity to learn, grow andreflect. I have found that mini-sabbaticals have offered me a valuable chanceto think and refresh. Taking time to pause and reflect is especially importantwhen you are moving as fast as we are at TripActions. I am also a foodie andenjoy unique food and eating experiences both when I am traveling and at home.And finally, I love and value the time I spend with my family and friends. More from our In the Big Chair series... PhocusWire talks to leaders across the digital travel landscape.