Ilan Twig – Co-Founder and CTO – TripActions – 3 of 4 – Fantastic Voyage
14 Minutes of SaaS Transcript
Ilan Twig: Expense is a pain in the butt. And that’s what it is. It’s like this thing that you need to worry about. What you optimise for when you travel for work is completely different than what you optimise for when you travel for leisure. We thought if there is a way that we could then make people think about, you know how they make their decisions when it comes to corporate travel more similar to how they do it when they book their leisure travel, there is an interesting opportunity for saving money for the company.
Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!
In this, episode 109 of 14 Minutes of SaaS, the second in our 4 part series with Ilan Twigg, we learn about Ilan’s fantastic voyage with Arial – where in the space of 50 months, they created the fasted growing software company in history with a valuation of 4 Billion. Lots of key insights here. One crucial one was realising that if a company can materially incentivise an employee to spend money on travel and hotels as if they were booking them for a personal leisure holiday, then everyone can win and money can be saved. This is quite a bit more sophisticated than telling employees to “spend like it’s their own”.
Ilan Twig: We thought we could disrupt this market just by creating a beautiful UX wide away. A way for you to book your travel, and see your travel, and manage your travel.
Stephen Cummins: So bring in … because it’s all so all silos … your Galileos, and your Amadeus …. even your UI at the start … because just bringing things in from different places and displaying them in one place, and giving the operator the feeling that they can find things and connect things up – that alone is a big start.
Ilan Twig: But I’ll tell you, I didn’t even know what Amadeus is when we started. We were so naive.
Stephen Cummins: OK. That’s amazing. You’re disrupting this industry!
Ilan Twig: That’s how disruption happens. It starts with being naive. It starts with not knowing … you know, all these details. And that’s what I think … that’s what it requires to disrupt. If you know everything before you start. If you think you know everything, where is the room for disruption? Because you know you will start putting limitations on yourself. When you focus just on the problems, you know, just on the on the problems that you experience as a user. And you’re saying, you know, “there must be a better way to do it!” I was thinking, you know, beautiful UI. I did not know about the complexity behind the scenes to get to this beautiful UI. If I knew, maybe I would have done something else. If I knew how complicated that thing was. And that’s where, you know, that’s exactly where you put limitations on yourself. And you might kill an idea that could have been amazing before you even start it.
Stephen Cummins: You get lost in the details. Or you accept the meme that these are too powerful to move.
Ilan Twig: You assume things. And then you … and then that’s where you go wrong.
So I didn’t know anything about Amadeus or Sabre or Galileo or Travelport, or any of these vendors and how it works. Or how travel is just really complicated. I did not know what it means to issue a ticket. So I just assumed you know, you have an API, you connect an API, you search, a rest API. You search you book, you manage, life is good! Clean. I would build an amazing view. It would work like a Swiss clock. And so we had this beautiful idea. And then we said, you know, “UI is very good for this disruption. You can totally disrupt an existing market just with a beautiful UI. But we said, you know what? It has to be more protected if you want to raise money. So we spent more time, and we realised, you know, that travel is so much bigger. It’s UI, of course, but support … because when you’re on the go – and when you’re on the go three times a month or four times a month, things always happen and you need help. And now, you know, four years later, I can tell you that 60 percent … these are not very accurate numbers … but roughly 60 percent of bookings are being touched later on. Touched means like to change … you need to change or need to respond to something. It’s very involved when it comes to corporate travel.
You know, when you plan you’re annually trip to Hawaii [I wonder if Ilan had researched me, because I used to have one of them to Hawaii annually!], the likelihood is that you change it in the last minute is very low. But when you have a meeting, you know, four meetings with four different customers in one month, the likelihood that one of them will cancel or change or that the airline will change or that the weather will affect you because you travel the entire year, is much higher. So that’s what happens in corporate travel. There is an assumption that things will happen. So support is a key. And then there is the whole expense part, which is also something that, you know, for all of you travelers that listen to this podcast … expenses are a pain in the butt. And that’s what it is. It’s like this thing that you need to worry about. And, you know, there’s never a good time to do it. And then you get the email from the CFO telling you that there is a deadline for this quarter. If you do not submit your expenses by this and that, you will not get reimbursed. And then you pull an all nighter to do it. And that’s a story that I’m sure that a lot of travelers can relate to.
Stephen Cummins: So we’re now on booking, on the go expense management …. and it’s the expense management that truly – on top of all those other things – brings you into the B2B space. Is that right?
Ilan Twig: It’s you know … it’s this whole it’s the whole thing. And it was not expense management … it was just can we help you with the expenses? Because you booked through us. We know how much you paid. Can we streamline it for you? And we had another, you know, very different, I would say, angle to corporate travel … which was when we realised that what you optimise for when you travel for work, it’s completely different than what you optimise for when you travel for leisure. You know, you would optimize for personal convenience when you travel for work. It’s all about personal convenience. It’s about your clubs … which makes a lot of sense, because when you’re on the go a lot, it needs to be constant.
Stephen Cummins: You’re away from your family, your away from your familiar environs.
Ilan Twig: Exactly! You want to be in a hotel, for example, that you trust. It’s clean. Because literally that’s for half the year. That’s your house. So it’s important! It’s not about being spoiled. It really is important. And we thought if there is a way that we could then make people think about, you know how they make their decisions when it comes to corporate travel … more similar to how they do it when they book their leisure travel. There is an interesting opportunity for saving money for the company. And so we have a as part of our offering, we have this incentive program that is built into the booking tool for hotels. So that rewards you for making wiser decisions. There’s a lot of details there, but its definitely another corner of offer of our offering.
Stephen Cummins: So .. you gamify a little bit?
Ilan Twig: Yes. We gamify it a little bit when it comes to hotels.
Stephen Cummins: Okay. Is it possible to explain that a little bit, how you do it?
Ilan Twig: The more choice you have, the more opportunity there is to save money … to make a wise decision. If you try to book a hotel in hotel in Tel Aviv, and there is only one hotel available, you’ll pay them as much as they ask you to. If there’s two hotels, now there is some room. And if there is a, you know, six, seven, eight hundred, which is what you have in New York or Paris or London, then there is a lot of potential to save. So choice creates space for saving …. 700 hotels. Each one has, let’s say, a hundred rooms. Some more, some less. Each room offers something else. Some rooms offer club points. Some rooms do not offer club points. Some rooms offer refundability. The others are non-refundable. Same room in the same hotel. You know, it depends on the how you buy it, where you buy it from, how much you pay … these will give you different benefits. Some will have the ocean view. The other ones will be, you know, the first floor bed type. There’s so much. So now it’s seven hundred times 100 rooms per …. so now it’s complicated. How can you the traveller make the best decision that would fully satisfy what you want as a traveler, but would be the most cost effective.
So then we thought, you know, we if we have our hands on top of this inventory, then we can bring everything. That was the key, bringing everything. So there’s a choice. B, we need to understand this inventory really well. Each room, what it offers, which turned out to be a big problem, a big challenge, technical challenge. Now that we know all of that, can we understand you a little bit, understand the inventory a lot and come up with a way to recommend to you … “Hey, these are things that you know could be best for you.” Now make a decision. And now there is different pricing and stuff. There is the distance from where you need to be. There are a lot of factors. And if we calculate, you know, price …. that we call it ‘a price to beat’. And now if you beat this price, you’ll save money. And if you save money, you’re going to keep 30 percent of the savings.
Stephen Cummins: Part of the plan that you formed with them is that the employees would actually … and it’s for their benefit too … they’d actually give you quite a lot of information about their preferences. So you would know that Employee X absolutely wants quietness. You’re getting the information. It is very complex. So would you have scraped information or integrated with TripAdvisor and all sorts of other places that have that sort of feedback?
Ilan Twig: Yes.
Stephen Cummins: Real time feedback. So you must be taking information from there and somehow making it … and using matching algorithms for that.
Ilan Twig: Yes. It’s actually … it’s a pretty complicated problem, which is which is great because … again, complication equals opportunity.
Stephen Cummins: Because it frightens people off.
Ilan Twig: Exactly. We were unaware of this complexity when we thought about reductions. But as we explored and, you know, we built more and more, we realized, “Oh, there is this thing .. Oh, now, you know, I have a few machines in Amazon that are working full time around the clock just to figure out hotels and understand them.” It goes even deeper because there are also pictures of the room. It turns out, you know … think about yourself … When you choose, when you when you book your travel for, like leisure, you want to stay somewhere … Your decision is really impacted by the pictures that you see. For example, if there is no pictures of the room, I don’t know. You know … it’s like …
Stephen Cummins: I would never choose a hotel with no pictures.
Ilan Twig: You would never choose. If there are pictures, but it’s all about the view around the hotel … and again not see the hotel itself, probably fishy – you will not do that. If you’ll see pictures of the hotel, but then the pictures of the room will be very blurry then, “Okay I don’t like that.” So we are impacted. So now we are analyzing pictures because we know that it is a factor.
Stephen Cummins: The booking part and the cost optimization, expense optimization and also experience optimization for the employees. Both of those I get …and in terms of complexity and all of that. The bit in the middle … on the go part … do you have employees that are non-software that are more involved in that … if something goes wrong, that can help out.
Ilan Twig: Absolutely.
Stephen Cummins: What percentage of revenue, or percentage of your business do you think that’s going to end up being? Because obviously a huge part of it is Software as a Service. What percentage might end up being service? Because that can be hard scale.
Ilan Twig: I cannot share it.
Stephen Cummins: That’s OK.
Ilan Twig: The dollar amount associated with that. But I can tell you that every day, less and less. So we are a travel agency. We are a very unique travel agency because we are very technical first. We are a Silicon Valley core technical company with you know a very modern technical stack, and the data, and everything is measured. And we also are a travel agency. And we had to hire a lot of people from the industry to give us this – in order to build the knowledge internally. And today, you know, I can definitely say we are a really modern travel agency. So now, you know, we have travel agents. And when you need support, they are there for you 24 by 7. And we have a really high SLA of 60 seconds. Up to 60 seconds. I think the average right now is 24 seconds. If you reach out to them, they’ll get back to you in 24 seconds.
We actually publish this number a live on our website as part of our transparency program. You go to our website, you can see the NPR score live. If it goes down, you see it. If it goes up, you’ll see it. We’re really proud of that.
Stephen Cummins: Transparency’s a great driver.
Ilan Twig: This is a great driver. It’s … exactly … it’s a great driver. It’s just …
Stephen Cummins: Because there’s nowhere to go.
Ilan Twig: We have a thousand employees. Next year we will have 2000, 3000. I don’t know. We want to send a message to the company, you know. Transparency. It creates alignment. It creates …. Yeah, so Greg is showing you these numbers.
Stephen Cummins: I can see it. Wow.
Ilan Twig: It’s just on TripActions.com. And you go to transparency and you can see everything.
Stephen Cummins: Average hotel savings of twenty nine percent.
Ilan Twig: Yes. Average time to book an itinerary … because we are really proud of the fact that it takes 5.4 minutes … we used to say 6, but it’s going down. Less than six minutes to book an itinerary on TripActions by yourself.
Stephen Cummins: In episode 110 of 14 Minutes of SaaS, the 4th in our 4 part series with Ilan, we continue to explore the TripActions journey and how in the last decade of his life Ilan has had a kind of awakening – that has propelled him to seek out, embrace … and even crave … hard questions, hard challenges and big opportunities.
Stephen Cummins: You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, and to Ketsu for the music. Thanks also to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and give the show a rating.