David Litwak:
Hello, everyone, and welcome to how I got here Mozilla and focus wares weekly podcast about innovators in travel and transportation. Today we’re joined by XIM Baroda Wallah of Valon to belong to is the global leader in post booking profit optimization and has had quite a wild ride with several name changes. So I think I’m gonna leave my intro at that is as easy as I think, you know, we like to start off every podcast the same way, which is to say first of all welcome, but then ask you to explain the twists and turns of how you got here.
Azim Barodowala:
Thanks, David. And thanks so much Kevin as well. It’s great to be here as well. Um, so yeah, I don’t know if you guys ever watched the show last? Have you ever seen the show lost
David Litwak:
an episode or two?
Azim Barodowala:
The very, very, very first episode took me a while to get into the show. But the very first episode, like the show starts brilliantly there’s this guy. And he’s lying down in what looks like a bed of grass. And the show just opens with his eyes like opening up. And there’s this, like, ominous music in the background looks like these airplane parts are falling from the sky. And nobody knows what’s going on. And it’s just like, there’s like wreckage on fire. And like, there’s just like, you have no idea what is just like hit you. And this guy looks like entirely like a deer in the headlights. And that’s that’s kind of, I guess that when I was think about what’s the image that best sums up what I felt like, in the first week or two of what has become a seven year, nearly seven year run, I’m doing what I’m doing, that would be it. So I, I come out of what you would consider to be a pretty kind of, you know, traditional path, you know, I, I finished up Business School in 2007, I went to work for, you know, kind of a white shoe global consulting firm, the Boston Consulting Group I worked there for about, you know, four years, then got the chance to do a lot of people do is leave and I became head of strategy of an airline in Australia. And then kind of my path diverged. And I ended up on my back with my eyes open with flaming wreckage around me sort of. But anyway, I, the first couple of weeks in the first I would say year was was particularly tough, because, you know, within the first I would say a few weeks, I had joined a company that essentially is the predecessor company of what would become belong to that company is since been divested by us and and doesn’t really, you know, kind of is not really a part of our company anymore. But that company was called audio so and was focused on meta search. So it was focused on kind of creating a new meta search engine is founded in Australia. And I had met the original founders of that business back in 2013, through mutual contact. And, you know, after a few months of talking, they offered me the chance to join as a CEO, and I was looking to do my next thing and it sounded like a really interesting opportunity. And maybe I should have done a bit more due diligence before accepting the offer. But But I did, you know, probably a little bit of ego as well played into that too. And I accepted it. And then you know, and then I found out we faced quite a few challenges. So within the first day, two of our employees out of five, basically said that they were planning on quitting, because they hadn’t been paid in six weeks. We I found out that our server providers were about to cut us off because we had about three or four months of unpaid server bills and about $60,000 in past expenses. We had about $2,000 in monthly recurring revenue at the time, and about $5,000 of cash in the bank. So that that was kind of week one. And it wasn’t a really great week. Because I remember that I had decided to pay for my own ticket to go to Australia from the US just thinking that I was just going to get reimbursed, then I was like it’s probably gonna be a while before I can get reimbursed. So, you know, but I really believed in the technology that had originally been built. I really believed in the CTO of that company, about iOS or the predecessor company fen Bailey. And, and I really felt that there was something there that could ultimately be used to build something bigger. And that was the start that we had, I just I just didn’t quite have a sense of how Bad Things were financially, kind of until I got my hands into it. We also had six years of unfiled tax returns, which would lead to $120,000 in penalties from the IRS, which was not great either.
But two years after that we were cashflow positive. And we were able to raise capital. You know, another year and a half after that we’d raise funds from some of the biggest names in kind of travel technology, venture capital, like JetBlue technology ventures and IAG and others. So we were really able to kind of move the ball forward. And it’s something that I was I was quite, I was quite proud of. So how we actually did that was through like, kind of a, as you said, a bit of a winding path. The first thing that we really had to do was to stabilize the ship by raising capital. So we were able to raise very quickly about $350,000 in 2013, which stabilize the ship. And a good portion of that came from, you know, direct acquaintances of my family, which was probably a bad idea. But But, you know, it’s not something I would do again in the future. But we we were able to stabilize things, we pivoted the business away from being focused on consumers to working directly with airlines. We took one aspect of what audio so did, which was a flight alerts product. And were able to successfully market it to airlines and Jetstar ended up becoming our first customer. And, and we grew that and, you know, and from that, ultimately, within a couple of years of business, it started, you know, picking up some customers, we got quanis, we got a few other airlines in Asia Pacific. And we were very lean and very scrappy, and were able to make it to become cashflow positive. And then we had another kind of big aha moment, early 2016, when we met a, I was just having breakfast in San Francisco with a guy who did ultimately become the VP of pricing for Alaska Airlines, a guy named Kevin Gert. And he said, you know, you guys have all the pieces in place to solve this huge challenge for revenue managers that airlines, which is the fact that, you know, once somebody books a ticket, like all our revenue management systems are designed to optimize revenue, up until the point that you booked a ticket. But after that, you can’t do anything, you can’t kind of transact on that ticket, and we can’t, you know, transact on that ticket. Again, if we, if demand profile changes on the flight, like, it’d be great if there was a tool that would let us do that. And we thought that was a really amazing idea. And he said that you guys have all the pieces in place to do that. And we decided to expand our platform. And that ended up becoming a very, very successful product for us, that then allowed us to really kind of catapult forward, you know, over the last few years to get to where we are,
you know, today so,
you know, things I would say at the beginning of the year, if we had this conversation where the 2020 was going to be this really, really strong year for us, unfortunately, due to the coronavirus crisis. You know, from a business standpoint, obviously, as much more larger human toll, but from from our perspective, as a business, it’s been a bit tough, but but you know, our tool is only going to become more valuable coming out of this crisis. And, you know, we’re, we’re really looking forward to moving forward out of this. So I’m leaving a lot out of the story, because I don’t want to, you know, drone on and on. But But, you know, we, we had to, you know, really kind of, you know, rethink ourselves a couple of times. And, and, and one thing I was thinking about when we had these conversations is that we really, we didn’t, we didn’t really have the luxury of, you know, thinking about a really cool idea, and then getting the market tested. And, you know, getting early user feedback and doing all the things you always hear about when people are like, Oh, I built this cool business now, like we, we had no money, like we were running out of cash and running out of time, we had to figure out a way to kind of just make it work. And that’s what we did.
Kevin May:
So, hi, his name is Kevin here. Thank you very much for joining us. I mean, it’s interesting, you said you joined what was then do so and realize the state of the or the, you know, the financial peril that the company was in? How quickly Did you stabilize that you said you managed to get a loan fairly quickly? How long was that period? And how did you kind of I know it’s a fairly small company? I do so but how long was that period? And how did you manage to keep people on board with you?
Azim Barodowala:
Ah, yeah, well, so it took about a year to fully pivot the business out. Because, you know, that business had history and that business had folks who really believed in a consumer focus and that was a moment painful for certain folks within that business to realize that maybe their original vision of the business didn’t fit with what we are going to become and, and therefore, maybe they didn’t fit with what we were going to become. And that I think, is part of every founding story of a company. And, and that was difficult for me personally, I’d never had to go through that. It was difficult for them to. So not all of the team stayed on some left. Yeah, and, and we shrunk. And then we grew. So about a year to really kind of stabilize things. When we think about kind of when our business as a volunteer was for formed and founded, it’s more kind of 2014. Because we really kind of think about first year as sort of winding down the audio so focused and moving on to becoming what would become belong to and changing the name of the business and, and kind of divesting that old focus.
Kevin May:
I remember back in my days as editor of teen news, we wrote a profile about ideas. So in the summer of I think it was 2010. And then a year later, we did a follow up with them and said, you know, what did you learn? I’m assuming it was Tom that answered the questions, you know, and he said then that they that had been quite a dramatic year for them in that kind of 2010 2011 period, and a lot of assumptions that they made about virtual interlining, which is now a fairly hot topic in travel tech. Now, I said that period, they hadn’t worked out like just quite how hard and there was no demand for it back then. I mean, it’s, it’s interesting that, that you did come in and it took a couple of years, but it was a very, I guess, a very concerted decision to take the company away from a consumer focus something into b2b land.
Azim Barodowala:
Yeah, it’s a it’s an interesting story. I mean, I remember one of the first days when I was at the company and I, I said to Tom and Fenn, I said, a year from now, I could envision a company that is wildly successful, and nobody even knows the name of the company. Nobody even knows the name of it. Nobody ever knows the name audio. So
and I just remember looking and
and, you know, and defend that seem completely normal, like, Yeah, of course. And I remember looking at Tom, and he seemed horrified by the prospect of that. Because to him, he was very, very proud of that name, and very, very proud of the kind of what would I mean, which is not just him, I mean, anybody who runs sort of a very strong consumer focus business believes in the brand that the consumer sees, whereas, you know, for Valon to, you know, we work with some of the largest airlines in the world yet. Nobody knows who we are. And we’re happy with that. Because for us, it’s all about the technology. And it’s all about, you know, ultimately building a great product that airlines find valuable. They’re the ones who pay our bills, ultimately. Yeah, so I have a question. And I’m surprised you kind of didn’t go over this a little bit. But why didn’t you leave? The minute that you got there, and you saw the flame exploding your proverbial plane exploding above you? You know, and rocking down? I mean, I think most people would go is there’s two parts of question one, one, you leave in two, did you feel like there was a lack of trust that they weren’t transparent with you? They know right off the bat and saying, here’s what you’re about to walk into? I would, it’s not even so much the situation? I think it’s stunning to me, it’s more than so they didn’t seem to, you know, tell you? Um, no, I mean, first off, I don’t I don’t fault Tom or fen for for anything, really, in that regard of you know, potentially kind of misleading me in any way they didn’t I asked them plenty of questions. They even gave me a references of people I could talk to I fought myself in the sense of being naive to a certain degree and not knowing necessarily the right questions to ask. So if anything, I put it on myself of Hey, you know, and have some lessons learned for Hey, the next time you get offered a gig, these are the probably the questions that you should ask as you know, as an entrepreneur, so they they never kind of you know, deliberately I would say, you know, misled me but I you know, the thing is, is that
so the question about why why did I leave and
I don’t want this to come off the wrong way, but I really I wanted the shot at trying to fix it. I think that there’s some folks and maybe the I think being an entrepreneur is sometimes our tracks a certain personality of, of just wanting like of just trying to throw caution to the wind a little bit and you know, and going for it and if you don’t have that in you like if you’re not okay, you know, with that with the risk and with the sort of the the risks Tolerance than this isn’t really for you, you know, I could have gone back to McKinsey or BCG or somewhere else and worked and made a hell of a lot more money than I’ve made any of the years in the last seven years, and had a much more stable kind of, you know, existence. I mean, gosh, this last seven years have been, except the last few months have been one of the greatest bull markets ever, you know, but, but I wouldn’t have had the chance to build something to the extent that I have had in the last seven years here. And I’ve learned so much about building a company and running a company in less than two years that I would never have gotten in anything else that I would have done. So that desire to have that experience, as part of my career was something that I really cared about. Plus, I’m passionate about travel, I really, really wanted to have this opportunity to try to build something meaningful in the travel space, and have it be my own. So that was really why I decided to stay. And you know, and and, and I like the guys a lot too, you know what I mean? Like, I wouldn’t have stayed if I didn’t like, you know, working with with the folks who were there and really kind of being in the same boat to try to get us going again. So I want to delve a little bit deeper into you know, your products, because I think one of the missions of this podcast is that everyone knows about the Expedia and booking.com and TripAdvisor of the world. And that’s kind of what I think actually, most people when they get into travel, they think oh, well I go to Italy sure I can start a travel company but they don’t under understand the underlying you know, tech systems and economics in your company is a very interesting kind of, I don’t know symbol of those, those airline economics, can you go a little bit into why an airline might actually want to resell seats or oversell or have oversell protection, these things that I think many, you know, even avid travelers go, you know, why are you offering people $1,000 at the door? to, you know, to not take this flight? Isn’t that, you know, incredibly bad business that clearly like there’s a method to the madness. Absolutely. So I’m going to focus on our what I would consider the revenue side of our product portfolio and not kind of the alerting side of the portfolio, which was the initial focus of our products, which, surprisingly, today, that alerting product still is having a renaissance in the post COVID world. And if we have time, I’m happy to discuss about it afterwards. But let’s stick on the kind of the revenue rebook product and the oversell protection product. And why an airline would want to use that. And what does it mean from a consumers perspective, because I think that’s really where the rubber meets the road. So let’s first talk about something that most consumers are very well aware of, which is an oversold flight. Now you’re all you all know this experience, get to the airport, you know, you’ve got you woke up at like three o’clock in the morning to make it in time for a 6am flight. You get there. And then at like, 515 in the morning, they’re like, Hey, you know, we’re oversold? Would you like to take the 11am flight? And you’re like, I would have liked to take the 11am flight if you would have told me, you know, 8pm last night or, or 9pm. Last night, but but, but now it’s six o’clock in the morning, I just I just don’t feel like it right. That’s, people think that something went wrong.
From an airline sampling, like all the airlines screwed up, you know, they oversold the flight. But what they don’t realize is that everything went right in that scenario from an airline’s perspective and 100%. That was right, that is intended to happen. That is the right thing to happen. From a revenue management standpoint, nothing went wrong from the airline’s standpoint, it’s how they deal with it, that can be improved. But but from a standpoint of whether or not that should have happened, it absolutely should have happen. So why is that the case and it comes down to the fact that when you buy a ticket for your flight, there is no guarantee that you’re going to show up for that flight. And every time a flight departs with an empty seat, that’s revenue that the airlines lose. So the airlines have plenty of calculations to know what the typical what they call show rate is on a flight. So, you know, on a flight, you know, maybe only about 95% of the passengers or 98% of the passengers who book a ticket will actually show up. So imagine the plane is, you know, 450 sorry, is 200 seat aircraft, and only a 90% of the people show up that means on any average flight, typically for seats are sold, but nobody actually shows up for the flight. And that’s not great for the airline. They think Hmm, you know, I could actually sold those seats to somebody else. So they start selling them and that’s how the old that’s how airlines start over selling, you know, flight so they’ll oversell a flight by four seats roughly. But what happens is that on average, four people don’t show up, but sometimes six people don’t show up and sometimes two people don’t show up and when more People show then are expected to show the airlines have to basically, you know, bump the passenger. And that’s the situation that you get into. So what our tool does is basically rather than having so we don’t attempt to solve overselling, you know, we’re not going to ever solve overbooking because overbooking is not a problem that is intended to be, quote, unquote, solved. we attempt to make that process flow better, better for consumers than better for the airlines, and less stressful for the gate agents. So what we try to do is improve the communication between the airline and the customers make it much easier for customers to actually know their options about alternative flights that they can take, make it virtual. So it happens over a, you know, over the phone or over, you know, over kind of an app or, you know, email as opposed to having to happen face to face at the gate, and trying to push it wherever possible that process sooner. So in some cases, you don’t have to actually come to the airport and be there at the last minute. And, you know, in the world that we live in now with Coronavirus, that’s going to just become more and more important because you know that face to face interactions, the thing that we’re trying to reduce, you know, and especially as you know, when a fights oversold people tend to get a little bit voluble, and, you know, and they may be some, you know, a little bit of anger coming up. And if we can manage all of that, you know, some people don’t have to have a lot of face to face interaction, and have a better outcome. That’s great. So that that’s sort of the entire, you know, oversell protection product, which I would say is solving a problem that most people are, you know, aware of, but it’s just kind of a new way to solve it. The revenue rebook is an entirely kind of new way of thinking about the process after you book a ticket. And I’m happy to go into that unless you have any questions about sort of the, the oversold protection,
Kevin May:
yeah, the oversold thing. And maybe I’m showing a lack of knowledge of my end here. But I was always under the impression that the oversold, kind of things that happen in aviation was, was a particularly North American, for fear of generalizing kind of concepts, rather than something that happens at the same kind of scale in, say, in European countries where I am, is that is that correct? Is it? Or am I completely wrong on that?
Azim Barodowala:
Um, you know, I think it’s very prevalent in the United States. But But, you know, you look at Asia, for example, it definitely happens in Asia. It definitely happens. He to certain extent as well in. In Europe, I just, I don’t, I mean, like some of our European customers, as well, you know, are looking for ways or they were historically looking for ways to push the booking profile on their flight higher. But with with regulation coming in is some very specific regulation, which you don’t want to throw in a bunch of jargon. But there’s a very expensive regulation that came into Europe that penalizes airlines for over booking. Yeah, and that is one of the reasons why a lot of European airlines tend to be more conservative. But in a post COVID world, where people are incredibly fickle, airlines are gonna have to oversell their flights a bit more. Otherwise, you’re just going to, you know, leave with only 60 or 70% of the seats filled on the flight, because of the show rates right now are so, so volatile.
Kevin May:
So then, tell us a little bit about the the revenue management part then.
Azim Barodowala:
Yes, absolutely. So that one is really exciting. I mean, that was the one where Kevin girl basically suggested this whole thing to us. I wish I could take credit for it, but it was really his idea. And so I take no credit for that. It’s, it’s, you know, he’s, as I said, the VP of pricing and revenue management at Alaska Airlines. And this was entirely his idea to us. So full credit to him. And he basically so the way that works, essentially is every every seat on a flight has a value to the airline. And it is a function of the price that a customer is willing to pay pay, and the probability that that seat will actually get sold. And some seats, not every seats created equal. Right, you know, the 7am flight from Atlanta to LaGuardia is going to be worth more than the, you know, 2pm flight. Yeah. So the idea here is that if those discrepancies to the extent that they exist, a week, two weeks before departure, but typically kind of seven to five days prior, which is where our tool really plays the best. You know, you can see that You have a higher value flight. And you can see that you have a quote unquote lower value flight. So if if the marginal seat on that 7am flight is worth to the airline, you know, $400. So that basically means that if I could squeeze one more seat onto that plane, it would be worth 400 bucks to me. And the end, that same marginal cost on a 1pm flight was only $100. Then there’s a $300 spread there of, you know, in economic terms of arbitrage, you know, because it’s the same asset, it’s the same Atlanta LaGuardia flight, it’s just at a different time of day having a different value. So So what our tool does is let airlines unlock that arbitrage value, let it unlock that value by making an offer five days before departure to the guys on the 7am flight to say, Hey, you know, are you willing to take 150 bucks to move to the 2pm? flight? I had a time now you’re confirmed on that flight. And if you say yes, now the airlines basically cleared, you know, say they paid the person $150 if cleared an extra 150. Because, you know, the marginal cost or marginal revenue would been 400 on the one that they’re getting. And the end, the displacement costs is 100 on the other flight, and they only had to pay somebody 150. So the total cost is 250. And they got 400. for it. So they cleared 150, which is great for the airline. And our airline partners are really loving that solution today. Because it’s an innovative new way to make money. That’s not made by you know, charging for an extra bag, or untidy sort of an extra, you know, ancillary while it is kind of an ancillary revenue source, it is completely new. And it really gives them the chance to benefit passengers, as well as generating incremental profit. And that’s why it’s really exciting.
Kevin May:
Now, you said, if we can wind back a little bit, you said your first customer equipment if I’m wrong was Jetstar. And one of the things that’s often that we found when talking to startup founders is that they often for the beginning, often have problems getting your foot in the door of their potential customers, whether it’s an airline or a hotel, depending on what they do, for example, but you know, Jetstar was your former employer? And was it an easier kind of conversation to have to convince them that you had something that was worth looking at? Because you had a connection with them through the previous previous role that you had? Or was it something else?
Azim Barodowala:
Yeah, so that definitely helps. So if I have to kind of give advice to folks who are thinking about this, you know, and founding a travel technology type startup, there’s sort of, at a minimum, three really huge challenges, and you’ve hit on one of them. But there are two other ones that are, are just as challenging. One is sort of just getting your foot in the door, like how do you even get on their radar. And for me, you know, having a connection, knowing I knew the chief Commercial Officer at the time, I was able to meet with him and show him some data. Like that definitely helped. But that was just like one of the three big steps. The other the second step, which everybody always forgets, and I didn’t even know this existed until I had to go through it is contracting, procurement and legal like that will kill more startups than you will ever imagine. And these are all the planning the graveyard of startups, because, you know, that the these these companies they have in house counsel that can just drag out the contracting process. And, you know, for us, you know, that could end up costing 10 $15,000 in legal fees. So, while we had the initial conversation in, you know, August of 2013, we didn’t get a contract signed until March of 2014. And then the third hurdle came in, which is actually the technology integration, which took another kind of five months to do. So, you know, it’s not just about, Hey, I have a really cool idea, and I got somebody really high up at the airline to buy into it. It’s about Hey, did you actually get a contract? Did you get the technology to work? And then ultimately, did you actually convince them to write you a check and pay you because oh, by the way, sometimes it can delay payments and do all sorts of other funny things, because they can and you’re small. So yeah.
Kevin May:
And another thing that kind of related to that question, really, is that you know, when you are on there knocking on the door, sometimes, again, whether it’s a hotel, or an airline, or whatever kind of supply that a tech provider might be wanting to work with, they don’t quite understand or they either don’t understand the product or they they offer some degree of resistance towards it, because they can’t see the wood for the trees as we would say here. I mean, what kind of resistance if any, did you get from airlines when you were trying to convince them that this is something that they should do?
Azim Barodowala:
Huge. So it’s it’s very challenging, especially when you deal with an airline and, and are part of the airline like revenue management where you which tends to attract some of the best and the brightest folks who really believe in it. You know, in what they’re doing, they’ve been schooled a particular way in revenue management, which is that revenue management occurs before ticket is booked, not after. So to getting them to change that perspective is a challenge. But I’ll tell you, one of the biggest things that’s helped us is, and I haven’t really mentioned as part of our story is that in 2019, after we had started achieving some success, we were able to form a partnership with Amadeus. And that has been, honestly, if there’s one thing in our history, that’s in our recent history, it’s been the most transformative change for us, it’s been having that partnership in place, because suddenly, we have kind of the, the, you know, the backing of, of a very well respected global brand, who has been very helpful in kind of helping, you know, taking us to airlines, giving us warm introductions to the right people there, and really helping us to help them understand the value in what we’re doing. And they’ve also tremendously reduced the technical friction that’s involved in installing our solution with with the airlines. So both of those things have been very transformative for us. And, and that’s kind of how we’ve gotten through and started to cut through and get more airlines engaged, even in the middle of this huge crisis right now. Yeah. So that’s a perfect segue. So you had a good experience with Amadeus? I don’t know very many people have had great experiences with GDS is I know that many of them are often very territorial, you know, mozia aggregates ground transportation, many more than one GDS has said they want to move into that eventually, and that was five years ago, hasn’t but still has prevented us from working with their airlines. So they, you know, we’ve, you know, realize these guys can be allies, but most of the time they can get in the way. And I’d love to understand, like, you know, how did you navigate that? You know, did competitive pressures from them come up? Did they think well, this is something we might want to do? We are the airline it, guys, and how did you win? I have a follow up questions about that about your ideas about the future of GDS is but let’s leave it at that for now. Yeah, no, absolutely. I mean, I’m sure, you know, if they hadn’t thought about doing it themselves, I’m sure. I’m sure. I mean, I’m almost positive that internally, they’ve looked at this, because you know, I’m in a loop is got a very kind of capable team. And I’m sure they looked at a lot of, you know, strong ideas. And this isn’t, like, what we’re doing is not something so novel that has never been thought of before. But I think, ultimately, it just comes down to, like, with everything this is if there’s one sort of people remember only one thing out of this whole experience, this whole podcast or whatever, it’s just that everything comes down to execution. Ideas are great, you know, chatter around and, and talk about, but at the end of the day, it’s what you do what you’re able to actually get done that matters, and execution is the most important thing. So even in this case, you know, you know, at least with respect to us, they were able to realize that it might be faster for them to to work with work with us, you know, to be able to bring the solution to market for their customers faster. And and essentially, that’s what we ultimately did. They, you know, they, we but we did have to be like just incredibly transparent with them about, like, what is in your product roadmap, and ensure that whatever we talked about with them was just like that, what we knew about like what we were doing, and that that steered clear of anything that could ultimately be considered competitive for them. Otherwise, there would always be this gray area. And, and we also had to structure to be quite honest with you the way our relationship work. And I can’t go into a ton of detail about how our relationship, you know, works on a commercial side. But we had to, ultimately we had to be willing we being Valon to, to give up a few things, for the sake of the relationship as as one does with any relationship, you know, business or personal in life. There’s a lot of give and take and ultimately, that’s led to a much more harmonious relationship with Amadeus and the future and one where we really consider them our closest one of our closest partners.
Kevin May:
And I suppose another significant or it seems significant at the time, I remember writing about it, but you went through the the hang of 51 program.
Azim Barodowala:
Absolutely. Yeah.
Kevin May:
iags kind of accelerator IAG, for those that are listening. And that don’t know is the parent company of British Airways, Iberia and a number of others. And first of all, as in can you tell us about that process? We’ve spoken to lots of people on how I got here that went through Y Combinator, for example, but not somebody that’s been through an airline based accelerator program. And and secondly, what I’m interested in in particular is that they did invest in you at the end of that process. Yeah, what does that mean for your ability to work with other airlines that perhaps perhaps aren’t in the Alliance, that ba and the others are into, does that kind of restrict some kind of impose some kind of exclusivity on you
Azim Barodowala:
know, so that the short answer is no, there’s there’s no real commercial restrictions that are tied to, you know, the investment that was something that we all agreed would not be in the interest of their, you know, investment. Yeah. But, but,
but yeah, let me talk a bit about that. It’s kind of interesting, because
the cap table of Milan to lists Y Combinator as an investor. Okay, so we are a, you know, at least, theoretically, in paper, a Y Combinator company, because of the fact that, you know, we came out of, you know, audio, so it’s still, it’s still part of our DNA. You know, I don’t think I’ve ever heard from Y Combinator in the six, seven years that I’ve been here, despite multiple reach outs for me say Y Combinator, if you’re listening, respond to my emails, because I’d love to hear back from you. And, but, but in all, in all seriousness,
the
tank 51 experience was great. Those guys really know what they’re doing. And they’ve been very dedicated to this program, it’s been incredibly beneficial for us. And, you know, we went through it in 2017. And, you know, they focus on some of these really tiny details, like, you know, making sure that the contracting processes are really simple for startups. Yeah. So that you don’t waste a ton of time making sure that the program is only 10 weeks long. So it forces everybody to be focused on output. And I think they did a really good job. And it allowed us to really be focused and demonstrate to them the value that we could drive in 10 weeks. And you know, and quanis had a similar program called Avro, which since, you know, discontinued, but coming out of that both Avro both quantocks and Igy, ultimately did invest in us. And it was kind of a byproduct of having had them had the ability to kick tires. And and you know, and see, you know, what we were like so, yeah, that was good. I want to quickly go back to we were talking about GDS is and I kind of asked more of a broad question, I think we should wrap it up for today. But, you know, we’ve interviewed a fair amount of kind of back end technology systems silverrail Freebird, which does something interesting around it kind of in your area around flight re bookings. But it seems like a lot of these guys are doing the innovation that like GDS is frankly should be doing you think, now, what am I first kind of what the fuck moments was realizing how extractive a lot of the geniuses were, and there’s been a lot of movements to try to kind of, you know, move away from the geniuses, ironically, you say, you went through it, and I’m pretty sure I am pretty sure it was one of the first ones to publish an API that was not GDS dependent, if I’m not mistaken. But I’m curious about how you think about the future of GDS and backend technology, when it comes to airlines is it, you know, Amadeus, and all these guys still staying at the forefront, and I recognize maybe you can, if you’re, if your opinion is that they’ll eventually be obsolete. And if you can’t share that, that would, you know, would love to just kind of hear how you think all this pans out from a back end airline perspective? Yeah, I mean, look, the The interesting thing is that, you know, what people like Amadeus is a is a massive company, right? That has huge like, they’re almost like a bunch they’re almost like a conglomerate that have a bunch of businesses that are related, but are not you know, are very, very, very different. Right? So they have the consumer business which would support you know, travel agencies and things like that. And they have a kind of a core PSS business, then they have you know, airline, airline software and airline you know, systems if the airline business aspect aspect of it alien technology. So we deal with one aspect of their business, but but there are there multiple others, like the aspect of the business charges, you know, revenues per flight segments, or whatever is something that we don’t typically even really interact with. But I made me my big contrarian and I’m not, I’m not just saying this because of our partnership with Amadeus. But I think the the GDS is do have a very strong role to play in the future. You know, I’ve spent my fair share of time in, in nice with the guys that Amadeus and you know, they’re very, like people, before I actually met them, I always thought that there were these bunch of old folks that were sitting around, you know, you know, maintaining mainframe computers, and you know, that the systems are all creaky and old, and that’s just the way that it was. But the reality is, is that, you know, they’ve got a lot of smart people, you know, working on a lot of, you know, challenging problems, and they’re essentially trying to
the whole system of travel itself is this company. Flex, you know, I think that’s a misnomer for a lot of folks to think that it can just be simplified down. And that, that there’s some silver bullet that’s going to result in a kind of a completely new way of working. There’s so many aspects of travel from, you know, departure control systems seating like ancillary products, I, you know, the the booking systems, there’s just so much stuff that, that, that makes up the one word of travel technology or two words of travel technology as a whole. That, that, that, that I think that the that you’ll see aspects of it change. But but it’s not going to change, I would say overnight, and I think the GDS is are going to play a core role in that process. Now, the reason we have, you know, where I sort of have a positive perspective around Amadeus is approach is because they’re really been engaged in quite a bit with respect to partners. So they’ve been, I would say, more open to working with partners and say what we’ve seen so far from somebody like say, Sabre, so, you know, over the last few years, Amadeus has really kind of pushed this partner strategy, trying to create almost like an app store, of a partner, third party, partner programs that their airline partners can, can sign up to, I think, ultimately, that’s going to be an interesting avenue of innovation for them, where they provide a platform that then other people can build on to, and allows them to get both, you know, the benefit of still being of all the relationships that they built with all the airlines around the world, but still being able to bring in new technology. And I think that’s kind of how I see the future playing out.
Keep in mind, I could be completely wrong.
Kevin May:
Okay. Very last, last question from us. And so it’s a very quick one, if it just take you back about 20 minutes ago to something that you said, we were talking about money. And you said that you you got some money from family, I believe he said, You said you’d never do that, again. We have a lot of entrepreneurs and other startup founders, etc, listening in, can you tell us briefly why you wouldn’t do that again?
Azim Barodowala:
stuff, stuff, I don’t know how else to say it. I mean, when you know, your parents, you know, I took money from my parents, I took money from my brother, I took money for myself. And and once you know, and that was, you know, hundreds of thousands of dollars, you know, from my parents retirement, you know, from my brother’s, you know, savings, you know, from my own savings from the ability to buy a house or, you know, I’m sorry, I’m being so personal. But I mean, that is, you know, I mean, you, you, it’s not, and you do it, because you believe in so much in what you’re going to do, but then you feel the weight of the world kind of come on your shoulders after that, because you know, that they’re that you’ve sort of that there is no going back. There’s no like, Ah, you know, I get up one morning, and I don’t feel like doing this No way, you know, I feel I have to feel like doing this is my parents money, you know, I have to make this work. Ultimately, I have to be successful. There’s no non there’s no, that we weren’t successful or that like that. We didn’t make it because we couldn’t try enough, you know, there isn’t, there’s nothing like that this has to work. So. So I think that that’s good. But I also think that it can put a undue amount of of stress and pressure where maybe it’s it’s sometimes good to have a bit of separation. Yeah, that’s all.
Kevin May:
Okay. I can only imagine how difficult that must be that kind of level level of responsibility that you have to kind of put yourself through giving you service your parents, your parents money and money from your brother, and he said, your own money. So thank you very much as that was terrific, really great interview, thank you for, especially for sharing so much of, you know, the the highs and the lows of this, this this journey that you’ve been through since you joined and, you know, hopefully, much brighter things to come in the future. As you said, there’s lots of things that can happen as a result of the the situation that we have found in the found ourselves in that could actually be more useful or even more useful for the products that you’ve created. So on behalf of David, thank you very much for joining us. That was great.
Azim Barodowala:
Yeah, no problem. I really appreciate it. And, you know, I’m, you know, I really think that this is going to be a crisis that with Coronavirus that that you’re going to see the travel industry emerge stronger from it’s going to look a little different. But yeah, at least from our business perspective, we’re very, very well positioned for the for the for the future. Okay.
Kevin May:
Everyone tuning in, you’ve been listening to another episode of how I got here that is Mozi Oh, and focus wise, weekly backstories on innovation, and all interesting things to do with entrepreneurship in travel and transportation. Thanks as always for listening and thanks to our guest as in Urdu Allah from Valencia, and we’ll see you next time. Thanks so much
Transcribed by https://otter.ai
