David Litwalk [00:00:01]: Welcome to “How I got here” the inside stories startups an innovation and
travel on transportation with your hosts Phocus Wire Kevin May and Mozio owner David Litwak.
Kevin May [00:34] Hello there good evening, afternoon wherever you are, welcome to How I Got Here. These are the inside stories of travel startups and innovation travel transport tourism all those kinds of things. This is another episode I'm Kevin May and always I'm joined by my co-host David Litwak. For this episode, while incentivizing accountability might sound like something for a management consultancy
handbook but you know it's actually a really neat idea from a company called Travel Bank where the employees for the companies that works with are rewarded for better handling their expenses. Now so to
talk us through this and to give us a sense of how we built the company after creating and selling one just a few years before. This week's special guest it's the CEO and co-founder of TravelBank Duke Chun and welcome “How I got here” Duke.
Duke Chung [00:01:24] Thank you it's a pleasure to be here to share our stories.
Kevin May [00:34] We look forward to hearing it. So the very first question we was ask everybody is how did you get here?
Duke Chung [00:01:36] Travelbank started at the end of 2016 and I started this business when we had actually just sold our previous business to Microsoft and I didn't have any plans in fact to stay on at the time but staying on to be part of Microsoft did change the history for myself. I soon learned to post acquisition because we were being asked to move to many of the Microsoft systems that Microsoft uses specific vendors to handle their expense and travel and unbeknownst to me because we as a small business didn't have anything like that for ourselves. We were being asked to move to concur and I would say in a matter of six months it became one of the bigger complaints that we heard from our employees post acquisition. And I'd never used anything like it before. So as a first time experience but that didn't change my thinking until some time in 2015 when there was a big announcement around acquired by SAP Concur for billions of dollars and that's when it actually caught my attention unknowingly how large this market is and really the need for travel and expense capabilities across every company. And, basically I went to take a look a little bit more into the space and. What I recognize and soon realized was this was a tremendous opportunity at that moment, thinking about how to build something amazing that can help really transform the next 10 years.
And so I left Microsoft and, moved out to San Francisco to pursue this next chapter in my entrepreneurial career, to build Travel Bank.
Kevin May [03:38] That's terrific. Thank you. I mean, when you would, when you came up with the idea and you were looking around and you could see what Concur does, and there are frankly some, you know, there's some other fairly large companies that are also involved in expense management.
How did you kind of set out the idea in relation to what they do and what you thought that you could do? How, I mean, how, give us a sense of how long back to come till you came up with the core idea behind Travel Bank.
Duke Chung [00:04:10] Yeah. So, first of all, Travel Bank, our mission is to focus on building the delights for complete, expense and travel solution for every user, every user, anything is really important in our mission.
Because what we've recognized, moving into this space was that these travel and expense systems have historically been built supporting larger enterprises, larger companies, and possibly because of the way these products were distributed through, you know, a series of very successful travel management companies: the American expresses the BCDs, the Carlson they have been major influencers in how these products were distributed and the way the products were built. Ee believe really we're focused on the larger end of this segment, the enterprises and the upper mid markets. And but one thing that's changed as we all know in the last, you know, five years plus is the distribution of these products, in accessibility to these enterprise capabilities before mobile phones and before the app stores.
And even before online distribution, you know, the only primary channel to distribute these kind of products were through these travel agencies. And I think what's changed so much in the last five years is now everyone has a mobile phone. Everybody goes to the app store to download their apps, and that fundamentally has reduced the friction for users.
Users in this case would be employees at companies to be able to gain access to these technologies in ways that were not available in the past. And I think the, this fundamentally changes the way that these types of enterprise products can now be, easily accessible and to be available in the hands of these users in a much faster way.
And so our mission was set out really to build an amazing technology with an incredible experience around expenses and travel, but focus on making it available to everybody around the world. Not just the largest companies, because they're working with their travel agencies, but quite frankly, any companies, small businesses, startups,, the segments of the markets around the world that have never been accessed or have never had the access to these types of technologies.
Well, because of the limitations before.
David Litwalk [00:06:46]: Very cool. So Duke, we met the president of Amex GBT a few episodes ago, and we were talking about how they're trying to kind of breakaway from the TMC being only at the service layer to also be in a, you know, kind of into the tech side as well.
And I'd love if you could elaborate a little bit on how you thought about that traditional divisions between TMCs, travel management corporations for the service lever, OBTs online booking tools for the tech layer and how you may be streamlined that, because from what I understand, you threw it all out. You're not working with many, if any, third parties when it comes to the service you are, you have, tech and service inhouse.
Duke Chung [00:07:43] Yeah, so we, the way we see it, as first off as, just there's evidence of scale, you know, the Travel Bank now in two and a half years has grown to 120,000 users. We're adding 10,000 new users,, we reached 20,000 organizations. So to give you, give everyone a sense of scale in just a relatively short amount of time. You know, when talking about reducing this friction to get out there, and I think what's, in the question around, you know, how this is becoming more separated, the first generation of travel management companies will, we'll call them teams.
You referenced the AMEX GBT, and others on that segment, historically has been very successful because as a large enterprise or mid market, when I need a travel service. I don't really think about going to Concur right away. I actually would call Amex GBT and I would evaluate the TMCs based on service, quality and ability to scale.
And then when it comes to the technology in this, you'd reference an online booking tool to OBT, you know, they can all resell the same product and typically Concur has been very popular. Of course, there's others that generation as well. So if you kind of step back and look at what has happened. To get to where we are.
The TMC wants one of those we'd say have typically led to the differentiation from a customer service perspective how well they can provide adequate scale and service quality when it comes to travel support. And technology has always been second to that. Technology is always the had always been you know, part of the RFP, you know, what online booking tool we consider to be part of this overall experience. And that's how these systems had been implemented and why everyone is where they are today.Tthrough, you know, seeing that scallop around the world, but what's changed in the last few years and it's we believe is going to continue to change in the next decade. The differentiation is no longer happening at the customer service level.
It's actually happening at the technology level. So what were the TMC 2.0 companies Iike Travel Bank are leading our differentiation for technology. We are showing the companies what the technology experience can be like for their employees and also for their admins, their finance teams, what that how delightful that experience can be.
And the service side is actually becoming second to it, which is that this sort of service side check the boxes of our expectations, that's being evaluated secondly, so. We believe this is very, disruptive.We call it the beginning of the digital transformation of the travel and expense industry where we've seen this happen in other industries as well.
You know, clearly retail is the best example right? Everything moved online in the last couple of decades. But also examples like, you know, Blockbuster and Netflix , we've seen Peloton come out and I guess time will tell to see how that does, but every category has its own technology disruption.
We're seemingly where our world is moving more towards looking at the technology first and in our industry here for travel and expense, we believe that this transformation is just at the beginning of it. Happening in, and we may be just one of the set of providers that are seeing it the same way with leading with technology first and then providing the 24/7 travel support experience as part of that solution, as part of our differentiator.
David Litwalk [00:11:23]: Awesome. We've had a couple people on the Podcast who've talked about the difference between a fix it business and a truly disruptive business. And, so this brings me to, you know, why, how did you think about the potential of working with others? KTS sold to AmEX GBT recently and they were more of a fixing business.
They wanted to kind of create a next generation OBT I feel like you're more of a disruptive business and why did you think that was the correct pathway to go versus kind of working with other people in the industry?
Duke Chung [00:11:55] Yeah, that's a great question. So we are in one of the areas of focus that really differentiates us is Travel Bank has started in the SMB space and also in the U S , so when we look at the U S markets who's in each segment if I were to split it out, the $300 billion market for the U S , I would say roughly two thirds of it is in the mid market and enterprise that's already being handled by a manage travel management company, like an AmEx or Carlson, but the other remaining one-third, which is called roughly a hundred billion dollars, is of a smaller- medium business market, SMB segment, which are typically companies that spend 10 million of travel or less.
Oftentimes, it's even much smaller. It could be as much as $50,000 a year. That segment we had found had been extraordinarily underserved. 90% of the time when we sign up a new customer in this segment, we're the first solution. So the company doesn't have anything.
They're grounded. They're leading to us mainly because of our technology differentiation to be able to get them up and running quickly and to be able to support a small but growing set of employees within their companies or business scales, and so what we found was that teaming up with the teams.
You know, to help them support their customers would naturally bring us into the mid market enterprise, which was a space that we had considered, but it would be a very long sales cycle. And quite frankly, you know, I think given that this industry is pretty old school as, as you guys know, .
We didn't have that much success. When we reached out to the TMCs early on you know, we were quickly shown the door and laughed out into the street because the setup was already in place. The TMC, the products they had were very successful together.
Six and some partnerships. Nobody wanted to disrupt the status quo. And and what we've learned is throughout the year, as many new. Online booking technologies had come in to try to, you know, to team up with the TMCs. But, you know, their products were always the last on the list or never included in there.
So it was a battle that we felt like was too hard to fight because, you know, there was already too much success being enjoyed in the current setup. And, and it is a true story, you know, we went in and we were shown the door so, you know, one would have to figure out how to find their fit in this market.
And thankfully it is a very big market. So and we believe, you know, that's why there's so many TMCs out there, so everybody can serve a different market. But we just have to figure out what made sense for us. And, you know, because we're technology led and we're using technology as a differentiation for our product, but also for our go to market. To acquire for lower costs, we can bring these customers in a much lower cost, we felt like a small business market was actually a great place for us to start and grow with and learn how to build a mature product over time, and then evaluate on a go to market we build this business and and see what happens and you know, five or 10 years, maybe we come back and team up with the TMCs over time it's possible.
But for now, the a hundred billion dollar us market is not, I had one TMC CEO tell me that Duke, if you guys were to just win the entire U S and B market, you would be bigger than AmEX GBT.
Kevin May [15:48] Going back a little bit. You were knocking on the doors at the TMCs and they were showing you the door fairly quickly. There's often the phrase this banded around using the gatekeepers of the status quo. Can you just give us a sense of how long that was into the Travel Bank journeys that you realized that you needed to go down the path where you're currently on. How long was your patience at that point?
Duke Chung [00:16:15] It didn't take long at all. You know, the company has probably only been live for about two and a half years. We launched November, 2016 so it hasn't been a very long journey, and as you can tell, we've already talked to a lot of people and ended up. But this in this past but the first year we launched our expense product, and while our expense markets were in the market, we were busy thinking about how to build the travel the online booking platform with the concierge service.
So we had many, many conversations. Then that's in 17 with the TMCs, with many teams. Just the largest TMCs, but also a lot of regionals as well. I think also not only being turned the door by the TMCs, but quite frankly, also a lot of suppliers, you know, a lot of suppliers in the airline side would ask us questions around how much volume we would have.
And, you know, being a startup, that's not your advantage. You don't have a lot of volume. So it's not something that you can put on a truck and show them and do anything. And so naturally, I think the barriers to get into this are quite high, because expectations are high from the beginning in order to play.
And I think because of this, it really forced us to think about what is a market that we could be successful in that others are not in. Maybe we can find a way to acquire that segment in a different way. Maybe using technology, we're channels. And also, how do we focus on really building up a moment within our install base so that we can we can sell this inventory that these airlines want us to sell.
So a lot of effort has gone into focusing on acquisition of customers and users for that purpose, the flywheel, we call it to make sure that we reduce all friction for users to science, and therefore we can move them into. You know, a Travel Bank managed account directly, so we can sell the inventory and support our suppliers as we scale up that our expense product is a free product.
And so companies around the world typically their employees are the ones who find us in the app store. So they download our app and we help them do an expense report. And then soon thereafter, their companies may sign up and standardize us on expenses. Then that usually will lead into, at some point when the small business scales up and they need more help around travel, like travel policies or reward incentives, analytics.
They'll standardize with us on a managed travel program. So, effectively, our efforts to scale this business has been more around thinking about how we do work with these publishers and solve their problems early and pay it forward so that when they scale up, we have an opportunity to work with them on the travel side over time. Not all of them will reach that initial scale, but but the ones that do, you know, we are there ready to support them. And., as you can imagine, the only reason we think this way was because of all the feedback we've gotten from the industry around ensuring that even more requirements in order to carry the inventory to be meaningful for them to be in this business.
Kevin May [19:40] Now just on that. So that's a bit, again, if we may come into the customer acquisition parts. I mean, it's great that, you know, as companies that you work with get bigger, you can help and do more things. How have you generally approached, just trying to get customers to come along and use the products. You did reference briefly there, the app store and things like that. Just give us an idea of what it's, what it's been like trying to get hold of these these customers so far.
Duke Chung [00:20:04] Yeah. So we I, I mentioned we Travel Bank has now we announced last week at our conference, we have a 120,000 registered users on our platform.
The registered users are the employees of small businesses. So it could be just one employee at a company. They find us in the app store or a play store or online as well. And , you know, one of our mission, our missions and our product is if we can help you do an expense report or book a flight within two minutes of signing up from our app, then we failed.
So it has to be that easy for any employee, because the employee, the only reason why the employer look for us in the app store is because their company doesn't have something, but they're in a situation where they either need to get a reimbursement for an expense report. Or expense reports, I should say, is more general over a period of time that you know, that has gone by and they need to get it done. Or they find us and want to book a flight or hotel in our system. So that first experience is so important for the employee because if the employee doesn't have a first good experience, then there is no opportunity for us to.
That employee may go tell their CFO or their controller that “I found this app. It's really amazing.” It helped me take photos of my receipts and scan them and create an expense report in two minutes, and here it is, and, and and be able to get their reimbursements in 12 hours.
So it's a really nice experience for them. And they'll tell the controller, they'll also tell the people in the company, so they'll tell their coworkers. “Hey, I've been, I found this app, you should around them”. And I would say typically when a company gets around five or 10 users on our expense, then there's enough visibility within the companies, which are these small businesses that the companies would hear about it and the decision makers would just standardize their entire company.
Kevin May [22:08] t's interesting. You rarely hear about a start up. Your business grew in a viral way because of this word of mouth, whereas often it's you're starting to occupy a more structured way. It sounds like you have benefits. It's a lot from the kind of divided the viral word of mouth part of it.
Duke Chung [00:22:35] That's right, yeah. Also very fortunate. I mentioned the barriers to being able to deploy an expensive travel solution are now not only not gated from the top down, where historically that's how this industry has sold into these enterprises. But you can see in this example, every day we have, you know, hundreds and every month we have thousands of users that just sign up across different organizations around the world.
And I mean, if you don't believe me, I, last week we shared a, actually, we just made this announcement of Will Smith, actor Will Smith. His agency actually found us that way. They downloaded our app and started doing expenses, started to travel, and one thing led to another.
They decided they want to invest in Travel Bank and we announced that this week. So we also, many people think we only support the Silicon Valley companies in the Bay area here, but in fact, we also have universities like Princeton that are on our system. We have I know David, you're in New York.
We have a favorite, very famous Congresswoman in New York, I will not mention her on this podcast, but you can run, figure it out. We support her. We support our agency. Right? , you just never know. I think that's probably the most amazing thing about this business because there's no barriers to signing up for our system.
You really don't know it's going to come through the door the next day, we didn't reach out to any of these companies. They, organizations or agencies, have heard about us or found us online and these app stores. And I think fundamentally. That's the biggest change and disruption that's happened is this the, the, the, the reduced friction, the ease to get up and running for systems like expensive travel that has never been available prior that is extraordinarily disruptive in this space.
David Litwalk [00:24:32] I want you to quickly rewind on something you said. But you made the expense process free. It sounds almost like a free mean to attract these SMBs. And I think if I'm not mistaken, maybe concur has a free tier. I got it though. Concur charges for expense. And I know that's actually the majority of their business.
And you seem to kind of dangle this as an incentive for people signing up. And I, I think that's a kind of a huge turning of the business model on it, on its head. People are normally making money off that part you decided to give away. Was that on purpose?
Duke Chung [00:25:05] Yes, it was on purpose, but you have to remember you know, because we started in a small business market you know, we really spent a lot of time thinking about what are the the constraints and the issues that these small businesses have. Now I believe the concurs of the world and you know, their peers had started more in the mid market enterprise where potentially paying for expense software is not a big deal because these are very large companies and you know, professional CFOs and are running these organizations. Right? So for them, it's sort of remembering back to my old Microsoft days post acquisition. I think budget was probably less of a concern for us when we were, it made it to that step.
Right. But for small businesses, it's a very different situation. David, I know you, you know, is running a small business too. You know, our, our constraints are different. We think about these products differently. Our employees are also thinking about which problems and you know, it relates to the products that they use.
You know, how to be able to get access to technologies quicker and easier and effectively, you know, less costs. So. Understanding the small business market, we intentionally made our products for free, it's in, currently it's not freemi because we don't charge for it. Over time we have the factory.
We made it for businesses, even if they, if they scale up and our goal is really to earn there. A travel business over time. I'm now a small business, and may not have much travel in their first year or two years, as they start to build out their sales and marketing functions as they start to attend more events, or maybe host their own their own, you know, sales and marketing or customer acquisition activities they tend to, you know, start to begin to spend a little bit more.
And when you reach a certain threshold, that's when we believe our travel program can come in and really help them streamline the approval flows and it also helps them save money or begin to save money as they scale up. And that's our model is to focus on earning that business over time.
David Litwalk [00:27:18] So, what's interesting is that I, I remember hearing some stuff that most of the money that a lot of these OBTs make are actually on their expense solution. And I think they also would theoretically like to capture a lot of that travel spend as well. But I, I've been to more than a few business travel conferences where they talk about the problem with people at major companies going and booking on Kayak.
And then, you know, filing it back into the expense system. And, I think one of the reasons why these OBTs have monetized expenses is because frankly, they, many of them have not been able to keep up on the user interface side.
Well, how are you thinking about what is a very complex user experience was, you're talking about multiple modes and then expensing and all this stuff working together, and you're only going to capture that travel spend if the end user experience is just as good as frankly as going to Kayak or Expedia.
Duke Chung [00:28:17] That's right. And you know, one of the things we talk a lot about here within Travel Bank is, you know, you know, looking back at the current offerings in the space, the, our incumbent are older and comments that you will, you know, I think one of the areas of focus, it has been largely around just the admin functionality.
It's all about the admin. It's about admin functionality. Because once these companies lock in it's about making sure the admin doesn't push them out, but quite frankly, the traveler experience, the traveler benefits have always been secondary or even third to the admin functionality. The only thing that might compete with the traveler's experiences. These OBTs also have to support TMCs as consistent fits in between. But clearly the traveler experience is really poor and it makes sense because once you've locked in the admin and you should build a travel policy for the company, then, the traveler doesn't really have much choice. If it's their own choice, if they go outside of policy, they just hope they don't get caught or the company has very lose you know, requirements.
David Litwalk [00:29:22] It's almost like they chose their solution based on what would help the travel manager.
Duke Chung [00:29:33] There’s a place for the admin. I think, you know, when it comes to building a policy and putting a program in place and ultimately helping the company save money, there's, you know, there nothing valuable to deliver there. But, you know, the question is really, to what expense of the traveler, the traveler is the one that's actually going on the road who's trying to focus on improving their product you know, reduce their stress and , make sure they get to and from these meetings and conferences effectively having a really great experience.
The question there is, where was that balance and was a balance actually getting further apart as these companies became more successful? So, what I really liked about what we're doing at Travel Bank here is that focused on making the product available to everybody, almost like a consumer like distribution, and the onus is on us, like deliver a really delightful, a really great experience for the traveler, because if we can't win the traveler, we know, we shouldn't win the account itself. There's no reason to force a company to use if the users don't like the experience. So, the way we've been able to be successful is really laser focus on that traveler experience, make sure the travelers like us for not only doing their expenses. No, it generally an employee and the company also has to just like our app for everyday expenses. So, users have to like our app and only if the users like our app we call it winning the hearts and minds of the employees, then we deserve to win the account.
And I think what that does from a mindset for our business, particularly our product and our design and our engineering teams, is it really puts the onus on us to deliver an experience where we can stand behind that the companies can trust, that we're doing a good job to make sure that their travelers are having the best experience they can out there.
At least at parody, hopefully better over time to what they would be able to do in you know, the public the open bookings situation on other public sites. We at least have to get to that level of standard. So, when we hired a design team and we, we made this mistake earlier because when I started this business, I come from the enterprise software, so product managers, and we soon realize that the product managers from the enterprise side actually couldn't design a product that met this expectation. So we had to start all over again, very early in Travel Bank, and I decided to rehire a new set of designers and product managers that were from the consumer side. So, we have, you know, folks that come from Airbnb or Hotwire or these OB, these online booking platforms, that public sites, and we wanted to bring TripAdvisor. We're bringing them in to help us because what I found was bringing the product designers, the designers and product managers in from the consumer side. The baseline of expectation or quality's higher. And that was really for us, and that's how we were able to begin to change the momentum of this business early on was really building at that higher standard. And I think that's really important to set the foundation early for that, because if we truly believe we can win by winning the hearts and minds of the employees for these companies, then we have to build a product experience that actually can win these folks over.
And that starts with hiring the right people in our team.
HERE WE ARE
David Litwalk [00:32:59] Very cool. So, I want to ask one more question that's a little more in the weeds before we can move on to general company stuff. But you know, for Mozio operates a lot in the corporate travel world and we get all types of very specific content requests you know, I want my limousine service in New Jersey, which happens to be on random specific system that we don't have yet. And you know, it ends up being a huge supply problem. How do we get all of this supply in our system? So, you know, my question is twofold, do you, do you cater to, you know, any companies like that or because even has some of the market people, you just normally tell those companies tough you know, this is what we have and to, you know, how did you think about supply from the beginning?
Did you just hook up to Skyscanner and be like, great, we have flights right now and then we'll, we'll go and replace Skyscanner individually one by one? Or what was your general supply strategy.
Duke Chung [33:53:00] Well, we, I would say we, we weren't that smart about it. So, because remember, I, you know, I entered this business not having come from the business travel space, maybe the only advantage was having solely price software, but as, as you guys know, this industry is very specific. There are a lot of specific attributes to the business travel and how everything was all tied together. So, you know, we are really discovery process involved us just trying to figure out how to get access to the inventory, so we went down the path of working with the GDS systems directly, but we soon thereafter discovered that a lot of these airlines also required minim requirements to get going. On the airline side, specifically, I think maybe less than hotel, but airlines. And so, we were very fortunate part of our early journey, in fact I believe in our first 10 employees, we hired over the head of supply over from Hipmunk. Why Hipmunk? it turns out actually San Francisco, although being such a great place for amazing technology companies it's actually turned out to be a very poor place for travel tech., there aren't a lot of you know, a consumer or even business travel vendors in this area, at least not historically.
Everyone else has been either in New York or Seattle from, you know, from a travel experience, so it was very difficult for us to find domain expertise or people who are simply just relationships with the airlines and the hotels, except for Hipmunk. Hipmunk, who was the only one whose area that actually I would say had a concentrated group of domain experts., but that was it. After them, I think it would drop off pretty significantly as far as the next player in this area, so we were very fortunate. We were able to recruit over some of the team over from Hipmunk and that's when we discovered that to do this right not only would we need a relationship, but we'd also have to go apply for all these licenses. So, we, our arc and ionic credited a travel agency, and we went through that entire process to make sure all of our licensing was in place so that we are able to sell the story at least beginning in the United States and then hopefully expand from here, and so we went through that entire process and I think. Now looking at our, some of our, even our you know, up and coming competitors, they haven't even gone through that process, you know, they, they find another way to, particularly maybe over time you know, go back and apply for licenses. But, you know, we, we did this all from the beginning and part of that was, you know, we, we set out to do business and try to build a foundation, put all the effort into building a foundation. So, think about building TravelBank over a longer period of time. And so, we didn't really want to take too many shortcuts. We wanted to spend the time to do with lawfully and put everything in place and only we can stand by it for our customers and we have a check box. All of the requirements to deliver a first-class experience for our customers, and we felt this was just part of the foundation. Now it took a little longer and we did get a little lucky because we had all the people in place to help us build this faster. , but we, we, we have certainly spent the effort and the investments early on to be able to access all the supply and to get that going.
Now we're doing the we've launched the hotels with 660,000 properties and we've also launched with 40,000 direct connects with the hotels for hopefully better exclusive rates that we can offer our customers and now limousine and the ground transportation experiences. I think I think first off, I think this category is extraordinarily exciting, I think if I look at the innovation that's happening around travel in general rotation nationally and maybe at the forefront of maybe becoming the most disruptive. , I think it's , not only the Uber's and lifts but I, you're seeing all sorts of different permutations. , you know, we announced something, which I think you're starting to see a younger generation explore these kinds of experiences., but the black cars, the limousines, I think are still a part of that. And, last weekend at Altitude, we launched our super itinerary, our new concept. What the super itinerary is, is the ability to, for users now to bring in their calendar schedule from their office calendars and we bring in all your flight and hotel check-ins, but we have also brought together a new marketplace and the marketplace we launched for 30 partners. , we're beginning to kind of bring together what we would call the traveler focus experience. , you know, kind of on our mission of helping the traveler have a better experience. A lot of these areas are things that we wouldn't do ourselves, we wouldn't have the capacity to do it, but we know the travelers are spending money on these areas to help them improve their own traveler experience. And I think that's the advantage of having our expense system. Cause we can look at the data to see what people are spending money on, but some examples are like coworking spaces where a lot of people are spending time expensing coworking spaces, they're expensing Wi-Fi not only on flights, but also in country. Spend a lot of money on that, we're seeing a lot of people spend more money on experiences local games. , you know, of course, client dinners, all the food expenses, and so even things like meditation and wellness, gym passes lounge passes, stuff that, you know, maybe I've been around for some time, you know, when we were in business travel, you would never dare to expense anything like that. However. You know, as we study the younger generation that's coming up you know, this, the work life balance actually becomes, you know, meaningful from a product to productivity perspective. And so how do we bring all this together and enhance the overall experience?
And again, these are things that, you know, if I told you guys today that we're launching a, me a medic. You may, you guys might all hang up on this podcast. You know, we instead are trying to bring together these experiences and really make them available. And I've only shared this story with you guys here in the U S I know you guys are actually in Europe, but even in Europe where you know, the experiences, but imagine if you guys were to travel to Asia, and there's, you know, and, .Dave, you know, this is, there's no Uber or Lyft. , how do we bring together the experiences there that can make it more comfortable, more trusting for the traveler to trust us, experience that their company endorses through a travel program that they can leverage and use.
Because maybe first of all, businesses, they don't travel that often and going to these countries, all these experiences will change. , all the restaurant reservation experiences, ground transportation, coworking spaces. , it's very difficult today for, we believe, for a traveler to understand all of that, but bringing it all together into a marketplace, making it available through your, what we call the super itinerary, we believe is the first step towards that.
And helping us kind of bring our vision to not just being flights and lodging and ground transportation focus, which was what we think this industry has been primarily focused on. A lot of the preached of experiences. It suggests that the in destination or intra experiences. Are as meaningful as the pre-trip experiences and, and largely that's all driven by mobile, which is where we've spent most of our time focusing on.
Kevin May [41:30] It's a, it's interesting too, I mean, you sound critically ambitious and have a great vision. I think just for the last kind of five minutes or so, I think it'd be interesting to just kind of get some perspective on how the company kind of runs. So, your two cofounders you've worked with before, the company that you sold to Microsoft with his Parature kind of from is a Reed and Ching ho who was the CEO of the previous company is now the chairman of the current company. How did you kind of go about creating the co-founding team? Was it you've worked with them before and you knew that they could do a great job alongside you, or how did that all kind of come together?
Duke Chung [42:33] It’s actually much easier than you would ever believe, because when when I left Microsoft has been acquired by Microsoft, you know, I had to sign a noncompete and non-solicitation, which probably is more relevant to this. And of course, that only really applied if the people stayed on. Now I stayed on. The only two people that didn't stay on was Reed and Ching ho, they left. So now Reed was in a cofounder of mine in my first company, but it was, Reed had actually joined us. I'm a little bit later on as one of our senior engineers, it was actually the best thing that happened because through that experience, I was able to meet him. And that led to us founding this company together alongside of GENCO, now that, you know, I've known for many, many years when I started Parature. In my dorm room at Cornell back in 2001, he was my first investor who flew up to Ithaca to see us in our dorm. And and he has been a very successful entrepreneur himself. and so to get his help to, you know, help us navigate our first one was extraordinarily valuable in addition to his investment, of course, and so he, he was along with me for my first business and when we started Travel Bank you know, of course you wanted to kind of rebuild this team together and, and get going. So that's how I ended up with both of them. , we were both available didn't violate my non-solicitation and what I decided to leave, it was very easy to call them up and say, hey, this is what, you know, here's a, here's a potentially great idea in a very fused market. And of course, again, back to the beginning of the conversation around concur. I think that the timing to do something, I would give it about two years when something like that happens, because as, as you guys know, know, we're not the only ones that saw the opportunity. I think being available as a founder, seeing the opportunity and a catalyst as big as an acquisition of concur happening, you know, three things happening at the same time, making the stars align. It's very rare that those three things, those three attributes actually happened at the same time.
Those that see it, if they jumped on it, I think there would be an opportunity to build something. And so, we decided to take advantage of the opportunity to come out and actually one set of doing in DC. We decided to move to San Francisco to build this business. And part of that was just you know; we had always read about Silicon Valley building our own tech company from the East coast, and we felt like, you know, maybe if we did another one, we should try building one inside of Silicon Valley to see what it would be like. And so, we decided to come out here to San Francisco to build this business. And I think it's been a very amazing experience, a very different experience in my first company, maybe for a longer conversation, but I think it's I can see why a lot of companies who move out here are very successful based on the community and the environment here. Yeah.
Kevin May [45:43] Sorry to interrupt. When you say just that you said the experience has been, you know, very interesting and helpful and the community's great, but you did reference in an earlier answer about, you know, there wasn't a lot of other kind of resources that you could draw on with particular experience in travel. So, would you say then it's just the experience of growing a business in that region that's been so, so interesting and rewarding rather than what it gave you as a travel business?
Duke Chung [46:10] Yeah, I would describe it if I could describe him in a few sentences. You know, building a business in Silicon Valley with the community here, you have to keep in mind that, you know, 70% of the people here are not from San Francisco. Many people have come here like myself to go build a business and pursue, you know, a passion or a vision for what they want to do. So interestingly, San Francisco isn't a place they were there, at least, you know, technology is, there isn't a deep rooted people. And whenever I meet someone from San Francisco, I get really excited because it's actually pretty rare that someone grew up here and I can actually hear the history. So, because of the transient nature of this city and a lot of new talent in fact, if you, if you do a little study on the biggest tech companies in Bay area, most of the CEOs and founders, none of them are from this area.
They're all from East coast or somewhere else, and they all just happen to be here. I think one of the things that it this community does is it's it, it forces people to be open to work with others because you really don't know anybody, so you're, you're in the same situation as everyone else. There's a level of there's sort of a cohort of similar thinking amongst the founders because several ones, you know, trying to explore and understand they're open. , people are more open minded about using things that are different. , then my experience on the East coast I think that just has to do a little bit of the culture, but as we all know, being different, I think technology can be a major advantage, but you have to have a community of potential customers that are willing to give you a chance. And then finally, I would say, we're offices in Soma in San Francisco. You know, why are corporal iron once told me when we first incorporated, they said, you picked a great location, you know, within five blocks of your office, there's 2000 startups, so you didn't really have to walk too far. So, I said, okay. So I took a look around, and it's true, when we first got going we, we served all these startups and. You started off to all made decisions really quickly. They're willing to try something different and they don't have anything as far as if I were to describe as a Petri dish it's a great place to start a company because you can really vet out your products.
And by the way, if your products aren't good here. The community will tell you right away, they'll stop using your product. So, and they're all technology companies too, so you almost have to build a product baseline that meets the expectations of these startups who they themselves are disrupting their own incbents and their own industry.
So, there is no way to cheat the system. You really have to, when I look at this community here, it's very hard to create that kind of community. And I haven't seen that, like that kind of constant, certainly in DC was much harder to find that. But here we're on compacted in one place with very similar mindsets and expectations, so when you have a community, a sort of early being customer base like that I think it could be very powerful. It suggests that if you can make it out of community, I, I call it like little Italy in Boston or in New York, if you're an Italian restaurant, you better serve your food as some quality, otherwise the neighborhood was through the door. I think you have that here in San Francisco. If you can't make it out of this community you will have a hard time scaling it outside of Seattle or the Bay area. So that makes this place rather unique. And I've learned a lot, you know, even though we've only been doing this business for less than three years by being able to build a business here, I think keeps us on our toes and forces us to continue to innovate, to be successful, to take care of our customers.
Kevin May [49:57] Okay, so just a quick one then for me, before David wraps up for something, just as a kind of a fairly cheeky follow up to that, if you weren't building a business-like Travel Bank in Silicon Valley, will you live there anyway?
Duke Chung [50:12] I guess the question was if you perhaps have ever pursued another startup or just no.
Kevin May [50:19] If it's a place that you would like to live anyway, if you were, even if you weren't involved in running a startup.
Duke Chung [50:25] You know, that's a great question, I, my family shared with me now, we have you know, we're very fortunate. We, I actually, since moving here, we've had the twins. And so I, it's, it was an adjustment for me, I'll have to be honest about that, but there were so many amazing things about San Francisco, the weather, I think the people are very different, but very open. And because it's so many different cultures coming together you may have some of the best restaurants as a result of that in the area outside of just technology.
I think it's a really great place to live, now it's a very expensive place to live. So, as I asked you if I was doing another startup to live here and not work, I think would be challenging. But if there was something that we were pursuing, you know, passionately, and it happened, we had a choice of where we live, would it be San Francisco? I would say it would be a strong consideration for us to stay and to be a part of this community. So I would say yes.
David Litwalk [51:28] Okay. Well, thanks Duke. That was really insightful dive into a very complex part of the travel industry, and we're at a time today, so this has been how I got here. Stories of innovation and travel and transportation with Kevin May, PhocusWire, and myself, Dave, the founder of Mozio. Next week we'll be putting out another interview. I'll say tunes. Thanks.
David Litwalk [51:54] Thanks for listening to the how it got your podcast. We'll be back next week with more insights, stories behind startups and innovation and travel and transportation. Check Mozio.com/ move for a complete write up of the highlights of every podcast with translations into five languages and get your daily dose of news on the digital travel economy by subscribing to the firstname.lastname@example.org.
See you next week.