David Litwak:
Hello everyone and welcome to how I got here bozhou and focus words weekly podcast about innovators and travel and transportation. Today we have Martin resta Lino of despot Gar on the podcast, Martin founded despot Gar, 18 years 21 years ago say with four friends who met at Dukes Fuqua Business School. decibel has grown to be the name and Latin American online travel with two major brands of despot Gar and deca, large, and recently acquired brands like el mundo, and best day. Thank you for joining us, Martin.

Martin Rastellino:
I thank you for having me here. Pleasure to be here.

David Litwak:
So we’d like to start every one of these interviews off the same way, which is for us to ask you to tell us how you got here.

Martin Rastellino:
Well, actually, that’s, as you said, a non story started 20 or 21 years ago, I have much more here than today back then. And actually, the Was his story of the of the company as you said it started in 1999 why we were studying an MBA in the US. And we created a company by a group of friends, a group of friends. And I always said that we were lucky enough to be in the US between 97 and 99, which was the internet boom. And we live there. And I think that we all share the interest of technology, etc. And one of us revert to Sweden, which was the founder and the guy that pulled us together, came up with the idea of doing an online travel agency. And from them, we started a roller coaster, roller coaster and we started a great, great part of 20 years old with a lot of fun. So after 20 years, they company, as I said, is a leading online travel agency in Latin America 105 went public in 2017, the New York Stock Exchange. And while although I’m not involved in the day to day activities of the company anymore, I’m still part of the directors of the company. That’s why I’m here.

Kevin May:
Okay, thank you. Thank you very much, Martin, for joining us is Kevin here in the UK and yourself. And, you know, a group of friends started this, but it’s more than just one or two co founders. This is a fairly big co founding team. So take us right back if you can, Martin. I mean, how did you all become friends? How did the process of you said that you suddenly decided that you wanted to start an online travel agency but that’s quite a arguably a difficult thing for, you know, a group of friends to do with different dynamic And all those kinds of things. So talk us through that, that makeup and the personalities, the role involved.

Martin Rastellino:
Okay. Yeah. She said that’s a key part of the company. And I would say that because we’re not friends for always I mean we some of them first we met at the NBA. So we started staying together. And I think that the first thing we shared was that their interest for technology individually, each of us realized what was going on in terms of the intimate room and we said, we wanted to be part of that. So when we came up with the idea of TA, we said, This is great. And when we stopped the analyzing the business etc, was we realized that it made a lot of sense. And I think, first of all, what we share was the common interest for the technology etc. and Then I would say that a Bing we haven’t analyzed that that much at that time. But uh, something that I think we share more than the technology interest, we share values. Because I mean, after these 20 years, we interacted and we work and not together and a lot of bad things, good things or bad things happen. And I would say that the only way to be able to survive or to create that was because of the group that group dynamics. And I would say that was when someone asked me about what what what are the things that you why you think we were successful? I think one of the main things What about the group dynamics, I mean, then that came it was very natural from day one. And we started working to where each one in a different role, nobody think No politics no thinking about the our guys doing, just focus ourselves on doing a great company. And I think that that that was that was great and was one of the key advantages and just an anecdote but as I said, Today, we are not involved in the company on the day to day activities anymore. But uh, at some point we decided to start some something fresh. But what we did was we bought an office and we are working together the five of us in different projects, but I am together again and there is no obligation. I don’t know that we are doing that because after 20 years, we’re still having fun, do anything together so broadly, that as a senior example, but something that shows the importance of the group, the group dynamics and the people that you choose. It’s interesting because you said

Kevin May:
You came together very naturally. And you found your roles within the company naturally, how did you decide amongst the group of you? Who was going to take on the commercial role? And who’s going to take on the it role? And who’s going to be the CEO and how to help you? I’m assuming you didn’t just flip a coin or something like that. I mean, how did you how did you figure out naturally which roles were going to be best suited to which person?

Martin Rastellino:
I would say that the first mostly on role was, was he he was the one that we thought that we would say, No, that was to me. It was the one and then we say that in the gender roles that we asked to different Did he two things? One thing was an expertise Barton. And I will say that there was one and one clear role that was the one of the CEO that was promoters. He was the one that put it into there. He was the CEO from day one, but a armanda I would say Say that a, we always worked as a group and we choose the different roles based on two things. One was the needs of the company, the company needed different things over time. And basically, based on the skills of each of us, and, for example, at the beginning of the company, I started, I was in charge of opening operations across Latin America. When that was done, then I moved to operations, etc. So I think that we we base that on, not based on on our backgrounds, but I will say I would say that was very important was that we all play as a team because, as I said, different ends of the company requested different skills. And at some point of the company, one position was the most important and then another one, for example, we’re running out of money. The CFO was Got, I mean, we’re all here all the attention once you have the money you have to deliver so that the guy that was running commercial teams or operations was more important. So what was funnier? The good thing about this, no matter which role do we have in the past? And if that particular role was more important in a particular point of time, we all knew that we were a team that were working together and if now you’re the star project be the star the next year or so. So even more importantly, assigning the roles I would say that it was very important, how we acted as a group.

Kevin May:
Last one for me for a second. I mean, starting an online travel agency is a daunting idea for anybody. And many of the internet’s most successful online travel brands have often started with one thing, say hotels or with flights or with packages. How did you decide which particular type of products you would focus on first? And how did that evolve in those very early phases?

Martin Rastellino:
Well, actually, we started mostly focusing flights. And that was, I would say, partly because of the technology available at that time. I mean, because of the GVS that were the like the companies are, we’re collecting all the information about the flights, etc. So technology was more readily available in for flights and for hotels, and that’s one of the reasons why most of the otas started selling flights. And then I think it was an unnatural movement from flights to accommodation and then to vacation. packages. So I think that it was mostly related to the availability of the technology. In our case, in particular, given that we were playing the game in Latin America and the technology there was much worse on our parts of the world, we needed to sometimes to try to get that technology and adapt that to the region, so that the availability of the technology play a bigger role in deciding which sector.

David Litwak:
Barton David here so I want to expand a little bit on that. It’s a good segue into, you know, talking about how you attack this market. You guys are currently, I think, biggest in Argentina, Brazil and Uruguay, or at least historically, maybe before you bought best day, which is in Mexico, Mexico. But how did you think about you know, sometimes people refer to Latin America as this one big market but it’s really not obviously there’s very local quirks. Did you guys decide to focus on one country? Or how did you go about you know, targeting your market.

Martin Rastellino:
We know we knew from day one that we wanted to be a regional player and actually the only way to succeed would be to be a regional player because Latin America, I mean, if you take a country, Salah as a standalone is not big enough, but if you take the region the whole region is a decent, an attractive market. So we knew that to be successful and to be able to monetize all day it investment we should play in, in the whole region. So we had that in mind from day one. And I think that was was one of the our difference is between our players. And as you said, of course, then In Latin America, a one size fits all is not the best case. Because I mean, each country has a particular flavors interest, etc. So although we decided to be a regional player, we open operations in each of the countries with the local teams, etc. So it was kind of far I think, global, but at NorCal mean, we decided to be a regional player, but we deployed local teams in each of the country to capture the knowledge of the days and the interests of each country’s

David Litwak:
what were some of those kind of local quirks? So I know for example, you guys do a lot of your bookings on payment plans, for example, you Lisa did at one point, right? And that’s, you know, a very different behavior than exists in America in a lot of other places. And so how did you kind of adapt the you know, the To model and I guess Expedia was only founded a few years ahead of you in 96 years were founded 99. So you know, what, what did you take from Expedia and say, you know, this needs to be different for Latin America?

Martin Rastellino:
Well, I would say from various examples at the beginning to more be examples later on. I mean, I remember in the early days, there were huge discussions over the course, that we use in each of the homepages, like for example, in Cantina we like that people like to have light colors. In Brazil, the people like very bright colors. So it was a big discussion. And I mean, if you put our like light blue, everybody or the customers in Argentina like that, but you go to Brazil, and they say, I mean, nobody pays attention to this. So from these very silly details, To the type of products that you choose, I mean some countries use more financing in terms of installments when they buy flights or packages than others etc. So, I would say that today I have to say one of the big differences is a of understanding or advantages of understanding the market is in terms of payments, I mean, having access to local payments and local payment options is a key advantage. But in the past, as I said in terms of which products to offer, which are the preferences in terms of destinations, etc, played a big difference now,

Kevin May:
and you told us in one of your first answers, Martin that you know, you had a great Barrett amongst the founding team. But no business goes through those, certainly through those early years without issues and problems that they need to resolve. Given that there were quite a few of you, as co founders, how did you, as a group of friends, as you said, resolve some of the problems that you may have faced, was it always put into the CEOs hand to make the final decision? Or did you have another more democratic way of of sorting issues out between you

Martin Rastellino:
know, I would say that I, we played as a team a lot, and we always had a pretty open discussion among us. And, I mean, then, of course, at some point, if, especially with matters among the US Attorney, someone had to decide it was the CEO but I think that We always acting as a group. And most of the big decisions, we bought all of us in participating in them. And I think that were one of the advantages of being more than one, and having the very different ways of understanding things. And we always try to be pretty open in terms of the discussions. And that was very useful.

Kevin May:
And did when you were expanding into other countries where there’s occasions when you thought this, this particular market is just too difficult for us because whether it was infrastructure, or whether the marketing was too difficult, or for some other reasons, did you? Did you ever have to pull out or think of things in a completely different way because the market was so challenging that you were going into

Martin Rastellino:
Yeah, I would say so. And I would say that in case we didn’t put out but a Brasil presented to us a big challenge. Basically more I mean, all of the founders are from Argentina. And between Argentinians and Brazilians, there is a big Raven. Everything. So it was for it was very hard for us to understand the Brazilian market. And for them to understand that they were working with a team of Argentina. So that was a big challenge and took us many years to fully understand the market and to be successful. And actually, what were these is one of us, went to live, went to live to Brazil for some years. I understand the market and internally we always put our goal have us thrown into Racine every month or every two months to make sure that we all understood the market because it was a, and it needs to be US market in the region. And but you really, we really need to think as resilience to make sure that we will succeed. So that I would say was a biggest challenge. One of the biggest challenges, and that’s what we didn’t pull out. I mean, that that’s the way we approach it took time, but we ended up being successful there.

Kevin May:
Did you mean, desperate or was there so early on in, you know, in the history of online travel? I mean, you launched long before some of the most well known brands that are in the market now even existed. So you’re almost one of the pioneers yourselves, but I’m interested. Did you ever look at some of the other brands that were in the markets in other countries. So Expedia, make my trip You know opodo in Europe, which was a big one back in the early 2000s. And learn anything from what they were doing, that you then brought into the way you maybe did things that desperate God at all.

Martin Rastellino:
Yes, actually, when we started, I think the biggest player was Travelocity and then epi. So we, we look a lot at them. And we copy or two, we use them as a model a lot. Of course, we needed to adapt that models to Latin America, what we call, we tropical eyes, the models. But I use them a lot as a model. And so bottom, for example, one of the big differences was that I mean, when they started, they were mostly online. When we studied business in Latin America. Nobody was trusting ecommerce. So we need to open call centers to because the people are saying, okay, I like the price that you have, but I’m not doing it. There is no way I’m gonna put my credit card on your website. So we need to open call centers and at some point at the beginning we needed to open offices for the people to bring their credit card and bank so yes, we use Travelocity and Expedia, some are not. But we also need to adapt those models to Latin America. Hmm, interesting.

David Litwak:
So yeah, it’s funny actually, that was about the question was about to ask because I think some point in was 2016 or 2017. around that. You guys phased out your call centers and I you know, I think that segues us into a very interesting discussion about in an emerging market you know, what intermediary steps do you need to do to kind of onboard people almost an educate them about the internet, you In addition to starting your business, and so you mentioned the call center. Could you tell us a little bit more about that and maybe is in general, how you navigated that that entire entire dilemma of basically launching an internet business in a place that wasn’t as trusting of it?

Martin Rastellino:
Yes.I would say that we did that with a lot of confidence on what we were doing. We knew that I mean that in America, people like personal relationships and they a lot of money on that. But we we have a clear view that if the technology is good and is good for the people, sooner or later the people will adopt it. So we knew that we wanted to be an e commerce company and technology company and we knew that the technology will make good for the people So we use the call centers or the the offices to receive people etc, as necessary steps to reach the final goal that was to be a pure online company. So, as I said, we educated people. I mean, at the beginning, I remember that the first homepage that we had, was full of information, rather than the transaction on homepage, because people wanted to believe that and so I remember that we, we used to hire journalists from each country to write content for free on tips and advice, because we want the people to get accustomed to the brand, their website and at some point in the future, if they trust us, they will buy from us. But at the beginning, we need to focus more on giving something for free and that was information and then as I said, I’m Open offices. I remember that people was in reality America, big cities, traffic, traffic jam is a mess. But although that people were traveling or commuting an hour just to bring the great car, because everyone wanted to put the credit card on the website, and they said, okay, they will know that that led to that they will have to have it will have to pay parking for them. And they will do that, because some point that’s going to change. So I would say that we took a lot of steps. But knowing that at some point, that would change. I mean, many came with a conviction that the technology was good for the people. No later they would fire.

David Litwak:
So I wanted to segue the conversation a little bit into crises and obviously in the industry, we’re in a big one right now but what I find amazing is that you started right before the.com burst. And there have been more than a few Argentinian currency crisis and you know, Brazilian, you know, currency issues as well. And little fact mozilo, actually, about a third of our employees are in Argentina and Cordoba in particular. And we’re about nine years old and I have personally lived through, you know, kind of employees asking for money into Us Bank Account, so they can exchange it on the black market at 1.5 x multiple. I know, you know, all of the, you know, things that have gone down over the past nine years for mozia with just kind of a little bit of, of exposure to your market and how can you elaborate a little bit of how you guys withstood so many crises? And how did you particularly think about the instability that is kind of inherent in a lot of these Latin American countries when it comes to simple things like payments?

Martin Rastellino:
Yeah, I would say you get accustomed to to crisis. And basically, we know and we knew from day one that we used to live with crisis and one of the things that we need to, to counter our data to mitigate that risk was to have operations in many different countries. Because in Latin America, you always know, you know that you will always have a country in crisis, if not, of course, Argentina, where I’m from Venezuela or the premium ones that wasn’t our crisis, three years, but it’s not Argentina or Venezuela is Mexico or Brazil or Colombia. So you know, that you would have always had a crisis in one country. So one thing that really isn’t, let’s be, we have to be in many countries, so we’ll always have a crisis but then we will have countries that will have crisis. And I would say that then, I mean, you get accustomed to that you get accustomed to be more flexible. And, you know, at the end I also think that I’m in crisis generate opportunities. And it’s not just a phrase. I mean, in our case, for example, in 2001, you know, Jen, Dina faced a very big crisis. And, but for us was the opportunity to win the brand almost for free, because nobody wanted to put money on commercials and advertising. And so we went to see the airlines and the hotels and we said, I mean, if you give some give us some tickets and some room nights, we can do combined come campaign with you and ask and they say, Okay, that’s good. And then we went to the TV TV show On the radios and we said, okay, you’re we have these tickets on this night to do a trip for the for the, the people not to do so and exchange of that we can we can have our brand in, in your TV show and they said that that’s great. So that was a way in which instead of investing money and putting money, we just use tickets and roommates from our players to develop our products. So I would say that I mean, in many cases and crisis generating opportunity, so you have to have an open mind from that. Did you ever

Kevin May:
I, I remember, you know, here in the UK, there was a there was a fairly long period of time, where economists and politicians and people in the travel industry we’re always talking About the BRIC economies, Brazil, Russia, India and China. And, you know, Brazil was one of the countries that you launched in as well. Did you ever feel that you had to live up to some kind of expectations from the rest of the world to make things work there? Because there was so much interest economically in Brazil, in particular, being such a success story as a country economy?

Martin Rastellino:
Yeah. See, I remember that time. And when that happened, if there was a time in which our investors say that they just care about our scene, and they didn’t care about the rest of Latin America, and at some point, they even say, I mean, your name should not be the speaker anymore. You know, the name of the company should be decorar which means which is the gun that we use in Brazil, so And that probably I mean, for some time, we put more focus in our scene because of that, and we got more pressure from them because that’s Brazil, Brazilian Brazilian machine. But, uh, other than that, I would say that I mean, we, of course, we agree that Brazil was the biggest market for us and most important, most important one. But we always try to have a long term view about what to do. So when everybody was crazy about Brazil, we said okay, diversity is really important. But we are not. We were still gonna pay attention for the rest of the countries etc. And then when something wrong that happened in Brazil, and people were not thinking are Brazil, okay? Brazil is still important. So we as we got some pressure, but specifically, especially with Brazil, but other than that, no big deal.

Kevin May:
Talk to us a little bit if you can, Martin about, you know, 2014 2015 when I’m guessing that’s probably when your conversations with Expedia started because they invested a very sizable amount of money in the company in in 2015 200 and $70 million. I mean, what was the what was the thinking as a founding team and as a management team, and as, you know, the conversations that you would have had with your investors at the time about that approach and taking that money from such a big end, you know, a big global player like Expedia

Martin Rastellino:
and was a big decision, I would say, but, um, in general terms like we were working with experience commercial partners on that, so we knew it for a while. And we had a very good commercial relationship with them before they invest in the company. So that was, I would say something that that can’t have been bought out other than that, I mean, we, from day one, we knew that we were not able to not able to build a company just ourselves. So we always relied on money or investment from third parties at the me was banks and private equity firms, actually a French term group a call or at the beginning, so I would say that we were accustomed to have big boulders and big partners, etc. Of course, Expedia was kind of was a little bit different because some way we compete, but I think that Ideally in which both both parties thought that there was an advantage of doing that, because there were a lot of why we compete in some market. We also have a lot of complimentary business in for example, they gave us access to all of the networks of their network of hotels out of Latin America, and they are taking advantage of our content networks in every network in the region. So I would say that it was a deal that made a lot of sense for both parties. And and also we knew them in advance from previous commercial relationships. So although it was a very big decision, it was not an attack. date.

David Litwak:
Yeah, so Martin, you said some thing interesting earlier, when you talked about You went to these hotels and flights and airlines, excuse me and got free flights and hotel rooms and then went to the the TV shows and got them to kind of, like put your brand on. And I love that because it’s just like a win win. And I almost feel like, you know, you’ve I, and I think this is like what I see with some of the best startups your value add is creativity, almost like you didn’t actually have the hotel room. He didn’t have the audience, but you were the creative person who actually could like, match them up. And, you know, this is maybe a little bit of an open ended question. But I’d love if you have any other stories like that, you know, just you know, very, very bluntly we you know, I think those are the types of things I don’t see startup entrepreneurs doing enough these days is kind of figuring out how you can you know, arrange everyone around you add value without actually spending any financial capital yourself. But getting your that positive brand equity, you know, out of it.

Martin Rastellino:
Yeah, I would say that that was a clear example. And I don’t know I write something or story about the one or, I mean, as I said, when we started the visit the America nobody was doing anything internet and was and was very happy. We decided to partner with local travel agencies at the beginning, so that we didn’t have to spend too much time on the back office and we will spend more time on developing the brand and the technology. Oh, we need to convince one of each of the travel agencies in each country to say again, we’re gonna give you traffic and sales lead. You’re gonna pay us a commission for that. I say we win and But although it was pretty clear that was mutually beneficial for everyone, I mean, it took us a huge effort for to convince them to do that. And so we needed to spend a lot of time and effort convincing the travel agencies to partner with us. And it was tough. But I was another example that we use to that time not to save money, but to save time because we said if we wanted to be a travel agency, or legal travel agency from day one in each country is going to take us like two years. So why don’t we put more emphasis in the technology in the brand and we partner with our local player in each country to do that, and then I would say, and I know that Bernie was Which we use a lot of creativity and play very well was at the very beginning. We have too much money to start the company, but the network of fellow students from MBA, so called our fellows to, in each of the countries in which we’re only not corporations, I mean someone from Brazil, Mexico, Chile, Argentina, etc. And we said to them, I mean you. We know each other from the MBA, we want to over open this business and we don’t have too much money and we don’t have money to hire a law firm and consulting firms up. So if you can help us and when we project you can open in the business by giving us advice etc. and we can Give you a stock option plan on the company. So it was like, we open the network of countries, every member countries in three months with almost no money just using the connections that we have from the NBA. So it was a pretty really fast and no cost mounting of the of the company.

So I’ve

Kevin May:
just one or two for me, really. And before we kind of wrap up, Martin, I mean, just talk us through a little bit about the that road leading up to the company going public. And that that’s the first part of the question. And I suppose I think for me, the more interesting parts is often How does that feel when you when you list your company on the public markets, and then you all started stepping? down from your particular roles, you know, this was your your child that you’d all helped create. And suddenly, you’re all starting to step away. I mean, Damien came in as the CEO, and you’re now doing other things. How does that feel as a founder to kind of, kind of let things go? It’s almost like the child has grown up and left home almost. But how do you how do you? How do you deal with that kind of almost psychologically.

Martin Rastellino:
But I would say that, I mean,

it was a privilege for us to be able to leave the whole process of creating a company. We create making a project, making it successful, and making it so successful that the company can succeed you. And so if I have to say something, thank you. I mean, I was we are really proud We think that we are privileged enough of doing that. And regarding the IPO, I would say that I mean, we, we always, we have always seen that as our natural step. Although we were always focused more on building the company and being the number one company rather than an exit strategy. I mean, our goal was always to bring the largest company in Latin America in trouble and but we knew that at some point, because of the size of the company etc, is where it was making an IPO was a clear path. So basically, it was a process that we started preparing like I would say three years ago, in terms of preparing the systems and you know, structure or minister to structure The team to have a company ready for for an IPO. And
and I would say that when we the company went public was during came to me when we saw our brand our name and then your success. I mean it was hard to believe. When that happened, I mean, will we the company went public back in 2017 and was like a dream came true. I mean, I’ve seen the company see a baby. And the success was a pre release was so great. I mean, after so many years, so many efforts, so many paths, so much passion. That was great. So I mean, is everything we can say is gratitude. And then, regarding the decision of stepping down today, I think that I mean, it was also a natural thing or something that at some point we wanted to do to freshstart and was a great decision because basically, I said there was a clear example of that. We need something that would succeed us

Kevin May:
Yeah, interesting. A very, very last quick one for me. I mean, what? briefly what one thing do you miss about running the company as a founder now that you’ve know you’ve left the business behind you, I know you’re still involved as a board director. What’s the one thing that you miss about the company?

Martin Rastellino:
Ah, I’m not sure if I’m mispronouncing

Kevin May:
maybe nothing, maybe don’t miss it anything at all. Personally,

Martin Rastellino:
I think I got a good balance because I’m still involved. Not in today today actives I’m still involved was part of the the support member and still, we’re still working together with the founders doing different things, etc. So I would say

we’re in the best of both worlds.

Okay, well, that’s great. I mean,

Kevin May:
it sounds like you’ve ended up in a very good place. Both professors And personally the way everything kind of worked out so well with the creation and the growth of the company and then the the eventual listing on the public markets. We obviously haven’t even touched upon what’s been happening this year. But certainly the backstory to despre Gary’s is really interesting. And we, we really thank you for joining us. On this episode of how I got here, Martin, thank you very much.

Martin Rastellino:
Thank you. Pleasure. And hopefully also, it’s a good idea for someone to start doing some enterprise projects as well.

Kevin May:
Okay. Again, thanks so much, Martin. This is another episode of how I got here. These are mozia and focus wise, weekly discussions with the entrepreneurs and innovators in travel and transportation. We thank you as always for listening. If you’re a non subscriber, we encourage you to subscribe to the podcast and use usual places. leave us a review, leave us some feedback. If you think you are a founder that’s got a good story to tell. We’re always interested to hear people that might want to pitch their story to us and get on the show. So you know where to find us in all the usual places as well on mozia.com and also focus wider calm for me. So, again, thanks so much, everybody for listening. Thanks again to Martin. And on behalf of David and I, thanks so much to everybody for tuning in. We’ll see you next time.

Martin Rastellino:
Bye Bye. Thanks.

Transcribed by https://otter.ai

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