Kevin May:
Hello there, good morning. Good evening. Good afternoon, wherever you are welcome to how I got here. This is focus fire and Mozio’s weekly podcast, where we talk to the innovators and entrepreneurs in travel and transportation. Thank you very much, everybody for joining us. This week we welcome Travis Katz. He’s the co founder and CEO of trip calm. For those of you don’t know the company was launched in 2010 under the name gogo bots, and was a trip planning and social content site in its first guys. After the name change. We’re rolling on a few years here, but after the name change in 2016, the former MySpace senior vice president Katz oversaw its eventual sale to Chinese online travel giant sea trip in 2017, which now stay with me here changed its name to trip.com group in 2019. Now, Katz, spent two years with Citroen, Skyscanner as VC as VP of products before leaving in late 2019. Welcome Travis. It’s Nice to have you on the show with us. Thank you.
Travis Katz:
It’s great to be here. Thanks for having me.
Kevin May:
Okay, no problem at all. As is tradition for those that are regular subscribers to our podcast we ask each guest the same question. And that is, if you can tell us Travis, how did you get here?
Travis Katz:
Sure. So, so trip comm was originally called Googlebot was not my first intervention in the internet space. So as Kevin mentioned, I was one of the early guys at my space. So I joined my space back in 2005, so about 18 months after the company was sold, and then stayed there for three years through the acquisition by News Corp. And, and basically led the expansion of the business around the world. The idea for what became trump.com was one that I had while I was working at my space and what sort of had I had the convergence of two things. One, which I was overseeing the international business for my space, was traveling all the time. I was trying Every week, Asia, South America. And I was living in London. So when I wasn’t traveling for work, I was traveling for personal stuff to see as much as Europe as we could. And I felt myself going through the same challenging experience every time, which is my wife, and I would say, let’s go away next week. And let’s pick someplace we’ve never been before. And we’d get up on a Saturday morning, make a cup of coffee, sit down before the computer and say, you know, let’s go to the south of France, let’s figure out where we can go. And every single time we did that, we would inevitably find ourselves eight hours later, still sitting in front of the computer, bloodshot eyes, you know, tired and still not really feeling like we knew where to go. And the challenge wasn’t a lack of information. At that point. Internet data was good, but finding stuff that was relevant to us and we were both pretty experienced travelers. We didn’t like to do the touristy things, you want to get sort of more off the beaten path. We’re foodies, and so we really want to know where where the best places Eat, but we had an 18 month old daughter at the time. So we need to figure out how can we do things with kids. And we just found ourselves spending hours going through sites like TripAdvisor, and, you know, other sites, and and we weren’t really getting where we wanted. And that’s when I thought, Hmm, this feels like an opportunity to make things better. And at that time, what we were seeing with things like MySpace and Facebook and Twitter was the dawn of a new kind of internet that was, as opposed to the old publishing model of one to many was one where users were not like creating content, but you could use signals about how users are interacting with content to figure out what was the right information to show the right person at the right time. And so that was sort of the genesis of the idea for what became Googlebot was really about could we build a better mousetrap and a trip planning site that was personalized based on who you were, what your interests were, and how you like to travel. So I spent about six months sort of noodling on that idea. So I left my space in 2009 moved to Hawaii and spent some time working on the idea there and then came back to the Bay Area and really sat down to work in it in earnest. I found a technical co founder guy named Maurice Saltzman, who I had known from the tech scene, he was a he was the chief architect for Yahoo boss and sort of the big tech guy at Yahoo. And we sort of started noodling on the idea and then eventually, you know, camping site and went and started pitching investors and ended up closing a investment round with a firm called battery ventures for $4 million back in 2010. And that was sort of how we got started. So it was a little bit unusual. We didn’t have a product built when we went out to raise money. We just had a nice PowerPoint deck and an idea Yeah, that we were pretty passionate about. But it was enough to sort of get people excited. And it was sort of the dawn of all these apps being built on the Facebook platform, etc. So we set off and launched them in November, we the business, when we first launched, nothing happened, it didn’t grow at all for six months. And then all of a sudden, we hit an inflection point where we started seeing pretty rapid growth. And a big part of that was just starting to get some content going, but also being able we figured out how to tap into Facebook at the time, you could tap into Facebook’s channel to have users invite their friends. It was easy to grow on Facebook and and within about a year we were signing up almost a million people a month. We raised a second round of funding in 2011 from red LED BY redpoint ventures $50 million round and then continued to grow the company and the company started off very much as a web based company over time, it became much more of a mobile centric company. And we moved from just sort of leveraging social data and interests, to really building in some of the first artificial intelligence
products that you saw in the travel space where we are really starting to take in signals that you could get from mobile not only your tastes and interests, what kind of traveler were you? But you know, where were you? Were you at home or not, when you’re opening the app? What was the weather like where you were to try to recommend in real time, you know, things you could be doing on your travels from activities to dining, as well as places you might want to go from there.
So
we continued growing it we in 2014, we raised third round, which is led by homeaway. And homeaway, was quite interested in we had already been working with them to power content in the homeaway app. And they were really interested in trying to make thing is more personal and more social at the time. And yeah, and went from there, we acquired the we were under the brand Googlebot, we ended up acquiring the brand trip.com. As you said, Kevin in 2016. bought that off Expedia. And and I think my feeling was on the acquisition was it was really a way to, I guess, make the product sound a little bit more mainstream and a little more obvious just what we were when people were discovering it, you know, that this was a travel brand global, could really be anything. And then we were acquired, and in 2017, we started getting some inbound interest from a few different companies. One of them was Skyscanner, which eventually led to discussions with sea trip. And then in 2017, we became part of sea trip which then later became the trip.com group.
So in a nutshell Sort of the Quick, quick and dirty journey.
Kevin May:
Okay. Right. So thank you. And I wanted you to take us back a little to the MySpace period. Because you know,
it’s a fascinating brand. I mean, I remember just, you know, the kind of the, the heady heights of my space and all the, you know, that incredible growth and the coverage it used to get. And I just wonder, because it was a fairly roller coaster ride. I think it would be fairly fair to say, Yeah, what would you say that you took from that? That was that experience that you applied? When you were creating gogo bought
Travis Katz:
a time. I mean, my space was really where I learned a lot about how the internet works and both what to do and what not to do. So. You know, on the positive side, MySpace was a company that really was very innovative and was successful despite most investors wanting nothing to do with it when it when it started. I remember talking with crystal wolf who was the founder and CEO, and he talked about when they would go out to raise money. And they would try to explain the products. And the VCs would say, Wait a second. So you are letting people build their own personal web page kind of geo cities, but it also has an email on it, and it also has blogging on it, and it also has photo sharing, and that’s not going to work. You really need to pick one thing and focus on doing one thing really well. And they would always give them examples like you should build an RSS company. And, and so and you know, that they obviously ignored that advice and, and, you know, ended up being incredibly successful. So, part of what we learned there was that you sometimes have to trust your instincts, even if nobody nobody else believes that what you’re doing makes any sense and I think when we were building Trip comm we had a lot of people, first of all saying you can’t focus on hotels, plus things to do plus restaurants. But we really thought about, you know, how, how do we serve the entire traveler? And how do we get people don’t want to you know, split up their travel experience across 12 different apps and have one that they use for hotels, one of these for restaurants and one for car rentals that it actually is hard to use, particularly on a phone. That was very counter intuitive thinking to a lot of people. A lot of people said, you know, the apps in particular are about the great unbundling and every app should just have one very small function that does well we never really bought into that narrative. And part of partially that’s where I think we got along with the sea trip guys really well because they you know, if you look in China, what’s happened been exactly the opposite where you have apps that really serve a lot of functions. things I learned that that I didn’t like them We how we did it at MySpace that we changed when I started trip comm was being data driven and how you how you build products. So MySpace had Tom Anderson was just a brilliant founder who just intuitively got what the social web was going to be and sort of invented it. But my space was not very strong on measuring things to really understand like artists things were building and working and are they working the way that we want them to? And and what are the factors that are driving growth versus driving around. And so when we built trip con, it was really a lot of focus. For me. I’m a data geek, I love data. And I believe it can be incredibly instructive. And we built a very data driven company, which I think was very helpful to us, and particularly, you know, in terms of thinking about things like growth. I guess one other thing that I learned at MySpace, so I wouldn’t my space from the hypergrowth period when It was we were the biggest site on the internet. For a couple years, we had more traffic than Google and making tons of money very profitable. And then the 2008 recession hit at the same time where Facebook sort of came out of nowhere and not really came out of nowhere, but finally started growing and overtake my space. And we saw the economic economics and the growth in the business pivot in the course of a couple of months from, you know, 25% month on month growth to negative 20% month on month growth really over the course of three months. And we had to rapidly change. We had to cut back costs, we did layoffs, the whole deal. And I think one of my takeaways from that was also the idea that no matter how good things are going, those good times may not last and you need to always be thinking about what could go wrong. And one How do you make sure your cost structures you know, stay lean and and tight but how do you also try to keep your eye on the horizon for or things that can become problematic. And Matt ended up being useful to us many times along the way with trip Comm.
Kevin May:
And last one for me for a moment. And, you know, most travel brands, travel startups to be precise, arrive on the scene and they want to be the something of something. So we’re thinking that we’ve had way too many the Airbnb of Yeah. What was what was googlebots aspiration? I know you kind of talked about it just a moment ago when you were doing your kind of intro to how you got here. But what was the aspiration given that, as you said, there were sites like TripAdvisor that were already on the scene. And some argued that a social network network like Facebook could
be that as well.
You know, people recommending places to go and blah, blah, blah, but it was very broad, but what was the aspiration for gogo balls?
Travis Katz:
Yeah, Aye. Aye. You know, in its simplest terms, what we really felt was we wanted to build a travel site that was user centric, that really started with who you were as a traveler and, and go from there as opposed to if you took a site like, you know, Expedia or TripAdvisor or a business like that, that the month all the all the companies that were big in travel, when we started the company, were companies that really came up during the web 1.0 era and sort of the big one too many sort of publishing model era. And so what the model was with a TripAdvisor and Expedia was, hey, we have this enormous database of all this useful travel information. And so here you as the traveler can go spend the next three weeks of your life digging through our database to try and find the information that’s that’s useful to you. And then for the quantity of data was good and they were always great. nuggets in there. I mean, if you dig in TripAdvisor, you can find almost anything you want, but it was too inefficient and time consuming to do it. And so our aspiration was really to say, Okay, look, you know, if I’m a, you know, if the traveler that I was where I’m traveling with a young, a young daughter, and I’m a foodie, and I like the outdoors, I don’t like touristy places. So let’s filter out all the information that’s from people who aren’t like me and really show me what do people like me do? What hotels do they stay in? What destinations do they pick? You know, where do they go for dinner? What are the best beaches and really try to make the experience pleasant and, and joyful. And I think we hit in a lot of ways. We had a very different model where a lot of people think we’re going to measure quality of the product by how much time people are spending on site. We actually wanted people to try to spend less time on our app and more time actually out experiencing travel. So the aspiration was really about making it more personalized. We we did really groundbreaking stuff in that space. Ultimately, I think the world is still dominated by old school stuff but the world is starting to become more personal and it is actually happening now which is a good thing to see.
David Litwak:
So Travis,
I think you were part of that first wave of social travel companies and I think it’s fair to say that you know, social travel travel never really took off a lot of those failed wander five trips calm and you were probably actually the most successful staring at an acquisition. And it seemed like pivoted a little bit more towards user reviews and kind of being a more social angle on a TripAdvisor but, you know, in retrospect, I’m curious kind of what do you think of the wider category because it had a lot of hype, you know, at one point of this, this idea of, of that kind of customer user centric view, what was always some wrong assumptions that you think you think everyone is making?
Travis Katz:
Well, I I never liked Kevin su I think we had discussion Simply I’ve never liked the the, the label of social travel for what we did cuz I not I never really thought about what we did but it was, it was the easiest way for people to to describe it. So when I think of social travel, I think what basically was happening, you know, if you think back to that time, Facebook, Twitter, YouTube, all these social products are sort of exploding on the scene and in and in 2010, Facebook had just opened up their platform to allow third parties to tap into Facebook’s API’s and build businesses on the back of the social graph. And so there was a ton of hype about this not just in travel, by the way, there was, you know, video sites and media sites and music sites there. There was a million companies born on the on the back of this excitement about what could you do with the social graph? We never really thought of our product as a social travel product because when I think of social media, I built one of the first social businesses out there and social businesses. About how do I connect with my friend around X or Y and I want to send messages and share media and, and socialize, where what we were doing was really about it’s closer to collaborative filtering. So leveraging data, and we we use social data, so people check in on Facebook or on Twitter or Foursquare. So we use social data to create better filtering. But the idea was never about building a community of people to socialize together. It was really about how do we help filter out content to get you to the most relevant information. Now, we did have a community aspect so we had our content creators who were posting photos and sharing reviews, you know, similar to a Yelp or TripAdvisor and there weren’t a whole bunch of social products built in there to sort of make that community work but that was a very small minority when you know any, any product with social data. You usually have 2% of people who are actually posting and the main area we focused on was really about getting the right person to the right data as quickly as possible. What I think a lot of other companies, where other companies struggled was I think trying to do that be the Facebook of travel and trying to really build a social network for travelers and I fundamentally, it didn’t believe that would work when it started and still don’t because people don’t want to have vertical social networks. They have sort of one or two places where they like to communicate with their friends. And I can talk to my friends about travel on Facebook, if I want to talk to my friends about travel. Or talk to them on Instagram now with Instagrams messaging so so the idea that you needed a separate social network for travel I think was a place where a lot of people got lost and sort of focus too much product effort in an area for People just fundamentally didn’t feel like they needed.
David Litwak:
Addressing. So I want to go back to the comment you made about focus and you said it from my space about how they were criticized a lot from VCs who said, Oh, you’re doing these five or six different things just focus on building the next RSS feed. Yeah. And it reminded me of some stuff I’ve heard at mozia which people told me focus on one city and we said no, we’re focusing on one use case the airport use case and that means multiple cities and some sometimes it can be deceiving what you’re actually focusing on so you know, you I get what you’re saying it was less social is more kind of like a just more intelligent filtering on top of content like that might have otherwise existed on a TripAdvisor like site that I need to sort through it is not very intelligent. So what did you focus on to try to tackle that? Because it seems like there’s, you know, what you said it wasn’t just hotels or just you know, one of these things. What was the use case that you focused on?
Travis Katz:
Well, the when we started the use case was planning a trip so I’m going on a vacation. And I need to decide we usually started with the point assuming that somebody knew what destination they were going to go to. But they didn’t know where they were going to stay. They didn’t know what they want us to do while they were there. And really help them from the research project to figuring out you know, figuring out the destination, what they were going to do. And then we tried to steer them down into the hotel bookings, which is where we made money. We built a hotel metasearch product to monetize, but really try to focus holistically on the traveler over time that evolved when we moved into mobile. So on the web, that was a natural place to start, and particularly because we got a lot of traffic from organic search in Google. And so that was usually where you could catch travelers was at the point they said I’m searching for places to stay and acts or things to do and destination
Travis Katz:
yeah. And, and so so we really focused on this, you know, how do we help people figure out where they’re going to go and where they’re going to stay. And to get started on that, unfortunately, what we had to do was, was get people writing reviews. So we had to build the company, essentially, in phases where the first idea was, you know, we’re going to help us all this personalization, social data to find you the right places, and what to do and the best advice for you. But when we launched the product on day one, there was no reviews and there were no photos and the entire site was empty. And so you couldn’t really feel anything until the phase one and building the company was really about how do we get enough travelers to share content on the product that we could build, you know, intelligent filtering on top of that. So I guess, you know, step one was really about that, you know, how do we get people using it and how do we make the experience of sharing reviews and photos and those things fun for travelers fun enough that they would choose to do it on our product rather than on TripAdvisor. Once we got that flywheel turning, and we started to build up a library of content, we were then able to move on to the next phase of how do we start making it smarter for and that sort of trip planning experience. Better. And then when I was gonna say, when we got to mobile, we started finding it was much more about real time search. So as soon as people wanted to be there opening an app in destination and saying, Okay, I’m hungry right now. You know, where can I go? Or I was going to go to the beach today, but it’s raining. So what can I do for fun, or we want to do a day trip somewhere. And so how do we pull that off? So, so it’s sort of interesting. We had a vision of a product that we wanted to build, but you can’t build everything at once. And you sort of need to think okay, what part needs to be built first in order for us to build the second part in order for us to build the third part. So we really had to start from Were one which was if we don’t have any users writing reviews then and posting photos and that sort of thing, we won’t be able to get to the meat of the business. So we really had to start from there.
Kevin May:
It’s something that I’m always very interested in when you speak to, I guess, first time travel startup founders. And what’s even more interesting with what you were doing was it it’s essentially, at that point, it was a content site, but you would have been exposed, whether it’s appearing at Focusrite conference and those kind of things you would have been exposed in meeting the rest of the industry. And I’ve often wondered, what did you make of the other people within the industry and the mechanics of how it works? Because I think it would be fair to say that sometimes people are quite surprised how either old fashioned it might be in terms of the technology and the processes and the protocols and the way way it all works. And I just wondered, you know, you’ve come, you’d come from an organization, like MySpace, which was a Go ahead, new digital age company, and all of a sudden, even though you’re essentially doing a content site, you’re getting exposed to the industry. And what did what did you think of all that?
Travis Katz:
Yeah, it was a really interesting experience. So so we launched the business, at focus, right in 2010. And, and at that time, it was just really funny to go to Tokyo strike for the first time because nobody wanted to talk to us, first of all, and they, you know, it’s like, Who are you? I don’t know who you are. And, you know, come back, come back and talk to us in a couple years, you’re still in business was the general the general attitude at the time? It travel felt like this bubble that sort of missed the entire new wave of what was happening on the internet with Facebook and YouTube. You know, everything All that stuff, people were still at that point, I think very skeptical that Facebook, or YouTube or real businesses that could survive and in the long run. So it was it was funny and it was hard. You know, we had a lot of companies we want to meet with and talk to, you know about partnerships and those sort of things. And the reality is nobody, nobody wants to talk to those people were very polite. But I think the travel industry is one where you see startups come and go all the time, as you guys know, and so nobody wants to invest time really talking to a new company or or doing stuff. So it took us a few years before, before we got in there. I can remember when we were talking about how social was transforming the web, and people being really dismissive of that. And then two years later, I think social was the theme of focus, right? So eventually, the industry did sort of come around if a little bit late. But the reality is if you look at how the industry is evolved, you know, it is the same players, you know, with the exception of, you know, an Airbnb and you know, a few, a few breakouts, it has been the same people for four decades now. So it’s not surprising that it was like that, I guess. But it was surprising to me.
Kevin May:
How did you earn? You know, in those early couple of years, then I think we met that first year in 2010, at the Focusrite conference, so And
what do you what did you kind of
put on your roadmap of those first things that you wanted to achieve in those first couple of years? Was it about the use quantity? Sorry, that the number of the quantity of users, the number of reviews, the amount of content that you could get? Or was it monetization? Or was it all of the above and how did you prioritize those?
Travis Katz:
It was users and content and not monetization at all. So so for us monetization was very much a not an afterthought. We knew how we were going to monetize. And, and but we knew that unless we had the scale of users and the scale of content, the monetization wasn’t going to work. You know, we could build it a meta search, meta search site, but there are already plenty of meta search sites out there. So in the beginning, our focus was entirely on how to get users signing up how to get users creating content. And then once we add content, how do we get them to start searching for you know, planning trips and searching for hotels. And then the monetization we really didn’t start focusing on a lot. Although we were monetizing from day one, we really didn’t start focusing on monetization more heavily until really around 2014 2014 2015. So we set up the white label partnership originally with booking.com and and went through a few others before we eventually built our own monetization platform. So, yeah, so monetization was was kind of far down the list and then beginning. Okay,
Kevin May:
so how did you, how did you grow the company? I mean, if it weren’t making, I’m not gonna say you weren’t making any money, but if money monetization wasn’t a key priority, how were you growing and hiring people and, you know, getting the income required to cover that monthly burn and stuff like that? Was it through the the original bits of investment that you got?
Travis Katz:
Yeah, so So part of the reason we raised venture capital money was so that we could build out the product and venture investors understand that if you’re going to build out a big idea, it takes time and if you are too narrowly focused on, on, you know, break even you may not invest in the bigger riskier ideas and ultimately venture investors care about, you know, big bets and and they they are willing to take those levels of risk. So we financed that with, with venture capital, but we kept our burn rate quite low. So the company was, you know, in the first couple years, I think we had less than 20 people at the company. And, you know, we kept our burn rate low. Most of our we weren’t buying ads. We were growing organically, both through search and through referrals from users. So we weren’t burning lots of cash, but we were burning cash and, and that was part of the plan, although it’s always a nerve racking thing. If you are running a company and you see that you’re spending more than you’re making. It’s not a comfortable position to be in for a long time. But we had to build the sort of core platform before we were going to make any money and I think everybody involved understood that that was the plan.
Kevin May:
And clearly that was working. I mean, forgive me if I’ve got this The dates and the figures wrong here when the battery was 4 million and then a year, and about a year later was red point. 15. So yeah, obviously, you had a pretty solid message that you were going out with and winning, winning, if that’s the right word, you know, securing that level of investment without a monetization in play at that point. So yeah, working.
Travis Katz:
Yeah. And I think you know it, you have to find the right you have to find the right investors. So there are plenty of investors that we talked to who are like, I love what you’re doing, but I won’t invest in the travel space because the travel space just is really hard and doesn’t work. But at the time, you know, around the time that we started or not, I think six months after we started something Instagram, Facebook acquired Instagram for a billion dollars and they had no revenue and, but they had developed a really engaged and sticky audience. When we went out to, to raise our B round when when redpoint ended up coming in, we had revenue, it was a small amount of revenue, but our user metrics in terms of growth and engagement and all that were very, very strong. And so what they were betting on is, hey, you built these metrics are telling us you built a product that people like, and a product that is growing without you buying traffic. And so that feels like you know, some momentum that we can bet on and usually if you go in for a second round of fun finding first round is mostly they’re they’re betting on who’s the team and you know, do we do we like this idea? And do we think the team is the team that can execute on it the second round, you need to have metrics that are showing that your ideas working and and that you’re, you have momentum and we had great momentum? And so it wasn’t revenue momentum, but I think they understood that travel, travel if you can get people in looking at hotels in particular, you can monitor ties that that’s a very, very straightforward the monetization. It’s mostly about volume of traffic that you can get through there.
David Litwak:
I’m curious, like, you know, there’s one of the issues that I think we’ve heard from a lot of social companies will sorry, that call your social travel company there for a second. I mean, higher up on the funnel travel companies is that they have a hard time converting hotels. farther down. This is something I continually see with other travel startups, they’ll they’ll sometimes say, you know, kind of like, Oh, yeah, like, well, we’ll be able to so tell us, but the bigger thing is like, do people want to purchase hotels at the time that they’re looking at your site? Right. So did you find that it was actually a good alignment? Or Or did you have that problem, too?
Travis Katz:
We didn’t have that problem. But that that problem, by the way, is not limited to startups. It’s amazing how many mature publicly traded travel companies are. In fact, I think kayak announced that they were doing this last year, Skyscanner is looking at it. There’s the Is this Valhalla that everyone in travel dreams about, which is the upper funnel, which is I want to inspire people and help them figure out which destinations to go to. And the reason particularly now that’s that’s an area people are excited about it. It lets you get around the Google funnel. And as you guys know, Google has largely killed organic search for travel in place of their own travel products. And if you either have to buy traffic through Google in the travel space, or or you’re not going to get traffic from Google and the Charles rates they’ve largely killed that is why TripAdvisor is lost 90% of its its market cap. We as a company did not focus high up on the funnel. So like I mentioned earlier, we focused on the point where you already knew where you were going to go and really wanted to plan a trip there. The reason that I funnel. A lot of people want to do that. And it would be great if you if you could own the spot where people pick their destinations. But if you look at the data about how people plan travel, it that’s not how they do it. So. So I had this discussion with Skyscanner guys, they were thinking about, you know, how do we crack this and, and the problem is, people don’t say, Oh, I want to figure out where I’m going to go on vacation next year. So I’m going to go to a website that helps you figure out destination, what they tend to do is they tend to be browsing their Instagram feed, and a friend will post a photo that looks really nice. And I’m like, Oh, that’s really cool. Where’s that? And they’re like, I’m gonna make a mental note of that, or they’ll, you know, meet a co worker for lunch back when you could meet coworkers for lunch, and they’d hear about someplace and say, Oh, that sounds really nice. I’d like to go there one day. And so there’s really this long period over which people sort of collect ideas through multiple sources and, and happenstance and then over time that sort of coalesces into I think I want to book a trip there. And that’s when our product started. There are a lot of products that tried to really do that. Yeah, that’s helped you find the destination you can put in some categories. It’s a great idea. In theory, it’s just not really how people plan trips. And there’s lots of research. Google did a lot of research about this. It tends to be they get the idea coalesces over the course of a year. I think Focusrite did a great study on this as well were truly course of the year 35 websites, conversations with friends. And so trying to bring that online, I wouldn’t say it’s impossible. I think you could do it, but you really need to have a great product. And there’s also the trust issue of if you are the booking site. And you’re the ones inspiring people, are people going to trust that you’re going to give the best recommendations or are they just going to get things where you’re going to make the most money. So I think that but i think that’s secondary. I think it’s the most People don’t pick a website and say I’m going to plan get inspired for my next trip.
David Litwak:
Yeah, it’s funny. I remember looking at a bunch of those and tried a couple of them out the travel inspiration startups. And it’d be like, do you like Paris? We did recommend Rome and you’re like, wow, that was revolutionary. And thinking that they were you know, we’re really measuring up but you you provided me the the perfect segue here. You mentioned in Google and mentioning tripadvisors. You know, decimated market cap. And, you know, Google, when you said some things earlier about having more intelligent search and sorting through to get new people to the right more relevant answering that is basically the directions Google going in their products. They have answered boxes and stuff like that, not just even about their own travel product, but they’re trying to be more of an answer engine than a knowledge graph, I guess you could say. And I’m curious how you view the wider market from you know from your namesake, you know, company now, even though it’s not exactly the same to Expedia or booking and to TripAdvisor, and is there a role for, you know, reviews first companies in a Google world?
Travis Katz:
It’s a really good question. So just taking a step back when the market is transformed enormously since we first started our company, so there were the two big things are one there is massive consolidation. So when when I started the business, and we were thinking we will monetize through Hotel metasearch. At that time, there was tons of fragmentation and between sort of 2013 and 2017 and you saw the entire industry rolled up so Expedia bought kind of lost it in orbits and banner a and what if and homeaway and booking kayak and Mondo and cheap fly. So you saw this massive consolidation which creates a problem for anyone Doing metasearch and takes the value out of, you know, price comparison. if everyone’s got the same inventory, then suddenly price comparison becomes a lot less useful. At the same time you saw Google picking, travel as a vertical where it was going to leverage it, what I would describe as a monopoly and search and use that to its advantage to build its own travel business. And so it used to be if you did a travel search, you know, when we launched the business, if you did a search for like best hotels in Paris, what you would see in the search results would be TripAdvisor first, and then probably Yahoo, travel and then Expedia, then hotels calm, you see all these different businesses. Today, if you do that same search from your mobile phone on Google, you will not see a result that isn’t a paid ad or a Google product until you scroll three full screen down on your iPhone and Google and said back in 2012, that they had lots of data Saying that, that users hate scrolling past ads and paid content to get to the real content. And they actually started punishing any website that had too many ads above the fold. And would make them disappear from search listings. Google, there are no nothing on page one of a travel search that isn’t an ad today, it all adds. So and at the same time, they’re building their own new building out the review function of Google Maps to really go into travel. So my sense is that absent some action from regulators around anti trucks, there probably isn’t a third party review, you know, review centric sites anymore on the web. I think sites like TripAdvisor and Yelp will have a very hard time surviving in the current world even though their content is better than what Google’s is today. And even the email The otas and main part of the reason I think the otas have had to consolidate the differentiation and brand has become less and less important because they’re essentially becoming pipes into sort of a Google, you know, a Google powered experience. So I, I think we’re going to go through a period where there will be less innovation in the travel space. And you’re going to have a few players that, you know, have billions of dollars to spend on marketing with Google who will stay in business because it’s in Google’s mutual best interest that they do booking and Expedia and a trip.com group, I think amongst those Airbnb, presumably as well, although they’re obviously going through a rough patch. But it’s it’s a different space. I do think at some point the regulators are going to sort of step in a bit in Europe, they’ve sort of gingerly stepped in and Google’s fighting them and dragging the process out the us so far, nobody showed me any stuff. to address it, ultimately, I think it has been in the interest of consumers that that they do.
David Litwak:
Yeah, there’s been a lot of turning a blind eye to potential monopoly power accruing behind our backs and a lot of different industries. And ours in particular seems to be pretty egregiously affected by it. And one last question before I wanted to turn it back over to Kevin, which is, I think at one point and correct me if I’m wrong, you, you guys pivoted a little bit more to being more around local experiences. You mentioned kind of on the on demand kind of mobile use case. But you know, it reminded me when you said a little bit more of social why plan and some of these attempts at doing the kind of what am I doing tonight, answering local, you know, the local question, how much of that was trying to kind of, you know, increase frequency as opposed to the one person who goes to Italy once a year, you know, the person who lives in their town, and how did that experiment go?
Travis Katz:
Yeah, it was, it was awesome. almost entirely around frequency. And anyone that’s doing that is doing it for frequency. Although it wasn’t, it wasn’t the sort of top down experience, we essentially followed our users into local. When we were trying to scribe before, we were looking at the data of how people were using the app, what we were finding was that people were using it in their home poun, to find restaurants and to find weekend getaways. And we hadn’t anticipated that at all. When we built the app, we literally thought people were going to do the exact same thing they did on the web, which was research their trip. But the data was showing us that more than 50% of users were using it locally when they were opening the app. And so for us, that was like an aha moment of Wow. How do we take advantage of this and how do we serve this and how do we do that without muddying our brand? And we had a lot of people say like you can’t do that you can’t do local and travel so you either local or your travel and But when we looked at what people were doing, we were like, well, that’s not really true. People are looking for hotels, or obviously you don’t look for hotels as much locally. But when you’re traveling, you’re looking for places to eat. You’re looking for fun things to do. Where can I go for a drink tonight? Where can I go for a hike this weekend? A lot of the content was the same, but the context was different. So the way we decided to tackle that was to say, look that the app doesn’t have to be a travel app or a local app, it should be about, you know, what do you do on your free time and the app should be smart enough to know which is which. So what we would do as soon as you open open the app, and this is sort of the magic that you can do with technology. So if you’re logged in, we knew who you were, we knew your travel tastes. Were you a family traveler, where you went to nightlife for the outdoors or what have you, but we also know where you are, because we have your location permissions and so from your location, we can say okay, David, you’re either at home Your hometown or you’re on vacation right now, or, or you’re in a different part of town than you normally go to. We know what time of day it is. We know what the weather is like. And we can recommend content to you that we think would be relevant. And this was a hard thing to build. This was sort of when we really started building more AI, you know, machine learning, basically a machine learning algorithm, thing to figure out what’s the most relevant thing to recommend. And, and by the way, it seems super obvious. Like I remember I went I went to Amsterdam, and I opened up the booking.com app, and I booked a hotel through booking.com. And booking.com had built some experience and stuff in there. They knew I booked a hotel with them on on booking.com. They knew the dates that I was there, they could see for my location that I was in Amsterdam, and they were showing me the sort of a generic hotel search, which I didn’t need a hotel. I was already there and I already booked Don’t help through booking.com. It just was a dumb interface. So we built this very, very intelligent thing. And we would detect, you know, if it was if you’re in Hawaii and it’s raining, we’d say, Hey, here’s a bunch of indoor things you can do today. If you’re in your hometown, we might say, Hey, you know, it’s, it’s, we’d see, you know, people are opening the app at 5pm, they’re most likely looking for dinner, or places to go for drinks or evening activities. So we would highlight the most relevant stuff first. And the goal was really about. What we saw on our research was people hate typing and searching on their phone. They just hate typing on their phone and typing and searching with a hassle. So the idea was trying to use data and use machine learning to predict what you’re most likely looking for and put that first and foremost in the interface, and then have everything else there because you can’t always predict right. This was massively successful for us. So when we before we had started that we were saying the average user of our app was over Running the app about 1.7 times per month. By the time we had fully integrated, you know, built out this experience, we were getting on average five sessions per user per month. And we had more than half of our user base was using the app every week. And what they were doing was, it was opening up and saying, okay, hey, where can I go tonight? What, what can I do? And then, you know, what can I do this weekend? Where can I grab a bite to eat? And then while we were there, we’d say, Hey, you know, you should plan out a weekend getaway. And here are places you can go. And you can get a hotel and you know, halfmoon bay for $200, or here’s some further away destinations. So the idea was to build a frequency model that would get people coming back and engaging with the app regularly.
And then while they were there, we could try to upsell them on travel, which most people were doing, you know, a couple times a year, so they weren’t always in the market for that. And and it really worked and, and, and I ultimately think that’s kind of what you need to do. In particular In the travel space, if you want to keep people around, I think, where you see so many travel companies struggling and a lot of the big guys, you know, we’re spending tons of money buying downloads. And if you get someone to download your app, and then you can get them to open the app, which is a hard first two steps, even if they booked it and had a great experience booking on Expedia, or whatever it is, a year later, when they’re going to book their next trip, the likelihood that they’re even going to remember they had downloaded that app is pretty low, because they haven’t used it or seen it somewhere on screen for until often. They had to reacquire those users through Google, again, by building an engagement model, or people coming back frequently, but then sort of putting travel front and center so we could remind them, hey, you can book this here. It actually allowed us to sort of get out of this cycle of constantly requiring our own users.
David Litwak:
You know, what’s interesting is we I wrote actually a op ed and focus wire about a year plus ago said kind of the point was transit after the new otas and basically saying they were going to pursue a very similar strategy, but like public transit wouldn’t be their loss leader and they’re gonna upsell a bunch of other things. So much like flights are our loss leader in our industry. But the one of the wider points I made was that I was starting to see some of the more innovative otas actually talk to me about food delivery or talk to me about these and other things. And they were talking about frequency. And you’re becoming a, you know, basically a destination and we had Luke on on this podcast before and they want to be kind of a super app, but for in destination activities, and a lot of people are thinking, I think along those lines about how do we, how do we own a channel and continue to get them to come back and build a habit. And so since you were a pioneer on that front,
Travis Katz:
yeah, we’re pretty early what what was interesting when we we, you know, started talking to sea trip before the acquisition. We explained to them the way we thought about it, and they instantly got it because in China, you know, they see trip does everything, but their real frequency hooked is trained like you’re saying so, in China, people Hate trains all the time, it’s a very regular thing. And so they don’t make a lot of money in terms of the margins on trains are very, very small. But it gets people coming back again and again. And then they can then upsell them on hotels and other things. So that was a very well understood model and in China A while ago, it’s interesting watching today, because it’s something that any, you know, any travel company or otaa could take advantage of. That’s not it’s not easy to do, but it’s not super hard. But it requires thinking differently about your core product, and particularly about your homescreen of your app. And I find that you again, and again, I see companies with initiatives to try to do this, but they aren’t really willing to put their money where their mouth is in terms of designing a product that would actually bring people back more regularly.
Kevin May:
So as we kind of come towards the end here, I mean, let’s talk a little bit about those last or the last few And in particular, the the sale. I mean, we’re very lucky on this podcast in that, you know, you’re one of the very few people that has launched a business and then seven or eight years later, has sold it to one of the biggest travel companies on the planet. I mean, as an entrepreneur and as the leader of a company just talked to us briefly a few can about that process and how you guided your own team through it, and that, you know, can make can be very unsettling from a, you know, from an existing kind of workforce perspective. How did you how did you manage that as the leader of the company?
Travis Katz:
Well, I’d like to say it was easy, it was not easy that this selling process was actually much easier than what came after and trying to lead lead the company through that and and I think, I kept thinking I should write a blog or a book about how to do acquisitions, right? Because they they So rarely go right in there lots of mistakes
that happen. So we were acquired in.
We announced it in November 2017. But it really the deal went through and in September, and it was something where, as a CEO, when we were going through the sale process and having a discussion, I tried to really keep that out of, you know, not talk about that in front of the team and try to really not not so much keep it as we did keep it a secret from the team. Mostly because anytime you have those discussions, they are super disruptive and everyone gets super excited and they may or may not amount to anything, you know, those companies will have discussions all the time and pull out and it can be very, very demoralizing for teams if they get super excited and either nothing happens for a very long time or the company pulled out. So we tried to sort of keep that keep the team focused on building product and focus On the mission and growing the business and doing the same thing as they always did. When the deal went through, everyone was super excited for a couple of weeks. And then what quickly came was and they, you know, they had us all sign agreements that we were going to all stay so that it took a little while. But what quickly came after was, it wasn’t sure what we were supposed to be doing next. And what you often see in acquisitions, and ours was no different was the people who are involved in the acquisition have a clear idea of why are we acquiring this company, and what do we want to do with it, but they don’t always communicate back to the rest of the company super effectively. And so once we got acquired, we sort of got handed off to a new set of people and that new set of people hadn’t been in the loop about what is the purpose of this acquisition. And so there was a very long
period where
nobody quite knew whether we were working on what the acquires wanted us to be working on or not. And we weren’t getting really clear direction because they didn’t know frankly. So, as a CEO, that was my job to try to sort out so I was flying back and forth to Scotland all the time. So what was agreed early on was that we were going to report into Skyscanner. We were going to be integrating our content into both Skyscanner and sea trip products. But the teams who we’re supposed to be working with to integrate that weren’t totally clear on where was this in the priority list of things they needed to do. So it was really hard. We, we ultimately got a lot of stuff done, but it it there was a solid year of sort of lost productivity I would say where we were blocked from really doing the integration work at full pace. by internal teams and it took us a good year before we sort of got unblocked that we could really start doing stuff. So in that time, and we just sort of had the team doing the best they could, and trying to keep it fun and exciting. You know, as we as we built things.
Kevin May:
Is there anything? Now, last question, really? So is there anything now that you would take from what you’ve done? No, I asked you the question about what you took from the MySpace experience. Is there anything that you would take from this experience with Googlebot on trip.com into a venture that you consider in the future, whether it’s management style or how to deal with partnerships, or indeed, I guess how you would eventually sell a business you sounds like you. Yeah, just from that bit.
Travis Katz:
Um, I think that the couple things that I would say that I learned is one you, you need to always plan for everything you’re doing to change. I know that the market changed so many times between consolidation of the industry to face book killing viral channels to Google building out their own business to mobile being a viable channel for travel, which it wasn’t when we started. So I think one of the things you have to do is you need to have a vision that you build towards, but you need to understand that you’re going to need to be flexible with that vision because the market is going to change and things are out of your control are going to happen that will cause you to change and part of the reason I think we were able to survive and ultimately have a successful exit was because we were able to see those changes coming and adapt what we were doing to to succeed. The The other thing I guess I would say is that hiring I still I’m more than ever a believer that hiring well is The key to everything and you have to build the you have to have the best quality people. And but the best quality people also have to be fit into your culture. So we had the sort of brilliant jerk problem a few times where we hired people that particularly on the engineering side who were absolutely brilliant, technically and could build anything but had a bad attitude, either they were, you know, had a negative attitude or, you know, egotistical or those kinds of things. And often as a CEO, you’re like, well, we, we need to build things and this person can build so well we should figure out how to work around that. And what I learned was that those people you need to get out of your organization as quickly as possible and and they impact the other, the morale of the rest of the team much more than you will ever know people won’t share it with you because they will also recognize that those people are good and but every time we let one Those people go there was, we just felt this complete transformation where people were thankful they were relieved. They were happy, they worked harder and were more motivated and we got a lot more done without those people than keeping them so I think I became over time much quicker to let people go that we just weren’t the right fit for the culture and weren’t creating it, you ultimately want to and positivity and the can do attitude because building a company is hard. And you need people who make it fun to go through those hard times together and and you know, and feel like a part of a real team. And if you can build a real cohesive team, you can accomplish a lot.
Kevin May:
And your first comment there about preparing for the unexpected and anything can happen. I mean 2020 is really shown that that’s exactly the case.
Travis Katz:
Yeah, that that’s certainly one That would have been hard for anyone to prepare for 80% drop in travel or spec. Yeah.
Kevin May:
Okay, that was terrific. Thank you so much, Travis. I mean, I think, personally, I’d been waiting to hear this, this backstory for a long time. And I kind of sense that that sales didn’t go as you obviously went through, okay, but just that, that the kind of the mechanics of how things unraveled off today, something that I’d heard and it’s interesting to get your perspective on it. So from on behalf of David and I, thank you so much, Travis Katz for joining us as our guest on how I got here this week.
Travis Katz:
Thanks, Kevin. Thanks, David, for having me. It’s great to talk to you.
Kevin May:
Okay. Thank you everybody for tuning in. This is another episode of how I got here. This is mozilo and focus wise weekly podcast where we talk to the innovators and entrepreneurs in travel and transportation. If you’re not a regular subscriber you can do by hitting those buttons on Spotify, iTunes and Google podcasts. leave us a review. Leave us some feedback. We always like to hear You’ve got to say I say this every week, but it’s what we want to hear from you the listeners. So thanks so much to everybody. Thanks again to Travis and we’ll see you next time.
Transcribed by https://otter.ai
