In The Big Chair - Ariel Cohen of TripActions

Ariel Cohen, co-founder and CEO

TripActions is only four years old, but the company is definitely playing in the big leagues, valued at more than $4 billion on more than $450 million in funding in the last 18 months and making moves to take on the legacy travel management companies. 

Born in Israel, Cohen attended graduate school at Northwestern University and worked at HP before launching his first startup, StreamOnce, in 2012 with his TripActions co-founder Ilan Twig.

Thinking back to 2015, what inspired you and co-founder Ilan Twig to create a new solution for business travel? 

Ilan and I were road warriors ourselves back when we founded our first company, StreamOnce (acquired by Jive Software). We were both traveling so much, and it dawned on us that there had to be a way to make the entire business travel experience better, smoother and less stressful for the traveler.

There was one particular instance that sticks out in my mind as being an inspiration for starting TripActions. I was traveling like crazy, taking multiple business trips, one after the other. On one international business trip, I had just gotten off a long flight in a country where I didn't speak the language. I caught sight of myself in the mirror and could barely recognize my own face. I finally made it to the hotel late at night and jetlagged, only to find that my hotel room had been cancelled.

This isn’t a unique story for the road warrior. Ilan has many similar business travel-gone-wrong stories himself. Like many others, we had become accustomed to the status quo and the hopelessness of using the same corporate travel tools we had always used because there was nothing better available.

We set out to change that. We saw the large opportunity to make the lives of travelers easier and better, starting first with the technology they use. In solving for the pain points of the traveler, we also believed we could solve the pain points of the enterprise, and give finance, procurement, human resources and travel program leaders a better option than the status quo.

Originally the TripActions concept was to provide not only better service for travel managers and business travelers but also to reward those travelers for choosing cost-effective hotels and flights. Why did you shift away from that focus on incentives?

At TripActions, we’re always thinking about putting our users first - all of them, all the time, so we’re continuously optimizing for their experience. Incentives have always been a part of the TripActions experience; by giving travelers extra incentive to spend company money as if it’s their own they end up selecting options that best suit their needs while also saving their company money.

It’s a win for the company, and a win for the traveler. We found that incentives for hotels were more compelling to travelers than rewards for flight savings. The reality is that there is much more equilibrium pricing in air than hotels and so less wild swings.

And travelers tend to book flights based on a mix of the availability of direct routes, departure and arrival times, and preference of airline, with much less flexibility than with hotel bookings where there are more options available. As a result, we focused our TripActions rewards on hotels.

However, incentives are only a part of our overall offering - we like to think bigger when it comes to delivering the best possible travel experience. We’ve mapped out the “40 steps of business travel” from when you find out you have to book a flight to when you land back home safely after a successful trip.

We focus on applying artificial intelligence and machine learning to personalize the booking experience and make it as fast and easy as possible (our travelers only take, on average, six minutes to book a trip versus an industry average of 60 minutes), offer unrivaled inventory of flights, trains, cars and lodging, and finally – support the traveler at every step of the way with proactive, global 24/7, 365 days a year live human support.

TripActions has had exponential growth in the last 18 months. You raised a Series B round of $51 million in March 2018, a C round of $154 million in November and D round of $250 million in June 2019. The company’s valuation is now $4 billion. How are you growing so fast?

There are multiple reasons that have led to 5X year-over-year growth. First, there is a huge addressable market – a $1.4 trillion industry that’s been starved for innovation. We also have great product-market fit; companies and their travelers have been looking for a solution that addresses their needs.

Most of the platforms are from the last century, and for those that are more recent, our customers who have switched from them tell us that they haven’t seen any innovation in their platforms in years. We saw an opportunity to offer a far better experience for users - all of them, all the time - from the traveler to the executive assistant supporting travelers, to the finance, procurement, HR and travel program leaders.

We’ve also focused on creating a win-win-win for not only companies and their travelers, but also for our supplier partners. The space is evolving rapidly, and airlines are now offering differentiated, unique experiences that hadn’t been properly presented in those legacy systems.

We were first-to-market with the Next Generation Storefront (NGS), offering our supplier partners the platform to showcase their offerings, while giving our travelers the most modern shopping experience available today.

This is all to say that there is certainly momentum in the space, and thanks to our partners, customers and travelers who entrust us, we’re leading the path to innovation. We now have more than 800 employees in nine offices around the world serving more than 2,000 customers of all sizes and industries. Those customers trust us to manage more than $1.3 billion in travel budget annually.

Does it potentially become more difficult to move quickly and innovate as the company gets bigger?

It’s in our DNA to grow and move quickly, to embody a mission-driven, nimble and ever-learning culture.  Innovation, speed and growth are at the heart of everything we do. We always put the user first, and our product roadmap is equally driven by customer feedback and our own vision.

We are laser-focused on this idea of moving fast while delighting our users.

What are you hearing from your investors?

Our investors saw a lot of the same opportunities we saw when starting TripActions - a huge, growing industry plagued by outdated technologies and legacy players who have consistently failed to address the needs of both enterprises and their travelers. They are also aligned with our strategy to disrupt through innovation by focusing on the traveler first.

They agree that business travel should be used as a strategic lever for growth and culture, and that broken travel solutions are hurting business. Our investors are aligned with our perspective that taking care of traveling employees is key to running a successful business and that taking care of your travelers and saving the company money aren’t at odds with each other.

A few weeks ago you announced TripActions Consulting, which adds hands-on, custom assistance to your enterprise solutions. This seems to be another move into direct competition with the large, legacy travel management companies. Tell us about that strategy.

As a result of new technologies, the supplier landscape is experiencing a fundamental shift. Newly minted shopping experiences and channels, including the industry’s NGS and NDC, offer suppliers exciting ways to market their differentiated offerings to travelers - mimicking, in many ways, how travelers book leisure travel.

These emerging channels ultimately create a highly dynamic, complex market that’s constantly shifting. Whereas legacy supplier sourcing tactics were static, organizations must now incorporate the latest and greatest into their company policy to deliver best-in-class corporate travel programs.

Top these new delivery models of supplier options with an exponentially more tech-savvy user base, and the main pain point for enterprises becomes creating a nimble travel program that’s quickly adaptable, scalable and user-friendly.

To help solve for this, TripActions Consulting is focusing on streamlining three key areas for customers:

• Incorporating the latest in supplier technologies and market pricing. We are overcoming the challenges of legacy supplier sourcing by applying the latest shopping experiences in-market, while leveraging our latest innovations in machine learning and data analytics.
• We are helping to negotiate supplier agreements: Securing unique air, lodging and car inventory for customers (by innovating legacy sourcing processes) to deliver full value offerings and new benefits to travelers without compromising spend targets.
• We are also at the table helping our customers build travel programs - being a true partner - helping them scale an effective global travel management program by providing a white-glove, always-on engagement model for sharing the latest market expertise, analytics and insights so clients can take advantage of dynamic changes and incorporate them more readily into their travel programs.

I spoke to representatives from American Express Global Business Travel, FCM Travel Solutions and CWT earlier this month and all of them say they have been investing in innovation and focusing on traveler-centered solutions for a long time. What is your reaction to that?

It certainly seems out of sync with what customers say to us when they switch to TripActions. Like industry-leading apps we use in our personal lives including Lyft, Netflix and Venmo, as well as those we use in our professional lives like DocuSign, Zoom and Okta, once you’ve experienced a better way than the status quo, you never want to go back to the old way.

They also say a primary point of differentiation between their services and the ones provided by startups such as TripActions is their focus on human-powered assistance and using technology such as artificial intelligence to make those agents smarter and more efficient. How important are agents to the services TripActions provides and how do you see that evolving in the future?

I would say the primary point of differentiation is that TripActions is focused on the end-to-end experience of all users, including travelers, executive assistants supporting travelers and finance, procurement and HR leaders, to deliver the best experience in business travel.

By focusing on the user, we solve the pain points of the business. Others in the industry often just focus on the business and miss the user completely, which results in a platform users don’t actually use, which means the business doesn’t get the visibility they need into their travel spend.

...once you’ve experienced a better way than the status quo, you never want to go back to the old way.

Ariel Cohen - TripActions

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With regards to AI and machine learning, we use them to complement our human support services, not replace them. We’ve applied AI and machine learning to the booking process. Machine learning personalizes the choices presented to the traveler, taking into consideration their loyalty programs and preferences, and it keeps learning over time based on what the user books.

As a result, users select from the top 10 results returned 90% of the time, and the top result returned in a TripActions search 60% of the time. By presenting relevant, personalized results, users are able to book a trip in six minutes on average versus the typical 60 minute industry average. The ultimate goal is to make booking that much easier, and faster, for the traveler such that they love using the platform.

And when a traveler faces a challenge, like a missed connection or a delay, we have a support team of live human agents who proactively re-accommodate travelers. And when travelers need us, our support agents are available 24/7 365 by chat, email and phone, responding on average in less than 60 seconds.

Simply put, we certainly use machine learning to enhance and optimize the entire travel booking experience, though we still believe the magic is in the empathy of the human touch. As a result, we consistently see an unprecedented 93% traveler satisfaction.

Nowadays, with improvements in digital tools for booking, expense management and even risk management, isn’t it easier than ever for a company to manage travel on its own, without the need for TripActions or any other TMC?

That may be the case for legacy players and other newer solutions with limited capabilities, but organizations of every size, industry and geography find value in TripActions. From providing a best-in-class experience for their employees, to helping organizations save up to 34% on lodging alone, to helping organizations fulfill their duty of care commitments via our live traveler map, there’s much more to TripActions than a traditional or legacy corporate travel booking tool.

Without a well-managed travel program, finance executives and travel managers risk losing track of spend. With an effective travel program and platform that travelers love, companies enjoy high levels of adoption, and therefore increased spend visibility and savings opportunities. The ultimate benefit is that they can use TripActions to turn travel into a strategic lever for culture and growth.

What are the biggest challenges TripActions is currently facing?

One of the reasons Ilan and I started TripActions is because we wanted to create an amazing place to work with an incredible culture. We are super proud of our culture and have been recognized and awarded for it. One of the challenges of being in a stage of hyper growth is maintaining that culture as we scale.

I mentioned earlier that one of our core values is always putting the user first, and when you are putting the user first you are also always trying to be better. This results in a constant push on the company and every single team member to think “how could I have done this better?” It's a challenge to always be learning, improving and never standing still, but you need to challenge yourself to grow.

If we talk again a year from now, what do you expect to be telling us about TripActions at that point?

I hope to tell you that TripActions has fast become the default for corporate travel.

What do you know about the travel industry now that you didn’t know before launching TripActions?

We have learned a lot. One of our key learnings is that the ecosystem is very important. Understanding the needs of suppliers, travelers and customers is key, especially as their needs evolve over time.

Prior to creating TripActions, you and Ilan created and sold another startup, StreamOnce. So with two successful ventures under your belt, what advice do you have for entrepreneurs that are just getting started?

We have learned so much from founding both StreamOnce and TripActions, and we continue to learn as TripActions grows and evolves. Three particular takeaways stick out in my mind:

• It’s important to be mission driven and crucial to hire mission-driven people aligned with your culture and values.
• To this end, know your core values and stay true to your vision. You need to trust your vision in order for others to.
• Build and grow a culture you believe in. We are very proud of the culture we have built at TripActions and know that continuing to foster it is essential to our continued success and growth.

And finally, what do you like to do in your free time?

What free time?

Believe it or not, I love to travel. I believe that visiting new places around the world offers an amazing opportunity to learn, grow and reflect. I have found that mini-sabbaticals have offered me a valuable chance to think and refresh. Taking time to pause and reflect is especially important when you are moving as fast as we are at TripActions.

I am also a foodie and enjoy unique food and eating experiences both when I am traveling and at home. And finally, I love and value the time I spend with my family and friends.