From finding the right talent at the right time to setting up accounting and legal, startup founders have enough on their hands. And while focusing in on one area of the business, like dev, can help push the product forward, failure to keep organisational oversight can bring growth to a halt.
You might think Covid-19 would be the biggest obstacle for a travel company, but it was a failure to keep the big picture in mind that almost grounded Barcelona-based business travel booking platform TravelPerk.
TravelPerk founder and chief executive Avi Meir told Sifted that the startup has actually grown stronger over the past year: “I certainly wouldn’t choose a pandemic to operate in, but we’ve tried to get the best out of it, considering we didn’t have a choice. We’re emerging stronger, having invested in our product and actually grew our customer base 60% over the past year.”
We spoke with Meir about why focusing too much on the product was his biggest mistake as a founder, and how turning to data and the company’s core values pulled them through the pandemic.
Look beyond the product
TravelPerk was founded in 2015 after Meir sold his previous company Hotel Ninjas to Booking.com for an undisclosed amount. Since then, TravelPerk has been on a growth tear: its workforce doubled in 2019, it opened its first office in the US in 2020 and has raised more than $130m in investment so far.
Achieving this rapid scaling required a ferocious focus on building the product, but this caused problems in other parts of the business, which captured less of Meir’s attention. Meir says his lack of organisational oversight led to staffing shortages that impacted growth.
“At one point in early 2018, we had way more interest from customers than we could handle. This was a good problem to have, but a problem, nonetheless. We didn’t have enough account managers to help interested customers test out our platform. Why? Because our HR department was very light and we couldn’t scale, as we needed to hire dozens of people,” says Meir.
However, a bug in your ‘people’ product — there’s no quick fix for that.
“I like to think of our people as a product, because I’m a nerd and this is the language I understand. If you have an architectural bug in your product, you can fix it relatively fast. However, a bug in your ‘people’ product — there’s no quick fix for that,” Meir says. “It took us a year to fix with hiring, training and getting our process straight.”
For Meir, this meant ‘reverse engineering’ the problem by starting with the desired outcome — more client bookings. To get this required recruiting account managers, but also hiring managers to find them, trainers to teach them about the product and HR leaders to ensure the company’s culture scaled.
He cautions other founders against this tunnel vision on building the technical product, advising them to keep an eye across the whole business.
“I would advise 2018 me to look at the whole product, not just the technical side, and try to guess where the architecture doesn’t scale,” Meir says. “Let’s assume we’ve grown to 5k customers. What parts of the business didn’t scale from 0 to 5k? If I’d thought about the company as a whole, I’d have understood that having two people in HR wouldn’t have worked. Instead, I had to solve it after the fact and that created a bottleneck in our business.”
To combat this, TravelPerk now uses data dashboards and metrics to measure employee engagement, feedback and potential pressure points across the entire business. Data is collected on different departments including finance and legal, as well as information on employee retention, recruitment and staff wellbeing.
The company can access data in realtime and predict future problems internally, in the same way it does with the technical product. Having a single viewpoint over the entire business stops similar mistakes from occurring.
“We measure everything. After our HR crisis, we started to proactively look at data from all sides of the business, whereas previously we just looked at product data. I now think of my team as a product, so it made sense to use the same type of tools and information.”
“Technical people like myself can see people and culture stuff as uninteresting and tend to underinvest in it at the beginning, but they can become the biggest pain points for scaling. Focus on the areas you find boring, because these are the areas where things will go wrong,” says Meir. “Use data and tools to get information on these areas in the same way as you do your product.”
Technical people like myself can see people and culture stuff as uninteresting and tend to underinvest in it at the beginning, but they can become the biggest pain points for scaling.
Stick to core values
This data overview helped inform TravelPerk’s decision-making during Covid-19. It started the pandemic in a fortunate position, having completed a €92.5m Series C funding round in July 2019 that gave it plenty of runway. The money helped the company take advantage of the perilous market by acquiring travel safety API Albatross in July and US-based rival NexTravel earlier this year.
But the key to growing during the pandemic was the decision to stick by the company’s ‘core values’, which Meir defines as principles you stand by even when you have something to lose. In practice, this meant avoiding redundancies, retraining employees and reallocating resources around the business — even as competitors were reducing workforce costs by up to 30%.
“Why did everyone cut 30%? Because this is what they had in sales and customer support, so they cut the volume-driven roles. Many companies have values around protecting their people, but when it comes to a crisis, they don’t stick to it. We did, even though we ended up paying millions of euros more to keep the team together,” says Meir.
As the pandemic struck, TravelPerk moved its entire sales team into customer support to deal with a near 100% cancellation rate in bookings. Then, as business travel began to recover around May, it switched, moving customer support into sales to help with new bookings. The result was that of the company’s 500 plus employees, less than five were left with no role. It also meant the organisation was upskilled, with ongoing training moving TravelPerk’s customer care up a level.
Many companies have values around protecting their people, but when it comes to a crisis, they don’t stick to it. We did, even though we ended up paying millions of euros more to keep the team together.
Long-term, Meir expects this to have a positive impact on the organisation’s productivity.
“We now have more skilled people in customer care, but we didn’t see the impact in 2020. It would have been way cheaper to let people go and then rehire, but I don’t see how your culture can scale if you don’t keep your values in times of difficulty. We stayed true to our people.”
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