00:37:29 · Michael Sindicich
[00:37:29] S1: Yeah. Most important is culture of the company and does it align. I do love the model of partnering with somebody first and then figuring out if it makes sense to acquire them just because things look really good on a piece of paper. But if you can actually partner first and see how they operate, see the solution, see if your customers... Most important is does the customer have a really good NPS in a CSAT through the partner? And are they telling you, yes, this is an amazing solution. This works really well. I'm happy about this. If you can find someone to partner with first, see it in action, then it's a really simple formula on, like, should you acquire them and does the return make sense for the price that you're gonna pay for them? So I think, like, that one was relatively easy. And then I think some of the ones that we've done in the past that we hadn't partnered with before that we had a gap in our solution or in our global reach, those are a little bit more, I would say, more science and a little bit more understanding of the solution and people. But I think we just spend a lot of time with the leadership team of the company that we're thinking about acquiring, really sharing our plans, understanding their plans, feeling who they are as a person, and are they gonna mesh well when we ultimately join forces? And I think that's, like, the most important thing, because if people are, you know, kind of trying to go after the same mission, then it easily aligns things going forward.
00:39:04 · Miguel Armaza, Michael Sindicich
[00:39:04] S0: Let's talk a bit about the current state of the corporate travel industry. [00:39:09] S1: Yeah. [00:39:10] S0: I was just looking at some numbers. It's been growing. Yep. At least dollar amount year over year. Volume, the growth has been less than dollar amount. Is that also because it's getting more expensive just in general to travel? That's one point, but in general, I'd love to hear your take on the state of the industry.
00:39:37 · Michael Sindicich
[00:39:37] S1: Yeah. Inflation is increasing prices. So I would say probably, in my opinion, you know, this is not based on anything, but I think that, you know, travel inflation is higher than the reported CPI inflation. So that's one piece. You would agree? I mean, it's expensive to fly anywhere and stay somewhere these days. So I think that's a baseline that travel prices are increasing, which, by the way, makes our solution more important because we help you save a lot of money. Our average customer saves about 15% on their entire travel budget, which is not insignificant when you're thinking about, you know, a larger company. But but prices are are increasing there. I also think... And we released a study called the BTB, the Business Travel Benchmark. It's something that we do every six months. And what it does is it basically, first and foremost, compares business travel trends versus TSA line trends. And what the TSA lines or the personal travel trends will show is how personal travel affects travel. And basically what you'll see is December, it skyrockets. And in the summer holidays, it skyrockets. Business travel is very different. It tanks in the summer. It tanks in December. And with the holidays and around Thanksgiving and things like that. And so we did that study first to show here are the trends of business travel, not the trends of what you would normally see on consumer or just general TSA, you know, lines. The other thing it shows is, as a same store sale, how people are prioritizing business travel. And before the pandemic, it was like sales and marketing and executives were traveling. And then after the pandemic or pandemic, no one traveled. After the pandemic started coming back, we saw like a big difference if the type of travel that was happening. So it was a lot of group travel. It was like engineers and product people and all the people that you had hired that were remote for a long time, now you want to bring them back to quarterly off sites and to build the culture of the company and to meet each other. And so that was a big trend. And then we started to see, you know, sales and marketing coming back and meeting customers and things like that. And what I can say today is it just really feels like people are prioritizing in person connections. People are knowing that I need to be out there meeting my customer.
00:42:03 · Michael Sindicich
If I'm not, then I'm going to miss the sale. Or my competition is gonna meet my customer, and I'm gonna miss the sale. One of my friends was in San Francisco this weekend, I was like, How well do you know the groom? He was there for a wedding. He was like, I know him pretty well, but also my competitor is at his wedding too, so I feel like I also really need to go to the wedding. And so, you know, but I just think people know how powerful in person connections, like doing this, is for building relationships, saving the customer, closing the customer, hiring the person. You know what I mean? And so travel just feels like it's more important and being prioritized higher than ever. And we don't see a slowdown in in travel for companies even though prices are are increasing. So that's that's kind of how I think about it. And I believe that if the world moves more and more with AI helping to automate things, then what's kind of left besides in person connections? And we think about it a lot when we're thinking about where we're going as a company and how in this world of technology and and and AI and and all the automation, we actually think our mission becomes more important than ever, which is powering in person connections. And if we can do that, I think we're in a in a good spot.
00:43:23 · Miguel Armaza
[00:43:23] S0: I think you're right. I was talking to a pretty significant leader in human resources in SF, and they were saying that some of the channels that you could rely on before for recruiting are kind of useless now and relationships of the company's employees are more important than ever. Right? So, and I guess that also cascades into travel and personal relationships, exactly what you're talking about. But let's talk about AI. Okay. Because I think this is an interesting topic about you guys. Yeah. You've launched a few solutions. Yep. And I believe you build them in house. Yes. You develop your own models. Does that mean you're also buying your own NVIDIA chips? So maybe tell us to what extent you're doing this in house and also let's talk about the specific solutions. Cool.
00:44:22 · Michael Sindicich
[00:44:22] S1: Yeah, so first thing to know when I joined in 2016 was the first time I heard the word machine learning at Navan. It's the first time I heard it in my life and it was at Navan. So the thing that I don't think people necessarily appreciated as much when we first IPO ed is like the story that we told them. We were really focused on machine learning and AI from day one. And the way that that translated into the product is think about this massive marketplace with all of these inventory sources. Now 80% plus of our bookings happen in the first three results that we show a user. And that relates to our average time to book is seven minutes in the platform to book a trip compared to, you know, with legacy systems, forty five minutes plus. And so the way that we filter all this inventory is we learn who you are, what's your loyalty clubs, your past booking behavior, what your company policy is, where your coworkers are staying, what's your office locations. And what we were doing is we were basically saying, okay, Michael always takes the United flight out of SFO into Newark at 9PM. He does the red eye and this is his kinda thing. And so that's what it's gonna show in the results. And and that was how we started using machine learning early days. Then we even started with chat support. We called it in the beginning. It was Cohen, Ariel, Twig, Elon, our co founder's names. We called it Kati. And so that was us basically saying, you know, we were the first ones to launch chat as a travel agent. And so people could chat into us instead of just call. But what if we could use natural language processing and basically automate the answers to a lot of the questions that were happening? And what if we could even connect it in so that it could basically manually, like, change or cancel a flight or push a hotel by a day or whatever? And then when ChatGPT came out and this entire agentic thing happened, we were like, holy shit. Like, this is this is massive, and we can do so many good things for our users. And that translated to a couple of the different products that you're talking about. You know, one thing that we're doing is we are always attacking the travel management space in a really efficient way.