There are times when markets plummet. Whether it be from a global pandemic or overvalued asset bubbles bursting, when markets come crashing down, CEOs are often forced to make bold decisions.
We sat down with Avi Meir, CEO of TravelPerk, to talk about how to take action in a changing macro environment. During times of rapid change, leaders should act decisively, especially when a collapse seems to be around the corner.
Taking action in the middle of a market crash: An interview with Avi Meir
Going through a downturn can be intimidating even for the most seasoned CFO. The changing macroeconomic environment has an ongoing impact on the strategy, financing planning, and decisions that every leader is now making for their business.
Julio: Let's kick off with some introductory questions before we get started. How did you make your way into the travel industry and become the co-founder and CEO of TravelPerk?
Avi: I started by accident. I go with the flow and let things happen as they come. I was never a huge aviation nerd, but I was genuinely interested in software engineering, cyber security, and hacking. As a result of this passion I had as a kid, I learned to code.
Later on, while in college, I got a job at the airport so I could pay for food and rent. That’s how I made my way into travel and developed my passion further.
Julio: The world changed a lot, at least during the past few years. What happened in March 2020 at TravelPerk? How did you guide TravelPerk through the COVID pandemic and transition the company to crisis-mode execution?
Avi: We raised our series C before the pandemic, so when COVID hit, we were in a very strong position for financial growth. During Q1 of 2020, which included March, we were growing 3x year-over-year in revenue. Yet, in March and April 2020, nobody was buying business travel anywhere.
Our reason why has always been the human connection and how technology can help humanity to keep growing. Thus, we decided to handle the crisis from a human perspective, despite the negative revenue in April 2020.
We went from growing 3x to negative revenue, as we refunded more money to our customers than what we generated in April. Our first value is providing a 7 star experience for both our customers and our team, so we stayed true to our core values despite the financial setback.
At that time, we worked hard to turn lemons into lemonade, and fortunately, we now have 10x revenue growth compared to before the pandemic.
Julio: What were some of the practical lessons you learned from that period? Are there any that you would recommend applying to the current market crisis?
Avi: The first thing is to be transparent and tell your team the way things are since day one. Be clear on what is happening, how you feel about certain situations, and what your plans are moving forward.
My second piece of advice is to stick to your values, especially when you're navigating through tough times. It's easy to stick to your values when you have something to gain, but what about when you have something to lose? This is not the time to drop them, but to give them a voice.
Julio: I often think the best CEOs are also the best capital allocators. What do you think about capital allocation internally? Can you share any advice on saving costs, extending runway, while also balancing focused long-term execution?
Avi: Uncertainty is one of the biggest elements of any crisis. I started writing a journal during COVID, because I wanted to remember the decisions I made at each stage to review them in the future.
In March 2020, I wrote to myself that everybody was exaggerating and that all would be over by June 2020. I proved to be completely over optimistic, as we got out of it as a company in H2 2021, and our industry is still recovering.
When it comes to capital allocation, we were only looking for optionality and ways to not run out of cash. COVID will eventually go away, all pandemics do, but how do we build optionality without losing the opportunity of emerging stronger?
In my opinion, the key is to get rid of as many fixed costs as possible, such as offices and fixed commitments. While they are not the easiest, they are the most important to let go.
Today, we're growing faster than we ever did in revenue, and that’s because of the dynamism we’ve achieved. Technology has given us a new flexibility, allowing us to get rid of some fixed costs, expand runway, and make our business more viable.
On the other hand, my advice would also be to stay optimistic. When you’re optimistic, you are able to imagine the other side of a crisis and be strong enough to see the opportunities coming your way.
Julio: In your opinion, what differentiates a good leadership team from a great leadership team? What are the lessons you learned from having your leadership team operating in crisis-mode?
Avi: Building a high-performing team is about creating a deep level of human connection that is not just professional. You need to be authentic with each other and be open to criticism without being afraid to show vulnerability.
We need, as a team, to be true to both our weaknesses and strengths, and accept imperfection. Finding a common ground and putting aside irrelevant differences with others is essential to keeping the focus on what we all care about: the company.
Another key factor when building a strong organization is to operate as a special forces team. Far from implementing a pyramid structure or giving orders, the idea is to work together, collaboratively. For example, the primary team within our company is the leadership team. We all take ownership and delegate the different areas of our organization to each other.
If someone wants to delve into either of these two concepts, I recommend reading The Culture Code and Team of Teams.
Julio: One last question. Can you share more about the effect that celebrating impact over effort has had on TravelPerk’s culture?
Avi: For many years, I’ve seen many consultants proud to work 100 hours, 20 hours, 70 hours a week, and I always thought that this was not the KPI to measure.
For example, imagine you are a developer, and you are working on a website page whose goal is to get people to sign up for a webinar.
As a result of your hard work when reengineering the entire back-end, now your page loads 400% faster. The effort responds to your hard work to get those results.
However, the goal of the website page is to turn a visitor into a sign up. Thus, what you should be measuring is whether your page, after your effort, has gotten more registrations or not. If the answer is no, then you wasted time, money, and an opportunity against your competitors by putting all this effort into something that didn’t achieve your goal.
We must keep in mind who our end user is, what we are trying to get with our actions, and how we are going to achieve our goals.
Leading companies are those that take action early on, take a human perspective to planning, and stay true to their values. With the right insights and mindset, companies are able to overcome obstacles and succeed despite being in a tough position.
Today, flexibility and adaptability are fundamental pillars to overcome uncertainty. Being able to plan long-term scenarios can help startups deliver faster execution, and thus position themselves for success.
Abacum’s collaborative Finance solution can help align your entire organization, even when facing difficult market conditions. To learn more about how your Finance team can drive change, book a demo with one of our specialists.