20VC TripActions CEO Ariel Cohen on The Future of Business and Personal Travel & Layoffs; How To Do Them The Right Way & Maintain Company Culture and Morale

In this episode of "20 minutes VC," host Harry Stebbings interviews Ariel Cohen, the co-founder and CEO of TripActions, a company that has felt the severe impacts of COVID-19, leading to the layoff of 350 employees. Cohen discusses his journey from Israel to Silicon Valley, his previous startup experiences, and the inception of TripActions, emphasizing the importance of business travel for human connections and the challenges of maintaining company culture during crises. Despite the pandemic's toll, Cohen is optimistic about the future of business travel and the role of TripActions in facilitating it once safety can be ensured. He also shares insights on managing startups during uncertainty, the significance of investor relationships, and the necessity of adapting to a new reality, all while keeping a mission-driven focus and transparent communication with the team.

• Harry Stebbings introduces the episode of "20 minutes VC."
• Harry invites listeners to suggest guests or questions for future episodes via Instagram.
• The episode focuses on the impact of Covid on the travel industry.
• Ariel Cohen, founder and CEO of Trip Actions, is the guest.
• Ariel's background includes founding StreamOnce and a leadership role at Hewlett Packard.
• Thanks are given to Arif Jan Mohammed and Oren Zeev for their question suggestions.
• Harry promotes Carter and Terminal, services for startups and remote engineering teams.

We are back on the 20 minutes VC with me, Harry Stebbings, and if you'd like to suggest either guests or questions for future episodes, you can on Instagram at H. Debbings 1996 with two B's.

This quote introduces the podcast episode and Harry's Instagram for audience engagement.

• Ariel Cohen is the founder and CEO of Trip Actions, a company managing business travel and expenses.
• Trip Actions is trusted by over 4000 companies and has raised over $980 million.
• Ariel's previous venture, StreamOnce, was acquired by Jive Software.
• He held a senior leadership role in product management at Hewlett Packard.
• Ariel has strong connections with investors from previous startups, like Arif Jan Mohammed and Oren Zeev.

To date, Ariel has raised over $980,000,000 for trip actions from some of the best in the business, including Lightspeed or and Zeve Andreessen horrors, to name a few.

This quote highlights Ariel Cohen's success in raising funds for Trip Actions and mentions prominent investors.

• Ariel Cohen moved from Israel to the US to pursue entrepreneurship in Silicon Valley.
• His experience at Jive and founding a small startup with Elon Twig led to lifelong connections.
• Ariel's previous startup was quickly sold back to Jive.
• He has extensive experience with business travel frustrations and management challenges.
• Ariel and his co-founder, Elon, saw an opportunity to improve business travel, leading to the founding of Trip Actions.

I'm originally from Israel and I've moved in nine to the US. And the main purpose, I've moved through HP after we got acquired in HP, but I've moved because I really wanted to move to the entrepreneurship side and really start startups.

Ariel explains his motivation for moving to the US and his transition from corporate to startup life.

• Covid has drastically affected travel, with Trip Actions laying off 350 people in March.
• Despite the shift to video conferencing, Ariel believes in-person connections are crucial for business.
• Ariel anticipates a return to normalcy in business travel post-Covid.
• Trip Actions provided tools for customers to manage travel during the pandemic, including live tracking of employee locations and correlating with CDC recommendations.
• The company adapted to support customers with cancellations and rebookings as travel restrictions emerged.
• Trip Actions faced a significant drop in day-to-day revenue due to reduced travel usage.

I know that a lot of people that right now are saying, hey, maybe doing everything through video conference, that's the solution. I think it's an amazing workaround, and I think it's actually fairly efficient workaround, but it also remove a lot of things from the cultural aspect, the in person connections aspects, the thing that really drive businesses.

Ariel discusses the limitations of video conferencing and the importance of in-person interactions in business.## Adjusting for the Long Run Post-COVID

• Ariel Cohen discusses the need for startups to think long-term for survival post-COVID, including making difficult decisions like layoffs.
• The focus is on ensuring the company's longevity, even at the cost of losing good employees.
• Ariel emphasizes the horrid nature of layoffs, especially when they involve letting go of competent team members.

"So we'll be here in a year from now, in two years from now, in three years from now. That was kind of what I was looking at. How can I make sure that we will be alive in the long run after Covid? And unfortunately, to do that I needed to do layoffs."

The quote reflects Ariel's forward-looking strategy to keep the company afloat during uncertain times, which regrettably involved layoffs.

• Ariel Cohen and Harry Stebbings discuss the difficulties of conducting layoffs remotely through Zoom.
• Ariel highlights the importance of human connection and face-to-face communication during such sensitive processes.
• The impersonal nature of video conferencing is criticized for its transactional feel and inability to capture emotional nuances.

"You start a meeting, you end the meeting, you don't really know what happens in the five minutes afterwards, the five minutes before that, all of the body language and so on."

Ariel criticizes the limitations of Zoom for not providing a complete understanding of the other person's emotional state during layoffs.

• Layoffs can breach a trust line when they are not performance-related but due to external circumstances like COVID-19.
• Ariel Cohen speaks to the importance of culture and mission in a company, and how layoffs, even when necessary, can negatively impact that culture.
• The distinction between company culture and workplace perks is made, with culture being about a collective belief in the mission.

"You are crossing a certain trust line when you do that."

This quote addresses the damage to trust when employees who perform well are still laid off, which can have a profound effect on company culture.

• Ariel Cohen provides advice to entrepreneurs on handling layoffs during uncertain times.
• He emphasizes the importance of being realistic and responsible when making tough decisions to avoid worse outcomes.
• Ariel advises against excessive optimism during crises and recommends preparing for a longer impact than initially expected.

"If you believe in the product that you have in the offering that you have in your company, right, in your mission, believing in it also means that you have to be very responsible."

The quote suggests that entrepreneurs must balance their belief in their company's mission with the responsibility to make difficult decisions during crises.

• Ariel Cohen discusses strategies to maintain culture and motivate employees through a crisis.
• Rallying the team around the mission and adapting strategy to the new reality is crucial.
• Ariel talks about focusing on customer acquisition and improving product and operational gaps during the downturn.

"We should use this time so when we are back, when the users will get back, they will have even a better experience with us than what they had before COVID."

Ariel stresses the importance of using the crisis as an opportunity to improve the company and prepare for a strong comeback.## Getting Back to Business

• Emphasizing the importance of returning to normal business operations.
• Recognizing business travel as an integral part of business.
• The need for companies to assist their customers in resuming their business activities.

And really what I've told the team is it's all about getting back to business. It's us getting back to business, but it's also helping our customers to get back to business.

This quote highlights the focus on reviving business activities both within the company and for their customers, acknowledging the interconnected nature of business success.

• Being transparent with employees about the company's financial status.
• Importance of not giving false hope and sharing the true situation with employees.
• Continuous update on company finances and expenditures to maintain employee trust.

But being transparent means of let's not communicate false hope to the employees, let's actually share with them the situation. Let's be very transparent on how much money do we have in the bank, how much are we burning, by the way?

This quote underscores the commitment to honesty in internal communications, specifically regarding the company's financial health, to build trust with employees.

• Video conferencing creates a transactional environment, limiting deeper conversations.
• Difficulty in maintaining the human element and personal connections remotely.
• Concerns about the degradation of communication quality and understanding in a remote setting.

Even all hands, you don't have the people walking into the room and walking out of the room, you cannot really see their faces. It's something that reduces the human element to minimum.

This quote expresses the challenges faced in remote communication, such as the inability to read body language and the reduced human element, which are critical for understanding and connection.

• Acknowledging the emotional rollercoaster of entrepreneurship.
• The importance of relying on trusted individuals for support.
• Personal coping strategies include open communication with family and colleagues.

Talking with people, we see our families much more. Talking with my wife, even with my kids, right. My son always like to better understand our business. So talking with them on everything, I think that helps a lot, at least for me.

The speaker shares personal experiences and strategies for coping with the stresses of entrepreneurship, emphasizing the value of family and trusted relationships.

• Trust and constructive challenge from investors are crucial.
• The value of having experienced investors who can provide guidance on culture, communication, and financial management.
• The importance of investors believing in the long-term vision of the company.

For me, as a CEO, as an entrepreneur, it's very important to see, to feel that our investors trust me to weather the storm, but also challenge you, asking you some questions, right?

This quote reflects the need for a balance between trust and critical support from investors, highlighting the importance of feeling trusted to manage through difficult times.

• Cash reserves are critical for startups to survive crises.
• Belief in the resurgence of business travel once safety concerns are addressed.
• The role of tech companies in providing tools for safe and efficient travel.

I think that once they'll know that it is safe to travel, they'll get back to the efficiency, right. To close a deal, you need to meet face to face.

The speaker predicts a strong return to business travel post-crisis, contingent on safety assurances, and underlines the tech industry's role in facilitating this return.

• The dilemma of accepting funding at the cost of higher dilution.
• The importance of having sufficient cash to ensure business continuity.

I think I'm actually very consistent on my thinking regarding to thi

Although the quote is incomplete, it suggests that the speaker has a consistent philosophy regarding fundraising and managing dilution, emphasizing the necessity of cash for business survival.## Importance of Choosing the Right Partner in Funding Rounds

• The focus should be on the quality of the partner rather than the level of dilution during funding rounds.
• The alignment of the partner's vision with the startup's vision is critical.
• A long-term partnership perspective is essential as the partner becomes part of the startup's journey.
• The wrong partner can negatively impact the startup.

"I think that what's important when you do a funding round is not the dilution level, it's actually the partner that you bring to the table and whether this partner is aligned to your vision or not."

This quote emphasizes the significance of the investor's compatibility with the startup's vision over the percentage of ownership lost in the funding round.

• Terms of the funding round can have long-term implications on a startup's growth.
• Dilution is just one aspect of the funding terms.
• The presence of unfavorable debt structures can hinder future growth.
• It's important to avoid terms that add undue weight to the startup, preventing growth.

"Are you putting weights on your startup right now that will prevent you from growing in the future?"

This quote highlights the importance of considering whether the terms of funding could create obstacles for the startup's growth in the future.

• CEOs must constantly evaluate all available financing options.
• The balance between cash on hand and financing options should be assessed.
• The purpose of raising funds should be clear, focusing on strengthening the company post-crisis.
• Decisions on layoffs and hiring should align with long-term company goals.

"I'm constantly looking at what we have the options out there in terms of financing, and that is one of them."

Ariel Cohen states he is always exploring various financing options to maintain a strategic approach to managing the company's finances.

• Being decisive and mission-driven is a key strength.
• Clarity in decision-making can be both a positive and a negative trait.
• Emotional investment in the company's dealings is seen as a weakness.

"I'm very decisive and mission driven person. Right. So I think that's very important."

Ariel Cohen identifies decisiveness and a strong sense of mission as his entrepreneurial superpower, which drives the company forward.

• The belief that there is always a way to achieve one's dreams.
• The importance of perseverance and not settling for less.
• Staying motivated to achieve company and personal goals.

"There is always a way, and there is always a way to achieve your dreams."

Ariel Cohen shares his personal motto, which reflects his optimistic and determined approach to overcoming challenges and pursuing goals.

• The first booking for tripactions was a significant milestone.
• The involvement of early investors like Lightspeed in facilitating client connections.
• The excitement and validation from early customer feedback.

"The first company that ever booked in tripactions are Netsco... And I remember their CFO calling me so excited that everything worked."

This quote recounts the memorable moment of tripactions' first client booking and the positive feedback received, which was a validation of the company's service.

• Tripactions aims to enhance human connections through its services.
• The goal is to expand the company's reach to as many people and companies as possible.
• Looking forward to restoring in-person interactions post-COVID-19.

"In five years from now, I hope that we'll be able to bring this experience, the experience that we create through trip actions, to as many people as possible."

Ariel Cohen expresses his aspiration for tripactions to facilitate human connections on a larger scale in the future.

• "Mr. Vertigo" by Paulo Starr is a favorite book for its entrepreneurial parallels.
• The book teaches the importance of striving for success while remaining humble.

"It's about teaching you that you can fly. And for me, as an entrepreneur, it's really, really. I think I relate to this in terms of the hassle, the ability to fly, and also the need to stay humble while you're doing that."

Ariel Cohen explains how "Mr. Vertigo" has influenced his entrepreneurial mindset and approach, emphasizing the balance between ambition and humility.