How did business travel company Lola survive the pandemic?

Sam Balter: We all know what the pandemic did to web conferencing. In the first six months of 2020, the entire industry grew over 200%. Other tech that helped us work remotely, like electronic signatures, grew over 56%. And there was a near infinite increase in Slack messages. But sometimes, a rise implies a fall. When one industry succeeds, somewhere, is there another industry struggling? In this case, there was. Someone was on the other side of the web conferencing coin. That person was Mike Volpe. Mike Volpe is the CEO of Lola, a travel management company. With the boom in working remotely, global travel collapsed causing Lola to lose over 97% of their business and lay off a lot of their staff. So what did Mike do? Let's find out on this week's episode of Talk Data To Me.

Mike Volpe: Yeah, I'm Mike Volpe and I'm the CEO of lola. com.

Sam Balter: Where are you right now?

Mike Volpe: I am outside Boston in the suburbs up in my attic/ office.

Sam Balter: And let's see, just so we can get a sense of things. Mike, how tall are you?

Mike Volpe: I am about 6'4".

Sam Balter: When did you become the CEO of Lola?

Mike Volpe: I started at Lola in August 2018. Lola had been founded by a guy named Paul English. He's still here, he's our CTO, he runs product and engineering. He was the co- founder of Kayak, which is probably the company that a lot of people have heard of, it's a very popular travel search engine. And Lola had started off in consumer travel, but over time they realized that their most active customers were all business travelers. So that kind of led them down this path of moving from being a consumer travel app to being a corporate travel app.

Sam Balter: So the company had already pivoted before you joined?

Mike Volpe: Yeah. I mean, like all good start- ups, you sort of start in one area. And this wasn't like a Slack, we made a video game, oh no, actually, sorry. We're going to make a chat app, right? It was, well, consumer individual travelers into kind of road warriors into corporate travel, which sort of makes some sense.

Sam Balter: Can you talk me through a little bit of what Lola was like when you came into the company?

Mike Volpe: Paul and I had known each other for a number of years, just because we had sort of worked in similar areas of the startup community. He wanted to bring on some more experience out of the team from someone who knew about B2B and SMB and SaaS and software and sort of all these things. And we had a good relationship, we started talking about it a little bit and all of a sudden I sort of started to get really excited about the opportunity to work with him and work with the team. And so we started a sell at the end of 2018 and we closed a few customers the first month we were selling, a few more the next month, a few more of the month after, we started building out sales and marketing. And 2019 was a year of just tremendous growth for us. It was like 10X growth because we just added a sales and marketing continue to build off the base that we had gotten started with. And so it was, it was a great year. And we were kind of had found our thing and we're just really doing well, had happy customers, really high ratings on all those customer reviews between Capterra and G2 and places like that. I mean, we were the highest rated corporate travel app and we were having a lot of fun and certainly there's challenges that you face as part of growth, but we were feeling like we're in a really good spot.

Sam Balter: So it sounds like things are growing well, everything's good. This is your first time being a CEO, right? Coming from previous jobs, you were a CMO, this is your first kind of CEO. So this first year, how are you feeling?

Mike Volpe: I mean, good. There's so many answers to that question, right? I mean, I felt good about the business, both in terms of team building, but also in terms of the actual results and getting new customers signed up and all those things.

Mike Volpe: The CEO job is sort of the number one imposter syndrome job for most people. You're always worried about the things that you're not doing because you can never possibly do it all or do enough. You're always worried about the team because it's impossible for 100% of the team to love you and think you're the most amazing CEO they've ever worked for.

Sam Balter: Were you shooting for that?

Mike Volpe: No. But I mean not 100, I mean, but I think I am the type of person that likes to be relatively collaborative and likes to lead from sort of more of a collaborative standpoint, as opposed to a command standpoint. And you hope that you earn the buy- in of a lot of your team, right? And I think that that's something that's important. I think most leaders want to be the type of leader that's earned that leadership role as opposed to demanded it. But I guess I would just say as the CEO, there's always something where you can doubt yourself because nothing is ever 100% perfect. And so you can look down the hall and say," Oh wow, we did great and we didn't really have any revenue or major customer traction before, but we got that figured out and look at all these customers, look at all this revenue, look at the team, look at all these things," but then there's always some efficiency metric where you feel like you're behind or some growth metric where you feel like you're behind, there's always some piece of something that you feel like you have to work through. There's always something where, even when something's going really well, there's something else that you're just worried about. It's the kind of job where I felt like you're just constantly worried about at least one thing. If it's only one thing you're worried about, that actually means like businesses is actually pretty good, right? And it's when you're three, four, five things that you're worried about, that's when they're the real challenges are.

Sam Balter: Give me a quick example of what was one thing you were worried about at the middle of 2019?

Mike Volpe: I was worried a lot about just efficiency metrics. We were growing. All of the metrics sort of moving in the right direction, but we're in an industry where part of our business is software, we have an annual subscription fee. We also make a little bit of money every time someone books travel through us. But as part of that travel booking, we're also taking on the service burden. So if you buy a flight through us, we make like$ 3 or$4, but we're taking on the customer service burden of if you want to change that flight or you miss your flight, you need to reschedule, whatever it is, we're taking that on. And there's a cost there because it's relatively human centric. There's a lot of things that we do to make it far better and easier so almost all of our service is by chat, we have some really amazing agents, we've built a lot of great automation tools for them, but this is the thing that traditionally, like an old school travel agency would charge you 30 or 50 bucks for that, we weren't doing that because a lot of our customers don't like to be nickeled and dimed to death. I mean, who does? And so we had kind of come up with this new pricing model, but I was worried about sort of just overall efficiency metrics. Like there's two types of worries, there's something where you're worried about it and you're like," I have no idea how we're going to overcome this." And this is like," We need to figure out a way around this problem." Or there's things where you say," Oh well, that's how that looks today but I feel really confident that if we do these four or five things that we could overcome this." And that's how I felt about all the efficiency metrics, it's like, you're here, we've been growing for a year to 18 months and we learned a ton, we had a good picture of what the LTV looked like, good picture of what the customer acquisition costs look like, what goes to the gross margin, what those costs look like. And we had plans around a lot of those things to improve all those metrics and we were making progress on them. So by the end of 2019, I felt good where the plan for 2020 was giving us a bunch more growth, but also a lot of progress on many of those efficiency metrics. So we felt like by the end of 2020, we'd be in a really good spot as a business.

Sam Balter: Okay. So you're in 2019, December, you're taking your break and you're maybe overcoming a little bit of imposter syndrome at the CEO role, no major concerns.

Mike Volpe: I was really good. I was like," Wow. I got brought in here to do a job and we're doing that job and we're making progress.

Sam Balter: Yeah, great. So now January, something happens and travel restrictions to China occur. Can you tell me a little bit about where you were when you heard that news?

Mike Volpe: I'll say that in January, we were not that worried. And the reason was, at that time, it wasn't clear that this was going to be a global pandemic, right? It was like, this might be epidemic to do have people that travel around the world, but all our companies are typically headquartered in North America because we're small. We didn't feel like... We're like," Okay, if this is contained to China or Asia or China and a few other countries, this is not going to have a major effect on us and it would be something interesting from a global perspective that some of the global partners that we work with within the travel industry might have to deal with, but not the kind of thing that's going to be a big thing for our business." So it's sort of like a," Oh, this is interesting." I read the New York Times and it's an interesting story to follow but in January it didn't feel like it was going to be this giant global thing.

Sam Balter: Were are you calling people in? You know what I mean? Were are you having meetings where everybody's in there and they're like," What do we know about this pandemic? Let's do tabletop exercises." Or was this just you reading the news and being like," Hey, what do you guys think of this?"

Mike Volpe: It was more the second to be honest. In January more of the second. It shifted that very quickly over time, but in January, it was more just a couple of Slack messages at the executive team level, watch the news, sort of see what's going on.

Sam Balter: Okay so it sounds like basically nothing changes your plans in January. You're not rewriting anything, you're not thinking like," Oh, this is going to be a major headache or anything like that."

Mike Volpe: It's hard because you don't... I mean, we had a growth plan for 2020, we finished January ahead of plan, we finished February ahead of plan. And so, while there's this thing out there that you're paying attention to that certainly introduces increased risk into your business, in some ways, it's a startup. The worst thing you can do is do too much scenario planning and put your ability to hit the 2020 plan at risk for this thing that might or might not happen. I mean, startups have all sorts of risks associated with them. To try to distract too much of the executive team time when you have a small company, everyone's super busy dealing with this thing. It's sort of like, it's a little bit more you pay attention to it, but then you expect to rapidly adapt to it when you get there. I think I was, in many ways, relying on the ability for us, because we're a small, because we're nimble, because we had a great executive team, that if something popped up that we would be able to make the right changes within a couple of days or a couple of weeks, and it wouldn't take us 90 days of prep to talk about things and all this stuff. So I think some of that is like more of a small company perspective maybe.

Sam Balter: Okay. So you're feeling like watching it, if something happens, then we have an adaptable team that has handled pivots and things like that before, we'll work through it.

Mike Volpe: That's right. That's right. And then March hits.

Sam Balter: And then March. March 16, that's when we add up with the 15 day guidelines to slow the spread down.

Mike Volpe: That's right. Leading up to that, so it was interesting. So I said, January, February were great. March, the first couple of days in a March, you started to see like a little impact, just each day, if I expected X, it was like 0. 9X or 0. 95X or 0. 88X.

Sam Balter: What is X in this situation?

Mike Volpe: So the amount of travel being booked through Lola by our customers. So that was the first place that we really saw an effect. So number of flights, several hotels, all that, that our customers are booking. And it just, because I get those numbers every single day, and you have kind of an expectation on your growth path of where do you think you'll end up for the month? And they were just like a little light, and like a little, like a little light, and so each day into March is just like a little bit light. And then it's like, they're a little light. They're like," Oh, maybe it's even more like that little bit it's maybe it's a little bit more." And it was sort of like a 10% impact each day for the first few days of March. And I remember, because we had a board meeting on March 12, I sent out slides to them on March 5 and in the slides, it's sort of like," Hey, we're seeing a little impact, don't know how long this is going to last," all things that sound crazy now, right?

Sam Balter: Was there a day or a moment where you were like, went from, I'm watching this to like, Oh, we need to do something.

Mike Volpe: I mean, I remember at one point, if you looked at net bookings, so the number of trips that we booked minus the ones that were canceled, it actually went negative because we're getting more cancellations than we were new bookings, right? Because the new bookings fell and then the cancellation spiked. Because it's like always, it's either growing or growing a little bit of growing a lot. And the idea that that number could be negative, never even occurred to me until it was negative. We're like," Wait, how's that?" And you're like," Oh yeah, we only had a small number of trips booked and like everyone just canceled."

Speaker 3: Let's just pause here for a second. What does he mean, he can't imagine a number going negative.

Sam Balter: This might be in the category of things you really need to worry about. Mike is saying Lola is not only not booking new trips, AKA, no new money is coming in. They're also seeing a huge spike in trips being canceled, AKA less money that he expected to get.

Speaker 3: Oh, okay. So this is really bad.

Sam Balter: Yeah. This is one of those, you really need to worry about it situations.

Speaker 3: Mike is screwed basically.

Sam Balter: Well, Mike might not be screwed, but remember those efficiency metrics he mentioned about last year, how he had that extra little bit of service for customers who canceled flights or might need to rebook.

Mike Volpe: So if you buy a flight through us, we make like$3 or$4, but we're taking on the customer service burden of, if you want to change that flight or you miss your flight, you need to reschedule whatever it is. But this is the thing that traditionally like an old school travel agency would cost charge you 30 or 50 bucks for that.

Sam Balter: Yeah, that part. That makes this next bit a lot worse.

Mike Volpe: Most of our travel is booked one to three weeks out so it's short- term business travel. And so all the trips that everybody had for the next 30 days, everyone's like, cancel, cancel, cancel. And again, we provide value far beyond the actual travel bookings, but that's kind of the canary in the coal mine. So I started to get really worried about," Okay well, if no one's going to be traveling, why are new customers going to sign up? They're probably not." So any new customer signups, new inaudible subscriptions, that's going to get pushed out. It started to become really clear that this was going to be a major, major effect. And I think from there, I think some people were thinking it might be two to three months. I think we had the perspective that it was going to be a lot... Once it got that bad, it was going to be a lot longer. And whether that would be because of global economic recession or inability to deal with a virus in a timely manner or everything that's happened, we sort of went from January, doesn't seem like it's going to be a big effect to us, but we'll see if it does to," Oh, this isn't going to be two or three.. It went from like not much effect to nine to 12 months longterm this is a big problem, we need to make some major, major changes pretty quickly."

Sam Balter: How does the mood start to change around this time period in the office or I guess on the Zooms maybe?

Mike Volpe: I think the mood became, I'd say a couple things and this is what a lot of we face throughout the course of the whole year, every company's faced, a combination of people having a lot more personal sort of things to deal with, whether it was family members or I mean, we had a board member who had a daughter who was studying in Europe at the time and he basically called me at one point, he was like," I know I'm supposed to talk to you this afternoon," And he's like," I can't, I got to figure out how to get my daughter back to the US from Europe." And I'm like," Yes, you should do that because she might be stuck over there. That would suck." So there were lots of personal things that people had to deal with at the same time where I think every one of the company was saying like," Wow, the future is really uncertain for Lola and work and all those things." So just the amount of uncertainty that everyone had to deal with really, really spiked, and that's a difficult thing to deal with. So it was like March 10 or something we told the whole... We had told the team, I think early March, like if you're uncomfortable, whatever, you want to work from home, it's cool whatever you want to do. And then I think March 10, we basically closed the office. I remember for the board meeting on the 12th, Paul English and I were in the office, but we were the only ones there, and the IT guy was packing some stuff up or something. And so it was basically like a ghost town at that point.

Sam Balter: Okay. So I'm picturing CEO Mike is out there all grit, no quit. And then you show up at this empty office that's barred with just you and the founder. And I'm kind of wondering, did you ever think," Why did I take this job?" Like for you personally, was there ever a moment of just being like," Oh, come on. The time I move into the CEO job and then I get hit with like the most crazy thing." Was there any sort of regrets or where you kind of going insane looking at back at that decision at all?

Mike Volpe: I mean, I try not to live my life looking in the rear view mirror, because all you can do is with the information in front of you at that time is make the best decisions you can and go for it. And I think, again, this isn't the kind of thing that somebody predicted. So it's not like the advice to yourself can be," Oh well, whatever new industry you go into, make sure there's not going to be a global calamity that affects that industry," because I mean, that advice is useless, right? But we spent more time talking about it and really we had a great travel product, we had a bunch of customers, we knew a lot about that industry, we knew what customers wanted. We had a bunch of experience selling into finance departments. And so really, when you looked at like the assets that we had, the advantage that we have as a company, it wouldn't have been smart to pivot so hard that you're not taking advantage of those things, right? And it wasn't like we hadn't found product or like we had product market fit, we had a highly rated product, we had all these things. It's not like people are never going to travel again. I think the travel habits may change a little bit, but we were sort of in a situation where what we're doing is going to work again. We just need to figure out how to get from point A to point B, how to get this bridge over this big chasm, which is going to be the global pandemic and how do we get to the other side?

Sam Balter: So just really short, just so I make sure I have it. Describe your new product.

Mike Volpe: Yeah. So we have a new product called Lola Spend. We still have Lola Travel, which is corporate travel platform. Lola Spend allows you to give everyone in your company a corporate card, but gives the finance team control and visibility on how much people can spend and what they can spend it on. So basically it's a spend management product that has budgets built into it. So you can kind of give the marketing team 50 grand and they can go and run and spend all that money. It eliminates expense reports, finance can see all the transactions in real time, and it prevents the marketing team from going to spend a$ 2, 000 bar tab in Vegas, but it gives them the ability to spend a$ 5, 000 on Facebook ads. So yeah, it maybe limits the funds, but it's sort of a new age tech enabled corporate card that has budget management built into it.

Sam Balter: And is that a larger market than Lola Travel was?

Mike Volpe: It's certainly potentially more companies. If at any size of company of 30 to 40% of them travel frequently enough that they want to have a corporate travel platform, a hundred percent of companies spend money and want to be wary of how they spend and budget and manage that spend. So we certainly can talk to a lot more customers. I think it's unclear the LTV calculation. I think it'll be interesting to see how that goes over time. You can, some of those customers may not spend enough to be worth a lot. Right. And, but the ones traveling frequently are worth a lot. So it'd be interesting to see, but it's definitely larger in terms of number of companies.

Sam Balter: Is there a moment that where you came up with this idea or really kind of confirmed that this was the direction you wanted to go into?

Mike Volpe: So we had already done a bunch of research. It was sort of on the roadmap for like late 2020, or maybe 2021. It wasn't really scheduled yet, but we had done research, we had done some technical research, we had done a lot of like front end UI mock up kind of stuff, which we tend to do very early. And we had sort of circulated some of those designs internally, got a little feedback on them. And so we had an idea about what we're going to do and so it was more about reprioritization than it was about thinking like," Oh, like what should we do?"

Sam Balter: And it's also, and correct me if I'm wrong here, it's in March where you made the decision to lay off some of your staff.

Mike Volpe: So leading up to that board meeting, we ran all the models, understood how much cash we have in the bank, understood what we thought the impact of this would be. Based on that, we said," Well, we need to cut way back. The prioritization now becomes what's the innovation engine and the company where we could invent something new that would help us?" And that's mostly product and engineering, so we kept that team largely in place and then cut as much as we could and all the other places which was real tough to go through. It was hard for the entire team, for everybody to go through, and it was really, really multi- dimensional, it wasn't just, I think companies sometimes go through struggles, but they go through them at a time when it's not, people aren't dealing with all this stuff in their personal life and all this stuff in the world in general, at the same time. I think the unique set of challenges that a lot of companies would have gone through in 2020 was that employees, you instantly go remote would be really hard for any company to do, you have a global pandemic, you potentially have sick employees or employees with sick family members. You've got your industry at upheaval, you've got layoffs, you've got all these things hitting you at exactly the same time. It's extremely hard to go through it, extremely hard for the team to go through it.

Sam Balter: Was it tough for you personally to go through it?

Mike Volpe: Yeah, I'm a big, just keep... It's like the quote from Dory in Finding Nemo it's like," Just keep swimming." I don't want to say that that's my mantra because it's probably a little too cartoonish, but...

Sam Balter: There's nothing wrong with that.

Mike Volpe: Yeah, I know, but it's true, it's both cheesy, but it's also true, right? You just need to keep moving forward and I think a lot of that is my perspective. So yeah, it was extremely, extremely tough. And so we made all those cuts and then decided to basically focus more on innovation and started to look at like, what else can we do if we're going to assume we're not going to be able to sell much of anything and travel for nine or 12 months, what else can we do? What's something else that we can sell because you could stick your head in the sand and say," I'm just going to wait until travel comes back. People are going to travel again someday. I'm just going to wait." But if you're a small company that's waiting around, you're just going to get trampled. You're just delaying the inevitable. And so you have to take it as an opportunity and say like,"Well, okay, like what are we going to do now?"

Sam Balter: And it seems like the pivot went pretty successfully.

Mike Volpe: Bang, bang, bang, let's go. Yeah, all of it. You just got to go. And so at the time that we did the layoffs, we explained to the team what the new plan was. I mean, we launched a product in private beta in five months, which is a financial product that moves money around, I mean, we're pulling money out of people's company's bank accounts, we're issuing Lola card, you'd get a Lola corporate card now. Yeah, to do that in five months, I think is great. And then we got live with a bunch of beta customers and then we just publicly launched it in a pretty short time period. So I feel really good about what we've accomplished so far.

Sam Balter: And what is it about your team that you think made them so able to adapt?

Mike Volpe: I talk a lot about... So first of all, I think having adaptability, in our case, all grit, no quit, as a core value in something that you talk about on a regular basis is important. So you're not... The first time you're talking to your team about adaptability is when you need them to be adaptable. You're just constantly talking to them about it. I've had guest speakers come into company meetings, even when our business was good, about how their company had struggled at certain points or how they need to be adaptable or how things needed to change in order for them to be successful. And so just constantly trying to build that as a core value, even when times are good, I think is important. I think the second thing is that you need to constantly be building your credibility with your team, sort of making deposits into your kind of trust account with them, so that when things are tough, you've built up a level of trust that they believe in you such that, even if they don't totally believe the new thing you're talking about, if they're like,"Well, the new products sounds okay, but I don't know," but they've built up enough trust with you when times were good, because you did the right things, you're open with them, you're transparent with them, that when you really need it, you can kind of call back that capital that you built up with them and say," Hey, I know you only 60% believe me right now, but I needed 100% of your commitment."

Sam Balter: Is there anybody you went to for advice?

Mike Volpe: A bunch of people, but I'd say there's two in particular. So one is a CEO of a business that I've been an investor in for a long time who has been through a lot of ups and downs. Almost went out of business,$5, 000 of cash in the bank, and am I going to be able to hit payroll next week? Kind of, almost out of business. Now doing 10 million in revenue and almost profitable. And I talked to him. And then the second one is someone who I can even say who it is because she's on our board, a woman named Gail Goodman, who was CEO of Constant Contact for a real long time. She's now at a company called Pepperlane, and she's been on a bunch of boards. She, I just feel like, has seen so much more than me at this point where I use her a lot for advice. And she gave me a good pep talk and she was like," No, you're going to fight through this, you got to plan, go do it, you got this." And then the second thing she told me was, and this kind of goes back to one of your earlier questions, and she like," You're a real CEO now." And I was like," What do you mean?" And she's like,"Well, it's your first CEO job and when things are good, that's fine and, yeah, you had a lot to do with the being good and whatever," she's like," But CEO of a travel company during a global pandemic where travel is completely shut down," she's like," Now you're learning how to be a real CEO." Which is always funny, and at the time she told me, this is like in March or April, I was like," Okay." But now I get it, and I'm sort of like you can actually now at this point, throw literally anything at me and I'm not going to say it's going to be fun, I'm not going to say whatever we do will be successful, I can deal with it now. Because it's like, what else do you to throw at me? Shut down my whole industry? We've been there. Global pandemic with other election issues, racial justice issues or whatever that make it really stressful and difficult for your entire employee base. Yep. Been there, done that. On the drop of a hat, take your entire company and make them go remote. Yeah, we've done that. Oh, how about this? Here's a good one. How about signing a new lease for a brand new office that's three times bigger than your existing office and spending a million dollars to renovate that new office and moving in just to be told six months later that you're not allowed to use that office anymore. Yep. Been there, done that. So it's like, I don't know what else you can throw at me. And I'm sort of daring the world to throw something new at me, which is not what I want right now, but once you've been through stuff like that, life is about how you deal with things, not what things you happen to come across. Just like dealing with adversity, it's just part of life, you just got to figure it out.

Sam Balter: So I guess just to sort of scale this into the final kind of question. What was the single most important thing that you learned from this experience?

Mike Volpe: It's really important to have something that you can look forward to and be excited about and use that as a source of excitement and energy for the company. So it's about quickly finding sort of something new and just really something that you can get excited about so you can share that excitement with the team.

Sam Balter: The thing I like about Mike in this interview is like, he's just does not pay attention to so much of the stuff around him. He sees it and then is like puts a little note on it like I definitely should keep track of this, but I'm not going to do anything with the information. Until all of a sudden he needs to act, and then he just goes like relentlessly forward without looking back. And I think that part is pretty interesting.

Speaker 3: I feel like he's just exceptionally good at compartmentalization.

Sam Balter: Yeah, Mike seems like the kind of person who like, he's a 100% with you, this is actually something that he's one of those people, I haven't met him that many times, but he's one of those people that like he's talking 100% to you, you know what I mean? Me, I'm relatively flighty and my eyes will go all over the place, and sometimes it looks like I'm thinking about something else. But when Mike is talking to somebody, it feels very much like he's 100% engaged.

Speaker 3: There's like a quality about being extremely present, and it seems like that shows up in the way that he handles business too. Because his whole thing is like, if you let the emotional stress of what's happening seep into and get in the way of the action plan that you're going to take, then that's when things will start to fall apart.

Sam Balter: Thanks for listening to this episode of Talk Data To Me. If you'd like to hear more, make sure to subscribe on Apple or wherever you listen to your podcast. And if you're feeling extra nice, you can leave us a review, we'd really appreciate it. This episode was produced by me, Sam Balter, with help from Steph Tonneson, and Castlebridge Productions. Special thanks, of course, to Mike. Without you, this episode would not have been possible. Thanks again and see you next time on Talk Data To Me.