For travel startups, company culture is more than window-dressing. It can have a lot to do with whether or not you survive to fight another day.
In our Skift Startup Stories series, we document travel startup issues, solutions, and lessons from a variety of angles, hoping to shed light on what separates the winners from the losers.
You can read all of the stories in the series here.
Cheryl Rosner, co-founder and CEO of boutique and independent hotel search startup Stayful, has a Hotels.com story that you know she’s told and retold as an object lesson countless times to anyone who’ll listen.
President of Hotels.com from 2003 to 2005 and later of sister company Expedia Corporate Travel, Rosner recalls how a nightmare of nightmares occurred at the hotel booking site one evening and, without revealing what the screw-up was, she now says, “I basically brought the company down in one fell swoop.”
But Rosner laughs about the crisis now because in dealing with the problem, as employees started drifting in late at night of their own volition, without being summoned, the team discovered an esprit de corps that she believes provided a solid foundation moving forward.
“They were there just because they cared,” Rosner says. “What we learned that above all else: The culture was the thing that was always going to help us to succeed through anything … ”
From her experiences at Hotels.com post-September 11 to Stayful today, Rosner says, “Our core values are to be good, true, beautiful and heroic, and then always do good in the hood, and travel’s our hood. Once again, we view it as we don’t need you to fail for us to succeed.”
If it all sounds a tad goody-goody, Rosner counters that knowing what you stand for and carefully crafting your company culture can inform how you treat employees and their responsibilities, who you partner with and which investors you take funding from.
Rosner has seen it all, given her journey inside and outside of the travel industry. In addition to holding the top posts at Hotels.com and Expedia Corporate Travel, which became Egencia, more than a decade ago, Rosner saw success as the CEO of Ticketsnow when Ticketmaster acquired the company for $265 million in 2008, after having raised $34 million in funding.
But a couple of years later she departed as CEO of daily deals site BuyWithMe after only seven months as the site faced tough competition from Groupon and LivingSocial, among others, and had trouble raising additional funding. Gilt Groupe acquired BuyWithMe a year later in November 2011 in an asset sale.
Throughout it all, Rosner can tell the tales of breaking in and coping as a female C-suite executive in the travel industry. “Back then it was fight to get in the room,” Rosner says. “Then once you got in the room, a fight to be heard. Once you could be heard, it was then a fight to get other people in the room. It felt like I needed to be stoic around different things.”
Rosner is stoic no more. Skift spoke with Rosner about her experiences as a female executive, the importance of company culture, maintaining your company’s focus, and other learnings for travel startups and entrepreneurs.
Skift: Thinking about lessons for travel startups, a lot of times you hear about venture capitalists only being interested in super-young people as startup founders. Looking at the lessons you draw from your experiences at TicketsNow and comparing that to Stayful, with certain dynamics being similar, and all the experience you gathered earlier in your career at Hotels.com, what is the moral to the story?
Cheryl Rosner: I’m not a young founder, obviously. I would be on the younger side of the Boomer world. I am not a young male founder.
Skift: That’s two strikes against you, right?
Rosner: I wouldn’t call them strikes but I’m aware of it. Let’s put it this way. There are the lessons learned from, I guess, the startup wars. In our days at Hotels.com, we always had an approach of do good in the hood, do good by your competitors, do good by your stakeholders, which are your hotels and your employees. And take care of all of your stakeholders and recognize the fact that they’re all interdependent. What you take care of takes care of you as well.
That was a lesson we learned early because we learned it at 9/11. We learned right away you could very easily look at what was happening in tourism at the time and make a lot of decisions around: Do we go through layoffs? Do we reduce salaries? Do we go to our hotels and make them drop their rates? All of the things that you could do and it was never even a thought in our heads. The first thing that we thought about very quickly and very clearly: How do we get as much of our team together to help as many of our hotel partners and our competitors?
Skift: Why be concerned about your competitors?
Rosner: Because our view was that the travel world is a community. Basically you don’t need to fail for us to succeed was basically the way we think about the world. And that’s how we think about the world today, which is there are a lot of learnings that you can gather from your competitors. There are a lot of learnings you can gather from the stakeholders that are in our model and in other models. We consider the media a stakeholder of our business. Our core values are to be good, true, beautiful and heroic, and then always do good in the hood, and travel’s our hood. Once again, we view it as we don’t need you to fail for us to succeed.
Skift: That’s interesting because Stayful is a small business, obviously, and there are all these gigantic hotel players out there, including Hotels.com where you came from, and companies like that. They don’t need to fail in order for you to succeed? It’s such a gigantic market that there’s plenty of room for you to succeed?
Rosner: Yes, yes. Because if you look at it Expedia and all of the companies that Expedia owns, and if you look at Priceline and all of the companies that they own, the two together make up less than 10 percent of the global travel market.
Skift: I think Expedia recently claimed to be globally less than 5 percent of the market.
Rosner: Yes. What you do have to commit to, and this is the lesson from Hotels.com and from TicketsNow, is know what you stand for and stand for it all the time. Don’t change your value proposition suddenly because that’s what everybody’s finding sexy in the industry. Going back to what you were talking about with how do venture capitalists think about your business and so forth, just because there is something that everybody thinks is really interesting, that doesn’t mean that you suddenly change your business to that type of model.
Skift: Because you can make more inroads by just not following the pack?
Rosner: In a lot of cases, if you’re looking behind you or sideways, that’s really where you’re going to wind up.
Skift: You started to talk about it before: As a women entrepreneur, what kind of lessons have you learned from your experiences at startups and older companies?
Rosner: There are all types of biases in the workplace, not just gender biases, but there are all types of biases in the workplace. We have a group of women that are all in travel and travel tech, located around the country, and so we hang. The first time we all got together was at PhoCusWright and someone was talking about the philosophy around “Lean In,” and what did we think? It was really interesting because the first thing that crossed my mind and came out of my mouth was just simply, “Oh my God, lean in? I’ve had to barge in for so long.”
We’re in a different world today from the standpoint of you’re not fighting to get in the room. Back then it was fight to get in the room. Then once you got in the room, a fight to be heard. Once you could be heard, it was then a fight to get other people in the room. It felt like I needed to be stoic around different things.
That type of inherent bias exists in a lot of places today. Like I said, it’s not only related to gender. It still exists. I think it’s important to spend time mentoring where you can. For me it’s a natural to mentor in hotel, travel and tech and then to women because, let’s face it, I’m a woman, so that’s natural. I think that’s our responsibility.
One of the things I bring to the table is any mistake that anyone can come up with, I guarantee you I’ve made it already and have done so in a very catastrophic way. When I became president of Hotels.com, if you thought about my career prior to that and prior to Hotels.com, it was an unlikely career trajectory and yet suddenly I was running a billion dollar business within the time that I was there. As a new president, you have no one you can talk to because you don’t want anyone to ever see you sweat. And at the same time you want to make sure that the team that you’re leading and the people you’re reporting to feel good about your leadership.
Skift: They can’t see any self-doubt.
Rosner: Back in those days, vulnerability wasn’t something that you could bring to the job. It just wasn’t.
Skift: Leave that at home.
Rosner: You had to check it at the door. That’s very different today. Today, with more and more millennial founders and CEOs, vulnerability is a trait that you want to look for. So there’s very much a different leadership style today than there was in the early 2000s, where there was still a lot of command and control. Whereas today it’s a much more conscious and collaborative leadership style that opens opportunities to bring the experiences around all of the things that we failed on, there’s a forum to be able to talk about it.
There were definitely catastrophic mistakes that I made at Hotels.com, Expedia Corporate Travel, which is now Egencia, at TicketsNow I’m always saying, if you’ve got issues like that in any one of these areas, you should reach me on Twitter, reach me on LinkedIn, call me, email me, text me, because you shouldn’t have to make the same mistake. You should make new mistakes that you can learn from.
Skift: How have any of those mistakes informed the way you’ve done things differently at Stayful?
Rosner: I mean the most important mistake of all time was something that happened at Hotels.com. I was me and Shawn [Freeman] who was my CTO at the time and then we were also at TicketsNow together. The one thing that I always said, “God, if that ever happened I think I would just perish on the spot,” and then it did. So it happened and OK, I didn’t die.
Skift: You are still here.
Rosner: My heart was pounding. I was scared. Shawn and I quickly came together and then we started to try to diagnose. We were in our office kind of late at night because it was all hands on deck. What we saw happening was people just started arriving at the office, so they knew. Everybody knew that there was something really wrong.
Skift: You don’t want to say what the problem was?
Rosner: It’s almost irrelevant. I basically brought the company down in one fell swoop.
Rosner: You name it. Yeah, it was catastrophic. When we were trying to figure out what was going on, like I said, people just started showing up at the office. It was really interesting because everybody knew there was something wrong.
Skift: This is late at night?
Rosner: Oh, this was middle of the night. Everybody knew there was something wrong because people started getting alerts. Then they would go to check things out themselves, and you’d see that there was something really wrong, and people started to come into the office. It became a really fun thing because everybody was there to solve this one problem. They were there just because they cared. What we learned that above all else: The culture was the thing that was always going to help us to succeed through anything because …
Skift: Because of that camaraderie?
Rosner: Why did people start showing up? It wasn’t like we stopped and called you and said, “Hey, get in the office.” People just started showing up. When we would talk about it later on, we said, “Wow, there’s something really special in this culture. What is it and how do we learn from that?”
Fast forward to TicketsNow, I had an account manager, who was super young. He’d basically been in the job for a few months. He got played by a journalist to give out a bunch of information on the pretense of wanting to start a business development relationship with us. We were in the midst of being acquired by Ticketmaster. It basically wound up in an article. He goes to his manager, who says, “We just got to go tell Cheryl what’s going on so she’s aware of it.” They both walk in my office and sit down. The account manager looked at me and basically bursts out crying. Then he told me what happened. I was like, “OK, you’re still here. You didn’t die, right? We didn’t die. We’re all still here.”
Skift: He still apparently had a job.
Rosner: Absolutely. I told him, “You will take this lesson with you basically for forever more.” But I immediately told him my Hotels.com story. By the time he walked out the door, I said, “Look, I need to go make a phone call to our future owner and let them know this is going on before everything hits the presses. What you need to know is what did you learn from this? Everybody has had something like this happen in their career. You’re lucky it happened to you when you’re young because now you know that you’re not going to die over this and you know now what to do as well.”
Then apply it today to Stayful. One of the first things that we understood, my partner and I, Shariq [Minhas], is our values and our principles and the culture of our business above all else are the most important thing because when something catastrophic happens, when you’ve got anything that is going to basically put you in that type of scenario, the culture of your company is what will carry you through as opposed to having your best team to diagnose something.
Skift: But do your investors feel the same way?
Rosner: Yes. Yes. Yes. We were very mindful when we were talking with potential investors that we shared values. Let’s put it that way.
Skift: Is that’s another lesson about going out and raising money?
Rosner: Yeah. You have to be able to sit on the same side of the table and have the same things in your heart as well as in your head, the same expectations, and it has to be shared values.
Skift: But don’t a lot people just give lip service to that in terms of, “Hey man, we needed the money. We’re going to take the money.”
Rosner: That’s the lesson. You have to know what you stand for, and stand for that when things get rough as well as when you’re having the good times. Because if you compromise your values at the first headwind, even in the startup world, even at the 100th headwind, and we go through 100 every day, it’s something that compromises a good portion of the heart and soul of your business and your culture.
Skift: Which sabotages yourself. Company culture then is more than just a feel good kind of thing?
Rosner: No, no. If you know that you can feel 100 percent confident that the values of your company are the values of your company, they’re not going to get compromised, then making decisions is easy. Knowing who to partner with is easy. You don’t have to check what people are doing all the time or monitor anything because everybody [you work with] has the same values. It’s as simple as the concept that we have unlimited paid time off, and we don’t count vacation days. It’s as simple as that.
We know what we stand for, and so why would I or anyone ever have to monitor everything like that because everybody’s going to do good for the company and that means being accountable and having that culture of accountability. Therefore we never have to monitor things like that, which saves us money, makes us more efficient.
Skift: At Skift we call that living the brand.
Rosner: Yeah. It’s what your values are. It’s where your heart is. As a human being, Ed Freeman says all the time, you do need red blood cells to live. That’s not what the purpose of your body is and your existence is, but you do need them to live.
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Photo Credit: Cheryl Rosner, co-founder and CEO of Stayful, says through trying times 'always do good in the hood, and travel's our hood.'