We recently launched our weekly Corporate Travel Innovation Report, a newsletter focused on the future of corporate travel, the big fault lines of disruption for the travel managers and buyers, the innovators emerging from the sector, and the changing business traveler habits that are upending how corporate travel is packaged, bought and sold.
As part of our increased attention to corporate travel, we’re sitting down with a handful of industry leaders for our new Corporate Travel CEO Listening Series to discover what the people at the top are concerned with now and where they are looking for inspiration.
This is the latest interview in the series.
Travel and expense service provider Deem has seemingly been stuck in limbo for years. After raising more than half a billion dollars and offering dozens of different products across the travel ecosystem, the company is now looking to pare down its offerings to a few core areas.
Deem, formerly known as Reardon Commerce, has raised a whopping $526 million in funding over the last 15 years, according to Crunchbase, including a recent $34 million investment from PointGuard Ventures. It’s most well known for its travel management and expense tools, but has invested heavily in technology related to connecting car services with business travelers, acquiring car service software provider Whisk earlier this year.
While currently staffed by 150 employees, Deem will likely reduce its workforce as it refocuses on its core product areas.
Deem’s new CEO John Rizzo, who was named to the post after longtime CEO and founder Patrick Grady stepped down in March, says the company will re-adopt a startup mentality by focusing on three core areas in the travel ecosystem. Rizzo helped advise Deem’s management as a part of PointGuard Ventures.
Rizzo, interestingly, was the first product manager for Apple’s Macintosh line of computers and worked previously at a variety of companies including Oracle.
Rizzo spoke to Skift about the challenges facing Deem as it moves forward and his perspective on the industry as a long-time technology industry expert.
Skift: You come from a technology and start-up background, not a travel background. From your perspective, how do you think Deem can find success in the crowded travel technology space?
Rizzo: How do you use technology to innovate in new markets? That’s my perspective. I come from a lot of knowledge coming from the traveler perspective, but not from the perspective of somebody inside the business. Which, in my career spent a lot of time looking at new technology markets and this is an exciting market to me. I think to take advantage of the technology that’s advancing at a rapid rate and participate more heavily in the business as time goes on is my goal.
Yes, so I can speak to that generally because I’m just new to the game. Let me just say, generally that if you take the company’s history with respect to travel, expense and car service, those three businesses, I think with each of those segments Deem has some particular strengths and then they’re different in each case. I think there are some really exciting core technologies there and some relationships with some key customers and partners, both on the corporate side and the travel management side. There are some existing business relationships that are positive and energetic.
Skift: Given your technology background, what are the major trends you see concerning the intersection of travel and technology today?
Rizzo: Yes, I think there are a few new major brands that will take over for a personal traveler. That transition will last 20 years. This is number one. I would say that there is an interesting transition happening very much like the transition that happened when the iPhone was introduced and the employees starting bringing their iPhones into the enterprise space. They began essentially making their own choices about the applications they’re going to use, and the company policies and tech departments were at a loss with how to deal with this kind of behavior.
I think there are similar trends in travel. In enterprise you’ve got employees who are traveling and using sharing economy services and [corporate travel managers aren’t] expecting that. They may not be in the loop yet on this, but the travelers are still doing it. I’ve done this myself on multiple occasions where I decided I want to go on a trip. I start getting on the travel site online and check out the fares and the flight times that I want, [outside of our company travel rules]… I’ve done this myself as a start-up CEO.
It’s very much like bringing your own device to work. Some of those situations have in the context of application software enterprise. That’s what’s going on and to me that’s tremendously interesting because it’s for companies like Deem to say, “How do we make a win for the traveler and how do we make it a win for the corporate travel manager? How do we make it a win for the travel agency or the travel company?” When there’s changes in the market this rapid of a rate, that creates a tremendous opportunity to figure all this out.
Skift: Deem’s been around for more than 15 years, but has struggled to define a focus despite taking on a staggering amount of funding over the years. Now that you’re CEO at Deem, how are you going to narrow down the company’s focus?
Rizzo: Examining what Deem has done in the last 15 years, I think there is always this trade off of executing in business, listening to customers, responding and building great technology in the core business. Deem has done lots of things, of course, it has some additional businesses in offers and procurement and a variety of other things that maybe slightly related to the core of travel and car.
Deem has tried to do too many things over a long period of time, instead of just trying to focus and drive hard into the center of the bull’s eye, which again I would say is what’s best for the travel customer. I think this is hurting the company.
Yeah, so going forward it’s all about the core. The core would be travel, car service and expenses. That’s where we’re going to concentrate 95 percent of our energy. I think we’re going to have more resources that we can point at how do we innovate for partners that say, “Gosh, if you will just do this or tha rapidly, we would love to have you be a partner with us for a long, long time.” Just do those few things.
There is a backlog of work, with respect to features or parts of our software stack that we simply have to finish. Those customers who are looking at Deem and wondering what it is that we really stand for, will feel comfortable that we really stand for what they want us to stand for, which is investment in solutions for them. I think we’ll follow through our commitments and more aggressively execute to the things that we know we have to do and our customers have been vocal about.
Skift: So by paring down Deem’s focus, you hope to be able to better meet your customers’ needs?
Rizzo: I’ve been saying this for a long time, that we we need to open our ears and be collaborative with customers to better understand what their needs are. If we’ve got a focus on resources, then we should be able to respond and do that. We got to get to the point where we’re over delivering every quarter to rise to those expectations. Then we are in the right mind to pour gas on the innovation fire more rapidly. To forecast on the innovation buyer more rapidly and come up with some solutions that maybe they’re not even thinking about but we are. We’re the folks investing in some new technology.
When you think you’ve got to do 10 things to be successful, it’s really hard to do 10 things well. Unfortunately the mathematics just don’t work to the extent that the company was going to stake its future exclusively on travel versus expense and live or die based on that focus.
That’s how start-ups work. Start-ups live or die on decisions they make on what they decide they’re going to be successful at and if they focus on their end, they have a much better chance at being successful because they’re not computers. Huge assets with respect to customer relationships that can be expanded upon, huge assets in terms of developed and to the extent we can just narrow down the focus and exclusively focus on those things that we know we can do well, then customers are happy and the employees are happy. The employees are happy, the investors hare happy. It’s a virtuous cycle that happens, focused on listening to everyone.
Skift: Deem acquired back of the house car service SaaS provider Whisk a few months ago. How does that fit in with Deem’s overall play in the ground transportation space?
Rizzo: That acquisition was for technology in the car service side for operators and their customers who travel and want to use the mobile app to access operators and the cars they provide. Clearly, that whole segment is in a massive transformation because of services like Uber and Lyft. We offer combination of our legacy car service business and the more contemporary Whisk technology. I think that we can provide a solution to those operators to compete more effectively with Uber and Lyft because the technology we’ll be able to use is, in fact, superior in that segment.
I’m really excited about that business in particular because there are so much disruption going on and there are so many traditional operators and travelers that use the services those operations provide that really are desperate for a Uber-like solution that helps them and I think we’ve got that. We’ve just got to focus and get the job done. Talking about how great it will be in the future is not a reasonable substitute for actually doing it today. It is going into a market that is undergoing massive disruption, whereas our solution is unique and it helps our car service operators and people using the services have a monitored ride.
It’s a huge opportunity. That market is worth four billion dollars in size. It’s a very substantial market. It’s leveraging the safety and security as results of all the other benefits of scheduling and reservations and so on to the extent you can provide, and I hate to use this word, an Uber-like mobile application to travelers, as well as to dispatchers and so on. I think there’s a huge win there. We’ve just got to go get it done. We’ve got to finish the work.