The year may be winding down but not for Rob Rosenstein, CEO & co-founder of Agoda. It was a public holiday in Thailand but the entrepreneur behind Asia’s top hotel booking brand was jam-packed with meetings, with people popping in and out of his office, all wanting time with him, including me. Here’s what we covered.
Q: As 2014 comes to an end, how would you describe the state of online travel right now?
It’s like there is this constant siege mentality and it’s because there is so much interest in travel. It’s such an interesting business, one that few people can object to. I mean, who can object to online travel? The only possible objection is around environmental concerns but that’s manageable and self-regulating.
Q: How about impact on local communities?
There are also self-regulating mechanisms coming up. Look at LocalAlike, the team from Thailand that won the People’s Choice at WIT. Lots of social entrepreneurs are coming up and focusing on these issues. I’d say that the travel business is more aware of its own ecosystem, more than other businesses.
So travel is fun, positive and has lots of growth – which means everyone wants a piece of that. Amazon, Apple, Alibaba, Google, Facebook – everyone is in it.
There is also an endless supply of private equity flowing into the space. The amount of start-ups being funded in Asia is unbelievable. Some models are innovative, some are just copycats and yet they are getting strong funding and many don’t have to make profit.
So there is a lot of competition, a lot of moving parts – everyone’s trying to come up with an angle to get media interest or attention from the financial community or you, the media.
Q: So between the monsters, copycats and start-ups, how do you as a leader deal with all that?
Rosenstein: Retaining really talented people requires that you check your ego at the door.
You got to figure out what’s real, what’s not. A lot of companies that start out with a lot of smoke end up real over time. You got to take all this seriously and understand what they are trying to do.
You got to ask the fundamental question – are these big players going to offer my consumers something different or better? This means talking to your customers, understanding their problems and building and developing to meet their needs.
Sometimes you see a company that’s offering something spectacular but you say, that’s not an area I want to pursue. Sometimes you see someone doing something smart and you say, I can learn.
What you need is a team of really smart people. When an environment gets so complex, you need a mix of nationalities, genders and opinions – not just a founder – to sort it out. You need that creative tension – that pushback – to work through the questions and bounce ideas and generally, the right ideas will bubble up.
Q: Everyone’s after smart people – with these big players coming in. How do you access smart people and keep them?
The most important thing is to create an environment where they feel they can contribute and be heard and where they have access to the senior leadership, and be culturally able to speak their minds.
The willingness to disagree and open up topics across the hierarchy is critical to success.
Q: Would you say this is tougher in Asia where organisations tend to be run on hierarchy?
This is where Internet companies have an advantage over traditional travel companies – we are not big on protocol. A lot of travel companies in Asia are family-owned and that’s tough because you’ve also got the family factor to deal with.
Retaining really talented people requires that you check your ego at the door.
Q: One way to get access to smart people too is via acquisitions of course.
Yes, that’s the over-riding feature. There’s got be a culture/people fit.
(The team from Qlika, the Israeli company bought by Priceline in March this year, is now seated in Agoda’s offices in Bangkok. The company was set up to tackle a big problem in online marketing – localisation – and offered micro-market targeting technology for a variety of industries. The Qlika team integrated by choice into Agoda, a culturally-similar company that shared their passion for data and solving complex consumer problems.)
Q: Other than building people, what are you keeping your eye on in 2015?
The sharing economy, mobile and price. There’s also always someone trying to beat you on price – we are a price-focused enterprise.
Q: Are you watching these last-minute mobile apps?
So far, they have no scale, but we definitely study them to make sure they aren’t out-innovating us.
Q: What was your focus of attention in 2014?
2014 was largely about plumbing to improve the speed of our websites, building a better mobile experience and satisfying customers better.
It was a weird year. A sad year for Malaysia, tough in Vietnam and Thailand. Every year there is something going on – that’s why you got to have scale. Often we have our best years when the worst is happening.
But expectations get bigger as numbers get bigger and sometimes, the biggest gains can seem so small.
I remember years when we made large strategic shifts – 2010-2103 was the shift to mobile. 2014 was not one of those years – it was a little bit of everything, an execution-focused year.
Q: What will 2015 look like?
It will be a very dynamic and interesting year. I feel so many factors converging and there are bound to be some more pronounced winners and losers – there will be some pain and some gain.
Everyone’s going at it and consumers are not going to be happy with certain brands.
Q: And it won’t be Agoda of course?
We will continue to innovate, we will use scale and size to solve problems for customers faster. We want to make things better, make price better.
Q: What other acquisitions would you be eyeing?
The hotel connectivity piece is interesting. How do hotels connect with OTAs? How do we offer consumers a better integrated experience?
Priceline buying Buteeq, for example, offers us a deeper closer connection with our suppliers. If we can solve their problems, we can solve consumer problems.
Q: Do you see Agoda going beyond booking – to become your customer’s “personal travel buddy”?
We will focus on booking, perfect that first. But we have the scale to build cool apps. We have been adding features but we don’t brag about them – but we test them and our customers like them.
The question is, is this approach good enough with the monsters, as you call them, coming in?
My personal feeling is – the Amazons of the world, unless they can offer better product, better pricing, I’d be less worried about them than a small start-up that creates something spectacular.
It’s the small companies that tend to do better than anyone else and what makes them work? Focus – they think of a problem a consumer has and they fix it.
