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8 learnings of how TravelPerk went from €0 to €150M ARR in 3 years
Imagine achieving €20M in ARR with your scale-up, only to see it vanish in the blink of an eye, plummeting to €0 in ARR. This exact scenario unfolded for TravelPerk, a travel management software company, in March 2020. You would think that this situation is the end for most companies, but for TravelPerk this couldn’t be further from the truth. Fast forward three years, they have not only rebounded but reached an impressive €150M in ARR, growing faster than ever before.
In our recent interview with Jean-Christophe (“JC”) Taunay-Bucalo, the Chief Revenue Officer at TravelPerk, we unpacked the secrets behind this remarkable feat. In this article we’ve bundled the 8 learnings that were crucial to the bounce back of TravelPerk.
(1) A Solid Foundation is Key
As the saying goes, “You can’t build a great building on a weak foundation.” The same holds true for a successful company, as evidenced by TravelPerk. One of their most critical advantages was having a 1.5-year financial runway when Covid struck, thanks to their €30 million reserves.
This financial stability gave them the time to analyse the situation, formulate informed hypotheses based on their beliefs and make strategic decisions.
Their decision you may ask? They believed that travel would go back to normal, once people would be free to do so. Therefore, the leadership team at TravelPerk decided not to make any drastic organisational or product changes.
(2) Lead from the top down
A cornerstone of their stability was the unwavering leadership team. With years of collaboration under their belts, trust was abundant, enabling them to make the right decisions during this crisis.
The leadership team displayed this commitment by voluntarily taking a 50% pay cut. Which showed that they were willing to go through this hard time and fight for the success of the company.
JC also made an interesting point on how to deal with doubt as a leader. As you can expect in this kind of situation, there was immense doubt. Nevertheless, JC believes that you can’t let this transpire to the team, you can not be vulnerable in front of them while you go through a crisis like this. He said it very well: “In the midst of the crisis you’re the lighthouse, you’re here to show the journey, the stable presence that’s strong and keeps going. You have to be upbeat about it, fighting for & believing in the project.”
With the leadership team deciding to cut 50% of their salaries, one could expect they would do the same for the entire org. Nevertheless, this couldn’t be further from the truth… which brings us to our next point.
(3) The strongest team wins
The leadership team showed their trust and commitment to their team, they made the decision to not do any layoffs, despite everything shutting down. Instead, they offered a generous package of two months of severance pay and a recommendation letter to employees who chose to leave. This decision, while intriguing, made sense as they aimed to retain a team that believed in the company’s future and was ready to fight for the future of the company. Ultimately, only 10-15% of the team accepted this offer, leaving 85-90% prepared to tackle the challenges ahead. With their first challenge being: get the revenues back on track.
(4) Redefine the Ideal Customer Profile (ICP)
With their customer base halted due to travel restrictions, and therefore ARR going back to €0, TravelPerk had to redefine their target audience. Their first step was identifying the five sectors that continued to travel. This gave the revenue team a very narrow market to work on, which created the focus they needed. Now, the sales team needed to be aggressive and fight for the few potential deals they had. With the change in ICP and sales process, they had to restructure the way objectives are set and performance is measured.
(5) Consistently Pursue New Objectives
When you experience a setback like the one that TravelPerk experienced, you can end-up with a deflated team that doesn’t see the path towards the situation from before. To solve this, JC introduced a notable initiative within the sales teams – a reset of all metrics, operating as though they were a brand-new company. From this point forward, they maintained a culture of setting objectives to keep the team motivated, with their initial goal being: reaching €5M in ARR by the end of the year.
(6) Don’t Skip Steps When Expanding to New Markets
The moment you’re scaling, not everything can go according to plan in terms of expansion. When we asked JC what the biggest learning was along their way, he referred back to their expansion to the US.
From a first glance, the moment seemed perfect: the first sales people were successful and the travel market was opening back up. Those were the 2 signs they needed to ramp their sales team to 60+ people.
Nevertheless, they made the mistake of the leadership team not being in the market and getting a feel of the market. In reality the market wasn’t as ready as they thought it was and the product was not on point for that specific market.
So they learned the following lessons:
- Always have the leadership team in-market before scaling to that market
- First have 5-10 sales explore the market and gather feedback from the clients
- Optimise the product for the market
(7) Everything comes back to product
As said in the previous point, the product plays a central part in the success of a SaaS company. Even though we talked a lot about the revenue side of things, this is something JC underscored multiple times in our interview. JC said that while marketing, sales, human resources, and other functions are crucial, they remain peripheral. Ultimately, a SaaS company’s existence hinges on solving B2B problems with its software, placing the product at the core of everything they do, which is something a lot of startups & scaleups get wrong.
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(8) Dare to go all-in, once you see the opportunity
A pivotal moment in TravelPerk’s success story was the reopening of the travel market. Their prior decisions to keep their team intact and prepare them for this moment paid off. In contrast, many competitors had to rebuild their staff or even overhauled their products, leaving them out of the market. TravelPerk also executed strategic acquisitions, including Click.com, Susterra, and Nextravel, to further expand their market share. As a result, what pré-pandemic was a market with ten players now only has two, with TravelPerk being one of them.
Conclusion
At this moment TravelPerk has reached €150M in ARR and is still growing at a staggering rate of 100% YoY. This shows how a company can bounce back from a major set-back, like they experienced in March 2020. We’re sure that this will not be the last thing we hear from JC and his team.
If you want to listen to the full interview, below you can find the podcast we recorded with JC. In this episode we also go deeper into the journey from 0 to €20 ARR, pré-covid.
