“How to Build a Startup with a Startup” with Navan’s EVP and Visa’s SVP

All right, well, thank you. They told me to project, so hopefully you guys can hear me. Today we're going to be talking about how to start a startup within a startup and we're going to click forward. When you don't work at a startup but you work at a public company like Visa as I do, we have to show these. Well, my legal team would never love this, but silly disclaimer. So make sure you read that and we'll get into the meat of the presentation. So I just wanted to introduce myself. My name is Veronica Fernandez and I manage commercial solutions at Visa for North America. What that really means is we cover off on small business, our large corporate, our government solutions and we have a B2B fintech partnerships team team and we're really all about connecting a network of networks. And we're going to talk about how we work with partners today like Navon to bring innovation and technology to the forefront. Michael?

Great. And my name is Michael Sinisich. I'm the EVP and GM for Navon Expense corporate cards and payments and I've been with Navon for a little over seven and a half years. I started at the company back when it was called Trip Actions and we were less than 10 people. My first role was to lead sales and take our travel product to market. And then about four years ago had a conversation with our CEO and decided we should build a startup within a startup to tackle this whole expense thing because it's so closely tied to travel. So that's a little bit about what we're going to talk about today. Today also, if you don't know Navon or Trip Actions, we recently rebranded, we're a private company, later stage, $9.2 billion valuation and we sell to enterprises like Unilever and Thomson Reuters and Netflix all the way down to lots and lots of innovative startups that are here today. So I think to get us started, it's obviously no question that disruption and innovation are really important when you're in a challenging or a competitive environment. But there's a few examples of companies that truly build start startups or companies and new companies within their companies. And we'll talk about how it's not exactly an easy thing to do, it's not exactly a cheap thing to do, but how you can do it and how you can find the right partners to be able to propel you and help you learn about the space that you're getting into. So if you're familiar, obviously Uber Eats is a great example where within Uber they had the Infrastructure, they had drivers delivering people. What if they could create drivers delivering food and AWS within Amazon, Right. So they had a big need for infrastructure. They became more efficient and they realized, wait a second, we've actually got a product here that we can sell. And it's really not similar to the core business, but it was an amazing offering. They built an entire team and company within it and then they took it to market. And now it's, you know, obviously a very, very successful company as it is today. And it's the same approach that we took with Navon, Expense within Navon. And we'll talk a little bit about that as the talk continues. So I guess, sorry, before we go, Veronica, I'm curious, how do you think about disruption at a company like Visa?

Yeah, for sure. So from a Visa perspective, we know that innovation is super important to stay at the forefront of things like digital payments. And so we rely on partners like Navon to really just kind of bring us into where is the puck going, right? To quote a hockey saying. And so the example that I give with Navon is perfect. We're going to talk a little bit about expense in a bit, but it really allowed us to deliver to some of our financial institutions another partner and way for them to go to market more quickly. So we'll talk a little bit about that in just a moment.

And as we were approaching thinking about this problem and what we should build next for our customers, we really looked at our customers and a lot of them, the finance teams who end up owning the travel product within them. Sometimes it's a travel manager or an admin, but generally it sits within finance and procurement. And most importantly, we're actually the employees that were leveraging our travel product and traveling on their day to day sponsors. But I think it goes a little bit deeper than that. And it's about really looking at the micro interactions as your users or employees are using the specific products that you offer. And I wanted to share a slide quickly. This is actually from our series A. So this slide was from seven, seven or so years ago, seven and a half years ago. And this slide's famous within the Navon company. We call it the 40 steps. And what we did is we, we said, all right, we want to solve corporate travel. Let's look at all the steps that happen along the way when a traveler is out there on the road. And as we were looking at it, and we quickly started to realize that so many of these steps that happen on a traveler's journey are actually related in some Way, shape or form to payments to corporate cards. And ultimately the worst part, when you come back from a trip, I'm sure a lot of you might feel like this after Saster is all these receipts coming at you. You have to file your expense reports. You have to talk and fight with your admins. Were you in policy? Were you out of policy? People are chasing you to upload your expense reports. And it's a horrible, horrible process that we thought can be automated and become much more smooth.

So we've all felt, if we go back, yeah, we've all felt kind of that pain, right? The pain of having an experience that's not super seamless. So at the end of the day, once you identify that pain, you've got to think about, do I build or do I partner? And it's very interesting because you also have to think about your products and solutions and whether you want to seed those to another company. You also have to think about, does that product fit, fit within your larger vision and mission? Is it a core competency for your company? And then can you get to market more quickly with that partner? Can you differentiate your product with that partner? So these are all questions that many of us ask ourselves as it relates to do I build or do I partner?

And we took a few different approaches throughout our journey. So when we started the company, we were focusing on corporate travel. Obviously, we knew that expense was closely tied to travel. In fact, we saw that 70% of all expenses are in some way shape or form tied to a trip. But we were busy with travel, and we started off by integrating with other expense platforms. But we saw that it wasn't exactly working perfectly. There's something to be had when you have this seamless, perfect integration. When I know when my employee's on a trip, policy changes. Whether an employee is traveling or not, you generally know that's when you should submit your expenses, when you come back. So there's so much goodness to be had when it goes together. But deciding to build this internally is a very, very, very big decision. It came with, you know, building our own completely separate team. It came with legal teams, marketing team, sales, customer success. It's basically building a completely new company within the company and leveraging some of the infrastructure of the broader company. And we took an approach that was, let's build, but we really, really need to collaborate because just like when we started on travel, none of us knew anything about the travel industry. We were travelers who didn't like legacy tools. And when we started with expense, we knew it could be better. But we really didn't know anything about fintech. And so what we're doing is we're actually working with deep integrated strategic partners to help us along the way. Visa, obviously, being a very, very big one of them. VERIFY is in the audience here. Shout out to you guys who are doing our OCR technology. But it's generally we build when we think we have a unique advantage and we partner when we don't want to go too deep into something and we find a partner that can be extremely strategic for us and be one of a kind.

So I actually love that theme. I love the call out, but I love the theme too because if you look at the slide, a lot of the partners that are on this slide are also partners of Visa. And at Visa, we think we're a network of networks. And so the value that we bring to Navon is. Okay, Michael, you're looking to do X, Y or Z. Let's think about the partners that we have in our ecosystem as well as financial institutions. And we'll talk about financial institutions in just a minute. But they have much more openness now because of all of you disrupting the space and payments. They have much more openness now to partner and go to market more quickly. And then it's a win win situation because those financial institutions will often bring scale to companies like yours.

And so when talking about kind of the journey of Navonix Spence, as we built the startup within the startup, actually first I wanted to take it back to the first couple days of trip actions. If you look on the left, that was our CRM on the top left. We didn't have Salesforce. We used to write our deals on the whiteboard. Your first day, you would build your desk. We didn't have, you know, it was in a box. We had a bunch of IKEA desks in boxes and new employees would come and build their desk. And funny enough, I actually got a library card because I thought I could learn about corporate travel from books in the library, which there definitely wasn't any. But the same approach when we started building our startup within our startup. So we had a very small team. We were put in the corner of the office. People really didn't talk to us. And we even had our own holiday party in the bottom right. We all wore our Christmas sweaters, but that's how we got started. And at the time when we started, probably the bigger company was maybe 1,000 people or so. It was already reaching. I think it was a $4 billion private valuation company. But we really operated completely separate to the point where actually now when you think about the rebrand, it was a huge shift for the company. We rebranded, we dropped the trip from the name. We created Navon, which was much more of a platform. It could support all the different products and offerings that we have. And we took the same approach, actually, across many different lines now. So if you look at the company, we have a GM for personal travel, we've got a GM for growth and SMB, we have a GM for meetings and events and VIP travel. So these are all different products where we're building different companies within our companies to be able to scale and have focus instead of one big organization that's rather flat. And a lot of times we acquire. So we made four acquisitions in the last couple years to fill in some of these gaps. But many times we actually build and again, we find strategic partners that can help us get there.

Yeah, and for us, a partner like Navon is unique because we wanted to partner with them from a travel perspective. But then we were also super excited about what they were doing in expense. And again, the more partners that we can have that really build on the ecosystem and the network of networks that we have, the more powerful the brand is and the more powerful that we can make partners like Navon.

I'm going to go fast because I see we have three minutes. This is actually a graph of our travel transactions and our bookings, so we can talk a little bit about the importance and timing of when we built our expense product. But, you know, 2020, before 2020, we were scaling very fast. There was an interesting event in the world where everybody canceled their flights in their hotels. Our revenue actually went zero. And again, think about it. We're a couple thousand people. We have a $4 billion valuation. We, we were making it and then everything went to zero. Luckily, travel is completely roaring back and, you know, looks like vaccines came out. Everyone's kind of back on the road. And so I think, as a matter.

Of fact, not to interrupt you, Michael, but the Global Business Travel association just had their big national conference. They put out some new numbers. We're seeing that travel is going to be over a trillion in spend for 2022, and then that's actually going to grow to 1.8 trillion in 2027. And a lot of this is being driven by different trends. Right. So the macro economy, certainly inflation, but also just the difference of how we're working today.

And so that it looks good, the travel growth is coming back, but what were we going to do in the meantime, when we had no visibility into this. And that's where you see the red on top of the blue. So the blue is our travel transactions, the red are actually our expense and our payments transactions with our corporate cards. So you can see the impact that it has. Not just, you know, if you zoomed in really closely, you'd see it was semi big during the early 2020, but you can see now just how much virality and effect the expense product has on all of our different users and touching more and more people and getting our brand out there and driving a lot of usage of the company. And I think, you know, I'm sure people here are aware the payments and expense space, the travel space, it's a super competitive, very dense market with lots of players that you can choose from. But I truly believe that actually the move that we made and the huge bet that we took to build within house and collaborate with strategic partners has allowed us, you can see in the top right, to separate from a lot of the pack and be named the best, the most user satisfaction, the easiest to use, the most helpful travel and expense product on the market.

Awesome. And this last slide is just really shows visually all the founders and strategic partners that Visa has in basically in our bag of tricks, if you will. Navon being an obvious choice for us. But what I also wanted to say is it's important to understand that fintech partners for Visa play a vital role, right? So whether it's a partner, an enabler, a processor, a NEO bank, you all play a vital role for us. And we continue to look for strategic partners and how we can help. And so we have programs, whether that's our API library and sandbox, whether that's the fintech fast track program to get you to market very quickly, whether that's Visa Ventures, we have a lot of different programs. So, you know, again, encourage you all to think broadly as you think about strategic partners.

And I think with that we're just at time, but I guess we'll leave you with the four main points that we wanted to provide and finish the talk with. So thank you guys all very much for paying attention and listening to us as we talk.

Thanks guys.