Tao of GetYourGuide on Building a $2B Travel Giant

Michael Koenig: This is Michael. Thanks so much for listening. It's because of you that great COOs want to come on the show and have a chat, but I need a favor. Can you head over to Spotify or Apple podcasts or wherever you're listening to this and leave an amazing review and five star rating. It helps not only reach more people, but also it helps me get amazing COOs on the show. There's no time like the present. So go do it now. I'll still be here. Thanks so much. Enjoy the episode. Hello and welcome to Between Two COOs, where phenomenal chief operating officers come to share their knowledge, advice, and at the very end, a crazy story. I'm your host, Michael Koenig, and one of my favorite things to do is bring in execs from companies that I'm a customer of. We're getting into the travel experience industry today with [00:01:00] Tao. Co founder and COO of Get Your Guide, the two billion dollar Berlin based rocket ship that has built a marketplace for finding and booking incredible travel experiences like turning on the lights at the Vatican Museum, which is an experience where a very small group of folks get a private tour of the Vatican Museum before it opens, where they get to unlock the doors, turn on the lights, and experience the Sistine Chapel on their own. It's also a much classier excursion than the duck boat tour I booked in Boston where I learned how to say, I packed my car and have a yacht. That just happened. Anyways, after starting the company out of a dorm room with his co founders, Tao has helped build Get Your Guide to over 80 million tickets sold with around 75, 000 experiences and 16, 000 providers listed at any given time. They also just completed 194 million Series F fundraise at a 2 billion valuation. Tao, thanks for being here. I'm excited to have you

Tao Tao: on. Yeah. Thank you, Michael. Excited about this.

Michael Koenig: Let's get it started. Set the stage for me. [00:02:00] Give me a quick overview of what the travel experience industry is. The size of the market, the overall trends that you've seen over the past decade, this is going to frame some of our conversation.

Tao Tao: Yeah, absolutely. So the travel experience market is really one that we'd like to say is the last greenfield that wasn't completely digitized. So when you think about airline travel, that was the first industry probably, a couple of decades ago, then Expedia booking. com, Priceline brought hotels online. And travel experiences is really this 300 billion market that has always been offline. So when you think about how you booked your experiences, very often it's, Oh, I asked my hotel concierge or I saw this pamphlet somewhere. I just walked up or some reason you cannot remember. And yeah, a huge market, lots of potential. And it's also very much in the zeitgeist of people doing experiences over things. So we're quite happy to move the space.

Michael Koenig: And it's become a part of my travel preparation. I'm going with two kids and we like to [00:03:00] find things before we're there. it's one of the key things. We're going to take a trip up to Toronto in two weeks or so. And what do we do? We hop on Get Your Guide. So it's become part of our habit when we travel. And I imagine with 80 million tickets sold, the same with everyone else. Tell me about the founding story of Get Your Guide. I mentioned that you started it out of your dorm room. That's one of the quintessential romantic startup stories where the founders write an algorithm on the window and then they start coding furiously. That's, that was your experience, right?

Tao Tao: Yeah, absolutely. So I think it's the it's the privilege of being naive and not knowing anything. So the backstory is so with my co founder Johannes and I, we've known each other for a long time and Back then we were studying at the Swiss Federal Institute of Technology. And so he was a basically a neuroscientist, a molecular biology, and I was a physicist. And so we really had everything to do with travel. However, we did love travel. And one of our travels took us to to Beijing [00:04:00] where I'm actually from. And Johannes, what he did is he booked his flights wrong. So he arrived at data early. And then on his own, try to figure out how to do sightseeing in Beijing and see anything. And I would say miserably failed and basically get stuck in his hotel room and didn't do anything. And when I came, the kind of the city opened up, people were friendly, food was great. And we, toured the Forbidden City. We went to the Summer Palace and climbed the Great Wall and all those cool things. And from that we basically, the idea for get you got was born where we thought, Hey, wouldn't it be great if you could discover incredible things to do anywhere you go and have, your local guide and tell you what to do. So that's really how it got started. When we came back, we were still in college with three other friends to we just, yeah, started coding and just. Started randomly cold calling local operators and said, Hey, we soon have this website. Why don't you join? And yeah, some of them just slammed the phone and some of them said we're crazy and yeah. And many other things.

Michael Koenig: iT's tough, especially when you're traveling to a [00:05:00] country where you don't speak the language. Exactly. You didn't start off, though, with travel experiences.

Tao Tao: Yeah. So the original idea was I think, for the, for those who've, who maybe above 30 still remember this thing called couch surfing. And so the original idea we actually had was to do a peer to peer platform for tour guides so that, you could be a tour guide somewhere, I could be a tour guide somewhere. So very much like an eBay for services, right? I think. Back in the 2000s, there was a few of these peer to peer platforms. That was the original idea. We launched that and had an incredible, I think, four bookings in a year, three of which came from my parents because they felt pity. And however, I think the serendipitously We then suddenly had some professional activity operators. I think the first one was a kayaking provider in Switzerland who just said, look, I want to list my stuff. How much does it cost? And that's when we started to actually [00:06:00] research a little bit about this, professional B2C experiences market and realize, okay, wow, this is actually pretty big. And our market research consisted of doing some Google searches. Is there a booking. com out there? Is there an Expedia out there doing this? There was not. Actually there was, we just didn't do our research properly, but there was a good thing. But so there was no brand, let's put it this way, global brand of discovering and booking unforgettable travel experiences. And we just went for

Michael Koenig: it. That's a pretty forward thinking kayak guy.

Tao Tao: That's a very forward thinking kayak

Michael Koenig: guy. Yes. And this is in what, 2009, 2010.

Tao Tao: Yeah, this is 2009.

Michael Koenig: I always love businesses that take an analog experience. And digitize it. It's magic whenever you can do that. Now you've had tremendous growth. 80 million tickets sold. You've raised north of a billion dollars at this point. What is that like? What is it like when you're 14 years in and you see Your baby grow up. [00:07:00] And then what I'm also interested in is as the co founder and as a COO How has your role shifted over the years?

Tao Tao: So I don't know if your audience is primarily North American, but in Europe I always like to use the soccer analogy so the soccer analogy I always use is so there are different divisions right all the way from the Champions League down to the regional club league and Sunday football leagues and the, I think the journey is similar as with a couple of friends, you start in the Sunday league, and then you just get promoted year after year. And in a way, I like this analogy because it shows two things. So one is. It's the journey with a group of friends and like minded people who are passionate about something and and try to fight for it. It also means that if you want to stay on the team, you have to get better yourself. So I think it's been a it's been a I think an incredible privilege to Experience this journey also personal growth journey that is both necessary, but also quite fun. So [00:08:00] I would say as a founder, the I always like to tell other founders, the you are number one superpower needs to be learning and growing more quickly than your competitors, because especially incumbents, right? They have all the. Assets and knowledge and network and whatever in place. And so, um, you know, unless you have a groundbreaking breakthrough technology, which frankly, 99 percent of startups cases is not the case, then you have to learn faster, be more agile, be more aggressive. And that's how I also look at my journey.

Michael Koenig: All of the success that you've had, it's been turbulent. We'll get into sort of the ups and downs in a bit, but for you personally as COO, I'm sure there are tons of different lessons that you've learned. What are, maybe one that is. Significant one that's been very impactful for you.

Tao Tao: I think there have been a few different learnings throughout different stages. So I think in the first [00:09:00] stage is really about how do you find product market fit, right? Um, many, Many interesting learnings there. I think if we go a little bit further out, I mean, there's of course, a ton of learnings. About managing people, hiring the right people and the importance of people. Then there've been some what in hindsight sounds like trivial learning. So one of our early advisors, investors, board members was the founder of booking. com. And one day he came to us and said um, you know, the most important thing is to follow your customer. And we said that sounds very obvious. And he said well, do you know what people search in your search bar and what are the top 10 things they search for? Well Said not really top of my head and said well, they are telling you what they want and you don't even know. Right. So that's just one story of um, you know, there, there is something about taking customer obsession truly to the next level and having that supported by data. So I think that was a very important learning in the early days. And you learnings about the importance of culture. Back [00:10:00] in 2000, maybe I forgot, this is so long ago, maybe 10 years. We did a small equity hire of a local company. They were doing something similar. It didn't quite work. And we acquired that team essentially for, yeah, just not a lot of money basically took on their liabilities. And that was the first time. I really experienced, you know, what you see in textbook about, organ rejection when you encounter a truly different culture and, and that was another important learning about, wow, okay, culture is actually real because when you come in touch with a different culture that doesn't work, it gets very real. [00:10:33] Marker So I would say those are some of the early learnings and maybe just to pick, I don't know, let's pick a learning from maybe three, four years ago is the importance of, again, sounds obvious, but the importance of strategy and. When you ask people like, are you strategic? And then of course I'm strategic, right? But I think the deeper insight and strategy that came to a lot of us is that it's not only the structuring and the [00:11:00] organizational thinking, but also the creativity. And so I think that's part of the strategy process that maybe we didn't quite recognize as much. It's that. combination of creativity, coupled with, of course, all this organizational synthesis and slicing and dicing that people do. So I think those are just a couple of, you know, learnings, I, I like to say, you know, every week, there's a new learning, because, again that's just, the measuring stick for growth.

Michael Koenig: Okay, let's back up. Creativity. What do

Tao Tao: you mean by that? So one of the frameworks or strategy um, you know, Michael Porter, where to play, how to win. I think that's a pretty classic one, but the question of where to play, how to win is, for example, where creativity comes in is to think about what are the relevant dimensions of where to play. For example, if I look at a picture one way to classify it is by, size, one way is by color, one way is by date, whatever, right? There's different dimensions. The creative part comes in. [00:12:00] Choosing what the right dimension is along which you want to evaluate or think about a problem. So for example, you can think about, get your guide as dimensions of play could be destinations. It could be your customer source markets. It could be categories, could be channels, right? And then strategies about picking which dimensions are the ones where you have a unique insight that this truly matters. So that's also what I mean with creativity and also sometimes just good ideas. And, it's. It's there are like two types of strategists or three types. The first step is the intuitive type. They're very creative, come up with an idea and execute it. And it works. The problem is they cannot explain it to anyone why it works. The second type and I think a lot of business consultants fall into that is you give them a problem. They slice and dice it, make a beautiful, spreadsheet and rice charts and whatever. But it's not particularly insightful. It doesn't create something new. So really the ideal type is you have that intuition, that [00:13:00] creativity about something that works and you have the capability to explain and slice and dice and and create that. So, um, not, Not my idea. I have this from the book. It's called the mind of a strategist. Written by a Japanese guy somewhere and yeah, so that's what I mean with creativity.

Michael Koenig: No, I love this and here's the thing about it when it comes to the creativity around the strategy. Strategy is very broad and can be based on some sort of ideal that isn't necessarily attached to reality. And the key to that creativity and you, and then I think perhaps this is what you meant with organizational synthesis is having the ability to tactically execute on that broader strategy. Is that kind of what you had in mind or something different?

Tao Tao: Something a little bit different. So the execution then follows strategy, definitely super, super important. I had more in mind is let's say in intuition could be. [00:14:00] So bad strategy. So an intuition could be, we should go into China and we should win the Chinese market. So that's, that could be the creative, intuitive, and there could be different reasons to do that. And then what I mean with the synthesis is to then actually do the business plan and evaluate, create options, pros and cons, mitigations, evaluation. So basically that creating that business case that's also important. And then follows the execution. And then

Michael Koenig: focusing on the strategy. Your strategy changes over time. You talked about culture and culture fit and the body rejecting an organ. How do you synthesize the culture when a strategy changes? How do you explain that to your team? How do you not shock the body and have that new strategy get rejected by it?

Tao Tao: Yeah, so the way we think about culture is, it's a little, so the analogy would [00:15:00] be government. So you have elected politicians every cycle, and then you have the, I would just say professional experts working in different fields that are, that have continuity. So the way I would look at culture is that is a continuous stream that doesn't change. And that's always there. And in fact, I think a good culture should be able to embrace new strategies. And of course the strategy shouldn't change every year. Certainly the mission, the purpose doesn't change. And yeah, the culture, I think, is there to support it. We, in the early days, we used to call it our constitution because it's really behaviors of the people, right? So, um, you know, Amazon has 15 leadership principles. Netflix famously has a couple of their core values, we have our core values, and I think they support any type of strategy that we want to implement.

Michael Koenig: Yeah, tell me about the core values because that was going to be my next question. Having a culture That you just described as being able to embrace new strategy. How do you lay that foundation? How do you build that over time? And what does that look like? Get your guide. [00:16:00]

Tao Tao: So maybe first telling you how we failed in doing so. So in the early days there was this great book by the late Tony Shea. So co founder of Zappos it was called a delivering happiness. And we read the book. And in one of the later chapters, they describe. the importance of core values. So with our great core values, let's do it. And so what do we do? We searched the internet for core values and did a best of core values mix of Amazon and Zappos and everybody else. And then we put that on the wall and said, these are values. That was, of course, a Absolutely catastrophic failure because people at one point started saying, but you don't live them. We don't live our values and they couldn't quite describe the problem, but what it boiled down to is it wasn't authentic. It just wasn't real. And a bit later different iterations later, where we ended up is we, we, we took an offside with our leadership team. And we put them in a room or put ourselves in a room and said, okay, can we put down the three, four people that we think are just awesome? And if we could clone them, we would [00:17:00] clone them. And the company would only consist of those three people. And surprisingly we, or not surprisingly, everybody wrote down basically the same two, three people. And then we said, okay, great. Now let's describe these two, three people. And that's then how we, in a way, bottom up. Inferred the principles of our culture and and that was basically then the real view one of our culture. I love

Michael Koenig: that. And then it also helps you figure out who shouldn't necessarily be at the company if they're not embodying or rather aren't able or have the capability to embody those values over time. It becomes pretty, pretty interesting when you start to actually look at that. Let's talk about COVID. Just before COVID, you raised a monster around 484 million. Then COVID happens, the world shuts down, your business becomes one of the many that saw their revenue [00:18:00] just hit dollar zero. Lockdown happens. What goes through your mind?

Tao Tao: Yeah, that was so if we rewind to 2020, I think we, like so many other businesses, had just a break, break out January, February. numbers through the roof. At that point, we're already 10 years into the business, and we were seeing 120 percent year on year growth. Incredible start. And then we kept hearing about this virus from China. And actually, my mom was back then in China, because Chinese New Year is always around that time. And she was telling me like, this thing is serious, very bad. I'm coming back. And uh, we thought, okay, fine. This is probably just a local regional thing. Didn't think too much of it. And then, so we have a lot of local offices, one of our local offices in Italy, I think in Europe, they were hit the hardest first, and that's when we said, okay, this thing is clearly real. And that's when we also then towards the end of March. So our revenue go to zero. Back then we were also a couple hundred people, what's going to [00:19:00] be a record year and then a revenue zero. I think what goes through your mind then is really just actually a lot of adrenaline. So it wasn't sadness or anything. It was just pure adrenaline of, we have to figure this out first. It was about making sure our employees. Uh, you know, In a good place, save and everything then to our customers. So we had a ton of cancellations to handle. So every customer got their money back. So we had to make sure that happens. Then of course, working with our activity partners, because now suddenly they had zero cashflow and they didn't raise a mega round. So, uh, very, Very tough for them. So tons of calls, what are we hearing? What are we learning? So I think that was really the first step. And then the second step is about. What now? And so what we decided was a little bit contrarian. So we didn't do any big layoffs in 2020 because we said, look, the team that is here is actually always building for the future. The technology teams are building technology that we will need. And the operational teams are building supply that we need. Or doing, brand [00:20:00] that we will need in the future. And so we just kept investing, which turned out to be quite good. So we came out quite strong back in, 21, 22, and now 23 is a, is an absolutely killer year. And yeah, I would say, look, it was obviously tough, but it wasn't. It was not the toughest year in our history. So I would actually say that if I think back on the first couple of years, that is mentally much harder because you don't know if you're building something that people actually need. And so, so not sure whether, you're just wasting time and money and everything is a mentally, I think a lot harder. I think COVID was more like um, Well, I'm sure this will go away, and if it doesn't, then we have other problems anyway. And so, um, we were just, hunkering down and just building product.

Michael Koenig: You're right. Those early years, you faced tons of existential threats, but you're usually going on just the euphoria of building something new, of being a founder, taking over the world. Very exciting. You figure it [00:21:00] out. And it's almost like those early shocks to the system prepare you for these giant crises where you've you've been through, not necessarily the same type, but you've already battle tested your ability to survive, execute, and, just continue to move mountains. But this is unique. The entire world shuts down. You were probably one of the minority that was like, thinking beyond it. And saying let's just plan for when this thing's over. You and your CEO, you had strong conviction. Like, how did you balance, let's say, the long term, multi year planning with just keeping those lights on during this super dire, uncertain time?

Tao Tao: There were definitely a lot of technical adjustments we did. So, um, Actually um, we, we did a program where a lot [00:22:00] of people actually sacrificed part of their salary in exchange for more options. In some countries, there was a work hour reduction that the government subsidized. So we, of course did a lot of those things, but I think ultimately the, because we were talking about strategy earlier, our unique insight was that A. This thing will be gone. It's a virus. And in a, in an interesting coincidence. So two of my co founders so, uh, Johanna is the CEO and Martin who runs our growth products. Both were molecular biologists who actually worked with COVID type viruses in the lab during the study. So we were definitely at the cutting edge of understanding this thing for a travel company. And obviously both of them kept up with the latest paper. So I think we had a decent understanding of this thing and you know, it was obviously not nobody knew for sure, but we didn't think this, this was going to be something sticks around for 10 years. So we thought this would be over. And what we knew quite early on is that this was a shock to the system. Also in terms of [00:23:00] digitization I like to joke that the biggest winner from the pandemic was the QR code. So QR code pre pandemic was like this ugly stepchild and now it's everywhere, right? So everybody knows how to book things online that waiting in line is makes no sense. And that is just much more smooth and seamless. to do things digitally with an app. And even though we lost two years, it did compress the overall timeline, actually, in a favorable way for us. And so I think if we look out, in 10 years, that actually it accelerated a lot of things for

Michael Koenig: us. Yeah, go on about that, because I was going to ask you about the QR code, I think. We all got used to eating outdoors at a restaurant and scanning a QR code on the table. How did that affect your business? Beyond just people getting used to using a QR

Tao Tao: code? Yeah just, just to give you a simple example. So we were working with a lot of historic attractions, museums, think of the Vatican, think of the Sagrada Familia in Barcelona. And the first picture of a mind is like these [00:24:00] endless queues in the morning or in the afternoon queuing for this thing. Now. That has never made sense, right? But the urgency to do anything about those cues has never been there. Now suddenly you have this pandemic and A you have time to implement digital systems, digital ticketing. And you had to do it for hygienic reasons for data gathering reasons. So basically, all of this now happened in those two years, and it helps us tremendously because the openness towards digital was now much bigger on part of our activity operators. And and also on the customer side. So people just are so used to booking things online. So one of the things when pre pandemic, we asked people is like, you know, we're doing this thing for experiences. One answer was like no, I usually just go there and figure it out or just wait in line or something. That doesn't make sense anymore. Post pandemic we've been educated to, to search, discover, and book online. Have it stored in an app. It's just much more convenient.

Michael Koenig: Yeah. It's crazy to think that you travel to Rome, [00:25:00] you go to the Vatican and then you spend just as much time as you would actually going through the Vatican museum, standing in line, trying to get in such a waste. It's, It's just another beautiful picture of technology allowing people to do more faster, which we're going to get into in a little bit.

Tao Tao: Exactly. And I think what's, what was interesting is the bottleneck of those lines is not because the museum's full. It's because you only have three people selling you tickets, right? So it's the bottleneck isn't actually capacity. It's those, you know, you know, old school things that were limiting um, just, you know, the flow of the, of the line.

Michael Koenig: So then the world opens up. And travel just explodes. I remember where I was waiting to get vaccinated. And part of me, I was just so stir crazy where I was like, you know what? I'm just going to chance it. I will have, I will drive down to Costa Rica. If I have like, I was really losing my mind. [00:26:00] So was everyone. So world opens up and we all immediately hit the road. What is that like for your business? So

Tao Tao: there's been a question that, some of our shareholders, investors ask is that, are you only benefiting from revenge tourism, right? So that, people were locked up for two years and suddenly you have to take revenge. So yes, we saw a huge spike again, but it's actually, if you look at flight data. It's only this year are we getting back to capacity. So I think it just seemed as a huge spike. Even though it's just following the natural trend. One of my favorite charts about travel is if you look at just travel overall, like air travel, and you, if you could draw a line from 1950 to now, It's a straight line up and we're not just going basically reverting to the mean of that trend line of just more people having a passport and more people being curious and wanting to travel. So, Yeah I mean, it's been great to see I think one trend that will persist a little bit is domestic tourism. So a [00:27:00] lot of folks have now realized, there's actually great things to do in their home country or in the backyard, not necessarily in your home city, but maybe, driving for a couple hours or taking the train somewhere. And there's actually beautiful things to discover. That said it's hard to beat the Vatican if you've never been. So that has also come roaring

Michael Koenig: back. Yeah, it is. And I've been very lucky to go twice. Watching the video of turning on the lights at the Vatican, which I would encourage everyone to do. We'll post a link to it. It really is stunning and I'm trying to think about walking through that giant hall filled with tapestries and then actually being able to turn these ancient keys and open up doors and then be able to go into the Sistine Chapel. It's you and four other people just take your time. There's no one else there. These are really. unique experiences that you're cranking out and you just did another [00:28:00] one for McLaren. Tell me about the operations behind this. .

Tao Tao: Yeah, absolutely. So we were always thinking, when we want to do marketing, what should we use? And then we realized our product is pretty good for it because it's inspirational. It's something people can dream of. And so we thought well, let's just take that to the extreme. Let's talk to our partners. So we've been working with the Vatican for years. We've been working with some of these museums for years and we said, what is the craziest thing we could do that tells the story of what this is about? Now, obviously, not, everybody can do the morning thing and turning on the lights at the Vatican. But it tells the story of what the Vatican is about and what, millions of people can do on a regular basis. [00:28:40] Marker And with McLaren was very similar. So McLaren has this beautiful facility where they construct these supercars. And for us, it's a lot of our values, both in the company and I think in our products about learning and curiosity and going deeper and beyond. And, not staying on the surface and just, staying in your [00:29:00] hotel and buy a postcard and eat something, but about going deeper and learning something. And. McLaren, very much shared this passion to like, go into details and how does this actually work? And then, we came up with this concept that you can tour the, the technology center and really, go beyond the door that normally you can only go beyond if you buy a car and um, yeah, and just look what it's like. And I think we have a lot of similar experiences like this, for example with the Sagrada Familia, where we are very long standing partners. So the beautiful Basilica in Barcelona. And we came up with this ideas that, okay, what is unique about Sagrada? What is truly unique is that it's an actual church, an active church, and their chief organist is a very famous artist because, he plays this beautiful organ. And we said wouldn't it be cool to do an after hours private organ concert? Once in a while. And so that's how we came up with the Sagrada experience where, you know, after the door closes, you stay there with a small group and, you're in the [00:30:00] church with a very few people and, you listen to the beautiful sound and there's the sunset coming through the windows. It's just a, it's a wonderful experience. So that's how we think about, telling stories that really convey what these experiences are all about.

Michael Koenig: Incredible. Let's get back to operations because this is a bit of an operations podcast. There's a lot going on here. It's a marketplace. Marketplaces are famously difficult to build. You've got your supply side, you've got your demand side, and then you've got the internal operations, the back office, so not just the things that are contributing to top line revenue. How do you break it down within GetYourGuide? What are your core areas of responsibility? I

Tao Tao: have essentially three areas. One area is all of the supply stuff. So we have local offices, sales teams internal teams, everybody working on supply, getting more inventory. And making the inventory even better. Second one is our customer service. So pretty straightforward, both on B2B and B2C. And the third one is broadly what I would call content. [00:31:00] So content, site merchandising, localization. So also just the operations of that. [00:31:05] Marker

Michael Koenig: And how have you structured, let's talk about that last one. How have you gone about structuring it? How have you operationalized

Tao Tao: that? Yeah, the there's a couple of. That I like when it comes to organizing or reorganizing teams. And this is, this I got from one of our board members, Sharon, and she said, most companies get it wrong because you start from the top and then you draw the tree. The way you should do it is think about the frontline worker who is doing stuff. So that could be the engineer. That could be the salesperson. That could be. The translation expert and then design the optimal chart for them to be effective. And that includes, if you think about this way fewer levels, right? Because you don't want to have between that person and the CEO, you don't want to have 10 levels, right? At least not at the size of our company. You want that person to [00:32:00] have a manager you want that person to be in a team that can make quick decisions you want to, you want that person to be in a team that can have, decisions making on resourcing so they don't have to ask another team. So if we think about from the what are the jobs to be done at the frontline and then designing the org chart from there. Then you usually end up not with an arc chart that pleases, the empire building grandeurs of managers, but rather optimize it for effectiveness.

Michael Koenig: You've got some pretty impressive board members. You talked about Sharon and then the Booking. com founder. How have you assembled this board? It's difficult to do, especially your private company. You've raised a series F now. I'm sure there are investors on your board. Tell us about

Tao Tao: that. Yeah it's a relationship that, we've built so the BookNet Confounder is not on the board anymore, but he was for many years. fiRst of all, we wanted to, for the independent board members the primary objective for us is to find people that we admire and that we can learn from. So for example one of our newer board members is Clara Jo [00:33:00] Martin. She used to be the CEO of Trainline. Running a public company in the UK sharing a column. She used to be the CFO or chief administrative officer at Best Buy. So running very large operations and so on. Or Fritz Dimopoulos, he actually is probably the most famous and successful non Chinese entrepreneur in China, because he built a tuner, which was actually then listed on NASDAQ. And that was in the early 2000. So just very impressive people that we just want to learn from and get their advice, but also have them hold us accountable, because they know what excellence looks like. And that checks and balances is

Michael Koenig: important. And that's getting the most out of your board. Let's get back to your most recent funding round. 194 million, 2 billion valuation. It had a different bit of a structure than we're used to with venture funding. It was 85 million in cash and then an RCS or revolving credit facility of 109 million. Tell me about that. Why the credit [00:34:00] facility? Why structured like that?

Tao Tao: Yeah, so I would view these things a little bit in parallel, so they were not a necessity of each other, but we thought it makes sense to, to communicate it in one go. So the RCF is really just to give us optionality. It's, it's, It's for those who don't know how the RCF works is you have a credit line. You can tap it or you can not tap it. So that's just there. And then for the equity funding is, for us, we just always thought it's important to keep investing into the future. We're a company that's, about to reach profitability and very profitable in some core markets like Europe. And so we didn't necessarily need that funding, but it's always good to have that optionality, that strategic word chest, if you want to, double down in certain areas and for us, the next step is really to win the U S that's been the stated goal for many years. And that's also what we're pursuing. And

Michael Koenig: what's the credit facility backed by, what is the credit line backed by?

Tao Tao: I would say, so for the exact details, I think our CFO will be the best person. But it's primarily backed by our reputation and our history. So these are banks [00:35:00] that we've already been working with for years. It's really about building also that banking relationship that you're a trustworthy lender.

Michael Koenig: This is a significant funding round, not just the size and who your investors are, but also the timing. This is a fundraise that's happening during a fundraiser drought. Consumer tech companies are having a tough time raising, and when they do, they're often, at down rounds. Valuations that are significantly less than private rounds. You defied both. You raised a healthy round, and at a significant increase in your valuation from your 2019 raise. What is it about Get Your Guide that allowed you to do this when so many other companies

Tao Tao: Ultimately, I think it's thanks to the the performance of the business. So ultimately, we're at a stage where you cannot just with a good pitch fundraise, a lot of capital, but it's really on the backs of the great work that our team has done over the years. I think a couple of factors that also play into this is. that travel businesses are not built overnight. [00:36:00] We never had, explosive 500 percent year on year growth as those type of things, because you have to build this global network effect and maybe something we can go into later. So we never had more than, 100 percent growth, but we just had it for the last 14 years, except for the COVID years. And so it would never had moon, like crazy, moonshot valuations either. So it's always been a healthy multiple on our revenue. And that's also how we look at this round. And, obviously a lot of investors are, were comping us to public comps. So what are the multiples that public companies get for similar revenue numbers, similar profitability margins? And that's basically what we came out with for us, actually, the most important thing in this round was not only to get an up round but to do it without um, without, you know, what's so called structure. You can make up any valuation if you accept a crazy liquidation preference or warrants or other types of things that I would say distort incentives for the shareholder base. That's something that we've always wanted to preserve. And, that's something we fortunately achieved and the reason to do it now is [00:37:00] now is the best time to invest, right? I mean The we were we started the company in 2008 2009 during the financial crisis and this is the best time to invest and in crises is when you know marketing is cheaper When talent is available and when the competition is maybe also weaker.

Michael Koenig: Tell me about deploying the capital, right? You raise a lot of money, but deploying hundreds of millions of dollars is non trivial. What is the philosophy here? How do you go

Tao Tao: about it? Yeah. So the way we think about investing is really flywheel is something that gets spoken about a lot, but we really just invest into the flywheel. So the key spokes of our flywheel are building a customer audience. Building an amazing product and then, generating incredible supply. Acquiring inventory, building selection, and that's really where also the investment goes. The largest teams that we have almost half the company is technology folks. So building great software for consumers great [00:38:00] software and products for us suppliers. So our activity operators. And also we have a third wheel, which is our distribution partners. So we work with airlines or credit card companies like Amex where they distribute our inventory. So really three sides where we have to build great technology for. And the second thing is of course, building a brand. So we're investing into brand building efforts in in Europe, but also in the US. And then it's building inventory. So we have now about 75, 80, 000 activities. I think there's more than a million, 2 million activities out there. So we're only getting started. And yeah, this is where we think about sensible capital allocation because All of these things pay off in the future as well. So building a brand pays off, building technology pays off, building supply pays off, and it just makes the flywheel fly a little bit faster.

Michael Koenig: And you also have, you've mentioned that you're 14 years in. You're able to think in much longer timelines than you would have. Even eight years [00:39:00] ago. That actually also plays into how you think about deploying capital. Let's get back to something you said. The global network effect.

Tao Tao: Tell me about that. Yeah, so I think the best way to think about it is to contrast it with what is not a global network effect. So if you think about mobility companies, so ride hailing or scooters the approach is to go city by city. So if I own New York City and I'm the market leader, doesn't mean I'm the market leader in Boston. Every city is new. You have to attack it and try to capture market share in travel once you've built a network. So if I have supply in New York City, I need global demand. If I have American demand, I need global supply. So that's why it takes forever to build this network. But once you have it, so imagine how would you try to disrupt Let's say Expedia for hotels in the U. S. Impossible. If you want to, try to attack them in a destination like New York. You need all their supply. But more importantly, you need the global [00:40:00] demand that makes the supply liquid and makes the hotels happy. Likewise, if you try to attack a certain source market, so customer source market, like let's take the U S you need global supply just like they have. And so. if you build this global network, it gets extremely defensible. So scale and travel is really the main mode that you build.

Michael Koenig: That's fascinating. And I've had a lot of COO from different marketplace companies that really fall into the former category that you described. I've learned a lot so far, but that's also really interesting. Now let's switch gears. And this is. Very, Very different. I think you're uniquely qualified to discuss this. As you mentioned, you're a native of Beijing. You recently traveled back to see your grandfather, which, I mean, you talked about following your customers. I wasn't following you, but I was stalking you on LinkedIn. I mean, This is all coming at a time when tensions are, are high. I usually avoid anything [00:41:00] political, but it is crossing over into our worlds within companies and investment that's happening. The U. S. is taking a very aggressive approach. We saw this hit the venture sector with Sequoia divesting their Chinese and Indian funds. What are your thoughts

Tao Tao: on this? So first of all the sentiment is of course sadness. So I think, a. A smaller world or flatter world or one that is more connected is always better, right? There's there are many concepts like the peace dividend. So if you have more peace, less money gets attributed military, which means you can invest more money into technology or infrastructure or education or whatnot. So that's just as an economist That's just on, on paper the problem. Any decoupling creates inefficiencies when it comes to trade, right? So obviously free trade is one of those things that at least creates global efficiency. So, So it's very sad. So any of that is very sad. I think the [00:42:00] question is what can we do about it? And I think different people have different roles to play. Fortunately, I think travel has one of the one of the probably the most positive factors you can create. And so I think the role that travel can play is to build bridges of empathy. That's really the number one thing. And, you were referencing my Linkedin post and one of the things I was there is I think one of the saddest things is that now for two well, for three years, there were, Chinese students who've never seen a foreign exchange student. And there are, you know, folks in the U S or in Europe who haven't seen the insides of China and vice versa. There are no Chinese students on American campuses. And so I think That's really sad. And I hope it picks up again. And I think travel has a similar role to play, right? If you only read the news, it gets very objectified. But once you're there, you speak to the people, you learn about the way people think. I think that's a positive factor. And you know, we hope that with travel, and especially with experiences where you don't [00:43:00] only stay in your hotel and take the pool or whatever, but really engage with the culture, I think that hopefully has a positive effect on this issue.

Michael Koenig: Absolutely. And getting the different life experience. Hopefully, you're able to. I mean, The American way of life. I know you're located in Germany, but the American way of life is very different than really any other place out there. So, Having that exposure to just a different culture, but not just sitting in your Western hotel hitting the Western buffet, but really being able to do it. Immerse yourself in the culture and get out of those, , well traveled lines, I think is one of, one of the main things here. Thanks for going there. Let's talk about AGI you introduced ChatGPT into the front end of your product. Very cool being able to ask it questions about your travel, about things of that [00:44:00] nature. Outside of the product, how do you think about applying AI in general to your operations?

Tao Tao: Many areas. Um, So we've, we've had the um, so not I, but you know, some of my colleagues had the foresight to already build a data science machine learning team already many years ago. And Being a marketplace, you usually have that team because you have ranking and that's just dealing with tons and tons of data. So ranking, relevance, recommendations has always been a core part. I think the, the, the beauty of AI or specifically I would say of the large language models is it helps a lot of areas such as uh, especially in my teams, like a translation, right? So you can now suddenly significantly lower the cost of translation, which means you can really scale translation. It can be instantly translated into 50 languages. Amazing. Helps our operators who can now upload stuff in their own language. And it helps, of course, the Hungarian customer who's visiting Mexico, doesn't read Spanish, but where we previously probably didn't have, the business case to translate Mexican content [00:45:00] into. into Hungarian, right? So that's a big one. I think customer service will be greatly disrupted by AI. And so I think those are just some couple of areas where there's some obvious operational efficiencies. And the other area is just much better relevance and recommendations. One of the things we just launched recently is where we do a AI generated synthesis of customer reviews. So we have a lot of activities with, I don't know, 5, 000 reviews, 10, 000 reviews. You're not going to read all of them. What is the relevant pieces that people have said that you should know? So I think there's a lot of great use cases of really just using large language models. It's

Michael Koenig: pretty incredible having the translation engine that can do it instantly. Having led localization and internationalization efforts dealing with PoE and MoFiles and all those horrible things. It's really slow. So that's brilliant. That's brilliant. Alright. Tao, time for my last and favorite question, as COOs, as executives, we've all seen something just completely off the wall and thought I [00:46:00] never thought I'd see that. Do you have one you can share with us? I

Tao Tao: mean, I have to go back to COVID and that was the uh, I didn't think I would see the day where we have zero revenue. Now to be fair, it wasn't exactly zero. I think we had one booking in New Zealand. So somebody in New Zealand was still booking for New Zealand, but I never thought I'd see the day of zero revenue again. So that was that was very new. Yeah,

Michael Koenig: absolutely. And we already talked about how you climbed out of that and uh, You know, even though it was negative for so many and especially your, your customers, you as a company were able to survive and somewhat excel during it. , well, Fantastic. Tao, thanks so much for joining me. Where can people go to keep up with you and get your guide?

Tao Tao: Yeah. So get your guide, download the app and hopefully use it on your next travel. We need every customer and we're grateful for everyone. And yeah, you can find me on LinkedIn. So it's TauTau. If you Google it, you see mostly panda pictures because there's a famous cartoon panda called TauTau as well. So you have to scroll beyond that.

Michael Koenig: Fantastic. Thanks so much, Tao. Thanks for listening to [00:47:00] Between Two COOs. I'm your host, Michael Koenig. And a very special thank you to Tao for joining us. Tune in next time for our next COO chat on Between Two COOs. And be sure to subscribe on Apple Podcasts, Spotify, or wherever you listen to podcasts so you never miss an episode. Just visit BetweenTwoCOOs. com for more. And if you have a minute, please leave us a review and tell other folks about the show so they can get great advice from phenomenal COOs. Thanks for listening. Tune in next time and until then so long