Omri Morgenshtern, currently COO, Agoda talks about his personal evolution, the lessons he’s learnt along the way about fitting into a corporation and making the best of scale, and yet keeping a keen eye on localisation, which is where he found his early groove as an entrepreneur. Plus, what has the Israeli military taught him? Have a read.
Q: Congratulations on your imminent appointment as CEO of Agoda. It’s an interesting evolution of Agoda’s journey. In Stage 1, it was run by one of the founders, Robert Rosenstein. Stage 2 saw a professional CEO, John Brown, take the helm. And now you, who have worked up through the ranks through product – what difference do you intend to make to Agoda in Stage 3?
I am somewhere between Rob the entrepreneur and John, who came up through the business. Fundamentally, though technology is the core of who I am and the foundation of Agoda, so you can expect to see a lot of technical innovation especially as we follow our vision to move towards a travel platform with more innovation coming for flights, accommodation and activities. And above all, making the whole journey for travellers seamless and easy – and staying true to our passion to deliver the best rates and value to customers.
Q: Your journey is an interesting one. You were one of the co-founders of Qlika, which aimed to tackle a big problem in online marketing – localisation. You and your co-founders developed technology to help advertisers manage and optimise their campaigns for each particular market, media channel and segment. Qlika was acquired by Priceline (at the time) for between US$15m-$20m in March 2014 and you joined Agoda as Senior Product Owner, Algorithms and Learning Systems. I know it’s history but why did you want to start Qlika? What difference did you want to make?
Localising marketing efforts yet maintaining control and still enjoying economies of scale is a hard problem we wanted to solve, and that’s why we started Qlika. We noticed many advertisers (in both travel and other verticals) were running global strategies but found it very hard to adjust to local requirements. Even in places like the US which is a predominantly homogenous market, we found that marketing localisation works very nicely to improve performance. This need becomes more crucial when you’re faced with a region as diverse as Asia, where localisation is a pre-requisite not just in marketing but in your product. We saw an opportunity to service this gap in enabling businesses to successfully localise while still maintaining control and enabling economies of scale, and we have been successfully iterating this within Agoda to help our partners increase efficiencies of their marketing efforts.
Q: It’s not often a founder manages to stay through an acquisition for now almost eight years and is now leading the business. What was the transition you had to make as founder to employee? And now, what’s the transition you have to make to CEO? What skill would you most like to get better at, to become a well-rounded leader?
It has been an interesting and rather unique journey to say the least. Firstly, moving from being a startup founder to an employee of a large corporation simply afforded me more resources – a larger team and budget to help grow the Agoda business. Along with this came the need to adjust to working with multiple internal stakeholders to get buy-in. Something like that might have limited our ability to move fast, but thankfully we had a good cultural fit with Agoda of moving fast, being scrappy and entrepreneurial.
As a leader you evolve as you grow, and so while I am someone who is very decisive, with a strong set of opinions, as I transition to CEO, I’m learning to develop more empathy and understanding and to listen more to different opinions and ideas, even if I might disagree initially. This will help me grow into a more well-rounded leader. I do not think the Steve Jobs leadership style is something which would work in 2022, and in our current climate.
One skill I would particularly like to develop is the ability to say more with less words. The leaders I look up to are individuals who can say so much in one simple, impactful sentence – I deeply value the ability to be clear, succinct, and straight to the point in my communication style.
Q: Very often, startups wither within the corporations that bought them. What’s the secret to startups surviving within a corporate giant? What is the lesson here?
There are a few secrets. The most important thing is to appreciate and have respect for the leadership that brought you in. Make sure that you share similar values, a similar working culture and vision for the business. Oftentimes, founders are looking to be bought over for monetary gains, but I believe it is better to make 50% less money and find a home you enjoy where you can truly make a difference. Secondly, it is also important to interact with key decision makers in the organisation before the acquisition, spend some time learning more about their business goals, principles and values. Glenn Fogel, CEO of Booking Holdings, was an invaluable support to me early on and I cannot tell you how much that has helped my career and my sense of direction.
Finally, be willing to adapt and change, skills you learn very quickly in a startup environment, use those learnings to pivot yourself and your organisation, don’t think you are bigger than the sum
Q: Localisation has been a big theme through the pandemic, so perhaps Qlika was ahead of its time. Are we in a period of hyper localisation now and what does it mean to a business like Agoda that relies on global network and scale?
Booking Holdings (formerly Priceline) were definitely brilliant to have the foresight on the importance of localisation some eight years ago, and the understanding that Asia was the most important place to apply it. Are we in a period of hyper-localisation? There is definitely a need to strike the balance of having more than one solution, it’s a decision we have to make at Agoda every day and we think the trick is to have the agility and innovative tech to localise to the customer but maintain scalability. Perhaps hyperactivity can work in some zero interest rate environments, but ultimately profitability matters (and it always does eventually) so if you localise too much you might end up with a non-scalable product and structure, and thus less profitable than competitors
Q: How has online marketing changed as a result of the pandemic? What three trends would you single out as most significant and that will influence your marketing spend?
Foundationally, not much has changed. Conversion and user experience (UX) remains important, as does Price. Channel mix is very similar to what it was before and as a team, we continue to aspire to be the best in the world in these aspects.
Domestic travel was key during COVID and it gave a lot of power to local brands to grow. Making sure we’re known to be a strong provider of domestic travel too, especially in places where we’re not a market leader (such as in Japan) is a challenge we’re currently trying to overcome. These obstacles cannot be easily managed through PPC or price comparison which is why we’re heavily investing in brand building – advertising, PR and marketing to shift the awareness in these markets.
Customer needs changed, and the biggest was the expectation of flexibility. We had to innovate and develop products like EasyCancel to give customers the choice of products that allowed for the ever-changing travel restrictions, and that is here to stay.
Q: As the new CEO, what are your top three priorities? You once told WiT that your foray into flights would be different and unique from everyone else. How so?
Well, firstly we are focused on catering to the basic needs of every customer – i.e., best prices, and a great user experience. We plan on being more creative in the way we bundle flights with other components of the trip. The benefit of offering multiple booking capabilities enables us to offer more attractive bundle deals for those looking to book their entire trip on Agoda. I won’t reveal too much beyond this point but keep your eyes peeled for some interesting announcements in the not-too-distant future.
Q: Finally, travel recovery in South-east Asia is underway. What trends are you seeing? What is the data telling you?
We’re seeing domestic travel in many places exceeding 2019 levels, and a very steady return to 2019 levels for international bookings too. Talking flights, we’re seeing flights exploding on our platform, with more bookings than we had anticipated, and we are super excited about it. It is an exhilarating time for travel in Asia.
Q: Though it is based in Thailand, Agoda strives to be a global brand. Is it harder to build a global brand out of a market like Bangkok versus say Amsterdam?
On the contrary, I actually think it’s easier. You need to think about your talent acquisition strategy, and the right composition of locals versus expats, but I think there is so much innovation coming out from this region, and smart graduates entering the job market each year. In the past, funding was much easier to come by in Europe or US, however this is slowly changing over time. While I do love Amsterdam and everything about it, I would pick Bangkok any day.
Q: Localisation is important both at the data and talent level. Which is more challenging to achieve?
Talent is probably the bigger challenge of the two, primarily due to the pandemic. Hiring and keeping relevant local talent is even harder. Our goal as a business is to create a diverse company, and for the most part we have achieved that well. We welcome all different nationalities, cultures and working styles from different walks of life. Allowing each person to excel based on their capabilities and merit. However, creating this diverse structure is not an easy task but it’s something we’re committed to and honestly, I think is our biggest asset.
Q: What new tech are you keeping your eye on?
Crypto in the world of travel is an interesting one for me. Like everyone else in the world, I can’t pinpoint the exact reason why… but the fact that it isn’t restrained by borders, is entirely autonomous and can be so easily exchanged and owned is fascinating. I am entirely eager to see what meaningful implications this can have in the world of travel.
I am a big believer in insurance tech, and price freezer features – I think we have only just scratched the surface here. As for fintech, the lines between banks, Buy Now Pay Later players and travel companies are blurry in this loans space.
Q: What’s your take on metaverse and NFT and their role in travel? Is Agoda building anything in that world?
Personally, I’m a big believer in the Metaverse and anything VR-related that Mark Zuckerberg is building. I am definitely someone who will be an early adopter.
While current new launches get boring after a few days for me, and a few weeks for my kids, I do believe someone will get it right one day. I just don’t think it’s three years away, more likely 15 years. As a business, we’re watching these developments closely and keeping up with the changing trends – we are playing but not heavily engaged or invested yet.
As for NFTs, this is something that has come up in our brainstorms and through user research and we are exploring the possibilities. However, everything is still currently very much on the drawing board. Given the state of the market now, we’re not looking to make any drastic changes, but you might hear something from us in the future.. so watch this space.
Q: You were a graduate of the prestigious Talpiot program of the Israel Defense Forces. What’s the biggest lesson military training has taught you and how has it shaped you into who you are today?
Talent and loyalty are the most of what you need to be successful. There’s nothing stronger than a group of very smart people who are dedicated to a goal and believe in one another, and to do the best you can with what is within your control.
by Yeoh Siew Hoon
