Ariel Cohen, Navan CEO: A Fortt Knox Update

Of course.

Yeah, by the way, I started this morning in a meeting covering that. So that's how much you know this is important for our business, but more than our business, for the travelers. Travelers that will travel in probably Sunday, maybe a little bit Monday, will have issues definitely in this area. We are trying to be extremely proactive with them. So our app will already tell them today, maybe you want to look at the different options. The flights are still not cancelled so you don't have to do anything. But we recommend that you kind of check and see if that's the flight that you want to take. Interestingly enough, when things like this are happening, airlines will actually allow you to change your trip. It will be without cost. So the airlines are actually supporting a certain process. We support that process but in a completely automated way. So you're going to go to our app, you're going to say that you want to change your trip. We're going to apply the credits. We're going to give you your money back if we need to give you your money back. Everything will be handled by us but very, very, very proactively. Basically starting today, that's the meeting that I started my day with.

People that will decide to travel because still the airports are open, they will have access to Ava, our chatbot, that will really try to find a solution for them assuming that there will be an issue. And the reason that I'm talking about Ava, there is no way to scale a support organization to the level of mass that we're going to have on Sunday overnight. You cannot hire trained people. You know, the support, these are travel agents, right? You cannot hire enough people overnight or just have a business that is planning for that event. And therefore AI is super, super important. Ava knows to support. We reported in Q3 54% of the interactions with us. That means that especially in a day of a storm, she will be extremely, extremely valuable. So between Ava and our agents, we're going to support you really fast.

It's Ava.

By the way, it depends on who you ask in the company. You ask my co-founder, he will say one thing and he actually developed it. I'm just talking about it. So I guess he's right.

So Navan, from day one, we are very, very strong on machine learning. We always wanted to know you, but this was more of like the Netflix way. This would be the movie that is relevant to you and the flight that is relevant to you. Actually, send technology. So that was the main in I would say the first seven years. When LLMs were introduced, we realized that we can actually take the customer experience from what I'm calling 85 to 90% of the vision that Elan and I had from day one to make it perfect no matter what happens to probably 100%. And we've developed three years ago a platform we are calling it Navan Cognition. This is our own AI platform. It is a combination of external LLMs with Anthropic and OpenAI and Google, but also our own models and also our own data and something that we are calling memory, everything that we know about you. So all of this sits in Cognition. Ava goes to Cognition to have a chat with you. But all of the data, what are the flights? What is the relevant? What should I tell you? Will you get your money back or not? All of these things sits in our platform and our connectivity to the travel industry. We mesh it together. We give you an answer. Ava is a cool thing. What is coming next from Navan, which is relying completely on Cognition, on this AI platform, is something that is called Navan Edge. It's our new product. I think it's the most important thing that we've ever released here. It will really take care of you as you have a virtual travel agent in your pocket. It will completely understand you. Plan your trip, change your trip, deal with your restaurants booking while you are here.

Ava was geared much more towards I'm going to support you when something happened. So, basically the trip is booked like you know on the mobile app. You click here, you click there, eventually you have a flight. Ava is kind of supporting you. Navan Edge, that's the name of the product, is going to, you're going to tell me I want to fly from New York to London. That's it. And the Edge will tell you we think that you want one of these three flights. We think that you want one of these two hotels. The reason is with everything that we know about you. We know that you really care about this loyalty club, but also you specifically always showed us that you care about the bar or you care about the swimming pool or about the gym. And it's not some gym, there is a gym. So what is the quality of the gym? Right. So we know this information. We have this data. We actually store the data in the last 10 years of everything that was done in the system. So we have the data. We can tell you this is the hotel. This is the flight. By the way, we recommend this restaurant. You can book it here. Here it's better to use Uber, there it's better. So the entire what we are calling internally destination, everything is happening in destination, in the destination make it to you. It goes to the level that we know you so much that if there is a flight that you usually take and this flight is not available, instead of just giving us some search results the flight is not there, this virtual travel agent will tell you we know John that you are usually selecting this flight, it's not available, we're going to book you on this flight, you have 24, 48 hours to kind of wait with this and I'm going to try to find you a place on the other seat on the other flight, maybe your status will allow me to call the airline on your behalf and so on. So, we automated something that travel agents can do, but I'm talking about the really high-end private travel agents.

Yeah. So, you and I talked about it over the years and I was always in the camp that it's not about business travel or not. It's about this. It's about the energy that we have between us versus if I'm in some other room and we talk through some camera or Zoom or whatever. And I think nothing replaces it. And I actually say, you know, I've done a road show recently. We took the company public. You take an airplane and you go, it's actually really tiring. You go from one place to the other and you meet investors and analysts and everybody that are involved in this process where they are. You want to meet them. They want to feel you. They don't know who you are. So what, they're going to invest $50 million because you met them for an hour over Zoom? They need to feel you out. So I feel, I think, you know, in a way I'm running an AI company and I'm talking about human connection. And I think that that's what it's all about. The AI can help you to do something and we can help you to make your trip super efficient. But this thing, this is the most important thing in business. So, and trends wise, we actually, business travel is way, way above where it was when we know on the eve of COVID. I think it's a combination of we saw the other thing. The other thing has some advantages. For example, I can work from a lot of different places. You know that I like that. But you also see where it is not effective and therefore I think people went to the two directions. I will kind of gain control of my life and work from different locations and work from home or work from the cafe down the street. But then I will steer to the other side and take a flight and meet you. And we really see both. And we even see it with the type of hotels people are booking. In the past it was some chain and there is a room and it's very, very functional and the only thing that you'd care about is the loyalty club. It's no longer the case. A lot of people care about the loyalty club, but they care about the quality of experience. And we see it, we really, really see it. That's why, you know, an icon, is there a bar? Is there a, you know, explaining for it's no longer the thing. Is that the bar that I want to be at when I'm coming back tired from all of the business meetings? We see it. So, I think actually people went almost to two directions. Technology that helps us a lot, and I want to meet you.

I think, and that's something even yesterday we had some important training about some regulation around being public to make stuff and you know people are new to this, I'm new to this, so you really need to be aware what can I say, what I cannot say. You think it's that river, it's not. There are some things that you can say but I would never think that that's a problem to say it, right? So you need to be trained. On the flip side, you cannot be in a situation that people will start to think if I'm making this right decision for our travelers, for our customers, for the business, how will it translate to something in the balance sheet. I think that if people will do that, we will not be around or will be so slow and definitely in the AI space, the startup down the street will just kill us and rightly so. So, I think there are a lot of advantages of being public. But I need to insist and I'm actually doing it that we will not go to the side that will make us less innovative, will actually make us think about short-term gains. It's all about the long term. We continue to think about our customers. You know, there's always gross margins. Gross margins affect your ability to service. So, cost, our COGS, our agents and service. Do you optimize for the reporting or do you optimize for your customers? We will always, always, always optimize for the user, the customers, the people that are using us. And being public can kind of take you to a different direction. I'm insisting, Elan, my co-founder, the management team, that it will not happen. But still, there are some things that slows you down. There's regulation. You need to report in a certain way. There are things that I can even right now I cannot tell you that I could have told you in the past. So yeah, definitely you need to be way aware, you have another layer kind of to think about.

I think I see it more sometimes in concerns of investors, especially public market investors, and less in reality. In the past, we didn't see any kind of any changes of some political event and business travel. If you have a war or something, you had it in the Middle East, yeah, you will need to have our customers kind of finding solutions for them and get them out of places and so on. But on some headline changes like this, people are traveling as usual.

I have actually an opposite point of view on that probably from what people are talking about. I actually think it makes you hire more entry-level positions and it actually places at risk the more experienced people. And the reason is if I'm an entry level and let's say that I'm a hard worker and I'm motivated, I have all of the values, I want to be successful, I actually have more tools right now that closes the gaps between me and an experienced employee really, really, really fast. So let's take an area that it's obvious, developers, engineers. In the past if I was a back-end engineer with 20 years of experience, I can ask whatever I want to and trust me any tech company CEO will give you whatever you want to. Okay, your impact was huge. Like it could be one person. The impact on the entire future of Navan would be huge. Now you can be a non-experienced engineer that is super smart and curious and you can develop stuff very fast. You will need to know the use case extremely deep. You'll take yourself to a different place. It makes product management even more important than ever. But yeah, is that back-end engineer as important as that person used to be? No. And that means that actually somebody that just came out of college and has all of the traits of somebody that wants to be successful can actually close the gap fast and actually see it happening. So I kind of, I can take it to travel agents because of Ava. We can actually hire travel agents that are from kind of this generation. You know, travel agents is kind of almost a dying kind of industry but we are bringing back people to this industry and giving them tools that closing gaps that without that they would not be able to support our travelers. So I actually think that there is an opportunity around new entrants, convincing them that they can be successful in jobs that probably in the past you wouldn't give them that early. So who's that super valuable employee now? I think like always the very motivated, the hard worker, somebody that wants to be successful. I think values are the thing that when I'm hiring I'm always hiring for values, way less for experience. Like you have the values that will work well with the team, by the teamwork, even more important than ever. So on one side you are in ChatGPT all day long asking questions, on the other side you know you want to bring it together. So I think it's values, it's hard working, it's motivation, it's I want to be successful, it's I want to work in a team. In the case of Navan, I genuinely care about the traveler. Really care about that person. And now I'm actually using AI to, you know, we developed as part of Navan Edge a technology that allows you automatically to see all of the clubs, the loyalty clubs that you are part of to know your status and you can start a discussion. Tell me what do I get from United in this context and then when you are buying a flight ticket we kind of optimize that. This is like think about it in the past I would need to hire some consultant that understand every club, you know, and map it and somebody will change something and I need to run the process again. Ask Gemini. You can ask Gemini right now everything that you want to know about the United Airlines club. So that means that the person that designed that feature had a huge, huge, huge edge over like I need a consultant here edge.

I found myself, I'm kind of dyslexic and I also English is not my first language. So I think that for years I was actually avoiding doing memos like writing stuff and sending it to the team. And I find myself, and just reflected on this, it was not like I'm planning to do it. I find myself that in the last year I start to send a lot of things to the team. So before the meeting here is, you know, what I want to talk about and what we're going to achieve. Here is my thinking about this here and how what has changed. I'm running it all through Gemini. So, I'm basically talking with it. I'm not typing and I'm saying and I'm asking it, hey, can you summarize what I've just said? And then I'm reading it and it's kind of there or I kind of work a little bit around it and I'm sending it. So, that's something that actually for me helps me a lot. On something that actually makes me much more accurate, much more deliberate, better on my communication with the team.

100%. 100%. I feel not only that, I feel that sometimes when we start to maybe go to a different direction I can go back and see what was my intent, why have we started this program, this product, this thing. So it makes you, it keeps you honest because you know by talking and talking and talking you kind of, and I'm like that, I can let's do this and let's do that and let's do the other thing and kind of it keeps me honest. I think it makes my team feel way more in like I would say a sane environment, you know, founders environments are sometimes, you know, iffy environments. So, feel right. So, I really think it helps me to do that, but also, you know, sometimes have some questions even about your strategy and I'm finding it very, very effective to tell me, hey, I'm thinking about that based on everything that I've told you up until now in the last year and a half. How would you think about it? And it's fairly good. So, I think it makes me better. To your question earlier, I think it has opened the door to younger CEOs. So, you know, the same kind of, so do you really need, you know, a CEO with 30 years of experience in tech? Probably not. Okay. So, I think I really think that it's exciting. It actually, it's a tool that can give a lot of opportunity if you'll take it.

Thank you so much.