Darrin Grafton, co-founder and CEO
After selling their first startup, Interactive Technologies
Limited, Darrin Grafton and Bob Shaw started Serko in 2007 to provide online travel
booking and expense management for corporate customers.
The company now has more than 6,000 corporate customers
across Asia Pacific, North America, the United Kingdom and Europe and says it
processes more than $4.5 billion of travel spending every year.
co-founded Serko more than a decade ago. What has been the biggest change in
business travel management since then? What still needs improvement?
travel is going through a new era of change. Although NDC may seem like the
latest buzz word, it fundamentally changes the world of air travel to a true
modern retailing model.
By changing the model, it impacts everything it touches
at the same time, and we're going to see the knock-on effects in other areas
like hotels, who already have dynamic rates but will also end up
"unbundling" their services as well.
The outcome will be the kind of
retailing that we haven’t seen before, where a flight to London includes not
only a seat and bag but a hotel, taxi, and meals all managed as a journey on a
corporate rate. Loyalty will get blended across brands and the outcome is going
to be something very special for this industry.
industry needed to move away from the traditional approach of booking travel to
support modern retailing, and this required a new generation modern retailing
platform that is built to manage the entire journey.
Google picked this back in
2012 and code named this Google Traveler by defining the modes of travel as how
we fly, stay, move, eat, work, play and rest. Booking travel is just one
aspect; disruption and change management all needed to be blended into this new
dynamic journey and marketplace.
have to remember that change doesn’t just affect the traveler, it affects the
travel arranger, authorizer, company, travel management company and suppliers
at the same time.
It also means faster, more user-friendly design and systems
need to be built that make the journey more automated and touch free so stress
points are removed from all aspects of travel.
Auckland, New Zealand
business travel sector has been criticized for being slow to innovate, with
some of the recent developments credited to pressure being caused by startups
such as TripActions and TravelPerk. What’s your take on that?
is fantastic and healthy in any industry and there is enough room in this
$1.3 trillion market to support new and emerging offerings, but our approach
is to focus on our strategy not on the competition.
that change just happens, but in fact change requires advocacy.
As an example,
Serko has supported NDC for years to get behind the airlines and industry
change, we worked with Routehappy as their first customer in this space and
helped drive the change in the visualization of air retailing in the corporate
Zeno we know are building a next generation platform that enables all aspects
of the business travel eco-system to come together and accelerate off a common
We have to connect all GDS systems, direct airline, ATPCO,
aggregators and related parties; not just one part but all of the parts
together and manage the entire journey and eco-system. This hasn’t been done
before, but we have now laid the foundations and the market is realizing that
this platform approach is the way to move forward.
Our partners can become
technology leaders in just a few weeks by white labeling the Zeno platform and
creating their own brand and servicing model, enabling their own set of content
and third parties to build and work with them to become a major player quickly.
As a traditional travel management company this means you can add your years of
experience onto a platform that can bring your identity and value to a new set
of customers at scale.
month Booking Holdings took a nearly 5% stake in Serko with a $11 million
investment. How did this deal come about? What opportunities does that create
for Serko and for Booking – do you think it’s eyeing a more active role in
been a partner of Booking.com
for a long time and have built up a trusted relationship with the team there.
We actually share the same vision for management of the entire trip, and with
our technology and patents we can enable true journey management and booking
holdings can look at the content acquisition needed to continually make the
traveler journey the best experience yet.
We were both aligned on the impact we
could make on the industry and booking made the investment because they believe
Serko and Zeno can change the industry and move it forward. It was fantastic to
have the endorsement not only of our strategy and vision for travel but also
our technology too.
August you announced a partnership with FaceMe to add a human-looking virtual
assistant into the Zeno booking tool. Yes that’s cool but what does it really
add to the interaction?
digital assistant was really designed around a new way for people with a
disability to interact with technology, we want our products to stand for
something so pushing the way the user interfaces with design is key.
went through the design process and chat models we realized that this appeal of
a digital human had wider applications. By using Microsoft Cognitive Services
we could tell from visual or voice tone if a user is getting confused or
frustrated and we can then adapt our messaging and technology to support users.
It was no surprise how much appeal this technology had, as travel is an
industry that is used to being based around the concept of a ‘travel
consultant’, so having a digital assistant that can remind you about a visa
application or to select a different fare because you have previously expensed
an additional bag on your expense report just makes life easier.
It is more
about creating this type of interface as a true omni-channel experience; the
ability to use text chat, voice, digital assistant, web browser and switch
between any of these channels as you desire.
about security concerns around the use of bots and the sharing of personal
information? How are you managing that?
security has become such an important issue for tech companies that our former
CTO now leads our own internal data security team.
Before any code is written
we build security in by design and our dedicated security team works through
the compliance and storage encryption processes needed to meet each global
market we touch.
The reality is that things like bots are just a different user
access layer over the smart back-end we have built.
a year ago, Serko acquired a U.S.-based expense management software provider,
InterpIX, and you described it as an important part of Serko’s global growth
strategy. Can you tell us more about those goals?
was an essential step in giving Serko a strong US base and immediately referenceable clients. They were strategically located near some major partners
in the USA and a central point close to a hub where our main carrier flies
The technology was also unique in that the parts that InterplX had built
around fraud, payment and compliance were very strong. Interplx has now become
Serko's center of excellence for expense and they are building the new
technology called “No Expense” which we believe will disrupt an industry that
has been built on automating 1980s excel spreadsheets of spend.
Zeno is about
making this process disappear especially for the travelers and users of our
are the biggest challenges Serko is facing?
are building a platform that can never go down. In technology this is the
ultimate challenge to think about; software that should be available 24/7 and
someone should be able to always have access globally and do the job your
software was intended to make easier.
Building this at scale across all the
regions, with the changing world of compliance is a fantastic challenge and one
we are getting closer to perfecting every day. We have learned a lot, and
we adapt quickly but as we go into every country we need to be mindful of the
way they do business and that the way their content works could be different.
Being born out of the Asia Pacific region we know that we are not experts in
rail so employing product people in market enables us to listen and learn.
people still believe we are building a corporate online booking platform, but
the fact is this is a true platform of the future of travel it is more than an
online booking tool - it is a shift in journey management and our own expectations of what this
can do is extremely high.
What I feel proud of is that we are doing this with
humility, transparency and honesty and building a community at scale that is
being endorsed by some of the biggest brands in the world as the future of
Zealand tops the World Bank’s “Ease of Doing Business” ranking – how has that
environment been a benefit to Serko? And conversely, what are the challenges of
being located there?
Zealanders are naturally welcoming, our culture as a nation is built around inclusion.
Being a small nation and remotely located we are forced to innovate and
think global from day one.
We don’t have the fear of going global or of
different cultures due to the underlying foundations of who we are. The biggest
challenge of course is distance and the time it takes to go between countries,
doing on average 100+ flights a year makes you laser focused on the travel
experience and where you can make changes.
One of the persistent challenges of
being located in New Zealand is around attracting talent when we have so many
outstanding tech companies competing for the same talent pool, but on the flip
side because of how New Zealand is view around the world there is amazing
talent coming in from Silicon Valley and wider wanting to relocate and have a
change in lifestyle.
Due to the success New Zealand has had on the world stage
we are attracting the backing of some of the largest VCs and investment banks
who are always looking at New Zealand tech.
began as an entrepreneur more than 25 years ago when you co-founded Interactive
Technologies Limited. What have you learned along the way that would be useful
to today’s startup founders?
always have the saying that cash management is one of the foundations
entrepreneurs should work on and manage well. I use the mantra “Cash is more
important than your mother” when I talk to startup founders, because it creates
But the fact is the best ideas fail through poor cash management. Commercialization
of an idea is hard, you need to learn to run early, fail fast and fix fast,
being late to the game can mean game over.
The other part founders need to get
their head around is not being afraid of having a small piece of a bigger pie
and also learning to let go and become the conductor of the business so they
are expending energy and time on the business and not just in the business.
transition to surrounding yourself with people that add strength to your
weakness and trusting them is key. The last point is to make sure everyone in
your company understands the strategy and what you are doing and why deals are
If everyone is heading in the same direction, beating to the same
drum, then you’ll be unstoppable.
do you like to do in your free time?
downtime is mostly spent with my family and friends. I also enjoy being on the
water and have a special spot on the Tutukaka coast, about two and a half hours
out of Auckland, which has the best diving and fishing in the world, and I just
love to switch off and think.
Some of my craziest ideas come from a weekend
away, which always drives my executive team crazy!
I think they prefer me to be
constantly busy as they know if I have down time I’m probably coming back with
another crazy way of disrupting an industry.
More from our In the Big Chair series...
PhocusWire talks to leaders across the digital travel landscape.