BTN's annual answer book for business travel managers.
Loews Santa Monica Beach Hotel - March 21, 2019
etc.venues: Fenchurch Street - March 28, 2019
Hilton San Francisco Union Square - April 2, 2019
Cvent's Reggie Aggarwal talks:
Cvent has spent the past two years integrating and upgrading technology after acquiring Lanyon in 2016. The company is in growth mode: expanding its client base, its geographical coverage and, as always, its technology stack. Cvent CEO Reggie Aggarwal sat down with BTN editor-in-chief Elizabeth West.
BTN: At this time last
year, Cvent projected it would hire 1,000 people in 2018 to support growth. Did
Aggarwal: We're very close to 1,000, and that's additional hires, not filling
existing positions. We did exceedingly
well in [growing our team]. The hiring market is tough right now. There are
a lot of good companies out there and a lot of full employment. To get the quality
we look for makes hitting that goal harder, so we are pretty excited that we
are in the zone to hit that number.
BTN: What roles were you
Aggarwal: Technology/engineering and client services are the top two
growth areas. We now have about 1,400 people in tech; even larger companies than
Cvent don't have that many engineers. We want to make sure we're extraordinarily
innovative. Our brand is pretty strong, but we have to keep backing
it up with great innovation and great product. So that's what we've been
doing. On the client services side, we're around 1,200 people now. We can be
the most innovative, fastest-growing company there is, but client services has
to keep up with it. You never want to do the work to bring on the customer, give
them the product and then trip at the finish line when they need the service. We
learned this lesson a few years ago, during another rapid growth period. You have
to meet the service demand.
BTN: You've opened four
offices in the past two years: Australia, Dubai, Germany and Singapore. Where
are you growing fastest?
Aggarwal: We don't like to look at percentage growth because it can be
misleading. Our fastest-growing [region] by raw dollars is still Europe. We opened an
office in London [about 5 years ago] and most of our 150 people in Europe are in
London, like 130 of them. We just opened Germany, so we'll start to see that
impact this year, but Europe is our fastest growing market. First: Because
we've been there, we have great brand recognition there and we have the most
people deployed against it. Second: because the market has adopted enterprise technology much like
the U.S. and there's lots of opportunity to deepen our relationships there with
BTN: So many businesses are
watching Asia/Pacific. What's the market like there for Cvent?
Aggarwal: Asia's consumer technology is advanced, but the business-to-business
enterprise software market is different, for different reasons in each market. But one reason is because labor is cheaper and companies hire people instead of
invest in the technology. Obviously, we are watching Asia, though. Our Singapore
office allows us to enter through an English-speaking market, and we are
targeting Hong Kong, another English-speaking market, through that office. What
we continue to watch—both China and India—is the rise of the middle
class and wage inflation. Because we believe that drives growth in the meeting
and event market. When you make $15,000 to be middle class, your company isn't
likely to spend $1,500 to send you to a conference, right? But now the wage
rates are increasing on average 15 percent compounded [annually]. That means you're
going to have magnitudes more travel. We've seen that with China, and as salaries
go up, it makes more sense to invest in those employees going to events.
BTN: Let's talk about your 2018 acquisitions: Kapow opened a new market
Aggarwal: There are no room-nights associated with Kapow, which
is mostly restaurant-oriented events. It's a big market. Just think of how many
dinners a company like Cvent does. We do hundreds every year, and we're 3,700
employees. But even though the market is there, third-party agencies don't want
to deal with these events because the margins aren't there. There's a lot of pain
from managing the invites and people, sourcing a private dining room or run of
venue, no standardization and a lot of things pushed down to assistants who are
generally not negotiating. So it was a compelling opportunity and it's a really
cool company with a great solution. We also knew Kapow's clients because many
of them were already our clients. That helps with the due diligence and driving the success of the acquisition.
BTN: And Social Tables adds some powerful capabilities.
Aggarwal: Social tables has 4 billion square feet of
actual meeting space loaded to scale in its database. A huge number of
hotels in North America already use this, and the company has supported like 5 million meetings. Planners use it to visualize the event space and then to collaborate
with their venue to diagram, create seating charts and share files and a lot of
dynamic stuff. No one else has this kind of content. Imagine this as part of the sourcing process, as well, providing to-scale visuals to make sure the space is right for the particular event.
BTN: So you are working to
integrate these into the Cvent platform now?
Aggarwal: We are doing two things: We invest in the technology because,
first, you make sure the product and experience is right. Second, we integrate
it into our platform. That always takes some time, but we know that’s where we
will go because we want that platform play, where everything you need is in one
place. The benefit of that, ultimately, is in the data that can pass through
all of it. Social Tables is the higher priority from an integration and data
perspective right now. They have so many dynamic features, and no one else is
going to have the content to power that.
BTN: Your biggest tech
investment ever is the Flex Platform, which became generally available to clients in
October. How is adoption?
Aggarwal: More than half of events are being built in the new
technology as of January. There are a few features from the old platform that
we still need to iterate in the Flex system. More people are getting on it
every day, but change management is funny in that it's just hard to do
something different than you are used to.
BTN: Are there complaints about the switch?
Aggarwal: Let me give you a quick story. Maybe seven years ago, I was
one of the last holdouts of BlackBerry. When I got my iPhone, I was complaining
constantly, but I was tired of carrying my Blackberry and getting mocked at
technology conferences. Then, I went to our India office, and they issued me a
BlackBerry to use while I was there because calling would be cheaper, etc.
Within the first 15 minutes, I was saying, "this sucks" about the BlackBerry.
It's just change. Flex technology is obviously superior and is the best investment
we ever made.
BTN: How so?
Aggarwal: We literally now have the simplest tool on the market for
the depth of functionality that we offer. Yes, a 10-feature product might be
simpler, but we have 100 features. No one can argue this. Nontechnical people can
feel like graphic artists and create what they need on a platform where everything
is in one place and the data is there. That's been our strategy. To truly
integrate into a triple threat: features, simplicity and platform.
BTN: Let's shift to the
business travel side. How have you invested in the Lanyon hotel RFP technology, and what are you looking to do with it in 2019?
Aggarwal: We've put a lot of investment into product infrastructure and
things like [General Data Protection Regulation] compliance and security. We did that so we could scale. It's
like changing the foundation a little bit so you can build another floor onto a
house. So that's what we spent a lot of 2018 doing. Now in 2019 and 2020,
you're going to start seeing improvement in the user interface and we'll add
more functionality. We've more than doubled the tech team on that product. The
revenue has not doubled, but we are forward investing and the market is changing.
It's interesting because transient contracts and RFPs are almost the opposite
of a meetings RFP, which is much more transactional. Transient RFPs are sourcing
a longer-term relationship, so there's a lot of complexity with that and the way
the product is actually consumed.
BTN: I've been intrigued
with a comment you made last summer about partnering with the Cvent Supplier Network
to make live inventory available to book for small meetings. Is that
Aggarwal: No other company has been able to do this, and we invested
in one many years ago that claimed to but were really just tricking the
system. But it was a really great idea. We have the trust from the market, we
have the infrastructure and we have the relationships, but it's going to take an
eight-figure investment to build. I think by 2020, something will happen, but we
need things to come together. I talked to the chief strategy officer at a large
Vegas chain, and he said, "100 percent, we'll back you. We'll give you our
inventory. I want to get those small meetings done [but] not by my sales team."
BTN: Even if you just had
Las Vegas, that's a great test market. A lot of meetings.
Aggarwal: And I can tell you right now, the reason it
will eventually happen is because clients are demanding it and, again, the third
parties don't love this business because the margins aren't there. It needs to
be automated; that is the general sentiment.
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