Why I sold my travel startup after it recovered from the travel downturn

For most founders, selling your startup is a goal - a dream realized. For many, it’s the end of a long, hard, and winding road. But for the Shep team, the recent acquisition of our startup by travel superpower, Flight Centre Travel Group, is not the end, but a new beginning.

The recent acquisition of our startup by travel superpower, Flight Centre Travel Group, is not the end, but a new beginning.

Making it as a travel tech startup during COVID has been a massive task that pushed our team to the brink. We lost all of our customers, cut our headcount to the minimum, and pivoted our product. After making those hard decisions, we’ve found great success with our business travel communication platform. In fact, we grew our customer count and revenue to levels that exceeded our early success pre-COVID but we needed to grow much bigger to support all of that activity!

Shep team at the Austin Startup Crawl 2017

Startups typically grow through four possible avenues; revenue, fundraising, partnerships, or acquisition. Here’s a little context on why we decided that joining Flight Centre was the right decision for us:

1. Revenue: While we continued to grow our revenue, COVID dramatically elongated the sales cycles while also limiting customer budgets (higher CAC + lower ACV). So, while we were closing customers, we found ourselves having to discount heavily due to limited business travel.
2. Fundraising: Up to 2020, we’d grown primarily through investor capital which allowed us to develop our team, build our product, and find product/market fit. When COVID hit and our existing customer pool dried up, financially-focused (vs. strategic/industry) investors shied away from the travel segment due to the short-term uncertainty.
3. Partnerships: We deepened our partnership with Flight Centre at the onset of COVID. They saw the longer-term picture and opportunity to differentiate, and after two years of close collaboration, it was time to take our partnership to the next level.
4. Acquisitions: Tada!

We didn’t sell because we were exhausted by a struggling industry (although we were exhausted). We didn’t sell because we couldn’t get enough customers (we had more than we could handle). We sold because we were excited and wanted to keep our momentum coming out of the COVID travel pause going. We knew that Flight Centre (their FCM division in particular) was the team to help us fully realize our potential and provide us with the resources we’ve been lacking since shrinking the team in early 2020. The Shep team did not sell to get out. We sold to dig in! And we can’t wait to accelerate our progress.

The Shep team did not sell to get out. We sold to dig in!

Pitching Steve Huffman, CEO of Reddit

Long-term partners

When my cofounders and I launched our first landing page in 2017, the first chat visitor was from Flight Centre. Before anyone else in the industry had any idea what we were building, Flight Centre was already curious. And that continuing culture of curiosity, innovation, and partnership is why joining forces with one of the globe’s four largest travel management companies (TMCs) was a good fit.

Before anyone else in the industry had any idea what we were building, Flight Centre was already curious.

We’ve continued to partner with the FCM team as noted in a recent article in BTN’s The Beat, “Having worked together ‘quite extensively over the last couple of years,’ Shep already had been ‘well integrated into our product process,’ said John Morhous, Flight Centre Travel Group?chief experience officer.” In fact, their December 2019 investment and ongoing support thereafter fueled Shep during the COVID travel-pocalypse - from product pivot and onto greater customer traction and revenue than we’d seen pre-COVID. Without their support, we likely would have had to shut our doors as our early pilot customers lost budget and froze their travel programs.

A great fit

Flight Centre put their money where their mouth (chatbot conversation?) was to help us validate our tool and see how it gelled with their customer base by making a strategic investment in December 2019. That timing was obviously very significant as it put some metaphorical gas in our tank just before COVID brought the corporate travel market to a standstill.

Layne demoing Shep at GBTA 2019

They—as we—believed that while the industry was struggling, it would come back with very different requirements and expectations. The opportunity to return to travel with tech that communicated priorities and rules, increased traveler efficiency, guided bookers to more sustainable options, and ultimately differentiated their offering was key. So, the team at Flight Centre doubled down on their belief in us, despite travel volumes being at record lows. They continued to push us to customers, give us access to their internal resources and guidance, and fund some of our development.

The opportunity to return to travel with tech that communicated priorities and rules, increased traveler efficiency, guided bookers to more sustainable options, and ultimately differentiated their offering was key.

Volunteering at Caritas, a local Austin community kitchen

In addition to the alignment with regard to innovation and new post-COVID customer expectations, we got to see the cultural fit of FCM. While still in due diligence, they invited our team to join them at customer and team dinners (and late-night Karaoke sessions) while out at GBTA, a large corporate travel industry conference. Sure, it may have confused a few of the employees unaware of the acquisition-in-progress, but they welcomed us with open arms and made us feel like family before we were, nonetheless.

They welcomed us with open arms and made us feel like family before we were, nonetheless.

The culture of care at Flight Centre affected me personally as—in the middle of due diligence—my mother became gravely ill in South Africa. With the support of both the Shep and Flight Centre teams, I flew to South Africa with my wife and kids where I got to see her before she passed away on December 29, just 7 days after my official start date as an FCM employee following the acquisition. Experiencing the joy and excitement of selling my startup while going through the grief and sadness of losing my Mother touched both ends of the spectrum. I truly appreciate the kindness and patience that I have been shown while I went (and continue going) through this emotional rollercoaster.

My wife, Anna; me; my kids; my sister, Amy, and my Mom.

What’s next

The Shep team will continue building cutting-edge browser extension technology to provide consistent cross-site communication about policies, COVID guidance, sustainability, and preferred suppliers. We’ll continue supporting our FCM and non-FCM customers, but with access to best-in-class resources, data sources, sales, and marketing. While we’ll continue working with our existing customers, we’ll likely be positioned more as an integrated feature of the new FCM platform than a stand-alone product moving forward. We’re excited to keep the story going!

Shep winning Plug and Play Travel Demo Day in 2018

We couldn’t have done it without...

While Rey Garcia, Layne Cassidy, and I are ecstatic to join the FCM team, we couldn't have done it without our board of Ellen Keszler (ex-President of Travelocity for Business) and Craig Cummings (Moonshots Capital), along with the mentorship, support, and investment by amazing folks including (but not limited to) Moonshots Capital, Capital Factory, Plug and Play Tech Center, MassChallenge, Chris Hoyt, Jimmy, Carolyn, Johnny Thorsen, John Morhous, Marcus Eklund, Mitch Gross, Kathy Misunas, Mariano Dima, Marc Nathan, Pete Harrison, Mike Daly, David Chemerow, Shakeel Rashed, Ben Boyd, Jen Cummings, and most importantly, my wonderful, patient, and supportive wife, Anna Senyard

Shep with Craig Cummings, Shep board member and Moonshots Capital partner at the Austin Startup Crawl 2021

We'd also like to acknowledge (and strongly endorse) our prior team members who played critical parts in our growth and development: Skipper Chong Warson, Simon Gooder, Ana DeAlvare, Jeremy Brooks, Ryan Manor, Dan Molitor, Andy Jones, Crystal Rivera, and co-founder, Rafael Torres.

For the official press release, check out the FCM blog: https://www.fcmtravel.com/en/press-releases/fcm-fortifies-technology-expertise-through-shep-acquisition