I had the pleasure of interviewing Axel Hefer.
Axel was named CEO of trivago in January 2020. Previously, he served as managing director and CFO for the company since 2016. Before joining trivago, Mr. Hefer was CFO and COO of Home24 AG, an online home furniture and decor company, and managing director of One Equity Partners, the Private Equity Division of J.P. Morgan Chase. Mr. Hefer holds a diploma in management from Leipzig Graduate School of Management (HHL) and an M.B.A. from INSEAD.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I grew up in a mid-sized town in Germany called Hagen. I started my career in strategy consulting at McKinsey, and then moved to private equity at Permira and JP Morgan. After 10 years of buying and selling companies it started to get very repetitive and I got bored. I decided to try something new and setup an investment business with a friend of mine, focused on natural resources. One day I got a call from an old co-worker who asked me whether I would want to move to tech and I decided to join Home24, an online furniture retailer in Europe and Brazil as CFO and COO. When Rolf asked me to join trivago in 2016 I immediately said yes — a global champion based in Germany with a unique culture. I took the company public as its CFO and became CEO at the end of last year.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
The funniest and most interesting story I remember was when I was at home24 (online furniture retailer.) A customer had returned a “custom-made” chair as it had a spot. We told him we were very sorry and that it could take weeks to get a replacement as the chair had been “custom-made” for him in Asia. After almost 2 months the customer called again — furious. We had delivered the chair — but with exactly the same spot — obviously it has been the same chair. What had happened: He had sent the damaged chair back and our inbound quality control team who received the chair, missed the spot. They classified the chair as new and repacked it. Our system registered that we now had a chair ready to deliver — and we delivered it back to the same customer. Very embarrassing but looking back also funny. The lesson to me is that customer feedback is crucial for any business. Your customers help you to find mistakes in your product, processes and setup that you cannot see in your data alone.
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
I have just finished a book that I bought a few years back while in Havana: “Guerilla Warfare” by Che Guevarra. The book is about how to organize a revolution through guerilla tactics and was written after the Cuban Revolution to summarize the learnings for future revolutions. I bought it more out of historical interest but reading it I realized that a few of the basic concepts were also transferable to our current business situation. One of the key challenges we are facing at trivago is the competition with Google. They have almost unlimited resources; they influence user behavior by changing the flow of their search product and integrate their accommodation search product more and more.
Key themes of the book have been 1.) to combat an opponent with superior resources, you need to turn your disadvantage into an advantage. Move fast, stay flexible, don’t attack head-to-head and keep extreme focus; and 2.) to win, you need to win over the hearts of the people.
Both very true and at the heart of our current strategy.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Our company purpose is, “empowering people to get more out of life” and has been in place for many years. But, interestingly, the coronavirus crisis has helped us to sharpen it, make it much more tangible, and be present everyday these days.
Over the past few months, we have been able to specify what we mean by “more”: More relationships, more perspective, more progress. And right now, with almost the entire western world being or just coming out of lockdown, stuck at home and with restrictions on meeting friends and family and activities — our purpose has become very tangible.
In the current crisis we accepted very early that in this unprecedented situation we need to stop promoting travel and accept that we will not incur any revenue. We need to focus on our future customers and our purpose — to help our customers safely travel with family and friends, to help them create new experiences even when they might be different than what we have been used to, and see the opportunity in the crisis. This has been very important in keeping us focused and is helping unite us right now — despite the fact that we are operating from 1,000 home offices rather than our central campus.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Focus on hiring the best people.
People are the lifeblood of your business, and it’s critical to keep it flowing. At trivago, we look for people who are hungry and ambitious. And while many entrepreneurs dream of having an international business with global offices, we take a different approach by bringing the world to our door. We hire a diverse team from around the world to work in our headquarters in Dusseldorf, Germany. We call this Diversity of Thought — being able to bring different worldly perspectives under one roof to ensure that we truly have a global focus.
The world is changing at an amazing pace. Even ignoring crises like we are experiencing right now; innovation and technology are leading to constant change. Only with the best team can you constantly adapt. Everybody makes mistakes, be it strategic or operational ones, but only a team with the attitude and passion to learn and adapt quickly can take full benefit of this changing environment. And in most cases, the most successful companies are not successful with their first product: Apple is all about phones and not about computers anymore, Google has become an integration advertisement platform ,and Amazon, a global logistics company and marketplace.
Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
I am not sure I would dare describe my situation as challenged. I have a garden and four children who all play together and keep each other company, and therefore are very fortunate. I really do feel for my colleagues with small children that are deprived from any social interaction with other children — who must balance childcare with work all from a house or apartment.
However, one small challenge that I am facing is the groundhog’s day feeling — the days are feeling endless with back to back video calls from the same location, hardly any movement. I am trying to make sure that I have time in my calendar to take a break and go for a walk or step away from the home office for a bit and am very disciplined about my morning workout. In the evening I am trying to cook on some days, something special, to break out of the daily routine and enjoy the time with the family at our daily dinners, something I rarely manage to in normal times.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
Being a travel business, our revenue completely stopped within weeks. This was very difficult at the beginning as the numbers declined daily and it was very challenging to focus on what really matters: the future.
Once we accepted that no revenue was our new reality for the foreseeable future, we were able to focus again on the future and what our customers will want once they can safely start any type of travel again: How can we help them to have a good travel experience? Do we have the right product for that customer at that moment in time? We pictured this moment in time, defined a “recovery plan” and started executing on it to ensure that we will have the right product, setup, and marketing once our customers are ready to travel again.
No revenue also means no data. We are a data driven business, challenging our ideas with rigorous testing to improve day by day. Without data we are forced to form a hypothesis about features and products. We have come up with a structure that will allow us to test backwards once volume comes back — but it has been quite a challenge to accept that we need to work in bigger iterations to do so.
The severity and the length of the pandemic will have a lasting impact on travel. The market will change, and we have to adapt our strategy and organization to be well prepared to master these changes. We will have to rebuild the industry over the next few years and had to make the difficult decision to adjust our organization and reduce headcount accordingly. We made the decision to do this in an open and supportive manner, meaning, we made the cut at once instead of dragging it out for some time. We are also actively working with alumni and our industry peers to find new opportunities for those effected and believe that we will be able to help find a new home for most of our colleagues.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
The current situation is very difficult for many of us, but it is most difficult for our children. Not only do they hear 24/7 about people getting sick and dying, they are also isolated at home, cannot see their school friends, or go to their afternoon activities.
The most important thing is to give them some structure. We try to keep the morning as learning time to keep a certain routine. Routine and structure give comfort, and comfort reduces anxiety. Now that — at least in Germany — the situation has improved and restrictions are eased it is important to step-by-step move back to a more normal, though changed, daily life. Participating in daily life with necessary safety measures is again something that further enlarges our daily routine and reduces anxiety.
On the other hand, it is also important to help them to see the opportunity in this crisis. We are spending more time together as a family: support in home schooling, joint preparation of dinners or the game in between video conferences.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
A lot of industries have come to a complete halt. They de facto disappeared entirely (like travel or almost any other leisure activity). And they will restart. For us, as individuals and as company, this is a once-in-a-lifetime opportunity. We can benefit from the learning and the mistakes we have made in the past few years and start from scratch. With a blank sheet of paper, we are thinking about what our customer will need, how we will support them and how we need to get organized to do so. Almost like being a start-up again with the resources and the experiences of a large company.
Specifically, we believe that local travel will gain in importance. Having been deprived of spending time with people that matter to us traveling will lead to even more preparation, more thought and effort being put into the preparation and finally, the biggest recession in our lifetimes, will mean that we need to help our customers to do so in the most cost efficient way.
Looking at where we have entered the crisis, as the provider of the most comprehensive price comparison for accommodation, there are a few gaps that we have been working on filling. We want to offer more inspiration, become more relevant and support local traveling to restart travel. And we do see a big opportunity in being agile and dynamic, meeting our customers future needs better and faster than our competitors. It is all about seeing the opportunity in the change ahead of us, rather than the challenge.
How do you think the COVID pandemic might permanently change the way we behave, act or live?
The pandemic will have a lasting impact on how we travel — and how we work.
Traveling had become a commodity. You can travel anywhere, anytime, at reasonable prices. This is not a given any more. The predictability of travel has been hit and the perceived safety of traveling must be rebuilt. Initially, and very likely also with a lasting effect, travel will be more local. With more time spent closer to home, new experiences will be remade and our perspective for long-haul travel will also change. What can we experience abroad that is unique, that we cannot experience nearby? How can travel become more sustainable overall? How will the travel experience focus more on local specialties? We do not have the answer to all these questions, but we believe that travel will become more sustainable and considerate.
Another thing that the crisis has taught us is that working remotely can work well. With the support of today’s technology, communication works smoothly, and travel and commuting hours can be used more efficiently by focusing on improving our product. On the other hand, I also do see the shortcomings of purely digital communication. It is harder to build relationships, smaller, informal discussions are not taking place and overall, the working day feels more stressful. Again, we do not have the answer yet, but we are working on analyzing our findings out of the current remote setup to find a new normal going forward. Although the solution is still uncertain one thing is clear already — the new balance will be more flexible and less rigid than the working world of the past.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
Our industry will need to rebuild post-Covid and we have the opportunity to be part of this solution. We know that our customer needs and wants as it relates to travel will change and we are anticipating this “new normal” and focusing our efforts in building our product to meet these new needs. For example, we believe that we have the opportunity to become much more relevant to travelers, encouraging interaction with our site on a weekly and eventually even on a daily basis. As we believe local and nearby travel will become more attractive, we are working on adapting the product to inspire short-term trips that can be planned spontaneously.
Similarly, what would you encourage others to do?
It is a rare opportunity to be able to reset — leverage this time. Start from a blank sheet of paper and think who you want to be, how can you best serve your customers, what do you need to change to be who you want to be. Looking at the past does not matter; it is a fresh start with the benefit of learning from previous mistakes.
It is my belief that it is more important now than ever to focus on what value we bring to our users, what our purpose is as a brand and company. Recently, there was a great article in Harvard Business Review titled, “Shift your organization from panic to purpose” that speaks to just this — that this moment provides a rare chance to reflect on why we’re in business to begin with.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My father told me to always live life as if you would have 30% less. Sounds simple but it is hard to live by: don’t take anything you have achieved for granted, stay humble, don’t focus on what others want you to be. This approach has helped me to stay more grounded, but also to take more risks in my life so far. If your life does not matter, if you take a step back, you are much more likely to make steps forward — personally and professionally.
How can our readers further follow your work?
Readers can find me on LinkedIn here.
