20VC: From $6.2BN Market Cap to $2.8BN: What Is Not Translating About Navan's Public Story | Are Any Public Company CEOs Actually Happy? | Why Navan Built It's Own Customer Service AI and What it Could Mean For Customer Service AI with Ariel Cohen

26:51You mentioned open models earlier and the willingness to use them. I'm intrigued to hear how you think about open model usage versus closed and what drives that. I think the way that we look at this, we have these concepts of models supervising other models, and it's for different tasks. And for different tasks, you need different things. And our point of view, you know, when you think about PII, when you think about security, we have an extremely, extremely strong CISO person in the company. And he is, on one side, very good on telling us what not to do and what are the risks, and on the other side, finding, you know, the right solutions.

27:33and it's important. That's why I've said it's actually hard to create software generally in the enterprise, but with new technology to lead into the enterprise, there are so many things that you need to take into consideration. But regulation is one of them. Travel and FinTech is regulated and it's very much license driven all over the world. So all of these things, we are really good on taking them into consideration and kind of completely changing the way that people are thinking about travel. But that's why I think we're going to win. The reason that I think that we're going to win, we are almost in the middle between, I would say, companies that already like the way that they perceive risk and we cannot do anything is very much there.

28:14We are also not a startup. We are in the middle and we're going to do the right thing for our customers. That's kind of what drives us. You mentioned the way that developers code and create is changing. How are you seeing that change internally? An area that I actually think it's almost impossible to disrupt us is the travel side. To create the infrastructure that we've created to bring the content into the platform, the plumbing there, I don't think that people fully understand the plumbing that you need to create and how deep it is to buy an airline ticket in a location, to then change the ticket, to then apply unused credits.

28:53It is extremely fragmented space. you need to be licensed everywhere in the world which means that you need to be incorporated in the world so you are running this online platform but on the other side you are connected to an infrastructure that we created in the last 10 years and we are still creating it to connect to everything to have the ability to change everything so that's really a huge huge moat right so when it comes to travel I'm more seeing the opportunity to sell better to service our customers better, to give them stuff through EVA and through Cognition. You're going to very soon see in our platform book with AI, which will be a completely kind of different experience.

29:34But I gave the team a challenge, and actually Elon, my co-founder, obviously took it first and did it over the weekend to vibe code our expense product. And it took him six hours to do that. So Elon, over the weekend, completely vibe code our expense product. There is nothing there. Like there is a big fintech component, very similar to travel. You know, how do you swipe a credit card and everything is magical? How do you report on the transaction and so on? But the actual app, super easy to vibe code. And you think about like we kind of briefly talked about the ERP earlier. You think that all of these integrations are very, very hard to some NetSuite or whatever, how to create.

30:16They are not. They are not. You can vibe code your way to a lot of things these days. And this is dramatically impact the way that we are thinking about where are we investing in engineering and how. What platform was he using? I actually don't even know, to be honest. No, I think Elon, when it's probably actually our own platform, I'm not certain about it. I can actually ask him. You have your own vibe coding platform? Yeah, Cognition is our own platform. But I think that recently they are kind of combining platforms there. So I'm actually not the right person to tell you which platform you used.

30:52Do you think you skipped the design process in a world of vibe coding? Instead of going through mock-ups and designs and design reviews, do you skip all that and say, Ilan? It's a good question. You know, I'm coming from a product background, right? And I keep asking myself, is the product person becoming really the most important person? Because actually knowing the use case is super, super, super important, probably more important than any time. and suddenly the product manager gets a tool to come and say, you know, like there is always this tension between a product and engineers, right? The product people will want to do something.

31:27The engineers will tell them that you cannot do that. I wonder if this tension is going away by the product guy just saying, I'm going to do this by myself and prove you wrong. I don't think that we are there yet, but I think we are increasingly getting there, which again, talking about modes, I think the knowledge mode is going to be very, very high, like knowing and very important, knowing the nuances, right? What exactly the users want, what customers want and so on. So I think the power dynamics are changing kind of in engineering, you know, between product design. But cycles will get shorter.

32:04I'm certain about that. How are you seeing develop productivity change? The first thing, and this is actually really good for me as a CEO, you can create way more pressure of move faster because you get to say but why can't you do it faster by vibe coding it right and and i think it's also not just like there's vibe coding and then there's also obviously like claude code and cursor which it's not really vibe coding referring to clode to be honest so i'm mainly referring to clode but but that's kind of where it is going and there are still things there that today you need to configure right so you need to connect to your servers, you need to connect to your backend, and so on.

32:45But who says that that will be the reality in six months or 12 months from now? I will tell you that Cognition, interestingly enough, Navant Cognition is doing the configuration for the developer. So we actually removed that part. How much more productive are your developers today versus a year ago? Give or take. I don't know to give you this answer. Elon will give you a really big number here which we decided not to share yet but you could you can see like if you'd ask me where most of the engineering investment is going to it's mainly to ai related projects and that's a huge change totally get you so it's like tokens to power cognition not to but also to develop new stuff because like nivan edge which i'm kind of really waiting to release is a completely different way to buy stuff.

33:37Basically, you know, we are focusing on the travel vertical, but you will look at this and you'll say, wow, that's actually an interesting way to think about what do I want, right, as a traveler in this case, but generally, what do I want? How do I want it? How my needs are being met? Do you see margin degradation with the quality of that increasing because you need context windows to expand. You need memory to increase. That costs money today. Inference is expensive. Unless you get more juice out of the end consumer, and this is my worry, unless the end consumer pays more, all of this just hurts margin.

34:15I kind of think about it the other way around. And we always thought about it like that. If you create value, you're going to get paid. I'll give you an example. We were the first ones and we are the leaders by far on this of connecting directly to airlines. Instead of going through some aggregators, connecting directly to the airlines. The model in travel says that if you go through an aggregator, you're going to make more money. But we knew that that's the right thing for our customers. When you connect directly to an airline, you get more information for them. So you can tell them this flight is likely to get delayed.

34:49You can tell them this is how the Delta 1 seat look like compared to the Polaris it looked like on this airplane, on this flight. These are things that people value. When we connected directly to airlines at the beginning, we did take a hit on the revenue. And now we are no longer taking a hit of the revenue because we have in the platform this win-win-win between the airline or any type of partner, the customer, and the user, and the employee. And that win-win-win, you eventually get paid for. So it also creates a win for us. but you need to take the first leap. I get you on the create value and you get paid for it down the line.

35:29As a public company, they don't love down the line. That's the luxury you get as a private company. Do you not think that the pressing nature of public market demands means they don't love the, don't worry, it'll come? Remember what I told you earlier, it's almost like I have two lenses that I'm managing in the van. Is the business doing great? The business is doing amazingly. Okay, so are we gaining share? Like you could see our Q3 earnings and you can see that we are taking a lot of shares, right? We've announced there are us getting into the enterprise market and taking companies as customers like Visa, huge healthcare companies, enterprises all over the world, like companies that are really in the main street of like doing stuff that are very, very far from, you know, we are all in the tech world, very far from tech and kind of becoming a one customer.

36:22The business is doing great. And I think as long as we will service our customers and our users, the business will continue to gain share. We're going to take the entire market. I really believe in it. And the market, the investors will figure it out. I think that eventually this will catch to where it needs to be. And I think, again, we need to make the right decisions for our users, for our customers, and the investors will benefit a lot from it over time. Jason Lemkin said on a show the other day to me, I'm sure you know Jason from Sasa. He said, I don't know one happy public company CEO. I don't know one, not one.

37:00That's my brilliant American accent. Are you happy? I think I told you I'm happy that we are out there and telling our story. Is that fun? You know, you have this mechanism that makes people obsessed on, I don't know, refreshing their screen and check what our share price is. It creates a burden to explain to people, your employees basically, you know, everything I'm telling you about Navan at the end of the day, it depended on the employees here being part of this journey. We talked about it in the context of COVID, right? How do you convince an employee to stay in a travel company during a pandemic?

37:36You can apply the same thing here. Everybody is saying everything is disrupted. Everything will be different. no software company that was created in the last 10 years will be alive. And an employee will need to decide, right, is the business that you see inside is really good compared to this grade that you take every millisecond in the share price. So that's the part that I don't like just because it creates behaviors that are not even relevant, right? I don't think that people can actually know why their share, I don't know why the share price goes up in this morning and goes down in that morning.

38:14and so on, you kind of know when you report, you know when you're delivering some announcement to the market. So that doesn't make me excited about that part of being public, so maybe that's kind of the reference, can you find the happy CEOs? But I do like the other parts that comes with it. Does your mood not correlate to price? I interviewed Vlad, he won't mind me saying this, I interviewed Vlad, and when they were, wherever they were, down, what, 15 billion. I mean, honestly, Ariel, he was a dead man walking. And then I interviewed him when they were at 100 billion, And the dude was walking on water.

38:46I mean, he looked younger. He had better energy. I'll tell you, it's kind of interesting that you bring up Robinhood. I was kind of investor in Robinhood through VCs, but then also through like in the IPO, I kind of jumped on it. And I went through, you know, the suffering, right? So they popped and then completely crashed and very long time they were down. And he did so amazingly, you know, he was like, you know, they're growing the company amazingly. They have really good cost structure that he did when they were going down. He penetrated to new products, new things. So I don't know why he was, you know, I don't know him.

39:25I don't know why he was depressed when the shelf price was done. I think this is where they actually defined the company and built the company and actually created. Oh, dude, because every day you're staring at your stock price going, I'm doing everything I can, everything right. Remember that we talked during COVID and everybody were telling me that nobody will ever travel again and what are we doing with Navan? And I told you, I don't know, I'm looking at it. I'm certain that people will travel when, you know, obviously when the pandemic will end. And I see all of the stuff that we are doing in Navan, all of the stuff that we are building, and I'm just waiting for people to come back to travel and to see the new Navan.

40:01And life would be great. I was like, this is an opportunity to think about how to build a better business. It's exactly the way that I'm looking at this today. Maybe that's a different type. I talked today about our culture. I see the opportunity. I see a huge opportunity for Navan, right? So I don't know. I'm like, I'm not waking up in the morning. I'm checking the share price twice a day. I'm checking it when I'm kind of waking up and when the market ends just to know, right? People are asking you and you need to know. But I don't know. In any case, I'm not selling or I cannot sell. My employees cannot sell.

40:35So I don't think it's matter. I think you need to build value, which eventually the shareholders and investors in Navan will actually benefit from it. But again, start with the customer, start with the user. If they will be happy, the shareholders of Navan will be super happy. Do you not think then that share price correlates to morale within a company? 100%. That's what I told you that I think that the tough part that it adds to is that what I've told you is me. Like, am I getting depressed or like in some mania when, you know, it's like when the share price is up? I'm not. But am I naive about it?

41:15Do I think that a lot of the Navan employees are refreshing their app all day long and checking where it is? They are. And it is my role to actually bring them along to the journey and keep pointing to what I know about the company, what the employees here know about the company. And, you know, we kind of talked about it in Q3. Think about like we are going like crazies in the PLG market and we are going like crazy by signing new deals in the enterprise market. And we pointed to examples in Q3. The employees have all of the information to make their decision. And yeah, then there is the share price and I'm sure that it impacts them.

41:50And it's my role to kind of tell them to look at this in a two years time frame, three year time frame and probably 10 years time frame. And think about like where we could be. You know, there is this famous kind of letter that kind of Bezos sent his investors, right, when their share price was, I don't even remember what was the number, but very, very low. And he was pointing to the business and to the business that is doing great. And guess what happened later? The share price more than caught up, you know, in that case. How brutal is the talent war today? You know, it seems kind of you're either hot and sexy, like Anthropic or OpenAI or Cursor or any of these companies.

42:28and then like all the talent concentrates there or you're not? How brutal is the talent war if you're not an AI first model company or one of the darlings? I think that the really good employees, and I told you I have experience with this during COVID, the really good employees are not built like that. I think they are very resilient. They want to win and they want to see through things that they've built. OK, this is what I saw during COVID. This is what I see now. So people that tend to go to the next shiny thing are not necessarily to begin with that align to our culture. Now, again, it's my role to explain the choice to them, to show them the vision, to show them the roadmap.

43:16But we had, you know, during COVID, kind of May, June, July timeframe, a lot of employees leaving to Zoom when they were at their peak. And I remember even then I was talking with them and I was telling them, hey, this is at the peak. Where do you think it will go? Do you think that more people than the people that live on this planet will use Zoom? What exactly do you think is going to happen? And they made their choices. And it's okay. But I want to have people in this company that believe in our mission, that believe in our vision, and check if we are going towards that. And if we are, they are usually staying.

43:53You have the last laugh now. on that one yes but it's not about that it's about people by the way can do their own journeys like you know how many career mistakes i made in my life people can have their own journeys and by the way some of them came back uh so people can have their own journeys and bet on the wrong bets but i actually think values and what kind of a story you want to be part of is more important than let jump to the next shiny thing final one before we do a quick fire what What career mistakes do you reflect on most? I'm too interested. Like I passed on deal at the seed round at a$10 million valuation to put in a large check.

44:30I think about that every single day because that's a billion dollar gain. What would your career mistake that you reflect on most be? Wow. I think that if I knew everything that I know today, I will probably skip a startup and actually start Navan way earlier. But I didn't know. But definitely, Ilan and I reflected on the Nirvana idea, the trip actions idea back then, way before we jumped to do it. We had another startup in the middle. Probably would have been really beneficial. Probably Nirvana would be significantly bigger and more impactful today if we would have done it earlier. So that's a pretty big.

45:09Do you think so? Do you think you needed to have that experience to build the company that you've built today? I think both of us worked in enterprise businesses. I've mentioned HP earlier, but others to have the needed experience to build something significant in the enterprise. But, you know, for us travel, we didn't know anything about it. And Conquer back then looked so scary that probably we've delayed this journey by two to three years. Totally get you. Dude, I'm going to do a quick fire with you. So I give you a short statement. You give me your immediate thoughts. Does that sound OK? Let's do it.

45:46What's been your biggest mindset shift in the last 12 months? Think about the long term. Stop, you know, obsessing about some short term issues and really, really think about the long term and make sure that everybody are with you on this journey. How did making money change your mindset towards life? It makes stuff easier in the way that you can focus more on things that you care about. You can get much more help around you to then actually creating a nice balance between building something great, but also having your own life. So I think money definitely helps there. But, you know, when I'm waking up in the morning, it's about like really building this thing.

46:30It's not like I'm checking, you know, the share price times my holdings. This is my money. I'm not doing that. Actually, it's not how I think. So I think it's about convenience. It's about you actually get more time back. What do you spend on that has made the biggest change to your life? I think, first of all, getting help, like having people around you that can do stuff that you don't want to do. I don't know, fixing stuff in the house, you know, doing stuff that also I'm not good at doing. Getting help free up a lot of time. Something that definitely, to your point about, I live in both New York and here in Palo Alto.

47:08That's recent. And I love it. I can enjoy some of the things here. My kids, by the way, live there, but I can also enjoy New York, and I love big cities. So that's kind of similar to what you said. We kind of have this really like apartment in a neighborhood that we love, and that's fun. How worth it is a jet? You know, I think I'm not there yet. I'm sometimes flying jets. Sometimes I'm flying commercial. I don't know. I think it saves time. I think that it just saves time. That's what it does. I think people, flying is hard, you know, like time zones is still a thing. Jet lag is still a thing.

47:46In a way, that's what, you know, I think my wife keeps making fun of me that the entire Nirvana was created because of my anxiety in an airport. And it's so, so true. And so I think it's still no matter what, even with jets, I'm still having the same anxiety. Dude, I'm going to speak to you in a year and you're going to have a Gulfstream, okay? I'm not sure, by the way. I'm certain. You said about kids. Tell me, what's your biggest parenting advice? What do you know now that you think is most important to being a good parent? I think, and that's kind of what I told you, that with money you gain more time.

48:27Invest the time in your kids. Five, six years ago, I didn't. In the last three years, I have. And there is nothing. You know, we talked a lot about Navan Mission and Vision and private jets and all of these things. There is nothing more rewarding than that. Like I have twins that are 18. My relationship with them is so good, so deep. And I have also a 12-year-old. Again, same thing. Invest the time. Invest the time. Don't pay that price. I did pay that price earlier. And I definitely regret it. And I'm not doing it anymore. I'm really, really spending the time with them. You regret it. But would it have been possible to do what you did without doing that regret?

49:10It wouldn't. That's the price. That's the price. So do you regret it? This is very, you know, very kind of loopy. Yeah, it's a good question. It's a really, really good question. I don't know. It's probably something to figure out with my therapist. But I can tell you that nothing is more rewarding than that. Dude, I want to finish on what are you most excited for? I like positivity too. You said you're an optimist. What are you most excited for when you look forward to the next decade? I think almost like the opposite of AI. I think that people will get way more towards fun, spirituality, experiences.

49:53I think you and I talked in the past about my kind of walkabout trips once a year by myself to scuba dive somewhere. I think people will have more time, more ability to also focus on that. like talking about the price that I've just talked about. And I'm excited to see what will happen there. It's kind of the opposite of tech, the opposite of AI, but it's kind of, I think, where society will be able to go to with way more efficient kind of life and workplace that we will have. Dude, you are the best. I so appreciate you, man. I had a lot of fun. It was so much fun talking with you. But before we leave you today, this episode is brought to you by Perk, the intelligent platform for travel and spend.

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