When talking about disruptive forces in the travel sector, we sometimes hear the dismissive comment: “Oh, they’re not a travel company, they’re a technology company.” Sometimes it’s a reference to the higher valuations technology companies enjoy. But often it’s followed with a knowing nod or dismissive expression, as if the new entrant doesn't count somehow because it's using technology instead of labor to deliver its services--it's not a real travel company.

Mark Andreessen’s article “Software is eating the world” made the case, which has been validated again and again since, that the most successful new businesses would take advantage of technology to advance the products and services they offered with lower cost and higher value than those that don’t. Those that don’t usually refers to incumbents, even very large incumbents. At the stage of economic development we’re in today, being a technology company means being a modern company, period. Companies that don’t use technology, or use it poorly, are simply falling behind. As Jeff Lawson, the CEO of Twilio puts it: “In the twenty-first century, every business is a digital business… The digital revolution is fundamentally rewriting the rules of general management. Software simultaneously lowers transaction costs, demolishes barriers to entry, and accelerates the pace of change. Companies—and institutions—that cannot cope with this pace and intensity will cease to be relevant.”

And from the most important perspective of all, the customer perspective, can anyone afford to think customers somehow believe that better technology that delivers superior service or better products is somehow not as good because it was not delivered by a legacy, manual process? They don’t. If a traveler calls and it takes the customer service agent 25 minutes to solve that customer’s problem by weaving in and out of six applications, cutting and pasting information between each of them to arrive at a result, how do you think that traveler’s NPS rating will compare to one whose identical problem is solved in three minutes because the agent had a unified service desktop geared to smoothly integrate all customer data? How do you think that customer would perceive the company if they could solve that problem with a chat bot that could do the work in two minutes? And what if the company ran a deep learning AI model that looked for problems, solved some by itself, and surfaced more complex ones to agents for resolution before the traveler even knew there was a problem? Customers don’t care what’s on the other end of that transaction or touch point as long as it enables them to solve one of their jobs to be done.

Technology will continue to eat the world and change all of the businesses in it. Along the way, some companies will embrace what technology can do while others won’t, for a variety of reasons they will continue to defend. Some companies won’t have the resources to be competitive, but for the many who do it will be important not only to invest in technology but to invest in the right technology. Too many companies are still pouring millions of dollars each year into technology investments that simply reinforce the status quo both in terms of their products and the antiquated processes they use to build and operate them.

The next time you hear someone say that a young company with a new way of doing things is a technology company instead of a travel company, just substitute the word “modern” for “technology.” Technology (including AI) is the new electricity. It’s everywhere and it’s making our travel products and services better and better, but it’s not evenly applied by all companies. Those that point it in the right direction and execute well on its delivery will leave their competitors in the dust.

What can companies that are behind in the successful application of technology do? In many technological laggards, there are two big steps to take, and both involve stopping things that are holding you back:

The first step is largely cultural and starts at the top: stop thinking of technology as a cost of doing business and start thinking of it as a significant, perhaps your most significant, competitive weapon. Too many companies try to simply manage technology costs to a minimum (some even commit the fatal mistake of putting technology under the CFO, which makes technical or product innovation nearly impossible) by restricting budgets without considering the upside that technology can provide. When you see ‘technology’ companies taking on hundreds of millions of dollars in investment and pouring it into technical infrastructure and product management, do you think their CFO is insisting on keeping spend below last year? Modern companies don’t build just for ROI next quarter or next year. They build platforms that will expand to meet future growth and accelerate their delivery over longer timeframes than just one or two years. Technology properly used is, and from here forward will be, your most effective potential competitive tool. Stop thinking of it as just an expense--it's an opportunity.

The second step is both cultural and procedural: As a senior leader, stop thinking you know your customers. Start realizing that your customers are far more varied and complex than you know, that they change continuously in response to the environment (travel and otherwise,) and that it is a full-time job (actually, many full-time jobs) to understand your customers well enough to figure out what they actually need both today and in the future. It is exceedingly common for senior leaders at travel companies to believe they know their customers well enough to determine “the roadmap” for product development. But that road leads to mediocre products and usually focuses on the needs of a few key customers, often to the detriment of the rest, and that is precisely where upmarket disruptors can find daylight to invade your customer base.

We’d also like to highlight a corollary to step two: Don’t let your sales teams drive product development unless you want them to drive you into a ditch. One of us remembers working with a company that spent tens of millions of dollars building software for their clients based on input gathered from salespeople interviewing management at their customers. After several highly anticipated launches (from V1 through several iterations and finally a V2 that would, for sure, resolve all the issues) they finally killed the application after determining that it was being used by less than 1% of the customer group. Their fatal flaws? First, salespeople are trained in sales, not in the kinds of neutral interviewing techniques and careful product testing that get at customer truths. Second, V2 met the customer’s managers needs, but they weren’t the ones who had to use the software.  Prioritizing managers’ requirements led to navigational flows that were so poorly designed, and software that was so slow to operate, that it held end users back from meeting their management-mandated productivity goals.

Modern travel companies give the job of understanding customer needs and designing value propositions and business models to modern Product Managers. The role of modern product managers and the appropriate process to follow in product management have been described in detail by authors like Marty Cagan, Theresa Torres, and Melissa Perri. We highly recommend Cagan’s “Inspired” as a great primer both for budding product managers and even more for company leaders who want to understand why the processes that were successful yesterday in building your business won’t continue to yield success for you tomorrow. The playing field has changed. You’re now up against modern companies that use technology as a competitive weapon and use modern product management to determine how to deploy it.

To summarize the two steps: First recognize that technology, properly utilized, can be a tremendous competitive weapon, and modern travel companies are leaning on that concept heavily. Second, if you don’t have a modern product management group, build one as soon as you can to help steer the outputs of your technology investments. Your modern product managers should be working with engineering and design to determine what to build and then driving the outcomes for your company. (Why harp on modern product management? Because the field has changed dramatically in the past few years to become much more effective and, in case you tend to conflate the two, is also not in any way related to that of project management.)

We recognize that for many long-lived companies in travel this may be culturally difficult to accomplish. but it’s what your modern competitors, those ‘technology companies’ are doing to execute so effectively. It's not rocket science, but it does require commitment and persistence.